EXHIBIT 10.4
BANK
EMPLOYMENT AGREEMENT
This agreement made and entered into this 2nd day of February 2004,
between the Mountain Valley Community Bank, Cleveland, White County, Georgia
("the Bank") and Xxxx Xxxxxx, ("employee");
WHEREAS, the Bank will be a state bank, regulated by the Georgia
Department of Banking and Finance, insured by the Federal Deposit Insurance
Corporation, and located in Cleveland, Georgia; and
WHEREAS, the Bank wants to employ the employee as President and Chief
Executive Officer of the Bank; and
WHEREAS, the parties desire to enter into this agreement setting forth
the terms and conditions of the employment relationship of the Bank and the
employee;
NOW, THEREFORE, it is AGREED as follows:
I. RELATIONSHIP ESTABLISHED AND DUTIES
1. The Bank hereby will employ the employee as President and
Chief Executive Officer, to hold the title of President and
Chief Executive Officer, and to perform such services and
duties as the Board of Directors may, from time to time,
designate during the term hereof. Subject to the terms and
conditions hereof, employee will perform such duties and
exercise such authority as are customarily performed and
exercised by persons holding such office, subject to the
general direction of the Board of Directors of the Bank,
exercised in good faith in accordance with standards of
reasonable business judgment.
2. Employee shall serve on the Board of Directors of the Bank,
and shall be entitled to Directors' Fees just like any other
director, and shall serve as a member of its Executive
Committee, subject to the terms hereof.
3. Employee accepts such employment and shall devote his full
time, attention, and efforts to the diligent performance of
his duties herein specified and as an officer and director of
the Bank and will not accept employment with any other
individual, corporation, partnership, governmental authority,
or any other entity, or engage in any other venture for profit
which the Bank may consider to be in conflict with his or its
best interest or to be in competition with the Bank's
business, or which may interfere in any way with the
employee's performance of his duties hereunder. Any exception
to this must be made by notification and approval of the
Board.
II. TERMS OF EMPLOYMENT
1. The initial term of employment under this Agreement shall
continue for 5 (five) years unless such is terminated pursuant
to the terms hereof or by the first to occur of the conditions
to be stated hereinafter. This Agreement will be automatically
extended each year after the initial term unless either party
gives 90 days contrary written notice to the other. The term
previously stated notwithstanding this contract shall be
terminated by the earlier to occur of any of the following:
a. The death of the employee;
b. The complete disability of employee. "Complete
disability" as used herein shall mean the inability
of employee, due to illness, accident, or other
physical or mental incapacity
to perform the services provided for hereunder for an
aggregate of sixty days within any period of 120
consecutive days during the term hereof; provided,
however, disability shall not constitute a basis for
discharge for cause;
c. The discharge of employee by the Bank for cause.
"Cause" as used herein shall mean:
1) Such negligence or misconduct as shall
constitute, as a matter of law, a breach of
the covenants and obligations of employee
hereunder;
2) Failure or refusal of employee to comply
with the provisions of this agreement;
3) Employee being convicted by any duly
constituted court with competent
jurisdiction of a crime involving moral
turpitude;
4) At the discretion of the Board, this
contract may be terminated if there are acts
the Board feels are moral turpitude;
d. If employee is dismissed or discharged without
"cause" as defined above, the terminated employee
shall receive an amount equal to 3 (three) times his
then existing annual base salary.
Termination of employee's employment shall constitute a tender by
employee of his resignation as an officer and director of the Bank. In the event
of termination the employee is entitled to severance pay equal to one month's
pay for each year employed by the Bank.
III. COMPENSATION
For all services which employee may render to the Bank during the term
hereof, the Bank shall pay to employee, subject to such deductions as may be
required by law:
1. Base Salary. An annual salary of $150,000 payable in
bi-monthly installments and subject to such deductions as may
be required by law, for the next 12 months. Thereafter, annual
increase reviews will be done during the month of December for
a January 1 effective increase date during the term of this
Agreement so that for the 12 months beginning on each such
anniversary date, the employee's salary increases will take
effect. The Board has sole discretion as to the amount of the
CEO's compensation.
2. Performance Bonuses.
a. Until the Stock Appreciation Rights
Incentive (SAR) program is implemented, the
Board, in consultation with the CEO, will
determine the amount of performance bonus to
be awarded to the executive officers.
b. When the Board, in consultation
with the CEO, determines that it is time for
the SAR program to be implemented it will
operate in the following way:
Each year, a performance bonus, will
be awarded, based upon mutually
agreed upon goals such as
achievement of the goals in the
Strategic Plan achieved before the
application of taxes based upon the
following formula: 50% of the Impact
Pool allocation as identified in the
Bank's Stock Appreciation Rights
Incentive Program ("SAR").
3. Stock Options. Based on his satisfactory performance the
Employee, as determined by the Board
using mutually agreed upon safety and soundness criteria as
well as capital adequacy, asset quality, profitability, and
liquidity, shall have the right and option to purchase an
additional number of shares of common stock of the Bank:
5% of the total capital of the bank over the term of
this Agreement not to exceed 10 years,
The option granted to the Employee pursuant to this paragraph
3 may be exercised by the Employee, in whole or in part, at
any time or from time to time during the period this Agreement
is in effect. Notwithstanding anything contained herein to the
contrary, if the shareholders of the Bank approve of a capital
reorganization of the common stock of the Bank or a merger or
consolidation of the Bank with or into another corporation, or
the sale of all or substantially all of the assets of the
Bank; then Employee shall have the right and option to
purchase stock options up to 5% of total capital of the Bank
at book value immediately upon consummation of any merger or
sale as stated above. The purchase price for each share of
common stock of the Bank that the Employee purchases pursuant
to the exercise of the options granted herein shall be the
book value at the time of purchase and shall be paid in cash
upon exercise.
IV. OTHER BENEFITS
1. The employee shall be entitled to participate in any plan of
the Bank relating to stock options, stock purchases, profit
sharing, group life insurance, medical coverage, education, or
other retirement or employee benefits that the Bank may adopt
for the benefit of its employees. The employee shall be
entitled to a comprehensive annual physical paid by the bank.
2. The employee shall be eligible to participate in any other
benefits which may be or become applicable to the Bank's
executive employees, shall be furnished a car with all
expenses of maintenance to cover all automobile use, a
reasonable expense account, the payment of reasonable expenses
for attending annual and periodic meetings of trade
associations, and any other benefits which are commensurate
with the responsibilities and functions to be performed by the
employee under this Agreement. Employer also agrees to pay all
reasonable expenses in connection with the attendance and
participation at said trade association meetings by employee's
spouse.
3. At such reasonable times as the Board of Directors shall in
its discretion permit, the employee shall be entitled, without
loss of pay, to absent himself voluntarily from the
performance of his employment under this Agreement, all such
voluntary absences to count as vacation time, provided that:
a. The employee shall be entitled to an annual vacation
of 4 (four) weeks per year.
b. The timing of vacations shall be scheduled in a
reasonable manner by the employee. The employee shall
not be entitled to receive any additional
compensation from the Bank on account of his failure
to take a vacation; nor shall he be entitled to
accumulate unused vacation time from one calendar
year to the next.
c. In addition to the aforesaid paid vacations, the
employee shall be entitled, without loss of pay to
absent himself voluntarily from the performance of
his employment with the Bank for such additional
periods of time and for such valid and legitimate
reasons as the Board of Directors in its discretion
may determine. Further, the Board of Directors shall
be entitled to grant to the employee a leave or
leaves of absence with or without pay at such time or
times and upon such terms and conditions as the
Board, in its discretion, may determine.
V. CHANGE OF CONTROL
1. If during the term of this Agreement there is a change of
control (COC) of the Bank, the Employee shall be entitled to
termination or severance pay in the event the employee's
employment is terminated, except for just cause as defined in
Section II., paragraph 1, c, after the change in control. In
the event the employee is terminated as a result of COC, the
employee shall be entitled to receive his salary through the
last day of the calendar month of the termination, or payment
in lieu of the notice period. In addition, the terminated
employee shall receive an amount equal to 3 (three) times his
then existing annual base salary. This payment shall also be
made in connection with, a change in control of the Bank if
such change in control was opposed by the employee or the
Bank's Board of Directors. This payment shall be in addition
to any amount otherwise owed to the employee pursuant to this
Agreement.
2. The following items are automatically considered due and
payable in the event that change of control occurs:
a. Non-forfeitable deferred compensation shall be paid
out in full.
b. Long-term performance plan objective payments as
described in Section III, 2, shall be declared
accomplished and earned based upon performance up to
date of the COC.
c. In the event that the employee is a participant in a
restricted stock plan, or share option plan, and such
plan is terminated involuntarily as a result of the
COC, all stock and options shall be declared 100%
vested, and distributed. The term "control" shall
refer to the acquisition of 25 percent or more of the
voting securities of the Bank by any person, or
persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934,
or to such acquisition of a percentage between 10
percent and 25 percent if the Board of Directors of
the Bank or the Comptroller of the Currency, the
FDIC, or the Federal Reserve Bank have made a
determination that such acquisition constitutes or
will constitute control of the Bank. The term
"person" refers to an individual, corporation, Bank,
bank holding company, or other entity.
VI. POST TERMINATION COVENANTS
1. If during the term hereof employee shall cease employment
hereunder for any reason, then employee agrees that for six
months if dismissed for cause and one year without cause
following such termination he will not be employed in the
banking business or any related field thereto in Cleveland,
Georgia or White County, Georgia. In consideration for this
non-compete clause the Board agrees to pay the employee at a
rate of the current annual salary annually. This compensation
will be for the length of the non-compete and will not exceed
one year. Furthermore, following such termination employee
agrees that he will not, without the prior written consent of
the Bank:
1) Furnish anyone with the name of, or any list or lists
of customers of the Bank or utilize such list or
information himself for banking purposes; or
2) Furnish, use, or divulge to anyone any information
acquired by him from the Bank relating to the Bank's
methods of doing business; or
3) Contact directly or indirectly any customer of the
Bank for banking solicitation purposes; or
4) Hire for any other Bank or employer (including
himself) any employee of the Bank or directly or
indirectly cause such employee to leave his or her
employment to work for another.
2. It is understood and agreed by the parties hereto that the
provisions of this section are independent of each other, and
the invalidity of any such provision or portion thereof shall
not affect the validity or enforceability of any other
provisions of this agreement.
VII. WAIVER OF PROVISIONS
Failure of any of the parties to insist, in one or more instances, on
performance by the others in strict accordance with the terms and conditions of
this agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder of the future performance of any such term or condition or of
any other term or condition of this agreement, unless such waiver is contained
in a writing signed by or on behalf of all the parties.
VIII. GOVERNING LAW
This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to void or unenforceable, the same shall not affect the remaining provisions
thereof.
IX. MODIFICATION AND AMENDMENT
This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of the parties hereto.
X. COUNTERPARTS AND HEADINGS
This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this agreement.
XI. CONTRACT NONASSIGNABLE
This agreement may not be assigned or transferred by any party hereto,
in whole or in part, without the prior written consent of the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
Employee:
__________________ _______________________________ _________
Witness EMPLOYEE Date
BANK
__________________ By: ___________________________ _________
Witness Chairman of the Board Date
