EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of
this 1st day of July, 2004 by and between Xxxxxx X. Xxxxxx, a resident of the
State of Georgia ("Employee") and CNB Holdings, Inc., a Georgia bank holding
company, and Chattahoochee National Bank, CNB Holdings, Inc.'s wholly owned
subsidiary (collectively referred to as "CNB").
WITNESSETH:
WHEREAS, Employee is currently an executive officer of CNB; and
WHEREAS, CNB and Employee have entered into an employment agreement as
of September 24, 2001 (the "2001 Contract"); and
WHEREAS, CNB and Employee each desire to modify the 2001 Contract by
amending and restating the 2001 Contract in its entirety as set forth herein;
and
WHEREAS, CNB 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.
NOW, THEREFORE, in consideration of the employment of Employee by CNB,
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. CNB hereby employs Employee to serve as
Executive Vice President and Senior Lending Officer 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 his full time and effort to his duties
hereunder.
2. TERM. The period of the Employee's employment under this Agreement
shall be deemed to have commenced as of the date of this Agreement, and shall
continue until the earlier of (i) December 31, 2005, unless the Employee dies
before December 31, 2005, in such case the period of employment shall continue
until the end of the month of such death, or (ii) any termination as provided
for in Section 12 herein.
3. COMPENSATION. For all services rendered by Employee during the term
of this Agreement, CNB agrees to pay Employee in accordance with the terms
outlined in EXHIBIT A, less normal witholdings.
4. EXPENSES. So long as Employee is employed hereunder, Employee is
entitled to receive reimbursement for, or seek payment directly by CNB of, all
reasonable expenses which are consistent with the normal policy of CNB in the
performance of Employee's duties hereunder, provided that Employee accounts for
all such expenses in writing.
5. EMPLOYEE BENEFITS. SO long as Employee is actively employed
hereunder, Employee will be entitled to participate in the employee benefit
programs covering the Employee's employment and duties as described in EXHIBIT A
of this Agreement, if any, provided and paid for by CNB for its employees
generally.
6. PAID TIME OFF. Employee shall be entitled to twenty-five (25) paid
time off days, twenty (20) of which may be scheduled in advance.
7. CONFIDENTIALITY. In Employee's position as an employee of CNB,
Employee has had and will have access to confidential information, trade secrets
and other proprietary information of vital importance to CNB and has and will
also develop relationships with
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customers, employees and others who deal with CNB which are of value to CNB. CNB
requires as a condition to Employee's employment with CNB that Employee agrees
to certain restrictions on Employee's use of proprietary information and
valuable relationships developed during Employee's employment with CNB. In
consideration of the terms and conditions contained herein, the parties hereby
agree as follows:
7.1 CNB and Employee mutually agree and acknowledge that CNB
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 CNB 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 CNB.
7.2 For the purposes of this Section, the following
definitions shall apply:
7.2.1 "TRADE SECRET" shall mean the identity of
customers of CNB, 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 CNB) 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 CNB and not
generally known by the public. Confidential Information shall include, but not
be limited to, Business Opportunities of CNB (as hereinafter defined), the
details of this Agreement, CNB's business plans and financial statements and
projections, and the costs of the services CNB may offer or provide to the
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customers they serve, to the extent such information is material to CNB and not
generally known to the public.
7.2.3 "BUSINESS OPPORTUNITIES" shall mean any
specialized information or plans of CNB 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 CNB 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 Holdings, Inc.'s Board of Directors
approves for release.
7.3 Employee shall not, without the prior approval of CNB
Holdings, Inc.'s Board of Directors, during his employment with CNB 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 CNB to use, disclose, or gain access to, any Trade Secrets of CNB, its
subsidiaries or affiliates, or of any other person or entity making Trade
Secrets available for CNB's use.
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7.4 Employee shall not, without the prior written consent of
CNB, during his employment with CNB and for a period of two (2) years 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
CNB to use, disclose, or gain access to, any Confidential Information or
Business Opportunities to which the Employee obtained access by virtue of his
employment with CNB, except as provided in Section 7.2 of this Agreement.
8. OBSERVANCE OF SECURITY MEASURES. During Employee's employment with
CNB, Employee is required to observe all security measures adopted to protect
Trade Secrets, Confidential Information, and Business Opportunities of CNB.
9. RETURN OF MATERIALS. Upon the request of CNB and, in any event,
upon the termination of his employment with CNB, Employee shall deliver to CNB
all memoranda, notes, records, manuals or other documents, including all copies
of such materials, pertaining to the performance of Employee's services
hereunder or containing Trade Secrets, Confidential Information or Business
Opportunities, whether made or compiled by Employee or furnished to him from any
source by virtue of his employment with CNB.
10. SEVERABILITY. Employee acknowledges and agrees that the covenants
contained in Sections 7 through 9 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 CNB and Employee, and that the existence of any claim, suit
or action by Employee against CNB, whether predicated upon this or any other
agreement, shall not constitute a defense to CNB's enforcement of any covenant
contained in Sections 7 through 9 of this Agreement.
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11. SPECIFIC PERFORMANCE. Employee acknowledges and agrees that the
covenants contained in Sections 7 through 9 of this Agreement shall survive any
termination of employment, as applicable, with or without Cause (as hereinafter
defined), 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 through 9 of this
Agreement would be difficult, if at all possible. Employee therefore
acknowledges and agrees that CNB shall be entitled in addition to and not in
limitation of any other rights, remedies, or damages available to CNB 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, all compensation, salary, expenses,
reimbursements, and employee benefits may be terminated as follows:
12.1 At the election of CNB for Cause in which case only
compensation due and payable through the effective date of termination shall be
owed to the Employee;
12.2 At Employee's election, upon CNB's breach of any material
provision of this Agreement in which case;
12.3 "Cause" shall mean (i) conduct by Employee that amounts
to fraud, dishonesty, gross negligence or willful misconduct in the performance
of his duties hereunder; (ii) the conviction (from which no appeal may be, or
is, timely taken) of Employee of a felony; or (iii) initiation of suspension or
removal proceedings against Employee by federal or state regulatory authorities
acting under lawful authority pursuant to provisions of federal or state law
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or regulation which may be in effect from time to time. No termination for Cause
shall be effective unless it is approved by a two-thirds (2/3) vote of CNB
Holdings Inc.'s Board of Directors, excluding the vote, if any, of Employee;
12.4 Upon Employee's death, or at the election of either
party, upon Employee's disability resulting in inability to perform the duties
described in Section 1 of this Agreement for a period of ninety (90) consecutive
days as determined by CNB Holdings Inc.'s Board of Directors in its sole
discretion in either case only compensation due and payable through the
effective date of termination shall be owed to the Employee;
12.5 By CNB without Cause in which case CNB shall pay to
Employee as Employee's sole remedy hereunder an amount equal to six (6) months
of Employee's existing base salary plus medical, hospitalization and term life
insurance; or
12.6 By CNB without Cause following a Change of Control (as
hereinafter defined) of CNB in which case CNB shall pay to Employee as
Employee's sole remedy hereunder an amount equal to one (1) year of existing
base salary. "Change of Control" of CNB means any transaction, whether by
merger, consolidation, asset sale, tender offer, reverse stock split or
otherwise, which results in the acquisition of beneficial ownership (as such
term is defined under the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended) by any person or entity or any group of
persons or entities acting in concert, of 50% or more of the outstanding shares
of common stock of CNB Holdings, Inc.
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:
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CNB: CNB Holdings, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
------------------------
With a copy to: Xxxxxx Xxxxxxxxx LLP
Fourteenth Floor
0000 Xxxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
Employee: Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to: ------------------------
------------------------
------------------------
14. COVENANT NOT TO SOLICIT.
14.1 For purposes of this Section 14, CNB and Employee conduct
the following business in the following territories:
14.1.1 CNB is engaged in the business of transacting
business as a bank holding company with subsidiary bank(s) which accept
deposits, make loans, cash checks and otherwise engage in the business of
banking ("Business of CNB").
14.1.2 CNB (through its subsidiaries) actively
conducts business in the geographic areas of Georgia at the business locations
of CNB's subsidiaries set forth in EXHIBIT B of this Agreement.
14.1.3 Employee has established business
relationships in the geographic area covered by a circle having a radius of
fifty (50) miles from the locations set forth in EXHIBIT B of this Agreement.
14.2 Employee agrees that both during the term of this
Agreement and for a period of twelve (12 months) after the termination of this
Agreement for any reason, Employee
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will not (except on behalf of or with the prior written consent of CNB Holdings,
Inc.'s Board of Directors), within such geographic area as described in Section
14.1.3, on his own behalf or in the service of or on behalf of others, solicit,
divert or appropriate or attempt to solicit, divert or appropriate any business
from any of CNB's customers, including prospective customers actively sought by
CNB, with whom the Executive has or had material contact during the last two (2)
years of his employment, for purposes of providing products or services that are
competitive with those provided by CNB.
14.3 Employee agrees that both during the term of this
Agreement and for a period of twelve (12) months after the termination of this
Agreement for any reason, Employee will not enter into, and will not participate
in, any plan or arrangement to cause any employee of CNB to terminate his or her
employment with CNB, and, Employee further agrees that for a period of at least
twelve (12) months after the termination of employment by any employee of CNB,
Employee will not hire such employee in connection with any business initiated
by Employee or any other person, firm or corporation. Employee further agrees
that information as the capabilities of CNB's employees, their salaries and
benefits, and any other terms of their employment is Confidential Information
and proprietary to CNB.
14.4 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 CNB,
whether predicated upon this or any other contract or agreement, shall not
constitute a defense to the enforcement by CNB of said covenants.
15. MISCELLANEOUS.
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15.1 This Agreement constitutes and expresses the whole
agreement of the parties in reference to the employment of Employee by CNB, and
there are no representations, inducements, promises, agreements, arrangements,
or undertakings oral or written, between the parties other than those set forth
herein.
15.2 This Agreement shall be governed by the laws of the State
of Georgia.
15.3 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.
15.4 Time is of the essence in this Agreement.
15.5 This Agreement shall be binding upon and enure 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.
15.6 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
"Employee"
/s/ Xxxxxx Xxxx /s/ Xxxxx X. Xxxxxx
------------------------------- -----------------------------
Witness Xxxxx X. Xxxxxx
ATTEST: "CNB"
CNB HOLDINGS, INC.
By: /s/ Xxxxxxxxx Xxxxxx By: /s/ X. X. Xxxxxx
--------------------------- ---------------------------
_______________Secretary President/CEO
-----------------------
(CORPORATE SEAL)
By: /s/ X. X. Xxxxx
-------------------------
Chairman Compensation Committee
CHATTAHOOCHEE NATIONAL BANK
By: /s/ Xxxxxxxxx Xxxxxx By: /s/ X. X. Xxxxxx
--------------------------- ----------------------------------------
_______________Secretary President/CEO
-----------------------------------
(CORPORATE SEAL)
By: /s/ X. X. Xxxxx
------------------------------------
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EXHIBIT A
---------
EMPLOYEE COMPENSATION
---------------------
SALARY:
Period Annual Salary Rate
------ ------------------
7/04-12/04 160,000
1/05-12/05 160,000
2004 ANNUAL PERFORMANCE BONUS
For the 2004 calendar year and payable in January 2005, Employee's Annual
Performance Bonus will be based on the criteria set forth below with the target
bonus being $100,000, weighted as follows:
Bank Earnings: 15% ($15,000)
Strategic Initiative: 85% ($85,000)
A. BANK EARNINGS
The 2004 Annual Performance Bonus calculated on bank earnings is based on the
performance of First Capital Bank/Chattahoochee National Bank (the "Bank")
meeting a targeted Return on Assets ("ROA"), as calculated and determined in
accordance with generally accepted accounting principals by the Bank's
independent certified public accountants, as set forth below:
Example with Target Actual
Budget
------
Projected EBT $2,289,150 Actual last 6 months EBT
Bonus of .65% Actual EBT x .65%
Bonus Annualized $14,900
Bonus for 6 months $7,500 50% of total
Exhibit A - Page 1 of 2
For the purposes of this Agreement: (i) ROA shall exclude any gains or losses on
investment securities as required by Statement of Financial Accounting Standards
No. 115; and (ii) ROA shall be determined after subtracting the sum of any
amount paid to or for the benefit of Employee hereunder and all other bonuses
and compensation paid to Bank's employees for such period.
B. STRATEGIC INITIATIVES
The 2004 Annual Performance Bonus based on Strategic Initiatives is based on the
Employee recruiting C&I Team Leaders and Producers as set forth below:
Number of Team Leader Recruits 1 2 3 4
------------------------------------ ---------- ---------- ----------- ---------
Bonus ($20,000 per recruit) $20,000 $40,000 $60,000 $80,000
Number of Producer Recruits 3 6 9 12
Bonus ($3,000 per recruit) $9,000 $18,000 $27,000 $36,000
For the purposes of this Agreement, Team Leaders must be "A" quality lenders
with a demonstrated performance record in one of CNB's target markets and
approved by Xxx Xxxxxx and Xxxx Xxxxxxx. Producers must be bankers of proven
reputation and production, as determined and approved by Xxx Xxxxxx and Xxxx
Xxxxxxx. Further, to count as a successful recruitment, the recruit must commit
to employment with CNB during the 2004 calendar year and be on the payroll of
CNB no later than February 15, 2005.
2005 ANNUAL PERFORMANCE BONUS PLAN
For the 2005 calendar year and payable in January 2006, Employee's Annual
Performance Bonus will be determined on the basis of the degree of achievement
of performance goals which shall be established by the Compensation Committee of
CNB Holdings, Inc.'s Board of Directors in its sole discretion, and which goals
shall be stated in terms of the attainment of specified levels of XXX and
certain strategic initiatives. Such performance goals shall be in writing and
communicated to the Employee
STOCK OPTIONS - Awarded by the Compensation Committee of CNB Holdings, Inc.'s
Board of Directors annually at its sole discretion.
AUTO ALLOWANCE - The greater of actual miles driven paid at the IRS standard
rate or $550/mo.
CLUB MEMBERSHIP - Horseshoe Bend Country Club monthly dues.
Exhibit A - Page 2 of 2
EXHIBIT B
BUSINESS LOCATIONS OF CNB'S SUBSIDIARIES
First Capital Bank
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxx X
Xxxxxxxx, Xxxxxxx 00000
Exhibit B - Page 1 of 1
