EXHIBIT 10.3
INTEGRITY BANK
EMPLOYMENT AGREEMENT
This agreement made and entered into this 23rd day of January, 2003,
between the Integrity Bank, Alpharetta, Xxxxxx County, Georgia, ("the Bank"),
and Xxxx Xxxxxxx, ("employee");
WHEREAS, the Bank is a state bank, regulated by the Georgia Department
of Banking and Finance, insured by the Federal Deposit Insurance Corporation,
located in Alpharetta, Georgia; and
WHEREAS, the Bank and BHC want to employ the employee as Senior Vice
President - Loans of the Bank; and
WHEREAS, the parties desire to enter into this agreement setting forth
the terms and conditions of the employment relationship of the Bank and the
employee;
NOW, THEREFORE, it is AGREED as follows:
I. RELATIONSHIP ESTABLISHED AND DUTIES
1. The Bank hereby will employ the employee as Senior Vice President -
Loans, to hold the title of Senior Vice President - Loans and to perform such
services and duties as the CEO and Board of Directors may, from time to time,
designate during the term hereof. Subject to the terms and conditions hereof,
employee will perform such duties and exercise such authority as are customarily
performed and exercised by persons holding such office, subject to the general
direction of the CEO of the Bank, exercised in good faith in accordance with
standards of reasonable business judgment.
2. Employee accepts such employment and shall devote his full time,
attention, and efforts to the diligent performance of his duties herein
specified and as an officer of the Bank and will not accept employment with any
other individual, corporation, partnership, governmental authority, or any other
entity, or engage in any other venture for profit which the Bank may consider to
be in conflict with his or its best interest or to be in competition with the
Bank's business, or which may interfere in any way with the employee's
performance of his duties hereunder. Any exception to this must be made by
notification and approval of the Board.
II. TERMS OF EMPLOYMENT
1. The initial term of employment under this Agreement shall continue
for 3 (three) years unless such is terminated pursuant to the terms hereof or by
the first to occur
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of the conditions to be stated hereinafter. This Agreement will be automatically
extended each year after the initial term unless either party gives 30 days
contrary written notice to the other. The term previously stated notwithstanding
this contract shall be terminated by the earlier to occur of any of the
following:
a. The death of the employee;
b. The complete disability of employee. "Complete disability"
as used herein shall mean the inability of employee, due to illness,
accident, or other physical or mental incapacity to perform the
services provided for hereunder for an aggregate of sixty days within
any period of 120 consecutive days during the term hereof; provided,
however, disability shall not constitute a basis for discharge for
cause;
c. The discharge of employee by the Bank for cause. "Cause" as
used herein shall mean:
1) Such negligence or misconduct as shall
constitute, as a matter of law, a breach of the covenants and
obligations of employee hereunder;
2) failure or refusal of employee to comply
with the provisions of this agreement;
3) employee being convicted by any duly
constituted court with competent jurisdiction of a crime
involving moral turpitude;
4) at the discretion of the Board, this
contract may be terminated if there are acts the Board feels
are moral turpitude;
Termination of employee's employment shall constitute a tender by
employee of his resignation as an officer of the Bank. In the event of
termination by the Bank other than for cause, or in the event employee
terminates the agreement for "good reason" (defined below), then the employee is
entitled to severance pay equal to one month for each year employed by the Bank
with a maximum of two years. For purposes of this agreement, "good reason" shall
mean:
(i) without the written consent of employee, a change in employee's
status, title, position or responsibilities (including reporting
responsibilities) which, in employee's reasonable judgment, represents an
adverse change from his status, title, position or responsibilities as in effect
at the date of this agreement or, if greater, at any time thereafter; the
assignment to employee of any duties or responsibilities which, in employee's
reasonable judgment, are inconsistent with his status, title, position or
responsibilities as in effect at the date of this agreement or, if greater, at
any time thereafter; or any other change in condition or circumstances that in
employee's
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reasonable judgment makes it materially more difficult for employee to carry out
the duties and responsibilities of his then-existing office; provided that good
reason under this subparagraph (i) excludes an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Bank
promptly after receipt of notice thereof given by employee;
(ii) a reduction, without the written consent of employee, in
employee's base salary as in effect on the date of this agreement or as the same
may be increased from time to time, or any failure to pay employee any
compensation or benefits to which he is entitled within five (5) days of the
date due;
(iii) the failure by the Bank (a) to continue in effect (without
reduction in benefit level and/or reward opportunities) any compensation or
employee benefit plan in which employee participated as of the date of this
agreement, or at any time thereafter, that is material to employee's total
compensation, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan, or (b) to continue
employee's participation therein (or in such substitute or alternative plan) on
a basis not materially less favorable, both in terms of the amount of benefits
provided and the level of employee's participation therein relative to other
participants; or
(iv) the Bank's requiring employee, without his consent, to be based at
any office or location other than in Alpharetta, Georgia or to travel on Bank
business to a substantially greater extent than required immediately prior to
the date of this agreement;
(v) the insolvency or the filing by any party, including the Bank or
any of its subsidiaries, of a petition for bankruptcy of the Bank or any such
subsidiary, which petition is not dismissed within sixty (60) days;
(vi) any purported termination by the Bank of employee's employment
otherwise than as expressly permitted by this agreement; or
(vii) the material breach by the Bank of any provision of this
agreement.
Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting good reason
hereunder. Any good faith determination of good reason made by employee shall be
conclusive.
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III. COMPENSATION
For all services which employee may render to the Bank during the term
hereof, the Bank shall pay to employee, subject to such deductions as may be
required by law:
1. BASE SALARY. An annual salary of $115,000 payable in bi-monthly
installments and subject to such deductions as may be required by law.
Thereafter, annual increase reviews will be done during the month of December
for a January 1 effective increase date during the term of this Agreement so
that for the 12 months beginning on each such anniversary date, the employee's
salary increases will take effect. The CEO has sole discretion as to the amount
of the employee's compensation.
2. PERFORMANCE BONUSES.
a. At the option of the Board of Directors, a SAR program may
be implemented when the bank reaches cumulative profitability, and the
Board, in consultation with the CEO, will determine the amount of
performance bonus to be awarded to the executive officers.
b. When and if the Board, in consultation with the CEO,
determines that it is time for a SAR program to be implemented, it is
intended that the SAR program operate in the following way:
In January of each year, a performance bonus, will be
awarded, based upon mutually agreed upon goals such
as achievement of the goals in the Strategic Plan
achieved before the application of taxes based upon
the following formula: Impact Pool allocation as
identified in the Bank's Stock Appreciation Rights
Incentive Program ("SAR").
3. STOCK OPTIONS. Based on his satisfactory performance the Employee,
as determined by the Board using mutually agreed upon safety and soundness
criteria as well as capital adequacy, asset quality, profitability, and
liquidity, shall have the right and option to purchase an additional number of
shares of common stock of the Bank Holding Company as follows:
22,000 shares of common stock of the bank holding company over the term
of this Agreement not to exceed 10 years, at a price per share of $11.00. This
stock option grant shall be evidenced by a separate grant agreement between
employee and the bank holding company.
IV. OTHER BENEFITS
1. The employee shall be entitled to participate in any plan of the
Bank relating to stock options, stock purchases, profit sharing, group life
insurance, medical coverage, education, or other retirement or employee benefits
that the Bank may adopt for the
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benefit of its employees. The employee shall be entitled to a comprehensive
annual physical paid by the bank provided that the cost of such physical shall
not exceed $1,250.
2. The employee shall be eligible to participate in any other benefits
which may be or become applicable to the Bank's executive employees, a
reasonable expense account, the payment of reasonable expenses for attending
annual and periodic meetings of trade associations (at the discretion of the
CEO), and any other benefits which are commensurate with the responsibilities
and functions to be performed by the employee under this Agreement. If the CEO
approves the payment of reasonable expenses for trade association meetings, the
Bank will also agree to pay all reasonable expenses in connection with the
attendance and participation at said trade association meetings by employee's
spouse.
3. At such reasonable times as the CEO shall in his discretion permit,
the employee shall be entitled, without loss of pay, to absent himself
voluntarily from the performance of his employment under this Agreement, all
such voluntary absences to count as vacation time, provided that:
a. The employee shall be entitled to an annual vacation of 4
(four) weeks per year.
b. The timing of vacations shall be scheduled in a reasonable
manner by the employee subject to the approval of the CEO. The employee
shall not be entitled to receive any additional compensation from the
Bank on account of his failure to take a vacation; nor shall he be
entitled to accumulate unused vacation time from one calendar year to
the next.
c. In addition to the aforesaid paid vacations, the employee
shall be entitled, without loss of pay to absent himself voluntarily
from the performance of his employment with the Bank for such
additional periods of time and for such valid and legitimate reasons as
the Board of Directors in its discretion may determine. Further, the
Board of Directors shall be entitled to grant to the employee a leave
or leaves of absence with or without pay at such time or times and upon
such terms and conditions as the Board, in its discretion, may
determine.
V. CHANGE OF CONTROL
1. If during the term of this Agreement there is a change of control
(COC) of the Bank, the Employee shall be entitled to termination or severance
pay in the event the employee's employment is terminated, except for just cause
as defined in Section II., paragraph 1, c, after the change in control. In the
event the employee is terminated as a result of COC, the employee shall be
entitled to receive his salary through the last day of the calendar month of the
termination, or payment in lieu of the notice period. In addition, the
terminated employee shall receive an amount equal to 1 (one) times his then
existing annual base salary. This payment shall be in addition to any amount
otherwise owed to the employee pursuant to this Agreement.
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2. The following items are automatically considered due and payable in
the event that change of control occurs:
a. Non-forfeitable deferred compensation shall be paid out in
full.
b. Long-term performance plan objective payments as described
in Section III, 2, shall be declared accomplished and earned based upon
performance up to date of the COC.
c. In the event that the employee is a participant in a
restricted stock plan, or share option plan, and such plan is
terminated involuntarily as a result of the COC, all stock and options
shall be declared 100% vested, and distributed. The term "control"
shall refer to the acquisition of 25 percent or more of the voting
securities of the Bank by any person, or persons acting as a group
within the meaning of Section 13(d) of the Securities Exchange Act of
1934, or to such acquisition of a percentage between 10 percent and 25
percent if the Board of Directors of the Bank or the Comptroller of the
Currency, the FDIC, or the Federal Reserve Bank have made a
determination that such acquisition constitutes or will constitute
control of the Bank. Notwithstanding the foregoing, a change in control
shall not be deemed to include additional acquisitions of stock by
existing shareholders unless such additional acquisitions have the
effect of increasing such person's share holdings to at least 25%. The
term "person" refers to an individual, corporation, Bank, bank holding
company, or other entity.
VI. POST TERMINATION COVENANTS
1. If during the term hereof employee shall cease employment hereunder
for any reason, then employee agrees that for six months if dismissed for cause
and one year without cause following such termination he will not be employed in
the banking business or any related field thereto within a 30 mile radius of the
Bank's primary office located at 00000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx
00000 or the location where the employee is stationed provided that the
foregoing restrictions shall only apply to positions in which employee has
duties that are the same or similar to those services actually performed by
employee for the Bank. Furthermore, following such termination employee agrees
that he will not, without the prior written consent of the Bank:
a. Furnish anyone with the name of, or any list or lists of
customers of the Bank or utilize such list or information himself for
banking purposes; or
b. Furnish, use, or divulge to anyone any information acquired
by him from the Bank relating to the Bank's methods of doing business;
or
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c. Contact directly or indirectly any customer of the Bank
with whom employee had material contact during the 12 months
immediately preceding the termination of employment for banking
solicitation purposes; or
d. Hire for any other Bank or employer (including himself) any
employee of the Bank or directly or indirectly cause such employee to
leave his or her employment to work for another.
2. It is understood and agreed by the parties hereto that the
provisions of this section are independent of each other, and the invalidity of
any such provision or portion thereof shall not affect the validity or
enforceability of any other provisions of this agreement.
VII. WAIVER OF PROVISIONS
Failure of any of the parties to insist, in one or more instances, on
performance by the others in strict accordance with the terms and conditions of
this agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder of the future performance of any such term or condition or of
any other term or condition of this agreement, unless such waiver is contained
in a writing signed by or on behalf of all the parties.
VIII. GOVERNING LAW
This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to void or unenforceable, the same shall not affect the remaining provisions
thereof.
IX. MODIFICATION AND AMENDMENT
This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of the parties hereto.
X. COUNTERPARTS AND HEADINGS
This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this agreement.
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XI. CONTRACT NONASSIGNABLE
This agreement may not be assigned or transferred by any party hereto,
in whole or in part, without the prior written consent of the other, except that
the bank holding company or the bank may assign this agreement to a successor in
interest.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
EMPLOYEE:
/S/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx
BANK:
/S/ Xxxxx Xxxx
--------------------------------
Chief Executive Officer
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