EXHIBIT 6(h)
CHANGE IN CONTROL AGREEMENT WITH XXXXX X. XXXXX
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") entered into this
17th day of June, 1999 between XxXXXXXX BANCSHARES, INC., a Georgia corporation
(the "Corporation"), and XXXXX X. XXXXX (the "Employee").
W I T N E S S E T H :
WHEREAS, the Corporation wishes to assure both itself and its key
employees of continuity of management and objective judgment in the event of any
actual or contemplated Change in Control (as defined hereinafter) of the
Corporation or XxXxxxxx State Bank, the Corporation's wholly-owned subsidiary
(the "Bank"), and Employee is a key employee of the Corporation and Bank and an
integral part of their management; and
WHEREAS, this Agreement is not intended to materially alter the
compensation and benefits that Employee could reasonably expect to receive in
the absence of a Change in Control of the Corporation or the Bank, and this
Agreement accordingly will be offered solely upon circumstances relating to an
actual or anticipated Change in Control of the Corporation or Bank.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS
As used in this Agreement of the following terms shall have
the definitions as set forth hereinafter:
1.1 "Board of Directors" shall mean the Board of Directors
of the Corporation or the Bank, as the case may be.
1.2 "Cause" shall mean either:
1.2.1 any act that constitutes on Employee's part, fraud,
dishonesty, a felony or gross malfeasance of duty, and that directly results in
material injury to the Corporation or to the Bank; or
1.2.2 conduct by Employee in his office with the Corporation
or the Bank that is grossly inappropriate and demonstrably likely to lead to
material injury to the Corporation or the Bank, as determined by the Board of
Directors acting reasonably and in good faith; provided, however, such conduct
shall not constitute Cause unless the Board of Directors shall deliver to
Employee notice setting forth with specificity that conduct to qualify as Cause,
reasonable action that would remedy such objection, and a reasonable time (not
less than thirty (30) days) within which Employee may take such remedial action,
and Employee shall not have taken such specified remedial action within the
specified time.
1.3 "Change in Control" shall mean either:
1.3.1 the acquisition, directly or indirectly, by any "Person
(as defined hereinafter) within any twelve (12) month period of securities of
the Corporation or of the Bank which represent an aggregate of twenty-five
percent (25%) or more of the combined voting power of the Corporation's or
Bank's outstanding securities; or
1.3.2 during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors, cease for
any reason to constitute a majority thereof, unless the election of each new
director was approved in advance by a vote of at least a majority of the
directors then still in office who were directors at the beginning of the
period; or
1.3.3 consummation of a merger, consolidation or other
business combination of the Corporation or the Bank with any other Person or
affiliate thereof, other than a merger, consolidation or business combination
which would result in the outstanding common stock of the Corporation or the
Bank immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into common stock of the surviving entity, or
a parent or affiliate thereof) at least sixty percent (60%) of the outstanding
common stock of the Corporation or the Bank, or such surviving entity or parent
or affiliate thereof outstanding immediately after such merger, consolidation or
business combination; or
1.3.4 consummation of a plan of complete liquidation of the
Corporation or the Bank or an agreement for the sale or disposition by the
Corporation or the Bank of all or substantially all of the Corporation's or
Bank's assets; or
1.3.5 the occurrence of any other event or circumstance which
is not covered by (i) through (iv) above which the Board of Directors determines
affects control of the Corporation or of the Bank and, in order to implement the
purposes of this
Agreement as set forth above, adopts the resolution that such event or
circumstance constitutes a Change in Control for the purposes of this
Agreement.
1.4 "Current Salary" shall mean that salary at the highest
rate in effect during the six (6) month period prior to Employee's termination.
1.5 "Disability" shall mean the Employee's inability as a
result of physical or mental incapacity to substantially perform his duties for
the Corporation or for the Bank on a full-time basis for a period of six (6)
months as determined by a physician acceptable to both Employee and the
Corporation.
1.6 "Involuntary Termination" shall mean termination of his
employment by Employee following a Change in Control, which in the reasonable
judgment of Employee is due to either:
1.6.1 a change in Employee's responsibilities, position
(including status, office, title, reporting relationships or working
conditions), authority or duties (including changes resulting from the
assignment to Employee of any duties inconsistent with his positions, duties or
responsibilities as in effect immediately prior to the Change in Control); or
1.6.2 a reduction in Employee's compensation or benefits; or
1.6.3 a forced relocation of Employee outside of Butts County
or significant increase in Employee's travel requirements. Involuntary
Termination does not include Employee's Disability, Retirement (as defined
hereinafter) or death.
1.7 "Person" shall mean a natural person, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
1.8 "Present Value" shall have the same meaning as provided in
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended.
1.9 "Proposed Transaction" shall mean either a public
announcement of a proposal for a transaction that, if consummated, would
constitute a Change in Control or the Board of Directors of the Corporation or
the Bank receives and decides to explore an expression of interest with respect
to a transaction in which, if consummated, would lead to a Change in Control.
1.10 "Retirement" shall mean Employee's termination by
"retirement" as that term is defined in any of the Corporation's or Bank's
retirement plans.
2. OPERATION OF AGREEMENT
This Agreement shall be effective immediately upon its
execution by the parties hereto, but anything in this Agreement to the contrary
notwithstanding, neither the Agreement nor any provision hereof shall be
operative unless, during the term of this Agreement, there has been a Change in
Control of the Corporation or of the Bank. Upon such a Change in Control of the
Corporation or of the Bank during the term of this Agreement, all of the
provisions hereof shall become operative immediately.
3. TERM OF AGREEMENT
The term of this Agreement shall be for an initial three (3)
year period commencing on the date hereof, and shall be renewable at the end of
the first year of such initial three (3) year period and annually thereafter,
for an additional one (1) year period following the initial three (3) year
period and prior extensions thereof in the sole discretion of the Board of
Directors of the Corporation and upon such terms and conditions as it may
authorize at such time.
4. BENEFITS FOLLOWING A CHANGE IN CONTROL
4.1 Employee shall be entitled to and the Corporation shall
pay to Employee, the salary, bonus and benefits set forth in paragraph 4.3 below
if a Change in Control occurs during the term of this Agreement and Employee's
employment is terminated within two (2) years following the Change in Control
either:
4.1.1 by the Corporation or the Bank other than for Cause or
by reason of Employee's Disability, Retirement or death, or
4.1.2 by Employee pursuant to Involuntary Termination.
4.2 Employee shall be entitled to and the Corporation shall
pay to Employee the salary, bonus and benefits set forth in paragraph 4.3 below
if during the term of this Agreement there is a Proposed Transaction and
Employee's employment is thereafter terminated by the Corporation or the Bank
other than for Cause or by reason of Employee's Disability, Retirement or death,
and the Proposed Transaction is consummated within one (1) year after the date
of termination of Employee's employment, then a Change in Control shall be
deemed to have occurred during the term of this Agreement and the
termination of Employee's employment shall be deemed to have occurred within one
(1) year following a Change in Control.
4.3.1 The Corporation or the Bank shall pay and Employee shall
receive his Current Salary (subject to withholding all applicable taxes) for a
period of one (1) year from his date of termination in the same manner as it was
being paid as of the date of termination; provided, however, that the salary
payments provided for hereunder shall be paid in a single lump sum payment, to
be paid not later than thirty (30) days after his termination of employment,
said lump sum payment to be determined by taking the salary payments to be made
and discounting them to their Present Value.
4.3.2 The Corporation or the Bank shall pay and Employees
shall receive a bonus (subject to withholding all applicable taxes) greater than
or equal to a pro rata percentage of the previous years' bonus based upon the
number of months worked during the current fiscal year prior to termination.
4.3.3 The Corporation or the Bank shall pay and Employee shall
receive the ss.401(k) contributions based upon Employee's Current Salary
(subject to withholding all applicable taxes) for a period of one (1) year from
the date of his termination in the same manner as it was being paid as of the
date of termination; provided, however, that the ss.401(k) contributions
provided for hereunder shall be paid in a single lump sum payment, to be paid
not later than thirty (30) days after his termination of employment, said lump
sum payment to be determined by taking the ss.401(k) contributions to be made
and discounting them to their Present Value.
4.3.4 Employee shall be entitled to any life, health or
disability insurance in effect at the time of Employee's termination for a
period of one (1) year from his date of termination in the same manner as it was
provided as of the date of termination.
4.3.5 Employee shall be entitled to purchase the automobile
provided by the Bank at the Bank's depreciated value.
5. MISCELLANEOUS
5.1 Assignment. The parties acknowledge that this Agreement
has been entered into due to, among other things, the special skills of
Employee, and agree that this Agreement may not be assigned or transferred by
Employee, in whole or in part, without the prior written consent of the
Corporation. Any business entity succeeding to all or substantially all of the
business of the Corporation or the Bank by purchase, merger, consolidation, sale
of assets or otherwise shall be bound by this Agreement.
5.2 Other Agents. Nothing in this Agreement is to be
interpreted as limiting the Corporation from employing other personnel on such
terms and conditions as may be satisfactory to the Corporation.
5.3 Notices. All notices, requests, demands and other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered or three days after mailing, if
mailed first class, certified mail, postage prepaid:
To the Corporation: XxXxxxxx Bancshares, Inc.
000 Xxxxx Xxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
To Employee: Xxxxx X. Xxxxx
c/x XxXxxxxx State Bank
000 Xxxxx Xxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
Any party may change the address to which notices, requests, demands, and other
communications shall be delivered or mailed by giving notice thereof to the
other part in the same manner provided herein.
5.4 Severability. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
5.4 Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a Waiver or relinquishment of
any right granted in this Agreement or 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 the party making the Waiver.
5.6 Amendments. This Agreement may be amended or modified only
to a writing signed by both parties hereto making specific reference to this
Agreement.
5.7 Governing Law. The validity and effect of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Georgia.
5.8 Arbitration. The parties agree that all disputes that may
arise between them relating to the interpretation or performance of this
Agreement, shall be determined by binding arbitration through an arbitrator
approved by the American Arbitration Association or other arbitrator mutually
acceptable to the parties. The award of the arbitrator shall be final and
binding upon the parties and judgment upon the award rendered may be entered in
any court having jurisdiction. In the event Employee incurs legal fees and other
expense in seeking to obtain or to enforce any rights or benefits provided by
this Agreement and is successful, in whole or in part, in obtaining or enforcing
any such rights or benefits through settlement, arbitration or otherwise, the
Corporation shall promptly pay the Employee's reasonable legal fees and expense
incurred in enforcing this Agreement. Except to the extent provided in the
preceding sentence, each party shall pay its own legal fees and other expenses
associated with the arbitration, with the fee for the arbitrator to be shared
equally.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by its duly authorized officers and Employee has hereunto
set his hand, as of the date and year first above written.
"CORPORATION"
XxXXXXXX BANCSHARES, INC.
By:
-----------------------------
Chairman
Attest:
--------------------------
President
(SEAL)
"EMPLOYEE"
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XXXXX X. XXXXX
