EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of the 2nd day of January, 2002 by and among
Liberty National Bancshares, Inc., a Georgia corporation (the "Company"),
Liberty National Bank, a national bank 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, XX (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company is seeking to retain Executive as it's Senior Lending
Officer; and
WHEREAS, Executive is willing to continue in the position of Senior Lending
Officer 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. Employment. Employer employs Executive and Executive accepts
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employment upon the terms and conditions set forth in this Agreement.
2. Term. The term of employment of Executive under this Agreement shall
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be the period commencing on the date of this Agreement and ending on December
31, 2004. 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 his annual
base salary paid hereunder in the event Executive's employment is terminated for
any reason other than that set forth in Section 11(a) hereunder.
3. Compensation. (a) Salary. For all services rendered by Executive,
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Executive shall be paid a minimum base salary of $85,000 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 President of the Bank. The President
in exercising his discretion shall annually consider Executive's performance in
light of the specific goals and objectives for the Bank, which Executive and the
President shall mutually agree upon by the end of December of each calendar for
the succeeding calendar year.
(b) Bonus. In January of each year, and in addition to Executive's base
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salary, Executive shall be eligible to receive such performance bonuses as
determined in the discretion of the President of the Bank, which bonuses may be
in amounts up to 30% of
Executive's base salary. The payment of any bonus pursuant to this Section 3(b)
shall be contingent upon the following:
(i) Prior to the granting of any bonus to Executive, the President
of the Bank shall consider, and document his findings,
Executive's performance in light the goals and objectives
mutually agreed upon between Executive and President at the end
of each calendar year pursuant to Section 3(a) hereof.
(ii) The overall credit quality 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 defined under the
regulations promulgated by the OCC pursuant to the Federal
Deposit Insurance Corporation Improvement Act of 1991.
4. Title and Duties. Executive shall serve as Executive Vice President
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and Senior Lending Officer of the Bank for the term of this Agreement. Executive
shall supervise the day-to-day lending activities of 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.
5. Extent of Services. Executive shall devote his entire time, attention
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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.
6. Working Facilities. Executive shall have such assistant, perquisites,
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facilities and services as are suitable to his position and appropriate for the
performance of his duties, including membership in appropriate civic clubs
(including dues, assessments and initiation fees).
7. Expenses. Executive may incur reasonable expenses for promoting the
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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.
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8. Vacations. Executive shall be entitled each year to a vacation in
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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.
9. Additional Compensation. As additional consideration paid to
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Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan. In addition, Executive shall have the use of a bank-owned automobile. All
stock options shall be exercisable for a period of ten (10) years from the date
of grant.
10. Change in Control of the Company. (a) In the event of a "change in
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control" of the Company as defined herein, and further, if this agreement is
canceled without cause, or if the Executive is terminated without cause, or if
the Executive does not receive benefits and compensation consistent with his
position prior to the change of control, or if the Executive is given duties and
responsibilities that are not consistent with his position prior to the change
of control, Executive shall be entitled, for a period of one hundred eight (180)
days from the date of closing of the transaction effecting such change in
control, to receive a cash payment equal to one-hundred percent (100%) of his
total compensation, including bonus, if any, received by Executive in the
one-year period immediately preceding the change in control of the Company,
whichever is later. (b) For purposes of this Section 10, "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 (such as 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.
11. Termination. (a) For Cause. This Agreement may be terminated by the
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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's credit
quality a "4" or a "5" under the Uniform Financial Rating System
or (b) has determined that the Bank's loan portfolio is in a
"troubled condition" as
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defined under Section 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 President and/or 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 11(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 11(b) hereof. In the event that the
Bank discharges Executive alleging "cause" under this Section 11(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 13 hereof.
(b) Without Cause.
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(i) The Bank may, upon thirty (30) days' written notice to
Executive, terminate this Agreement without cause 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 fifty percent (50%) of his
annual base salary. The severance payments provided for in this
Section 11(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 13 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 13 hereof.
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(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 the
termination at which time all such options shall expire.
12. Death or Disability. In the event of Executive's death, Employer shall
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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 3 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 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 10(b)
hereof, and (ii) any benefit payable pursuant to Section 3 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 12.
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.
13. Non-Competition and Non-Solicitation. (a) Executive acknowledges that
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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 10(b) (ii) prior to the expiration of the term
of this Agreement, Executive agrees with Employer that through the actual date
of termination
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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
Rockdale or adjoining counties, either directly or indirectly, serve as an
employee of any bank, bank holding company or other financial institution.
(c) The covenants of Executive set forth in this Section 13 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 13, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 9 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 13 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 of the purposes intended. Should any covenant,
term, or condition contained in this Section 13 become or be declared invalid or
unenforceable by a court of competent jurisdiction, then the parties may request
that such court judicially modify such unenforceable provision consistent with
the intent of this Section 13 so that it shall be enforceable as modified, and
in any event the invalidity of any provision of this Section 13 shall not affect
the validity of any other provision in this Section 13 or elsewhere in this
Agreement.
14. Notices. Any notice required or desired to be given under this
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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.
15. Waiver of Breach. The waiver by Employer of a breach of any provision
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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.
16. Assignment. Executive acknowledges that the services to be rendered by
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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.
17. Governing Law. This Agreement shall be governed and construed in
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accordance with the State of Georgia.
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18. Entire Agreement. This Agreement contains the entire understanding of
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the parties hereto regarding employment of Executive, and supersedes and
replaces any prior agreement relating hereto. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"Bank"
LIBERTY NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
"Company"
LIBERTY NATIONAL BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice Chairman
"Executive"
/s/ Xxxxxxx X. Xxxxxx (L.S.)
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Xxxxxxx X. Xxxxxx, XX
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