1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 21st day of February 1997, by and
among Rockdale National Bancshares, Inc., a Georgia corporation (the
"Company"), Rockdale National Bank (Proposed), a proposed national bank to be
organized under the laws of the United States (the "Bank") (the Company and the
Bank are collectively referred to herein as the "Employer"), and Xxxxxxx X.
Xxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the directors of the Company, as organizers of the Bank, are
seeking approval from the Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation ("FDIC") to charter a national bank in Rockdale
County, Georgia; and
WHEREAS, Executive is willing to assist the directors of the Company
in the organization of the Bank and to become the President and Chief Executive
Officer of the Bank and the Company in accordance with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. CONSULTING SERVICES. From January 1, 1997 through such time as
the Bank opens for business, Executive shall serve as a consultant to Employer
for the purpose of assisting with the organization of the Bank and the Company,
and as a consultant Executive shall be deemed to be an independent contractor.
Executive shall be paid $7,500 per month, payable bi-weekly, for such
consulting services.
2. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
3. TERM. The term of employment of Executive under this Agreement
shall be the three year period commencing on the date the Bank opens for
business and ending on February 21, 2000. Notwithstanding the foregoing, in
the event that the term of this Agreement expires and Executive and the
Employer have not entered into a successor, amended, or replacement employment
agreement, Executive shall be entitled to receive a cash payment equal to fifty
percent (50%) of Executive's base salary paid hereunder in the event
Executive's employment is terminated for any reason other than that set forth
in Section 12(a) hereunder.
4. COMPENSATION. (a) Salary. For all services rendered by
Executive, Executive shall be paid a minimum annual base salary of $100,000,
payable in equal semi-monthly installments during the term of this Agreement.
Salary payments shall be subject to withholding and other applicable taxes.
Such base salary shall be increased in the discretion of the Board of Directors
of the Bank within thirty (30) days after the end of the calendar quarter in
which total deposits of the Bank equal or exceed $20 million. The Board of
Directors in exercising its discretion shall consider Executive's performance
in light of the specific goals and objectives for the Bank which Executive and
the Board of Directors shall mutually agree upon by the end of December of each
calendar for the succeeding calendar year.
1
2
(b) Bonus. Beginning on the second anniversary of the Bank's opening
for business, and in addition to Executive's base salary, Executive shall be
eligible to receive such performance bonuses as determined in the discretion of
the Board of Directors of the Bank, which bonuses may be in amounts up to fifty
percent (50%) of Executive's base salary. The payment of any bonus pursuant to
this Section 4(b) shall be contingent upon the following:
(i) Prior to the granting of any bonus to Executive, the
Board of Directors of the Bank shall consider, and
document its findings in the minutes of the meeting
wherein the issue was considered, Executive's
performance in light of the status of the Bank's
internal controls, loan documentation, credit
underwriting, interest rate exposure, asset growth,
asset quality, earnings, and such other performance
goals and objectives mutually agreed upon between
Executive and such Board of Directors at the end of
each calendar year pursuant to Section 4(a) hereof.
(ii) The overall condition of the Bank must be
"satisfactory" in the opinion of the OCC as set forth
in the most current OCC Report of Supervisory
Activity provided to the Board of Directors of the
Bank and the Uniform Financial Institution Rating of
the Bank shall not be less than a "3"; and
(iii) The Bank shall be "adequately capitalized" as under
regulations promulgated by the OCC pursuant to the
Federal Deposit Insurance Corporation Improvement Act
of 1991.
5. TITLE AND DUTIES. Executive shall serve as President and Chief
Executive Officer of the Bank once the OCC has granted preliminary charter
approval and a member of the Interim Board of Directors and the initial Board
of Directors of the Bank. Executive shall run the day-to-day activities of the
Bank and oversee the Bank, within the framework of the approved annual budget,
and with a sound system of internal controls and in compliance with the
policies of the Board of Directors of the Bank, and all applicable laws and
regulations. Executive shall also serve as President of the Company and shall
be nominated as a director of the Company for the term of this Agreement.
6. EXTENT OF SERVICES. Executive shall devote his entire time,
attention and energies to the business of Employer and shall not during the
term of this Agreement be engaged in any other business activity which requires
the attention or participation of Executive during normal business hours of
Employer, recognition being given to the fact that Executive is expected on
occasion to participate in client development after normal business hours.
However, Executive may invest his assets in such form or manner as will not
require his services in the operation of the affairs of the companies in which
such investments are made. Executive shall notify Employer of any significant
participation by him in any trade association or similar organization.
7. WORKING FACILITIES. Executive shall have such assistants,
perquisites, facilities and services as are suitable to his position and
appropriate for the performance of his duties, including membership in one
country or golf club and appropriate civic clubs (including dues, assessments
and initiation fees).
8. EXPENSES. Executive may incur reasonable expenses for promoting
the business of the Bank, including expenses for entertainment, travel, and
similar items. Executive will be reimbursed for all such expenses upon
Executive's periodic presentation of an itemized account of such expenditures.
2
3
9. VACATIONS. Executive shall be entitled each year to a vacation
in accordance with the personnel policy established by the Bank's Board of
Directors, which vacation shall be not less than fifteen (15) days, during
which time Executive's compensation shall be paid in full.
10. ADDITIONAL COMPENSATION. As additional consideration paid to
Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan (in the event one is adopted by the Board of Directors of the Bank). In
addition, Executive shall be paid $700 per month as an automobile allowance.
The Company shall also grant to Executive options to purchase one percent (1%)
of the amount of Common Stock of the Company sold in the Company's initial
public offering at a purchase price of $10.00 per share pursuant to the
Company's Incentive Stock Option Plan, as soon as practicable after the Bank
commences business. Fifty percent (50%) of these options shall vest beginning
on the date the Bank commences business; twenty-five percent (25%) shall vest
on the first anniversary of the Bank's opening for business; and twenty-five
percent (25%) shall vest on the Bank's second anniversary. All options shall
be exercisable for a period of seven (7) years from the date of grant.
11. CHANGE IN CONTROL OF THE COMPANY. (a) In the event of a "change
in control" of the Company, as defined herein, Executive shall be entitled, for
a period of thirty (30) days from the date of closing of the transaction
effecting such change in control and at his election, to give written notice to
Employer of termination of this Agreement and to receive a cash payment equal
to one hundred percent (100%) times the compensation, including bonus, if any,
received by Executive in the one-year period immediately preceding the change
in control. The severance payments provided for in this Section 11(a) shall be
paid in cash, commencing not later than ten (10) days after the date of notice
of termination by Executive under this Section 11 or ten (10) days after the
date of closing of the transaction effecting the change in control of the
Company, whichever is later.
(b) For purposes of this Section 11, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
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 the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
12. TERMINATION. (a) FOR CAUSE. This Agreement may be terminated by
the Board of Directors of the Bank without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) receipt by the Bank of written notice from the OCC
that the OCC has criticized Executive's performance
or his area of responsibility, and has either (a)
rated the Bank a "4" or a "5" under the Uniform
Financial Rating System or (b) has determined that
the Bank is in a "troubled condition" as defined
under Section
3
4
914 of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989;
(ii) failure of Executive to follow reasonable written
instructions or policies of the Board of Directors of
the Bank;
(iii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Bank
during the term of this Agreement, or at any time
while he was employed by the Bank prior to the term
of this Agreement, if not disclosed to the Bank prior
to the commencement of the term of this Agreement; or
(iv) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 12(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 12(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this
Section 12(a), such notice of discharge shall be accompanied by a written and
specific description of the circumstances alleging such "cause." The
termination of Executive for "cause" shall not entitle the Bank to enforcement
of the non-competition and non-solicitation covenants contained in Section 14
hereof.
(b) WITHOUT CAUSE.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time during the term of this Agreement upon
the condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to
the payment of his base salary for a period of six
(6) months and reimbursement for up to $3,000 in fees
incurred in connection with outplacement counseling
or services. The severance payments provided for in
this Section 12(b) shall commence not later than
thirty (30) days after the actual date of termination
of employment of Executive. The termination of
Executive "without cause" shall not entitle the Bank
to enforcement of the non-competition and
non-solicitation covenants contained in Section 14
hereof.
(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive than for monies paid and the Bank shall be
entitled to enforcement of the non-competition and
non- solicitation covenants contained in Section 14
hereof.
(iii) In the event this Agreement is terminated without
cause, whether by Executive or by the Bank, any
stock options or unexercised portion thereof, granted
pursuant to this Agreement, whether or not vested on
the date of termination, may be exercised by Executive
within thirty (30) days from the date of termination
at which time all such options shall expire.
4
5
13. DEATH OR DISABILITY. In the event of Executive's death,
Employer shall pay to Executive's designated beneficiary, or, if Executive has
failed to designate a beneficiary, to his estate, an amount equal to
Executive's base salary pursuant to Section 4 hereof through the end of the
month in which Executive's death occurred. Such compensation shall be in lieu of
any other benefits provided hereunder, except that (i) in the event of a change
in control of the Company as defined herein, Executive's designated beneficiary
or his estate, as the case may be, shall be entitled to the benefits of Section
11(b) hereof, and (ii) any benefit payable pursuant to Section 4 shall be
prorated and made available to Executive in respect of any period prior to his
death. The Bank may maintain insurance on its behalf to satisfy in whole or in
part the obligations of this Section 13.
In the event of Executive's disability, as hereinafter defined,
Employer shall pay to Executive the base salary then in effect through the end
of the month in which Executive became disabled. Executive shall be deemed
disabled if, by reason of physical or mental impairment, he is incapable of
performing his duties hereunder for a period of sixty (60) consecutive days.
Any dispute regarding the existence, the extent, or the continuance of
Executive's disability shall be resolved by the determination of a duly
licensed and practicing physician selected by and mutually agreeable to both
the Board of Directors of the Bank and Executive; provided, however, if
Executive officially establishes his eligibility to receive social security
disability benefits or is deemed disabled under the terms and conditions of any
disability insurance policy carried on Executive by the Company or the Bank, he
shall be deemed to be disabled as provided herein without further proof.
Executive shall make himself available for and submit to such examinations by
said physician as may be directed from time to time by the physician. Failure
to submit to any such examination shall constitute a material breach of this
Agreement.
14. NON-COMPETITION AND NON-SOLICITATION. (a) Executive acknowledges
that he has performed services or will perform services hereunder which
directly affect Employer's business. Accordingly, the parties deem it
necessary to enter into the protective agreement set forth below, the terms and
condition of which have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of twelve (12)
months after such termination date, Executive shall not, without the prior
written consent of Employer, within the Primary Service Area of the Bank as set
forth in the Charter Application filed by the Bank with the OCC, either
directly or indirectly, serve as an executive officer of any bank, bank holding
company or other financial institution.
(c) The covenants of Executive set forth in this Section 14 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter
into this Agreement. In the event that a court of competent jurisdiction finds
that Executive has violated the provisions of this Section 14, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 10 hereof shall immediately become null and void. Further, each of the
aforesaid covenants may be availed of or relied upon by Employer in any court
of competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including but not limited to
reasonable attorney's fees) suffered by Employer arising out of any breach of
the aforesaid covenants by Executive. The covenants of Executive set forth in
this Section 14 are cumulative to each other and to all other covenants of
Executive in favor of Employer contained in this Agreement and shall survive
the termination of this Agreement for the purposes intended. Should any
covenant, term, or condition contained in this Section 14 become or be declared
invalid or unenforceable by a court of
5
6
competent jurisdiction, then the parties may request that such court judicially
modify such unenforceable provision consistent with the intent of this Section
14 so that it shall be enforceable as modified, and in any event the invalidity
of any provision of this Section 14 shall not affect the validity of any other
provision in this Section 14 or elsewhere in this Agreement.
15. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
16. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless
in writing and signed by an authorized officer of Employer.
17. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
18. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia.
19. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.
6
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"BANK"
ROCKDALE NATIONAL BANK (PROPOSED)
/s/ Xxxxxxx X. Xxxxx
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
"COMPANY"
ROCKDALE NATIONAL BANCSHARES, INC.
By: The Board of Directors
/s/ X. Xxxxx Xxxxx, D.V.M.
-----------------------------------
/s/ Xxxxx X. Xxxxxx
-----------------------------------
/s/ Xxxxxx X. Xxxxxxxxxxx, Xx.
-----------------------------------
/s/ Xxxx X. Xxxxxxxx
-----------------------------------
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
/s/ C. Xxxx Xxxxxx
-----------------------------------
/s/ Xxxxx X. Xxxxxx
-----------------------------------
"EXECUTIVE"
/s/ Xxxxxxx X. Xxxxxx (L.S.)
-----------------------------
Xxxxxxx X. Xxxxxx
7
