EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into as of April 19,
2004 by and among Xxxxxxx X. Xxxxxxx, a resident of the State of Georgia
("Employee") and CNB Holdings, Inc., a Georgia corporation ("CNB"). CNB and its
wholly-owned financial institution subsidiaries are hereinafter collectively
referred to as the "Bank Group."
W I T N E S S E T H:
WHEREAS, Employee is currently an executive officer of First Capital
Bancorp, Inc., a Georgia corporation ("FCBI") and First Capital Bank, a
financial institution organized under the laws of Georgia ("Bank") and a
wholly-owned subsidiary of FBCI. FCBI and Bank are hereinafter collectively
referred to as "First Capital." FCBI has entered into an Agreement and Plan of
Merger (the "Merger Agreement") with CNB, pursuant to which FBCI will be merged
with and into CNB (the "Merger"), and subsequently Bank will become a
wholly-owned subsidiary of CNB (CNB and the Bank are hereinafter collectively
referred to as the "Employer");
WHEREAS, First Capital and Employee have entered into an Employment
Agreement as of January 1, 1997 (the "1997 Contract");
WHEREAS, upon consummation of the Merger, Employer and Employee each
desire to modify the 1997 Contract by amending and restating the 1997 Contract
in its entirety as set forth herein; and
WHEREAS, Employer and Employee each deem it necessary and desirable, for
their mutual protection, to execute a written document setting forth the terms
and conditions of said relationship upon consummation of the Merger;
NOW, THEREFORE, in consideration of the 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 as follows:
1. Employment and Duties.
1.1 Employer hereby employs Employee to serve as Vice Chairman,
Chief Operating Officer and Chief Financial Officer of CNB and Bank and to
perform such duties and responsibilities as customarily performed by persons
acting in such capacity. During the term of this Agreement, Employee will devote
substantially all of his full time and effort to his duties hereunder.
1.2 Other Business Activities. The parties agree that the Employee
shall be free to engage in other non-competitive business activities and
ventures during the term of this Agreement, so long as any such other business
activities and ventures do not conflict or compete with the business of the Bank
Group or prevent the Employee from the faithful performance of his duties
hereunder.
2. Term.
Subject to the provisions of Section 12 of this Agreement, the period of
Employee's employment under this Agreement shall be deemed to have commenced as
of the effective date of the Merger, and shall continue until December 31, 2004,
unless the Employee dies before December 31, 2004, in which case the period of
employment shall continue until the end of the month of such death.
3. Compensation.
For all services to be rendered by Employee during the term of this
Agreement, Bank shall pay Employee an annual base salary equal to $145,000
subject to normal annual increase through the Effective Date of the Merger (the
"Base Salary"), less normal withholdings, payable in equal monthly or more
frequent installments as are customary under Bank's payroll practices from time
to time, provided, however, that at no time shall the Employee's Base Salary
trail the Base Salary of the Chief Executive Officer of CNB by more than
$10,000. Bank's Board of Directors shall review Employee's Base Salary
annually and may increase Employee's Base Salary from year to year during the
term of this Agreement subject to the approval of CNB's compensation committee.
Any Base Salary increase (regardless of form), will be determined by the Board
after taking into account, among other things, changes in the cost of living,
Employee's performance and the performance of Bank. Any action or review by the
Board may be delegated to an appropriate committee thereof. The Employee also
shall be entitled to annual incentive compensation in such amount and subject to
such criteria as the parties mutually agree.
4. Expenses.
So long as Employee is employed hereunder, Employee is entitled to receive
reimbursement for, or seek payment directly by Bank of, all reasonable expenses
which are consistent with the normal policy of Bank in the performance of
Employee's duties hereunder, provided that Employee accounts for such expenses
in writing.
5. Employee Benefits.
5.1 So long as Employee is actively employed hereunder, Employee
will be entitled to participate in the employee benefit, option, bonus, dental,
health, life and disability insurance programs, and any other compensation or
benefit programs covering executive officers of the Bank Group substantially
similar to those amounts received by the group of executive officers of the Bank
Group disclosed in any CNB filings as the group of highly compensated employees
or similar designation as well as the item set forth on Exhibit A attached
hereto. In addition, for the 2004 calendar year, the Employee shall be entitled
to a pro rata portion of the annual bonus otherwise payable to him pursuant to
Section 4(b) of the 1997 Contract; provided, however, that such bonus shall be
calculated based upon the performance of FCBI through the last day of the
calendar month coinciding with or immediately preceding the effective date of
the Merger and such bonus shall be payable no later than 30 days thereafter.
5.2 The Bank will provide the Employee with the use of a Chevrolet
Suburban (or substantially similar make of automobile) during the term of this
Agreement. The automobile will be replaced with a new model no less frequently
than every two (2) years. The Bank will pay all expenses associated with the
operation and maintenance of the automobile, including, without limitation,
maintenance expenses, tag fees, insurance premiums and fuel costs.
5.3 During the term of this Agreement, the Bank will provide the
Employee with supplemental cash bonuses when and as necessary from time to time
to permit the Employee to pay the premiums for maintaining an existing insurance
policy on his life with a $5,000,000 death benefit. The amount of each such
supplemental cash bonus will equal the amount of the then due periodic premium.
5.4 During the term of this Agreement, the Bank will pay the
monthly dues associated with the Employee's existing membership in the Atlanta
Athletic Club.
6. Vacation.
Employee shall be entitled to four weeks annual vacation.
7. Confidentiality.
In Employee's position as an employee of Employer, Employee has had and
will have access to confidential information, trade secrets and other
proprietary information of vital importance to the Bank Group and has and will
also develop relationships with customers, employees and others who deal with
the Bank Group which are of value to the Bank Group. Employer requires as a
condition to Employee's employment with Employer that Employee agrees to certain
restrictions on Employee's use of the proprietary information and valuable
relationships developed during Employee's employment with Employer. In
consideration of the terms and conditions contained herein, the parties hereby
agree as follows:
7.1 Employer and Employee mutually agree and acknowledge that
Employer may entrust Employee with highly sensitive, confidential, restricted
and proprietary information concerning various Business Opportunities (as
hereinafter defined), customer lists, and personnel matters. Employee
acknowledges that he shall
bear a fiduciary responsibility to Employer to protect such information from use
or disclosure that is not necessary for the performance of Employee's duties
hereunder, as an essential incident of Employee's employment with Employer.
7.2 For the purposes of this Section, the following definitions
shall apply:
7.2.1 "Trade Secret" shall mean the identity and addresses of
customers of the Bank Group, the whole or any portion or phase of any scientific
or technical information, design, process, procedure, formula or improvement
that is valuable and secret (in the sense that it is not generally known to
competitors of the Bank Group) and which is defined as a "trade secret" under
Georgia law pursuant to the Georgia Trade Secrets Act.
7.2.2 "Confidential Information" shall mean any data or
information, other than Trade Secrets, which is material to the Bank Group and
not generally known by the public. Confidential Information shall include, but
not be limited to, Business Opportunities of the Bank Group (as hereinafter
defined), the details of this Agreement, the Bank Group's business plans and
financial statements and projections, information as to the capabilities of the
Bank Group's employees, their respective salaries and benefits and any other
terms of their employment and the costs of the services the Bank Group may offer
or provide to the customers it serves, to the extent such information is
material to the Bank Group and not generally known by the public.
7.2.3 "Business Opportunities" shall mean any specialized
information or plans of the Bank Group concerning the provision of financial
services to the public, together with all related information concerning the
specifics of any contemplated financial services regardless of whether the Bank
Group has contacted or communicated with such target person or business.
7.2.4 Notwithstanding the definitions of Trade Secrets,
Confidential Information, and Business Opportunities set forth above, Trade
Secrets, Confidential Information, and Business Opportunities shall not include
any information:
(i) that is or becomes generally known to the
public;
(ii) that is already known by Employee or is
developed by Employee after termination of employment through entirely
independent efforts;
(iii) that Employee obtains from an independent
source having a bona fide right to use and disclose such information;
(iv) that is required to be disclosed by law, except
to the extent eligible for special treatment under an appropriate protective
order; or
(v) that CNB's Board of Directors approves for
release.
7.3 Employee shall not, without the prior approval of CNB's Board
of Directors, during his employment with Employer and for so long thereafter as
the information or data remain Trade Secrets, use or disclose, or negligently
permit any unauthorized person who is not an employee of the Bank Group to use,
disclose, or gain access to, any Trade Secrets of the Bank Group, or of any
other person or entity making Trade Secrets available for the Bank Group's use.
7.4 Employee shall not, without the prior written consent of CNB,
during his employment with Employer and for a period of 24 months thereafter as
long as the information or data remain competitively sensitive, use or disclose,
or negligently permit any unauthorized person who is not employed by the Bank
Group to use, disclose, or gain access to, any Confidential Information to which
the Employee obtained access by virtue of his employment with Employer, except
as provided in Section 7.2 of this Agreement.
8. Observance of Security Measures.
During Employee's employment with Employer, Employee is required to
observe all security measures adopted to protect Trade Secrets, Confidential
Information, and Business Opportunity of Employer.
9. Return of Materials.
Upon the request of Employer and, in any event, upon the termination of
his employment with Employer, Employee shall deliver to Employer all memoranda,
notes, records, manuals or other documents, including all copies of such
materials containing Trade Secrets or Confidential Information, whether made or
compiled by Employee or furnished to him from any source by virtue of his
employment with Employer.
10. Severability.
Employee acknowledges and agrees that the covenants contained in Sections
7, 8, 9 and 14 of this Agreement shall be construed as covenants independent of
one another and distinct from the remaining terms and conditions of this
Agreement, and severable from every other contract and course of business
between Employer and Employee, and that the existence of any claim, suit or
action by Employee against Employer, whether predicated upon this or any other
agreement, shall not constitute a defense to Employer's enforcement of any
covenant contained in Sections 7, 8, 9 and 14 of this Agreement.
11. Specific Performance.
Employee acknowledges and agrees that the covenants contained in Sections
7, 8, 9 and 14 of this Agreement shall survive any termination of employment, as
applicable, with or without Cause, at the instigation or upon the initiative of
either party. Employee further acknowledges and agrees that the ascertainment of
damages in the event of Employee's breach of any covenant contained in Sections
7, 8, 9 and 14 of this Agreement would be difficult, if at all possible.
Employee therefore acknowledges and agrees that Employer shall be entitled in
addition to and not in limitation of any other rights, remedies, or damages
available to Employer in arbitration, at law or in equity,
upon submitting whatever affidavit the law may require, and posting any
necessary bond, to have a court of competent jurisdiction enjoin Employee from
committing any such breach.
12. Termination.
During the term of this Agreement, employment, including without
limitation, except as otherwise provided in Section 12 of this Agreement, all
compensation, salary, expenses reimbursement, and employee benefits may be
terminated as follows:
12.1 At the election of Employer for Cause;
12.2 At Employee's election upon Employer's breach of any material
provision of this Agreement;
12.3 "Cause" shall mean (i) material dishonesty, gross negligence
or willful misconduct by the Employee in the performance of his duties hereunder
which conduct results in material financial or reputational harm to the Bank
Group; (ii) conviction (from which no appeal may be, or is, timely taken) of the
Employee of a felony; (iii) initiation of suspension or removal proceedings
against the Employee by federal or state regulatory authorities acting under
lawful authority pursuant to provisions of federal or state law or regulation
which may be in effect from time to time; (iv) knowing violation by Employee of
federal or state banking laws or regulations; or (v) refusal by Employee to
perform a duly authorized and lawful written directive of the Bank's Board of
Directors. No termination for Cause shall be effective unless it is approved by
a two-thirds (2/3) vote of CNB's Board of Directors, excluding the vote, if any,
of the Employee.
12.4 Upon Employee's death, or, at the election of either party,
upon Employee's disability as determined in accordance with the standards and
procedures under Employee's then-current long-term disability insurance coverage
provided by Employer, or, if such disability insurance coverage provided by
Employer is not then in
place, upon Employee's disability resulting in inability to perform the duties
described in Section 1.1 of this Agreement for a period of 180 consecutive days.
12.5 If this Agreement is terminated either (i) by Employer at any
time for any reason other than for Cause or (ii) upon Employer's breach of this
Agreement, then Employer shall pay to Employee as Employee's sole remedy
hereunder the compensation and benefits for six months, including, but not
limited to, Employee's salary for six months at the Base Salary rate then in
effect and the cost of medical, hospitalization and term life insurance
coverage.
12.6 If the Agreement is terminated either for Cause or by Employee
pursuant to Section 12.4 of this Agreement, Employee shall receive no further
compensation or benefits, other than Employee's Base Salary and other
compensation as accrued through the date of such termination.
13. Notice.
All notice provided for herein shall be in writing and shall be deemed to
be given when delivered in person or deposited in the United States Mail,
registered or certified, return receipt requested, with proper postage prepaid
and addressed as follows:
CNB: CNB Holdings, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attn: X. X. Xxxxxx, Xx., President
with a copy to: Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esquire
Employee: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
with a copy to: Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
14. Covenant Not to Compete and Not to Solicit.
14.1 For purposes of this Section 14, Bank and Employee conduct the
following business in the following geographic areas:
14.1.1 Bank is engaged in the business of transacting business
as a bank which accepts deposits, makes loans, cash checks and otherwise engages
in the business of banking ("Business of Bank").
14.1.2 Before and after the merger, Bank will actively conduct
business in the geographic areas of Georgia from its main office located at
Suite A, 0000 Xxxxxxx Xxxxxx Xxxx, X.X., Xxxxxxxx, Xxxxxxx 00000 (the "Main
Office").
14.1.3 Employee has established business relationships and
performs the duties described in Section 1.1 of this Agreement in the geographic
area covered by a circle having a radius of 50 miles from the Main Office, and
will work primarily in such area while in the employ of Bank.
14.2 Employee covenants and agrees that for a period of six months
after the termination of his employment with Bank for any reason, Employee shall
not, directly or indirectly, as principal, agent, trustee, consultant or through
the agency of any corporation, partnership, association, trust or other entity
or person, on Employee's own behalf or for others, provide the duties described
in Section 1.1 of this Agreement for any entity or person conducting the
Business of Bank within the geographic area covered by a circle having a radius
of 50 miles from the Main Office.
14.3 Employee acknowledges that an important factor leading to the
Merger is the loyalty of Bank's employees. Accordingly, Employee agrees that
both during the term of this Agreement and for a period of six months after the
termination of this Agreement for any reason, Employee will not on his own
behalf or in the service of
or on behalf of others, solicit, recruit or hire away or attempt to solicit,
recruit or hire away, any Bank employee to another person or entity providing
products or services that are competitive with the Business of the Bank.
Employee further agrees that information as to the capabilities of Bank's
employees, their salaries and benefits, and any other terms of their employment
is Confidential Information and proprietary to Bank.
14.4 Employee and Bank shall periodically amend this Agreement by
updating the address referenced in Section 14.1.2 of this Agreement so that it
at all times lists the then current geographic area served by Bank for which
Employee performs the duties described in Section 1.1 of this Agreement.
14.5 The covenants contained in this Section 14 shall be construed
as agreements severable from and independent of each other and of any other
provision of this or any other contract or agreement between the parties hereto.
The existence of any claim or cause of action by Employee against Bank, whether
predicated upon this or any other contract or agreement, shall not constitute a
defense to the enforcement by Bank of said covenants.
15. Change in Control.
None of the benefits provided in Section 15 of this Agreement shall
be payable to Employee unless (i) there shall have been a Change in Control of
any member of the Bank Group, as set forth in this Section 15, and (ii) Employee
is employed by Bank at such time.
15.1 "CNB Board" shall mean the Board of Directors of CNB.
15.2 "Change in Control" shall be deemed to have occurred if:
15.2.1 During the term of this Agreement, the individuals
constituting CNB's Board immediately following the effective date of the Merger
("Beginning CNB Board") cease for any reason to constitute at least a majority
of said Board, provided that in making such determination, a Director elected by
or on the recommendation of the Beginning CNB Board shall be deemed to be a
member of such
Beginning CNB Board, excluding, for this purpose, any Director whose assumption
of office occurs as a result of an actual or threatened election contest or
proxy contest with respect to the election or removal of directors; or
15.2.2 If (i) a notice or an application is filed with the
Federal Reserve Board ("FRB") pursuant to Regulation "Y" of the FRB under the
Change in Bank Control Act or the Bank Holding Company Act or with the Georgia
Department of Banking and Finance (the "Department") pursuant to the Financial
Institutions Code of Georgia for permission to acquire control of any member of
the Bank Group, or (ii) more than 25% of CNB's outstanding common stock or
equivalent in voting power of any class or classes of outstanding securities of
CNB entitled to vote in elections of Directors shall be acquired by any
corporation or other person, or group. "Group" shall mean persons who act in
concert as described in Section 13(d)(3) or 14(d) (2) of the Securities Exchange
Act of 1934 as amended; or
15.2.3 CNB shall become a subsidiary of another corporation or
shall be merged or consolidated into another corporation and (i) less than a
majority of the outstanding voting shares of the parent or surviving corporation
after such acquisition, merger or consolidation are owned immediately after such
acquisition, merger or consolidation by the owners of the voting shares of CNB
immediately before such acquisition, merger or consolidation, or (ii) a person
or entity (excluding any corporation resulting from such business combination or
any employee benefit plan or related trust of CNB or such resulting corporation)
beneficially owns or controls 25% or more of the combined voting power of the
then outstanding securities of such corporation, except to the extent that such
ownership existed prior to the business combination, or (iii) less than a
majority of the members of the board of directors of the corporation resulting
from such business combination were members of the CNB Board at the time of the
execution of the initial agreement for such merger or consolidation; or
15.2.4 Substantially all of the assets of CNB shall be sold to
another entity other than a sale to a wholly-owned subsidiary of CNB; or
15.2.5 The sale or transfer of any of the stock or
substantially all of the assets of any member of the Bank Group other than CNB
regardless of the form of the transaction, other than a sale or transfer to a
wholly-owned subsidiary of CNB.
15.3 In the event of a Change in Control, if Employer terminates
Employee without Cause, or if Employer takes any action specified in Section
15.4 of this Agreement during the term of this Agreement following the date of
occurrence of a Change in Control ("Termination of Employment"), Bank shall pay
Employee a lump sum cash payment in an amount equal to the product of three (3)
multiplied by Employee's annual compensation from Bank, including salary,
bonuses, all perquisites, and all other forms of compensation paid to Employee
for his benefit or the benefit of his family, however characterized, for the
fiscal year during the term of this Agreement for which such compensation was
highest ("Employee's Annual Salary"). The payment provided for in this Section
15.3 shall be due and payable to Employee within 30 days after the date of
Termination of Employment. In no event shall payment(s) described in this
Section exceed the amount permitted by Section 280G of the Internal Revenue
Code, as amended (the "Code"). Therefore, if the aggregate present value
(determined as of the date of the Change in Control in accordance with the
provisions of Section 280G of the Code) of both the severance payment and all
other payments to the Employee in the nature of compensation which are
contingent on a Change in Control (the "Aggregate Severance") would result in a
"parachute payment," as defined under Section 280G of the Code, then the
Aggregate Severance shall not be greater than an amount equal to 2.99 multiplied
by Employee's "base amount" for the "base period," as those terms are defined
under Section 280G of the Code. In the event the Aggregate Severance is required
to be reduced pursuant to this Section, the Employee shall be entitled to
determine which
portions of the Aggregate Severance are to be reduced so that the Aggregate
Severance satisfies the limit set forth in the preceding sentence.
15.4 During the remaining term of this Agreement following the
effective date of a Change in Control, if Employer takes any of the following
actions, such action shall be deemed to be a termination without Cause. Those
actions are: (i) a reduction in Employee's salary, bonus provisions or other
perquisites as were in effect immediately prior to a Change in Control, (ii) a
material change in Employee's status, offices, titles, reporting requirements,
lending authority after initial modification by CNB after the Merger, duties or
responsibilities with Bank as in effect on the effective date of the Merger
(iii) a failure by Bank to increase Employee's salary annually in accordance
with an established procedure, or (iv) due to Bank's requirement that Employee
relocate more than 50 miles from the Main Office. In any such event, Employee
shall be entitled to all payments provided for in Section 15.3 of this
Agreement.
16. Miscellaneous.
16.1 This Agreement constitutes and expresses the whole agreement
of the parties in reference to the employment of Employee by Employer, and there
are no representations, inducements, promises, agreements, arrangements, or
undertakings oral or written, between the parties other than those set forth
herein.
16.2 This Agreement shall be governed by the laws of the State of
Georgia.
16.3 Should any clause or any other provision of this Agreement be
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any clause or provision of this
Agreement, all of which shall remain in full force and effect.
16.4 Time is of the essence in this Agreement.
16.5 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their successors and assigns. This Agreement shall not
be assignable by any other parties hereto without the prior written consent of
the other parties.
16.6 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute but a single instrument.
16.7 Upon the Effective Time of the Merger, the 1997 Contract shall
be amended and restated in its entirety as set forth herein, except as provided
in Section 5.1 hereof. The change of control provisions of the 1997 Contract
shall not apply or be activated by the Merger.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxx /s/ Xxxxxxx X. Xxxxxxx (SEAL)
-------------------- ---------------------------
Witness Xxxxxxx X. Xxxxxxx
CNB HOLDINGS, INC.
ATTEST
By: /s/ X. X. Xxxxxx, Xx.
-----------------------
Title: President & CEO
/s/ Xxxxxx X. Xxxx
-------------------
(CORPORATE SEAL)
EXHIBIT A
[To be mutually agreed upon.]
