Exhibit 99.1
SOUTHFIRST BANCSHARES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(Amended and Restated, Effective as of January 1, 2005.)
(Xxx X. XxXxxxxx)
THIS AGREEMENT is entered into as of the 1st day of January, 2005 (the
"Effective Date"), by and between SouthFirst Bancshares, Inc., the parent and
holding company (the "Holding Company") of First Federal of the South, a federal
savings bank (the "Bank") and Xxx X. XxXxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Holding
Company as Chief Executive Officer and is experienced in all phases of the
business of the Holding Company; and .
WHEREAS, the parties desire by this writing to establish and to set
forth the employment relationship between the Holding Company and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is hereby employed as the Chief
Executive Officer of the Holding Company. The Employee shall render such
administrative and management services for the Holding Company as are currently
rendered and as are customarily performed by persons situated in a similar
executive capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of the Holding
Company. The Employee's other duties shall be such as the Board of Directors of
the Holding Company ("Board") may from time to time reasonably direct, including
normal duties as an officer of the Holding Company.
2. Consideration from Holding Company: Joint and Several
Liability. The Holding Company, in lieu of paying the Employee a base salary
during the term of this Agreement, hereby agrees that, to the extent permitted
by law, it shall be jointly and severally liable with the Bank for the payment
of all amounts due under the employment agreement of eyen date herewith between
the Bank and the Employee (the "Bank Contract"). Nevertheless, the Board may in
its discretion, at any time during the term of this Agreement, determine and
agree to pay the Employee a base salary for the remaining term of this
Agreement; provided that, prior to such determination by the Board, the term
"base salary" as used herein shall refer to the base salary paid to Employee by
the Bank under the Bank Contract. If the Board agrees to pay such salary, the
Board shall thereafter review, not less often than annually, the rate of the
Employee's salary and in its sole discretion may decide to increase such salary.
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3. Performance Bonus. Beginning on the Effective Date, and in
addition to Employee's base salary, Employee shall be eligible to receive such
performance bonuses as may be determined in the sole discretion of the Board.
4. Additional Compensation.
(a) Participation in Retirement, Medical and Other Plans.
The Employee may participate in any plan that the Holding Company maintains for
the benefit of its employees if the plan relates to (i) pension, profit-sharing,
or other retirement benefits, (ii) medical insurance or the reimbursement of
medical or dependent care expenses, or (iii) other group benefits, including
disability and life insurance plans.
(b) Employee Benefits; Expenses. The Employee shall
participate in any fringe benefits which are, or may become, available to the
Holding Company's senior management employees, including for example, any stock
option or incentive compensation plans, club memberships, provision of company
owned or leased automobile, and any other benefits which are commensurate with
the responsibilities and functions to be performed by the Employee under this
Agreement. The Employee shall be reimbursed for all reasonable out-of-pocket
business expenses which he shall incur in connection with his services under
this Agreement upon substantiation of such expenses in accordance with the
policies of the Holding Company, including country club initiation fees and
dues, which further the interests of the Holding Company and Bank.
(c) Stock Options. Beginning on the Effective Date, and
in addition to other compensation provided to the Employee pursuant to this
Agreement, and in addition to the Employee's participation in any incentive
stock option plan adopted by the Holding Company, Employee shall be eligible to
receive a grant of such stock options, pursuant to such provision therein
regarding amount, exercise price, vesting, expiration and other relevant option
terms, all as may be determined in the sole discretion of the Board.
5. Term. The Holding Company hereby employs the Employee, and the
Employee hereby accepts such employment under this Agreement, for the period
commencing on the Effective Date and ending 24 months thereafter (or such
earlier date as is determined in accordance with Section 9). Additionally, on
each anniversary of the Effective Date, this Agreement and the Employee's term
of employment shall be extended for an additional one-year period beyond the
then effective expiration date, provided the Board determines, in a duly adopted
resolution, that the performance of the Employee has met the Board's
requirements and standards, and that this Agreement shall be extended.
6. Loyalty; Full Time and Attention.
(a) During the period of his employment hereunder and
except for illnesses, reasonable vacation periods, and reasonable leaves of
absence, the Employee shall devote all his full business time, attention, skill,
and efforts to the faithful performance of his duties hereunder; provided,
however, that, from time to time, Employee may serve on the board of directors
of, and hold any other offices or positions in, companies or organizations,
which will not present any conflict of interest with the Holding Company or any
of its subsidiaries or
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affiliates, or unfavorably affect the performance of Employee's duties pursuant
to this Agreement, or will not violate any applicable statute or regulation.
"Full business time" is hereby defined as that amount of time usually devoted to
like companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Holding
Company, or be gainfully employed in any other position or job other than as
provided above.
(b) Nothing contained in this Paragraph 6 shall be deemed
to prevent or limit the Employee's right to invest in the capital stock or other
securities of any business dissimilar from that of the Holding Company, or,
solely as a passive or minority investor, in any business.
7. Standards. The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards as the Board may
establish from time to time. The Holding Company will provide Employee with the
working facilities and staff customary for similar executives and necessary for
him to perform his duties.
8. Vacation, Sick Leave and Annual Physical Examination.
(a) The Employee shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of his duties under this
Agreement in accordance with the terms set forth below, all such voluntary
absences to count as vacation time; provided that:
(i) The Employee shall be entitled to an annual
vacation in accordance with the policies that the Board periodically establishes
for senior management employees of the Holding Company.
(ii) The Employee shall not receive any
additional compensation from the Holding Company on account of his failure to
take a vacation, and the Employee shall not accumulate unused vacation from one
fiscal year to the next, except, in either case, to the extent authorized by the
Board.
(iii) 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 obligations with the Holding
Company for such additional periods of time and for such valid and legitimate
reasons as the Board may in its discretion approve. Further, the Board may 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.
(iv) In addition, the Employee shall be entitled
to an annual sick leave benefit, as established by the Board.
(b) The Employee, at least once during each 12-month
period, beginning on the Effective Date and each anniversary thereof, shall
schedule and submit to a full physical examination by a licensed medical
physician and, if requested, shall submit the findings of such examination to
the Board of Directors.
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9. Termination and Termination Pay. Subject to the provisions of
Section 11 hereof, the Employee's employment hereunder may be terminated under
the following circumstances:
(a) Death. The Employee's employment under this Agreement
shall terminate upon the event of his death during the term of this Agreement,
in which event the Employee's estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar month in
which his death occurred.
(b) Disability. The Holding Company may terminate the
Employee's employment after having established, through a determination by the
Board, the Employee's Disability. For purposes of this Agreement, "Disability"
means a physical or mental infirmity which impairs the Employee's ability to
substantially perform his duties under this Agreement and which results in the
Employee becoming eligible for long-term disability benefits under the Holding
Company's long-term disability plan or under any disability insurance otherwise
provided to Employee (or, if the Holding Company has no such plan in effect,
which impairs the Employee's ability to substantially perform his duties under
this Agreement for a period of one hundred eighty (180) consecutive days). The
Employee shall be entitled to the compensation and benefits provided for under
this Agreement for (i) any period during the term of this Agreement, and prior
to the establishment of the Employee's Disability, during which the Employee is
unable to work due to the physical or mental infirmity, or (ii) any period of
Disability which is prior to the Employee's termination of employment pursuant
to this Section 9(b).
(c) For Cause. The Board may, by written notice to the
Employee, immediately terminate his employment at any time, for Cause. The
Employee shall have no right to receive compensation or other benefits for any
period after termination for Cause. Termination for "Cause" shall mean
termination because of, in the good faith determination of the Board, the
Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. Notwithstanding the foregoing, the
Employee shall not be deemed to have been terminated for Cause unless there
shall have been delivered to the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the
Board (excluding the Employee, if a member of the Board) at a meeting of the
Board called and held for the purpose (after reasonable notice to the Employee
and an opportunity for the Employee to be heard before the Board), finding that,
in the good faith opinion of the Board, the Employee was guilty of conduct set
forth above in the second sentence of this Subsection (c) and specifying the
particulars thereof in detail.
(d) Without Cause. Subject to the provisions of Section
II hereof, the Board may, by written notice to the Employee, immediately
terminate his employment at any time for any reason; provided that if such
termination is for any reason other than pursuant to Sections 9 (a), (b) or (c)
above, (the Employee shall be entitled to receive the following compensation and
benefits: (i) the base compensation provided pursuant to Section 2 hereof, for
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a 12-month period, and (ii) the average annual compensation less the base
compensation for the 12-month period based upon the benefit levels substantially
equal to those that the Holding Company provided for the Employee at the date of
termination of employment. Said sum shall be paid, at the option of the
Employee, either (I) in periodic payments over the remaining term of this
Agreement, as if the Employee's employment had not been terminated, or (II) in
one lump sum within ten (10) days of such termination. The Employee's "average
annual compensation" shall be the average of the total annual "compensation"
acquired by the Employee during each of the five (5) fiscal years (or the number
of full fiscal years of employment, if the Employee's employment is less than
five (5) years at the termination thereof) immediately preceding the date of
termination. The term "compensation" shall mean any payment of money or
provision of any other thing of value in consideration of employment, paid or
guaranteed hereunder this Agreement, including, without limitation, base
compensation, health, life and disability benefits, bonuses, pension and profit
sharing plans, director fees or committee fees, fringe benefits and deferred
compensation accruals.
(e) Voluntary Termination by Employee. Subject to the
provisions of Section 11 hereof, the Employee may voluntarily terminate
employment with the Holding Company during the term of this Agreement, upon at
least 60 days' prior written notice to the Board of Directors, in which case the
Employee shall receive only his compensation, vested rights and employee
benefits accrued up to the date of his termination.
10. No Mitigation. The Employee shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise, and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Employee in any
subsequent employment.
11. Change in Control.
(a) Notwithstanding any provision herein to the contrary,
if the Employee's employment under this Agreement is terminated by the Holding
Company, without the Employee's prior written consent and for a reason other
than for Cause, death or disability, in connection with, or within the period
that is twelve (12) months before to twenty-four (24) months after, any change
in control of the Holding Company or the Bank, the Employee shall be paid an
amount equal to the difference between (i) the product of 2.99 times his "base
amount," as paid or guaranteed under this Agreement, and as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations promulgated thereunder, and (ii) the sum of any other parachute
payments (as defined under Section 280G(b)(2) of the Code) that the Employee
receives on account of the change in control, and payments received under
paragraph 9(d) if any. Said sum shall be paid in one lump sum within ten (10)
days of such termination. The term "change in control" shall mean (1) an
increase in the ownership of, or the holding of, or the power to vote, by any
person, or by any persons acting as a "group" (within the meaning of Section
13(d) of the Securities Exchange Act of 1934). The Holding Company's or Bank's
voting stock, to an amount which is more than 25% of the issued and outstanding
shares thereof, (2) a change in the ownership of, or possession of, the ability
to control the election of a majority of the Holding Company's or Bank's
directors, (3) a change in the ownership of, or possession of, the ability to
exercise a controlling influence over the management or policies of the Holding
Company or the Bank, by any person, or by persons acting as a "group" (within
the
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meaning of Section 13(d) of the Securities Exchange Act of 1934) (except in the
case of (1), (2) and (3) hereof, ownership or control of the Bank, or its board
of directors, by the Holding Company itself shall not constitute a "change in
control"), or (4) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Bank or
the Holding Company (the "Company Board") (the "Continuing Directors") cease for
any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of the Company
Board was approved by a vote of at least two-thirds of the Continuing Directors
then in office shall be considered a Continuing Director. For the purposes of
defining "change in control", the signing of a letter of intent that would
result in any of the foregoing items (1) through (4), shall constitute a change
in control. The term "person" means an individual (other than the Employee),
individuals acting in concert or as a "group", a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed
herein.
(b) Notwithstanding any other provision of this Agreement
to the contrary, the Employee may voluntarily terminate his employment under
this Agreement within twelve (12) months following a change in control of the
Bank or the Holding Company, and the Employee shall thereupon be entitled to
receive the payment described in Section l1(a) of this Agreement, upon the
occurrence of any of the following events, or within ninety (90) days
thereafter, which have not been consented to in advance by the Employee in
writing: (i) the requirement that the Employee move his personal residence, or
perform his principal executive functions, more than thirty-five (35) miles from
his primary office as of the date of the change in control; (ii) a material
reduction in the Employee's base compensation as in effect on the date of the
change in control, as the same may be increased from time to time; (iii) the
failure by the Holding Company to continue to provide the Employee with
compensation and benefits provided for under this Agreement, as the same may be
increased from time to time, or with benefits substantially similar to those
provided to him under any of the employee benefit plans in which the Employee
now or hereafter becomes a participant, or the taking of any action by the
Holding Company which would directly or indirectly reduce any of such benefits
or deprive the Employee of any material fringe benefit enjoyed by him at the
time of the change in control; (iv) the assignment to the Employee of duties and
responsibilities materially different from those normally associated with his
position as referenced at Section 1; (v) a failure to elect or reelect the
Employee to the Board of Directors of the Holding Company if the Employee is
serving on such Board on the date of the change in control; or (vi) a material
diminution or reduction in the Employee's responsibilities or authority
(including reporting responsibilities) in connection with his employment with
the Holding Company.
(c) Notwithstanding any other provision of this Agreement
or the Bank Contract to the contrary, the Employee may voluntarily terminate his
employment under this Agreement within twelve (12) months following a change in
control of the Holding Company or the Bank, and the Employee shall thereupon be
entitled to receive the payment described in Section 11(a) of this Agreement.
(d) Any and all amounts paid to Employee under Section 9
and/or Section 11 of the Bank Contract shall be deemed to be paid in
satisfaction of, and shall therefore offset, any amounts to be paid to Employee
pursuant to Section 9 hereof or pursuant to this
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Section 11, to the extent that any amounts to be paid under Section 9 hereof or
under this Section 11 are attributable to, or related to, the base salary, or
other compensation and amounts paid to Employee by the Bank under the Bank
Contract.
(e) Any payments made to the Employee pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.
(f) In the event that any dispute arises between the
Employee and the Holding Company as to the terms or interpretation of this
Agreement, including this Section 11, the parties shall follow the dispute
resolution procedure specified in Section 13. The Employee shall be reimbursed
for all costs and expenses, including reasonable attorneys' fees, arising from
such dispute, proceedings or actions, provided that the Employee shall have
obtained a final judgment by the arbitrator in favor of the Employee. Such
reimbursement shall be paid within ten (10) days of Employee's furnishing to the
Holding Company written evidence, which may be in the form, among other things,
of a canceled check or receipt, of any costs or expenses incurred by the
Employee.
12. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Holding Company which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Holding
Company.
(b) The Holding Company and Employee agree that the
Holding Company is contracting for the unique and personal skills of the
Employee. The Employee, therefore, shall be precluded from assigning or
delegating his rights or duties hereunder, without first obtaining the written
consent of the Holding Company.
13. Alternative Dispute Resolution. THE PARTIES TO THIS AGREEMENT
HEREBY EXPRESS THAT ALL DISPUTES, CONTROVERSIES OR CLAIMS OF ANY KIND AND NATURE
BETWEEN THE PARTIES HERETO, ARISING OUT OF OR IN ANY WAY RELATED TO THE WITHIN
AGREEMENT, ITS INTERPRETATION, PERFORMANCE OR BREACH, SHALL BE RESOLVED
EXCLUSIVELY BY THE FOLLOWING ALTERNATIVE DISPUTE RESOLUTION MECHANISMS:
(a) Negotiation -- The parties hereto shall first engage
in a good faith effort to negotiate any such controversy or claim by
communications between them. Said Negotiations may be oral or written. To the
extent that they are oral, they should be confirmed in writing.
(b) Should the above-stated negotiations be unsuccessful,
the parties shall engage in mediation pursuant to the American Arbitration
Association Commercial Mediation Rules, or such other mediation rule as the
parties may otherwise agree to choose.
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(c) Should the above-stated mediation be unsuccessful,
the parties shall agree to arbitrate any such controversy or claim with the
express understanding that this Agreement is affected by interstate commerce in
that the goods and services which are the subject matter of this Agreement, pass
through interstate commerce. Said arbitration shall be conducted pursuant to the
American Arbitration Association Commercial Arbitration Rules (the "Arbitration
Rules") or such other arbitration rule as the parties may otherwise agree to
choose.
(d) The cost of the above-stated mediation shall be borne
equally between the parties. The cost of the above-stated arbitration shall be
borne by the party against whom an award is issued and in favor of the
prevailing party. In either event, each party shall bear the cost of its own
attorney's fees and costs.
THE PARTIES UNDERSTAND AND AGREE (i) THAT EACH OF THEM IS WAIVING
RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL; (ii) THAT
PRE-ARBITRATION DISCOVERY IN ARBITRATION PROCEEDINGS IS GENERALLY MORE LIMITED
THAN AND DIFFERENT FROM COURT PROCEEDINGS; AND (iii) THAT THE ARBITRATORS' AWARD
IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND (iv) EITHER
PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS,
IS STRICTLY LIMITED.
The venue for mediation and/or arbitration under this paragraph shall
be in the City of Birmingham, State of Alabama.
14. Amendments. No amendments or additions to this Agreement shall
be binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
15. Applicable Law. Except to the extent preempted by Federal law,
the laws of the State of Delaware shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. Entire Agreement. This Agreement, together with any
understanding or modifications thereof as agreed to in writing by the parties,
shall constitute the entire agreement between the parties hereto. Further,
should any provision of this Agreement give rise to a discrepancy or conflict
with respect to any applicable law or regulation, then the applicable law or
regulation shall control the relevant construction and operation of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first hereinabove written.
ATTEST: SOUTHFIRST BANCSHARES, INC.
_______________________ BY:____________________________________
Secretary Xxxxx X. XxXxxxxx, III
Chairman of the Board of Directors
WITNESS:
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Xxx X. XxXxxxxx ("Employee")
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