FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.9
FIRST
AMENDMENT TO
THIS
AMENDMENT (“Amendment”), made and entered into as of December 9, 2008 (the
“Effective Date”) by and among Xxxxx X. Xxxxxx, a resident of the State of
Georgia (“Employee”), SouthCrest Financial Group, Inc. (f/k/a Xxxxx Bankshares,
Inc. which was f/k/a First Polk Bankshares, Inc.), a Georgia corporation
(“SouthCrest”), and The First National Bank of Polk County, a national banking
association (“Bank”) (collectively, SouthCrest and Bank are the
“Employer”).
W I T N E
S S E T H:
WHEREAS,
Employer currently employs Employee as the President and Chief Executive Officer
of SouthCrest and the President and Chief Executive Officer of Bank pursuant to
that certain employment agreement between Employer and Employee dated September
29, 2004 (the “Employment Agreement”);
WHEREAS,
Employer and Employee desire to continue such employment;
WHEREAS,
Employer and Employee now desire to revise the Employment Agreement to reflect
the change in the name of “Xxxxx Bankshares, Inc.” to “SouthCrest Financial
Group, Inc.”; and
WHEREAS, Employer and Employee also
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 substituting each reference to “Xxxxx Bankshares, Inc.”
with a reference to “SouthCrest Financial Group, Inc.” and each reference to
“Xxxxx” with a reference to “SouthCrest” wherever such references appear in the
Employment Agreement.
2.
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.”
3.
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.”
4.
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,”.
5.
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 15.3, 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 SouthCrest and the Bank and
all affiliated companies that, together with SouthCrest and the Bank, 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.”
6.
By deleting the existing Section 15.2 and
substituting therefor the following:
“15.2 ‘Change
in Control’ shall be deemed to have occurred during the term of this Agreement
if:
15.2.1 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 SouthCrest or Bank prior to such
acquisition), acquires stock of SouthCrest or the Bank, as applicable, 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 SouthCrest or the Bank, as applicable;
15.2.2
within any twelve-month period (beginning on or after Amendment Date), a
majority of members of SouthCrest’s Board of Directors is replaced by directors
whose appointment or election is not endorsed by a majority of the members of
SouthCrest’s Board of Directors before the date of the appointment or
election;
15.2.3 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 SouthCrest possessing thirty percent (30%) or more of the total voting power
of the stock of SouthCrest; or
15.2.4 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 SouthCrest
or the Bank, as applicable, 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 SouthCrest or the Bank, as
applicable, 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
15.2.4:
(i)
a shareholder (determined immediately before
the asset transfer) of SouthCrest or the Bank 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
SouthCrest or the Bank;
(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 SouthCrest or the Bank; 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
15.2.4(iii).
For
purposes of this Section 15.2, 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.”
7.
By deleting the first clause of Section 15.3
up through and including the phrase “(‘Termination of Employment’)” and
substituting therefor the following:
“In the
event of a Change in Control, if Bank terminates Employee without Cause
contemporaneously with or subsequent to the Change in Control, or if Bank 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’)”.
8.
By deleting the last sentence of Section 15.3 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.”
9.
By deleting the first sentence of the
existing Section 15.4 and substituting therefor the following:
“During
the remaining term of this Agreement following the effective date of a Change in
Control, if the Bank 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.”
10. By
deleting the last sentence of the existing Section 15.4 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 15.3 of this Agreement.”
[SIGNATURES
ON THE NEXT PAGE]
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 X. Xxxxxx | /s/ Xxxxx X. Xxxxxx |
(SEAL)
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Witness
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Xxxxx
X. Xxxxxx
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“SouthCrest”
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ATTEST
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SouthCrest
Financial Group, Inc.
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By:
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/s/ Xxxxxxx X. Hertha | |||
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/s/
Xxxxxxx Xxxxx
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Its:
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Senior Vice President | ||
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(CORPORATE
SEAL)
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“Bank”
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ATTEST
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The
First National Bank of Polk County
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By:
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/s/ Xxxxx Xxxxxxxx | |||
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/s/
Xxxxx Xxx
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Its:
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Vice President/Board Secretary | ||
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(CORPORATE
SEAL)
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