Exhibit 10.14
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement"), is entered
into as of the 26th day of August, 1996, by and between ABC BANCORP,
a Georgia corporation ("Employer" or the "Company"), and XXXXXX X.
XXXXXX III, an individual resident of Cleveland, Georgia ("Executive").
W I T N E S S E T H :
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WHEREAS, Employer wishes to employ Executive as its Executive Vice
President and Chief Operating Officer, and Executive wishes to serve in
such position, on the terms and conditions set forth herein;
WHEREAS, Executive desires to be assured of a secure minimum
compensation from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of Executive
on behalf of Employer on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person
to obtain control of Employer;
WHEREAS, the Company recognizes that when faced with a proposal for a
change of control of the Company, Executive will have a significant role in
helping the Company's Board of Directors (the "Board") assess the options and
advising the Board on what is in the best interests of the Company and its
shareholders, and it is necessary for Executive to be able to provide this
advice and counsel without being influenced by the uncertainties of his own
situation;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Executive on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it has developed over the years at
substantial expense and assurance that Executive will not compete with
Employer for a reasonable period of time after termination of his employment
with Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of these premises, the mutual covenants
and undertakings herein contained, Employer and Employee, each intending
to be legally bound, covenant and agree as follows:
1. EMPLOYMENT. Upon the terms and subject to the conditions set forth in
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this Agreement, Employer employs Executive as its Executive Vice President and
Chief Operating Officer, and Executive accepts such employment.
2. POSITION AND DUTIES. Executive agrees to serve as the Executive Vice
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President and Chief Operating Officer of Employer and to perform such duties in
that office as may reasonably be assigned to him by the Board or the Company's
Chief Executive Officer; provided, however, that such duties shall be performed
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in or from the offices of Employer currently located at Moultrie, Georgia, and
shall be of the same character as those generally associated with the office
held by Executive. Employer shall not, without the written consent of Executive,
relocate or transfer Executive to a location more than fifty (50) miles from the
Company's principal executive offices. During the term of this Agreement,
Executive agrees that he will serve the Company faithfully and to the best of
his ability and that he will devote his full business time, attention and skills
to the Company's business; provided, however, that the foregoing shall not be
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deemed to restrict Executive from devoting a reasonable amount of time and
attention to the management of his personal affairs and investments, so long as
such activities do not interfere with the responsible performance or Executive's
duties hereunder. The Company shall nominate Employee as a director of the
Company during the term hereof consistent with the Company's Bylaws. In the
event of a voluntary termination pursuant to Subsection 10(C) hereof, Executive
shall, unless otherwise requested by the Company, immediately resign as a
director of the Company.
3. TERM. The term of this Agreement shall begin on the date hereof (the
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"Effective Date") and, unless otherwise earlier terminated pursuant to Section
10 hereof, shall end on the date which is three (3) years following the
Effective Date (hereinafter referred to as the "Initial Term"). The Initial Term
shall be extended automatically for an additional year (each an "Additional
Term") on the last day of the Initial Term or each Additional Term hereof unless
either party hereto gives written notice to the other party not to so extend
within ninety (90) days prior to the expiration of the Initial Term or any
subsequent Additional Term, as the case may be, in which case no further
extension shall occur and the term of this Agreement shall end two (2) years
subsequent to the anniversary as of which the notice not to extend is given;
provided, however, that, notwithstanding any notice by Employer not to extend,
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the term of this Agreement shall not expire prior to the expiration of
twenty-four (24) months after the occurrence of a Change of Control (as
hereinafter defined). Notwithstanding the foregoing, this Agreement shall
automatically terminate (and the Initial Term or any Additional Term shall
thereupon end) without notice when Executive attains 65 years of age.
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4. COMPENSATION.
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(A) Executive shall receive an annual salary of ONE HUNDRED SEVENTY
FIVE THOUSAND DOLLARS ($175,000) ("Base Compensation") payable at regular
intervals in accordance with Employer's normal payroll practices now or
hereafter in effect. Employer may consider and declare from time to time
increases in the salary it pays Executive and thereby increase the Base
Compensation. Prior to (but not after) a Change of Control, Employer may
also declare decreases in the salary it pays Executive if the operating
results of Employer are significantly less favorable than those for its fiscal
year ended December 31, 1996, and Employer makes similar decreases in the salary
it pays to other executive officers of Employer; provided, however, that
Employer shall not be permitted to decrease Executive's annual salary below
$175,000 during the Initial Term hereof. After a Change of Control, Employer
shall consider and declare salary increases based upon the following standards:
a. Inflation;
b. Adjustments to the salaries of other senior management
personnel; and
c. Past performance of Executive and the contribution which
Executive makes to the business and profits of Employer.
Any and all increases or decreases in Executive's salary pursuant to this
Section 4(A) shall cause the level of Base Compensation to be increased
or decreased by the amount of each such increase or decrease for purposes
of this Agreement. The increased or decreased level of Base Compensation as
provided in this Section 4(A) shall become the level of Base Compensation for
the remainder of the Initial Term or any Additional Term until there is a
further increase of decrease in Base Compensation as provided herein.
(B) In addition to his Base Compensation, Executive shall be awarded,
on a pro-rata basis for Executive's employment during calendar year 1996
and for each calendar year thereafter during the Initial Term or any Additional
Term hereunder, an annual bonus (an "Annual Bonus") either pursuant to a bonus
or incentive plan of Employer or otherwise on terms no less favorable than
those awarded to other executive officers of Employer.
5. OTHER BENEFITS.
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(A) So long as Executive is employed by Employer pursuant to this
Agreement, he shall be included as a participant in all present and future
employee benefit, retirement and compensation plans generally available
to employees of Employer, consistent with
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his Base Compensation and his position as Executive Vice President and Chief
Operating Officer, including, without limitation, Employer's Simplified Employee
Pension Plan, and Executive and his dependents shall be included in Employer's
hospitalization, major medical, disability and group life insurance plans.
Employer agrees to continue each of the above benefits in effect on terms no
less favorable than those for the other executive officers in effect as of the
date hereof (as permitted by law) during the Initial Term or any Additional Term
hereof (i) unless prior to a Change of Control, the operating results of
Employer are significantly less favorable than those for its fiscal year ended
December 31, 1996, or (ii) unless (either before or after a Change of Control)
(a) changes in the accounting or tax treatment of such plans would materially
adversely affect Employer's operating results or financial condition, and (b)
the Board concludes that modifications to such plans need to be made to avoid
such adverse effects. If, during the term of this Agreement, by virtue of the
terms and conditions of Employer's employee benefit or retirement plans which
may then be in effect, including, without limitation, Employer's Simplified
Employee Pension Plan, Executive cannot participate in such plans on a fully
funded and vested basis, Employer shall pay to Executive an amount, in cash, to
be calculated on a pre-tax basis, that is equal to the amount, if any, that
Executive would be entitled to receive under such plans had Executive been
entitled to participate in such plans, calculated using identical formulas and
time frames.
(B) If, during the Initial Term or any Additional Term, Executive is denied
coverage with respect to a "pre-existing condition" under Employer's
hospitalization, major medical or disability plans (the "Plans") solely by
reason of such condition, Employer shall pay such costs and expenses incurred by
Executive with respect to the diagnosis and treatment of such condition as
Executive would have been paid had such condition been covered under such Plans;
provided, however, that any such obligation of Employer to pay such costs and
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expenses shall terminate as soon as such "pre-existing conditions" are so
covered. Employer shall not be obligated to pay for any of Executive's costs and
expenses hereunder, if Executive is denied coverage under Employer's
hospitalization, major medical or disability plan for any reason other than by
virtue of a pre-existing condition, and any payments made by Employer to
Executive hereunder shall be calculated and paid in accordance with the terms
and conditions of such plans as the same are in effect as of the Effective Date.
For purposes of this Agreement, the term "pre-existing condition" shall mean
each of the physical conditions of Executive listed on Exhibit A attached hereto
and incorporated herein by this reference. Notwithstanding anything to the
contrary herein, if Employee elects to continue coverage for himself and his
dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (Public Law 99-272), then Employer shall pay the cost of such continuation
coverage if and to the extent it exceeds the cost that Employee
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would have paid for coverage for himself and his dependents under the
Plans had Employee and his dependents been covered thereunder.
6. EXPENSES. So long as Executive is employed by Employer pursuant
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to this Agreement, Executive shall receive reimbursement from Employer
for all reasonable business expenses incurred in the course of his
employment by Employer, upon proper submission to Employer of written
vouchers and statements for reimbursement.
7. VACATION. Executive shall be entitled to one (1) week paid
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vacation during the remainder of calendar year 1996 and shall thereafter,
during the Initial Term or any Additional Term hereof, be entitled to two
(2) weeks paid vacation during each calendar year of Executive's employment.
8. USE OF AN AUTOMOBILE. Employer shall provide to Executive a full-size
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automobile during the Initial Term and any Additional Term hereof and shall
reimburse Executive for all mileage driven by Executive in connection with
his duties hereunder in accordance with the Employer's mileage reimbursement
policy as in effect from time to time.
9. MISCELLANEOUS EXPENSES. Employer (i) shall reimburse Executive
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for all reasonable packing and moving costs incurred by Executive in connection
with Executive's relocation to Moultrie, Georgia pursuant hereto, provided
Executive receives three (3) competitive bids for such packing and moving costs
and accepts the lowest of such bids, and (ii) shall also pay to Executive the
sum of $10,000 upon Executive's purchase of a residence in Moultrie, Georgia,
to cover certain costs incurred by Executive in connection with such relocation.
In addition, if Executive is unable to locate a buyer who is ready, willing and
able to purchase Executive's residence located in Cleveland, Georgia by the date
which is six (6) months after the Effective Date hereof, Employer shall pay to
Executive a "carrying fee" for each month thereafter that Executive is unable
to locate such a buyer; PROVIDED, HOWEVER, that Employer shall not be obligated
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to pay Executive the carrying fee after the date which is twenty-four (24)
months after the commencement of the carrying fee payments by Employer to
Executive hereunder. For purposes of this Agreement, the term "carrying fee"
shall mean an amount, in cash, equal to the sum reached by multiplying
eighty percent (80%) of the appraised value of Executive's residence in
Cleveland, Georgia by an annualized rate of 7.50% calculated on a monthly
basis. In connection with Executive's purchase of a residence in Moultrie,
Employer agrees to pay to Executive all closing costs and points associated
with obtaining a fifteen (15) year, fixed rate mortgage with respect thereto
at an annual percentage rate of 7.50% in an amount equal to not more than
80% of the purchase price thereof (but in no event in excess of $150,000).
Employer shall use its best efforts to provide to Executive a country club
membership for business and personal use and shall pay for all initiation
fees and monthly dues
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related thereto; provided, however, that such membership shall be and remain the
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sole property of Employer.
10. TERMINATION. Subject to the respective continuing obligations of the
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parties, including, but not limited to, those set forth in Subsections 12(A),
12(B), 12(c) and 12(D) hereof, Executive's employment by Employer hereunder may
be terminated prior to the expiration of the Initial Term or any Additional Term
hereof as follows:
(A) Employer, by action of the Board and upon written notice to Executive,
may terminate Executive's employment with Employer immediately for
cause. For purposes of this Subsection 10(A), "cause" for termination
of Executive's employment shall exist (a) if Executive is convicted of
(from which no appeal may be taken), or pleads guilty to, any act of
fraud, misappropriation or embezzlement, or any felony, (b) if, in the
determination of the Board, Executive has engaged in gross or willful
misconduct materially damaging to the business of Employer (it being
understood, however, that neither conduct pursuant to Executive's
exercise of his good faith business judgment nor unintentional physical
damage to any property of Employer by Executive shall be a ground for
such a determination by the Board), or (c) if Executive has failed,
without reasonable cause, to follow reasonable written instructions of
the Board consistent with Executive's position as Executive Vice
President and Chief Operating officer of Employer and, after written
notice from Employer of such failure, Executive at any time thereafter
again so fails.
(B) Executive, by written notice to Employer, may terminate his employment
with Employer immediately for good reason. For purposes of this
Subsection 10(B), "good reason" shall mean a good faith determination
by Executive, in Executive's sole and absolute judgment, that any one
or more of the following events has occurred, without Executive's
express written consent, after a Change of Control:
(1) a change in Executive's reporting responsibilities, titles or
offices as in effect immediately prior to the Change of Control, or any
removal of the Executive from, or any failure to re-elect the Executive
to, any of Executive's positions that Executive held immediately prior
to the Change of Control, which has the effect of diminishing
Executive's responsibility or authority;
(2) a reduction by Employer in Executive's Base Compensation as in
effect immediately prior to the Change
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of Control or as the same may be increased from time to time or a
change in the eligibility requirements or performance criteria under
any bonus, incentive or compensation plan, program or arrangement
under which Executive is covered immediately prior to the Change of
Control which adversely affects Executive;
(3) Employer requires Executive to be based anywhere other than
within fifty (50) miles of Executive's job location at the time of
the Change of Control, provided that if Executive's job location at
such time is not within fifty (50) miles of Employer's principal
executive offices, then Employer may thereafter require Executive to
be based within such fifty (50) mile radius without such event
constituting good reason hereunder;
(4) without replacement by a plan providing benefits to
Executive equal to or greater than those discontinued, the failure
by Employer to continue in effect, within its maximum stated term,
any pension, bonus, incentive, stock ownership, purchase, option,
life insurance, health, accident disability, or any other employee
benefit plan, program or arrangement in which Executive is
participating at the time of the Change of Control, or the taking of
any action by Employer that would adversely affect Executive's
participation or materially reduce Executive's benefits under any of
such plans;
(5) the taking of any action by Employer that would materially
adversely affect the physical conditions existing at the time of the
Change of Control in or under which Executive performs his
employment duties, provided that Employer may take action with
respect to such conditions after a Change of Control so long as such
conditions are at least commensurate with the conditions in or under
which an officer of Executive's status would customarily perform his
employment duties; or
(6) a material change in the fundamental business philosophy,
direction, and precepts of Employer and its subsidiaries, considered
as a whole, as the same existed prior to the Change of Control.
Any event described in this Subsection 10(B)(1) through (6) which occurs prior
to a Change of Control but which Executive reasonably demonstrates (A) was at
the request of a third party who has indicated an intention, or taken steps
reasonably calculated, to effect a Change of Control or (B) otherwise arose in
connection with, or in anticipation of, a Change of Control which actually
occurs, shall constitute good
reason for purposes hereof, notwithstanding that it occurred prior to a
Change of Control.
(C) Executive, upon ninety (90) days written notice to Employer, may
terminate his employment with Employer without good reason.
(D) Executive's employment with Employer shall terminate in the event of
Executive's death or disability. For purposes of this Agreement,
"disability" shall be defined as Executive's inability by reason of
illness or other physical or mental incapacity to perform the duties
required by his employment for any consecutive one hundred eighty (180)
day period.
(E) A "Change of Control" of Employer shall mean any of the following
events:
(i) Unless approved by the affirmative vote of at least two-thirds
(2/3) of those members of the Board who are in office immediately prior
to the event(s) and who are not employees of Employer:
a. the merger or consolidation of Employer with, or the sale
of all or substantially all of the assets of, Employer to any
person or entity or group of associated persons or entities; or
b. the direct or indirect beneficial ownership, in the
aggregate, of securities of Employer representing twenty percent
(20%) or more of the total combined voting power of Employer's then
issued and outstanding securities by any person or entity, or group
of associated persons or entities acting in concert, not affiliated
(within the meaning of the Securities Act of 1993, as amended) with
Employer as of the date hereof; provided, however, that the Board
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may, at any time and in its sole discretion, increase the ownership
percentage threshold of this item b. to an amount not exceeding
forty percent (40%); or
c. the shareholders of Employer approve any plan or proposal
for the liquidation or dissolution of Employer.
(ii) A change in the composition of the Board at any time during
any consecutive twenty-four (24) month period such that the "Continuity
Directors" cease for any reason to constitute at least a seventy
percent (70%) majority of the Board. For purposes of this Agreement,
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"Continuity Directors" means those members of the Board who either:
a. were directors at the beginning of such consecutive
twenty-four (24) month period; or
b. were elected by, or on the nomination or recommendation
of, at least a two-thirds (2/3) majority of the Board
11. Compensation Upon Termination. In the event of termination of
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Executive's employment with Employer pursuant to Section 10 hereof, compensation
shall continue to be paid by Employer to Executive as follows:
(A) In the event of termination pursuant to Subsection 10 (A), compensation
provided for herein (including Base Compensation and an Annual Bonus)
shall continue to be paid, and Executive shall continue to participate
in the employee benefit, retirement, compensation plans and other
perquisites as provided in Sections 5 and 6 hereof, through and
including the Date of Termination (as hereinafter defined) specified in
the Notice of Termination (as hereinafter defined). Any benefits
payable under insurance, health, retirement and bonus plans as a result
of Executive's participation in such plans through such date shall be
paid when due under such plans.
(B) In the event of termination pursuant to Subsection 10 (C), compensation
provided for herein (including Base Compensation and an Annual Bonus)
shall continue to be paid, and Executive shall continue to participate
in the employee benefit, retirement, compensation plans and other
perquisites as provided in Sections 5 and 6 hereof, for the remainder
of the Initial Term or any Additional Term hereof, as the case may be,
during which the Notice of Termination was given. In addition, any
benefits payable under insurance, health, retirement and bonus plans as
a result of Executive's participation in such plans shall be paid when
due under such plans for the remainder of such Initial Term or
Additional Term.
(C) In the event of termination pursuant to Subsection 10 (B), compensation
provided for herein (including Base Compensation and an Annual Bonus)
shall continue to be paid, and Executive shall continue to participate
in the employee benefit, retirement, compensation plans and other
perquisites as provided in Section 5 hereof, through the Date of
Termination specified in the Notice of Termination, and any benefits
payable under insurance, health, retirement and bonus plans as a result
of
Executive's participation in such plans through such date shall be paid
when due under those plans. In addition, if the event of termination
pursuant to Subsection 10(B) occurs within twenty-four (24) months
after the date of a Change of Control, then (a) Executive shall be
entitled to continue to receive from Employer for two (2) additional
12-month periods his Base Compensation at the rates in effect at the
time of termination plus an Annual Bonus in an amount equal to at least
forty percent (40%) of such Base Compensation as of the date of the
event of termination, payable in accordance with Employer's standard
payment practices then existing; (b) for two (2) additional 12-month
periods, Employer shall maintain in full force and effect for the
continued benefit of Executive each employee welfare benefit plan (as
such term is defined in the Employment Retirement Income Security Act
of 1974, as amended) in which Executive was entitled to participate
immediately prior to the date of his termination, unless an essentially
equivalent and no less favorable benefit is provided by a subsequent
employer of Executive, provided that if the terms of any employee
welfare benefit plan of Employer or applicable laws do not permit
continued participation by Executive, Employer will arrange to provide
to Executive a benefit substantially similar to, and no less favorable
than, the benefit he was entitled to receive under such plan at the end
of the period of coverage; (c) Employer shall also contribute the
maximum contributions allowable under Employer's Simplified Employee
Pension Plan, or any successor plan thereto, for the benefit of
Executive; and (d) Executive shall also be entitled to receive payment
from Employer for reasonable relocation expenses if Executive relocates
within five hundred (500) miles of Moultrie, Georgia if such relocation
occurs within one hundred eighty (180) days after the Date of
Termination specified in the Notice of Termination.
(D) In the event of termination pursuant to Subsection 10(D), compensation
provided for herein (including Base Compensation and an Annual Bonus)
shall continue to be paid, and Executive shall continue to participate
in the employee benefit, retirement, and compensation plans and other
perquisites as provided in Sections 5 and 6 hereof, (i) in the event of
Executive's death, through the date of death, or (ii) in the event of
Executive's disability, through the Date of Termination specified in
the Notice of Termination. Any benefits payable under insurance,
health, retirement and bonus plans as a result of Executive's
participation in such plans through such date shall be paid when due
under those plans.
(E) Employer will permit Executive or his personal representative(s) or
heirs, during a period of ninety (90) days following the Date of
Termination (as set forth in the Notice of Termination) of Executive's
employment by Employer for the reasons set forth in Subsection 10 (B),
to purchase all of the stock of Employer that would be issuable under
the outstanding stock options, if any, previously granted by Employer
to Executive under any Employer stock option plan then in effect,
whether or not such options are then exercisable, at a cash purchase
price equal to the purchase price as set forth in such outstanding
stock options.
(12). RESTRICTIVE COVENANTS.
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(A) Executive acknowledges that (i) the Company has separately
bargained and paid additional consideration for the restrictive covenants
herein; and (ii) the Company will provide certain benefits to Executive
hereunder in reliance on such covenants in view of the unique and essential
nature of the services Executive will perform on behalf of the Company and the
irreparable injury that would befall the Company should Executive breach such
covenants.
(B) Executive further acknowledges that his services are of a
special, unique and extraordinary character and that his position with the
Company will place him in a position of confidence and trust with employees of
the Company and its subsidiaries and with the Company's other constituencies and
will allow him access to confidential information concerning the Company and its
subsidiaries.
(C) Executive further acknowledges that the type and periods of
restrictions imposed by the covenants in this Section 12 are fair and reasonable
and that such restrictions will not prevent Executive from earning a livelihood.
(D) Having acknowledged the foregoing, Executive covenants and
agrees with the Company as follows:
(1) While Executive is employed by Employer and for a period of two (2)
years after termination of such employment for reasons other than
those set forth in Subsection 10 (B) of this Agreement, Executive
shall not divulge or furnish any trade secrets (as defined in (S)16-8-
13 of the Official Code of Georgia Annotated) of Employer or any
confidential information acquired by him while employed by Employer
concerning the policies, plans, procedures or customers of Employer or
any of its subsidiaries to any person, firm or corporation, other than
Employer or upon its written request, or use any such trade secret or
confidential information (which shall at all times remain
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the property of Employer) directly or indirectly for Executive's
own benefit or for the benefit of any person, firm or corporation
other than Employer.
(2) For a period of two (2) years after termination of Executive's
employment by Employer for reasons other than those set forth in
Subsection 10(B) of this Agreement, Executive shall not directly or
indirectly provide banking or bank-related services to, or solicit
the banking or bank-related business of, any customer of Employer
or any of its subsidiaries at the time of such provision of
services or solicitation which Executive served either alone or
with others while employed by Employer in any city, town, borough,
township, village or other place in which Executive performed
services for Employer while employed by it, or assist any actual or
potential competitor of Employer or any of its subsidiaries to
provide banking or bank-related services to or solicit any such
customer's banking or bank-related business in any such place.
(3) While Executive is employed by Employer and for a period of two (2)
years after termination of Executive's employment by Employer for
reasons other than those set forth in Subsection(B) of this
Agreement, Executive shall not, directly or indirectly, as
principal, agent, or trustee, or through the agency of any
corporation, partnership, trade association, agent or agency,
engage in any banking or bank-related business or venture which
competes with the business of Employer or any of its subsidiaries
as conducted during Executive's employment by Employer within a
radius of fifty (50) miles of Employer's main office or the main
office or any of its subsidiaries; provided, however, that this
Subsection 12(C) shall not prohibit or otherwise restrict Executive
from accepting employment with a bank holding company that has a
banking subsidiary within any such 50-mile radius so long as the
principal offices of such holding company are outside any such 50-
mile radius and Executive's place of employment is also outside any
such 50-mile radius.
(4) If Executive's employment by Employer is terminated for reasons
other than those set forth in Subsection 10(B) of this Agreement,
Executive will turn over immediately thereafter to Employer all
business correspondence, letters, papers, reports, customers'
lists, financial statements, credit reports or other confidential
information or documents of Employer or its affiliates in the
possession or control of Executive, all of which writings are and
will continue to be the sole and
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exclusive property of Employer or its affiliates, as the case may
be.
If Executive's employment by Employer is terminated for reasons set forth in
Subsection 10(B) of this Agreement, Executive shall have no obligations to
Employer with respect to trade secrets, confidential information or non-
competition under this Section 12. Executive acknowledges that irreparable loss
and injury would result to Employer upon the breach of any of the covenants
contained in this Section 12 and that damages arising out of such breach would
be difficult to ascertain. Executive hereby agrees that, in addition to all
other remedies provided at law or at equity, Employer may petition and obtain
from a court of law or equity, without the necessity of proving actual damages
and without posting bond or other security, both temporary and permanent
injunctive relief to prevent a breach by Executive of any covenant contained in
this Section 12, and shall be entitled to an equitable accounting of all
earnings, profits and other benefits arising out of any such breach. In the
event that the provisions of this Section 12 should ever be deemed to exceed the
time, geographic or any other limitations permitted by applicable law, then such
provisions shall be deemed reformed to the maximum extent permitted thereby.
13. NOTICE OF TERMINATION AND DATE OF TERMINATION. Any termination of
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Executive's employment with Employer as contemplated by Section 10 hereof,
except in the circumstances of Executive's death, shall be communicated by
written "Notice of Termination" by the terminating party to the other party
hereto. Any "Notice of Termination" pursuant to Subsections 10(A), 10(B) or
10(D) shall indicate the specific provisions of this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination. For purposes of this Agreement, "Date of
Termination" shall mean: (i) if Executive's employment is terminated because of
disability, thirty (30) days after Notice of Termination is given (unless
Executive shall have returned to the performance of Executive's duties on a
full-time basis during such thirty (30) day period; or (ii) if Executive's
employment is terminated for cause, retirement, good reason or pursuant to
Subsection 10(C) hereof, the date specified in the Notice of Termination;
provided, however, that if within thirty (30) days after any such Notice of
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Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally resolved, either
by mutual agreement of the parties or by a final judgment, order or decree of a
court of competent jurisdiction (the time for the appeal therefrom having
expired and no appeal having been perfected).
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14. EXCESS PARACHUTE PAYMENTS AND ONE MILLION DOLLAR DEDUCTION LIMIT.
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(A) Notwithstanding anything contained herein to the contrary, if
any portion of the payments and benefits provided hereunder and benefits
provided to, or for the benefit of, Executive under any other plan or agreement
of Employer (such payments or benefits are collectively referred to as the
"Payments") would be subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or
would be nondeductible by Employer pursuant to Section 280G of the Code, the
Payments shall be reduced (but not below zero) if and to the extent necessary so
that no portion of any Payment to be made or benefit to be provided to Executive
shall be subject to the Excise Tax or shall be nondeductible by Employer
pursuant to Section 280G of the Code (such reduced amount is hereinafter
referred to as the "Limited Payment Amount"). Unless Executive shall have given
prior written notice specifying a different order to Employer to effectuate the
Limited Payment Amount, Employer shall reduce or eliminate the Payments, by
first reducing or eliminating those payments or benefits which are not payable
in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as hereinafter defined). Any notice
given by Executive pursuant to the preceding sentence shall take precedence over
the provisions of any other plan, arrangement or agreement governing
Executive's rights and entitlements to any benefits or compensation.
(B) An initial determination as to whether the Payments shall be
reduced to the Limited Payment Amount pursuant to the Code and the amount of
such Limited Payment Amount shall be made by an accounting firm at Employer's
expense selected by Employer which is designated as one of the six largest
accounting firms in the United States (the "Accounting Firm"). The Accounting
Firm shall provide its determination (the "Determination"), together with
detailed supporting calculations and documentation to Employer and Executive
within thirty (30) days of the Termination Date, if applicable, and if the
Accounting Firm determines that no Excise Tax is payable by Executive with
respect to a Payment or Payments, it shall furnish Executive with an opinion
reasonably acceptable to Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. Within ten (10) days of the delivery
of the Determination to Executive, Executive shall have the right to dispute the
Determination to Executive, (the "Dispute"). If there is no Dispute, the
Determination shall be binding, final and conclusive upon Employer and Executive
subject to the application of Subsection 14(C) below.
(C) As a result of the uncertainty in the application of Sections
4999 and 280G of the Code, it is possible that the
14
Payments to be made to, or provided for the benefit of, Executive either have
been made or will not be made by Employer which, in either case, will be
inconsistent with the limitations provided in Section 14(A) (hereinafter
referred to as an "Excess Payment" or "Underpayment, respectively). If it is
established pursuant to a final determination of a court or an Internal Revenue
Service (the "IRS") proceeding which has been finally and conclusively resolved
that an Excess Payment has been made, such Excess Payment shall be deemed for
all purposed to be a loan to Executive made on the date Executive received the
Excess Payment, and Executive shall repay the Excess Payment to Employer on
demand (but not less than ten (10) days after written notice is received by
Executive), together with interest on the Excess Payment at the "Applicable
Federal Rate" (as defined in Section 1274(d) of the Code) from the date of
Executive's receipt of such Excess Payment until the date of such repayment. In
the event that it is determined by (i) the Accounting Firm, Employer (which
shall include the position taken by Employer, or together with its consolidated
group, on its federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution of the Dispute to
Executive's satisfaction, that an Underpayment has occurred, Employer shall pay
an amount equal to the Underpayment to Executive within ten (10) days of such
determination or resolution, together with interest on such amount at the
Applicable Federal Rate from the date such amount would have been paid to
Executive until the date of payment.
(D) Notwithstanding anything contained herein to the contrary, if
any portion of the Payments would be nondeductible by Employer pursuant to
Section 162(m) of the Code, the Payments to be made to Executive in any taxable
year of Employer shall be reduced (but not below zero) if and to the extent
necessary so that no portion of any Payment to be made or benefit to be provided
to Executive in such taxable year of Employer shall be nondeductible by Employer
pursuant to Section 162(m) of the Code. The amount by which any Payment is
reduced pursuant to the immediately preceding sentence, together with interest
thereon at the Applicable Federal Rate, shall be paid by Employer to Executive
on or before the fifth business day of the immediately succeeding taxable year
of Employer, subject to the application of the limitations of the immediately
preceding sentence and this Section 14. Unless Executive shall have given prior
written notice specifying a different order to Employer to effectuate this
Section 14, Employer shall reduce or eliminate the Payments in any one taxable
year of Employer by first reducing or eliminating those payments or benefits
which are not payable in cash and then by reducing or eliminating cash payments,
in each case in reverse order beginning with payments or benefits which are to
be paid the farthest in time from the Section 162(m) Determination (as
hereinafter defined). Any notice given by Executive pursuant to the immediately
preceding sentence shall take precedence over the provisions of any other
15
plan, arrangement or agreement governing Executive's rights and entitlements to
any benefits or compensation.
(E) The determination as to whether the Payments shall be reduced
pursuant to Section 14(D) hereof and the amount of the Payments to be made in
each taxable year after the application of Section 14(D) hereof shall be made by
the Accounting Firm at Employer's expense. The Accounting Firm shall provide
its determination (the "Section 162(m) Determination"), together with detailed
supporting calculations and documentation to Employer and Executive within
thirty (30) days of the termination date specified in the Notice of Termination.
The Section 162(m) Determination shall be binding, final and conclusive upon
Employer and Executive.
15. PAYMENTS AFTER DEATH. Should Executive die after termination of
--------------------
his employment with Employer while any amounts are payable to him hereunder,
this Agreement shall inure to the benefit of and be enforceable by Executive's
executors, administrators, heirs, distributees, devisees and legatees, and all
amounts payable hereunder shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee or, if there is no
such designee, to his estate.
16. NOTICES. For purposes of this Agreement, notices and all other
-------
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive: Xxxxxx X. Xxxxxx III
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
If to Employer: ABC Bancorp
000 Xxxxx Xxxxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
17. GOVERNING LAW. The validity, interpretation, and performance of
-------------
this Agreement shall be governed by the laws of the State of Georgia without
giving effect to the conflicts of laws principles thereof.
18. SUCCESSORS. Employer shall require any successor (whether direct
----------
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Employer, by agreement in form
and substance reasonably satisfactory to Executive, to expressly assume and
agree to perform
16
this Agreement in the same manner and same extent that Employer would be
required to perform it if no such succession had taken place. Failure of
Employer to obtain such agreement prior to the effectiveness of any such
succession shall be a material intentional breach of this Agreement and shall
entitle Executive to terminate his employment with Employer for good reason
pursuant to Subsection 10(B) hereof. As used in this Agreement, "Employer"
shall mean Employer as hereinbefore defined and any successor to its business or
assets as aforesaid.
19. MODIFICATION. No provision of this Agreement may be modified,
------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and Employer. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of dissimilar provisions or conditions at the same or
any prior subsequent time. No agreements or representation, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in the Agreement.
20. SEVERABILITY. The invalidity or unenforceability of any provisions
------------
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.
21. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
22. ASSIGNMENT. This Agreement is personal in nature and neither party
----------
hereto shall, without consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder except as provided in Sections 16 and 19
above. Without limiting the foregoing, Executive's right to receive
compensation hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent or distribution as set forth in Section 16
hereof, and in the event of any attempted assignment or transfer contrary to
this Section 23, Employer shall have no liability to pay any amounts so
attempted to be assigned or transferred.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
----------------
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
17
IN WITNESS WHEREOF, Executive has executed, sealed and delivered this
Agreement, and Employer has caused this Agreement to be executed, sealed and
delivered, all as of the day and year first above set forth.
ABC BANCORP
[CORPORATE SEAL]
By: /s/ Xxxxxxx X.Xxxxxxxxx
-------------------------------
Attest:
Its: President and CEO
--------------------------
/s/ Xxxxx Xxxxx, VP/OPS
------------------------------------
Assistant Secretary
/s/ Xxxxxx X. Xxxxxx III (SEAL)
--------------------------------
XXXXXX X. XXXXXX III
Executive Vice President and
Chief Operating Officer and Director
18
EXHIBIT A
PRE-EXISTING CONDITIONS
Menieres Disease - Xxxxxx X. Xxxxxx
Allergies - Xxxxxxx X. Xxxxxx (dependent)
19
