FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.22
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT is made on this 31st day of December, 2008, by and between Georgia Bank &
Trust Company of Augusta (the “Bank” or the “Employer”), a state bank organized under the laws of
the State of Georgia, and Xxxxxxx X. Xxxxx, a resident of the State of South Carolina (the
“Executive”) (hereinafter from time to time collectively referred to as the “Parties”).
INTRODUCTION:
WHEREAS, the Parties established the existing employment relationship by executing an
Employment Agreement dated April 30, 2007 (the “Agreement”);
WHEREAS, the Parties now desire to amend the Agreement to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and the final Treasury Regulations issued
thereunder;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the Parties
hereby agree to amend the Agreement, effective January 1, 2009, as follows:
1. By deleting Section 1.6 in its entirety and substituting therefor the following:
“1.6 ‘Change of Control’ means any of the following events:
(a) the acquisition by 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 or total voting power of the Company or
the Bank prior to such acquisition), of stock of the Company or the Bank that, together with
stock held by such person or group, constitutes more than fifty percent (50%) of the total
voting power of the stock of the Company or the Bank, as applicable; provided, however, that
the current and future holdings of any person who is a shareholder of the Company or the
Bank as of the Effective Date shall be disregarded in determining whether the fifty percent
(50%) threshold has been attained;
(b) within any twelve-month period (beginning on or after the Effective Date) the date
a majority of members of the board of directors of the Company is replaced by directors
whose appointment or election is not endorsed by a majority of the members of the Company’s
board of directors before the date of the appointment or election;
(c) within any twelve-month period (beginning on or after the Effective Date) the
acquisition by any one person, or more than one person acting as a group, of ownership of
stock of the Company possessing fifty percent (50%) or more of the total voting power of the
stock of the Company; or
(d) within any twelve-month period (beginning on or after the Effective Date) the
acquisition by any one person, or more than one person acting as a group, of the assets of
the Company and the Bank 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 the
Company and the Bank 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 of Control under this subsection (d):
(i) an entity that is controlled by the shareholders of the Company or the Bank
immediately after the transfer;
(ii) a shareholder (determined immediately before the asset transfer) of the
Company or the Bank in exchange for or with respect to its stock;
(iii) an entity, fifty percent (50%) or more of the total value or voting power
of which is owned, directly or indirectly, by the Company or the Bank;
(iv) 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 the Company or the Bank; or
(v) 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 (d)(iv).
Notwithstanding the foregoing, no Change of Control shall be deemed to have occurred for
purposes of this Agreement by reason of: (A) a merger, consolidation, reorganization or
other transaction as to which the holders of the capital stock of the Company before the
transaction continue after the transaction to hold, directly or indirectly through a holding
company or otherwise, shares of capital stock of the Company (or other surviving company)
representing more than fifty percent (50%) of the value or ordinary voting power to elect
directors of the capital stock of the Company (or other surviving company); or (B) any
actions or events in which the Executive participates in a capacity other than in the
Executive’s capacity as an employee, director or shareholder of either the Company or the
Bank. For purposes of this Section 1.6, 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 the Company or the Bank.”
2. By adding a new Section 1.11A to read as follows:
“1.11A ‘Disability Period’ means a period, beginning on the date the
Employer determines that the Executive is subject to a Disability and ending on the earlier
of the date the Executive begins receiving income replacement benefits under any long-term
disability plan or policy maintained by the Employer or the date that is six (6) months
after such determination, during which the Executive remains subject to a Disability.”
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3. By adding a new Section 1.16A to read as follows:
“1.15A ‘Separation from Service’ shall mean a termination of the Executive’s
employment that constitutes a separation from service under Treas. Reg. Section
1.409A-1(h).”
4. By deleting Sections 3.2.1(b) and (c) in their entirety and substituting therefor the
following:
“(b) Without Cause (other than a termination in connection with a Change of Control
pursuant to Section 3.3), at any time, provided that the Employer shall give the Executive
thirty (30) days’ prior written notice of its intent to terminate, in which event the
Employer, upon the Executive’s Separation from Service, shall be required to meet its
obligations to the Executive under Sections 4.1 and 4.2 for the remaining Term then in
effect; or
(c) Upon expiration of the Disability Period.”
5. By deleting Section 3.2.2(b) in its entirety and substituting therefor the following:
“(b) Upon expiration of the Disability Period.”
6. By deleting Section 3.2.6 in its entirety and substituting therefor the following:
“3.2.6 The aggregate amount payable pursuant to Section 3.2.1(b) shall only be payable
commencing upon the Executive’s Separation from Service following the payment event and
shall be payable in substantially equal monthly installments over the remaining Term. For
purposes of Section 3.2.1(b), the bonus component of the Employer’s obligation attributable
to Section 4.2 shall be determined by dividing the sum of the annual bonuses, if any, paid
to the Executive for the three (3) calendar years (or, if fewer, the number of full calendar
years) immediately preceding the calendar year of termination by the full number of calendar
years so determined and dividing that result by twelve (12).”
7. By deleting the third paragraph of Section 3.3 in its entirety and substituting therefor
the following:
“The amount payable pursuant to this Section 3.3 shall be paid in substantially equal
monthly installments over a twenty-four (24) month period commencing as of the first day of
the calendar month following the effective date of the Executive’s Separation from Service.”
8. By adding the following new paragraph to the end of Section 3.3:
“Any Gross-Up Payment, as determined pursuant to this Section, shall be paid by the
Employer to the Executive or to the applicable taxing authorities on or before the date on
which such taxes are due, but, for purposes of Code Section 409A, in all events by the end
of the Executive’s taxable year following the Executive’s taxable year in which the
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Executive remits or is required to remit the related taxes (however, this period is by
no means an outside payment date nor does it diminish the Executive’s right to be paid
promptly).”
9. By deleting Section 3.4.3 in its entirety and substituting therefor the following:
“3.4.3 Notwithstanding any other provision of this Agreement to the contrary, as a
condition of the Employer’s payment of any amount in connection with a termination of the
Executive’s employment, the Executive must execute a release agreement in such form as is
acceptable to the Employer within such period of time following termination of employment as
is permitted by the Employer and not timely revoke the release agreement during any
revocation period provided pursuant to the terms of the release agreement. All payments of
severance under this Agreement shall accrue from the date of termination of employment and
shall be made or commence at the end of the revocation period provided pursuant to the terms
of the release agreement, but no later than the sixtieth (60th) day following the
Executive’s termination of employment, with any accrued but unpaid severance being paid on
the date of the first payment.”
10. By adding a new Section 3.4.5 to read as follows:
“3.4.5 Notwithstanding any provision in this Agreement to the contrary, if the
Executive is a ‘specified employee’ within the meaning of Code Section 409A on the date of
his termination of employment, then such portion of the payments provided for in this
Agreement 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 the Executive during the
seventh month following the date of his termination of employment.”
11. By adding a new Section 4.9 to read as follows:
“4.9 Taxable Reimbursements and In-Kind Benefits. All taxable reimbursements
and in-kind benefits provided by the Employer shall be made or provided in accordance with
the requirements of Code Section 409A, including, where applicable, the requirement that (i)
any reimbursement shall be for expenses incurred by the Executive during the Term of this
Agreement; (ii) any in-kind benefits must be provided by the Employer during the Term of
this Agreement; (iii) the amount of expenses eligible for reimbursement, or in-kind benefits
provided, during a calendar year may not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other calendar year; (iv) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year following the
year in which the expense is incurred; and (v) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.”
12. By deleting Section 16 in its entirety and substituting therefor the following:
“16. Attorneys’ Fees. With respect to arbitration of disputes and if litigation
ensues between the parties concerning the enforcement of an arbitration award and the
Executive
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prevails in the dispute, the Employer will be financially responsible for all costs,
expenses, reasonable attorneys’ fees and reasonable expenses incurred by the Executive (or
the Executive’s estate in the event of his death) in connection with the dispute and shall
pay such costs and expenses to the Executive (or the Executive’s estate in the event of his
death) within sixty (60) days after a final determination (excluding any appeals) is made
with respect to the litigation.”
13. Except as specifically amended hereby, the Agreement shall remain in full force and effect
prior to this First Amendment.
IN WITNESS WHEREOF, the Parties have caused this First Amendment to be executed on the day and
year first above written.
| THE BANK: GEORGIA BANK & TRUST COMPANY OF AUGUSTA |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Print Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and COO | |||
| THE EXECUTIVE: |
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| /s/ Xxxxxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
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