FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.14
FIRST
AMENDMENT TO
THIS
AMENDMENT (“Amendment”), made and entered into as of December 11th, 2008 (the
“Effective Date”) by and between Xxxxxxx X. Hertha, a resident of the State of
Georgia (“Employee”), and SouthCrest Financial Group, Inc., a Georgia
corporation (“Employer”).
W I T N E
S S E T H:
WHEREAS,
Employer currently employs Employee as its Senior Vice President and Chief
Financial Officer pursuant to that certain employment agreement between Employer
and Employee dated February 10, 2005 (the “Employment Agreement”);
WHEREAS,
Employer and Employee desire to continue such employment; and
WHEREAS, Employer and Employee now
desire to amend the Employment Agreement primarily so that the payments and
benefits under the Employment Agreement comply with, or are exempt from, the
rules of Section 409A of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, in consideration of the continued employment of Employee
by Employer, of the premises and the mutual promises and covenants contained
herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to modify the Employment Agreement as follows, effective
as of January 1, 2009:
1.
By adding the following to the
end of the existing Section 4:
“All
reimbursements shall be paid as soon as administratively practicable, but in no
event shall any reimbursement be paid after the last day of the taxable year
following the taxable year in which the expense was incurred, nor shall the
amount of reimbursable expenses incurred or in-kind benefits provided in one
taxable year affect the expenses eligible for reimbursement or the in-kind
benefits provided, as applicable, in any other taxable year. The
right to a reimbursement or an in-kind benefit under this Agreement will not be
subject to liquidation or exchange for another benefit.”
2.
By deleting the
existing Section 12.5 and substituting therefor the following:
“12.5 If
this Agreement and Employee’s employment are terminated either (i) by the
Employer at any time for any reason other than for Cause or (ii) by Employee
upon the Employer’s breach of this Agreement; then Employer, as Employer’s sole
remaining obligation under this Agreement, shall: (i) pay Employee’s Base Salary
to Employee for the remaining months of the term of this Agreement in
substantially equal monthly installments beginning with the month following the
month of Employee’s termination of employment at the Base Salary rate then in
effect; (ii) reimburse Employee for the cost of COBRA health continuation
coverage for Employee for the lesser of (a) the remaining term of this
Agreement, or (b) the period during which Employee is entitled to COBRA health
continuation coverage from the Employer, provided that, in either case, Employee
must elect such coverage and pay the applicable premium; and (iii) pay to
Employee the cost for term life insurance coverage provided by the Employer to
the Employee for the remaining months of the term of this Agreement in
substantially equal monthly installments beginning with the month following the
month of Employee’s termination of employment in an amount not to exceed the
monthly cost of premiums for such coverage in effect on the effective date of
termination.”
3.
By
adding the following immediately following the phrase “pursuant to Section 12.4”
in Section 12.6: “, or for any reason other than pursuant to Section
12.2,”.
4.
By adding the following new Section
12.7:
“12.7 Notwithstanding
anything in this Agreement to the contrary (i) Employee shall be treated as
having incurred a termination of employment hereunder, and shall be entitled to
payments and benefits under Section 12.5 or 15.2, as applicable, only if he has
incurred a ‘separation from service,’ within the meaning of Section 409A of the
Internal Revenue Code, as amended (the ‘Code’), from Employer and all affiliated
companies that, together with Employer, constitute the ‘service recipient’
within the meaning of the regulations issued under Code Section 409A; and (ii)
if Employee is a ‘specified employee’ within the meaning of Code Section 409A,
at the date of his termination of employment, then any payments made in
connection with Employee’s termination of employment that would result in a tax
under Code Section 409A if paid during the first six (6) months after
termination of employment shall be withheld, starting with the payments latest
in time during such six (6) month period, and paid to Employee during the
seventh month following the date of his termination of employment.”
5.
By deleting the existing
Section 15.1 and substituting therefor the following:
“15.1 ‘Change
in Control’ shall be deemed to have occurred during the term of this Agreement
if:
15.1.1 on
or after January 1, 2009 (the ‘Amendment Date’), any one person, or more than
one person acting as a group (other than any person or more than one person
acting as a group who is considered to own more than fifty percent (50%) of the
total fair market value of the stock of Employer prior to such acquisition),
acquires stock of Employer that, together with stock held by such person or
group, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of Employer;
15.1.2 within
any twelve-month period (beginning on or after the Amendment Date), a majority
of members of Employer’s Board of Directors is replaced by directors whose
appointment or election is not endorsed by a majority of the members of
Employer’s Board of Directors before the date of the appointment or
election;
15.1.3 within
any twelve-month period (beginning on or after the Amendment Date), any one
person, or more than one person acting as a group, acquires ownership of stock
of Employer possessing thirty percent (30%) or more of the total voting power of
the stock of Employer; or
15.1.4 within
any twelve-month period (beginning on or after the Amendment Date), any one
person, or more than one person acting as a group, acquires assets of Employer
that have a total gross fair market value of eighty-five percent (85%) or more
of the total gross fair market value of all of the assets of Employer
immediately before such acquisition or acquisitions; provided, however, that
transfers to the following entities or person(s) shall not be deemed to result
in a Change in Control under this subsection 15.1.4:
(i)
a shareholder (determined immediately before the asset
transfer) of Employer in exchange for or with respect to its stock;
(ii) an
entity, fifty percent (50%) or more of the total value or voting power of which
is owned, directly or indirectly, by Employer;
(iii) a
person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of
all the outstanding stock of Employer; or
(iv) an
entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a person described in the above subsection
15.1.4(iii).
For
purposes of this Section 15.1, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with Employer, to the extent provided under Code Section 409A.”
6.
By deleting the first clause of Section 15.2 up
through and including the phrase “(‘Termination of Employment’)” and
substituting therefor the following:
“In the
event of a Change in Control, if Employer terminates Employee without Cause
contemporaneously with or subsequent to the Change in Control, or if Employer
takes any action specified in Section 15.4 of this Agreement during the term of
this Agreement contemporaneously with or subsequent to a Change in Control and
Employee terminates his employment contemporaneously with or subsequent to such
action and, in either case, Employee’s termination of employment occurs within
two (2) years following the Change in Control (‘Termination of
Employment’)”.
7.
By deleting the last sentence of
Section 15.2 and substituting therefor the following:
“In the
event the Aggregate Severance is required to be reduced pursuant to this
Section, the portions of the Aggregate Severance paid or provided latest in time
will be reduced first and if portions of the Aggregate Severance to be paid or
provided at the same time must be reduced, noncash benefits will be reduced
before cash payments.”
8.
By deleting the first sentence of the existing
Section 15.3 and substituting therefor the following:
“During
the remaining term of this Agreement following the effective date of a Change in
Control, if Employer takes any of the following actions and Employee terminates
his employment contemporaneously with or subsequent to such action and such
termination occurs within two (2) years following the Change in Control, such
termination shall be deemed to be a termination of employment by Employer
without Cause.”
9.
By deleting the last sentence of
the existing Section 15.3 and substituting therefor the following:
“In any
such event, if Employee terminates his employment contemporaneously with or
subsequent to such action and such termination occurs within two (2) years
following the Change in Control, Employee shall be entitled to all payments
provided for in Section 15.2 of this Agreement.”
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year
first written above.
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“Employee”
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| /s/ Xxxxxxx Xxxxx | /s/ Xxxxxxx X. Hertha |
(SEAL)
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Witness
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Xxxxxxx
X. Hertha
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“Employer”
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ATTEST
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SouthCrest
Financial Group, Inc.
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By:
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Xxxxxx X. Xxxxxx | |||
| /s/ Xxxxxxx X. Xxxxxxx |
Its:
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Chairman | ||
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(CORPORATE
SEAL)
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