EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this 26th day of January, 1995 ("Effective
Date"), by and between Xxxxxxx County Federal Savings and Loan Association (the
"Association") and Xxxxx X. Xxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed by the Association as
Chief Executive Officer and is experienced in all phases of the business of the
Association; and
WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship of the Association and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed in the capacity as the Chief
Executive Officer of the Association. The Employee shall render such
administrative and management services to the Association and any to-be-formed
parent savings and loan holding company ("Parent") as are currently rendered and
as are customarily performed by persons situated in a similar executive
capacity. The Employee shall also promote, by entertainment or otherwise, as and
to the extent permitted by law, the business of the Association and Parent. The
Employee's other duties shall be such as the Board of Directors for the
Association (the "Board of Directors" or "Board") may from time to time
reasonably direct, including normal duties as an officer of the Association.
2. Base Compensation. The Association agrees to pay the Employee during the
term of this Agreement a salary at the rate of $75,000 per annum, payable in
cash not less frequently than monthly; provided, that the rate of such base
salary and total compensation shall be reviewed by the Board of Directors not
less often than annually, and Employee shall be entitled to receive annually an
increase in base salary at such percentage or in such an amount as the Board of
Directors in its sole discretion may decide at such time upon a determination
and resolution of the Board of Directors that the performance of the Employee
has met the requirements and standards of the Board, and that such base salary
shall be increased. .
3. Discretionary Bonus. The Employee shall be entitled to participate in
an equitable manner with all other senior management employees of the
Association in discretionary bonuses that may be authorized and declared by the
Board of Directors to its senior management employees from time to time. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Employee's right to participate in such discretionary bonuses when and
as declared by the Board of Directors.
4. (a) Participation in Retirement and Medical Plans. The Employee shall be
entitled to participate in any plan of the Association relating to pension,
profit-sharing, or other retirement benefits and medical coverage or
reimbursement plans that the Association may adopt for the benefit of its
employees.
(b) Employee Benefits; Expenses. The Employee shall be eligible to
participate in any fringe benefits which may be or may become applicable to the
Association's senior management employees, including by example, participation
in any stock option or incentive plans adopted by the Board of Directors of
Association or Parent, club memberships, a reasonable expense account, and any
other benefits which are commensurate with the responsibilities and functions to
be performed by the Employee under this Agreement. The Association shall
reimburse Employee for all reasonable out-of-pocket expenses which Employee
shall incur in connection with his service for the Association.
5. Term. The term of employment of Employee under this Agreement shall be
for the period commencing on the Effective Date and ending three years
thereafter on January 25, 1998. Additionally, on each annual anniversary date
from the Effective Date, the term of employment under this Agreement shall be
extended for an additional one year period beyond the then effective expiration
date upon a determination and resolution of the Board of Directors that the
performance of the Employee has met the requirements and standards of the Board,
and that the term of such Agreement shall be extended.
6. Loyalty; Noncompetition.
(a) The Employee shall devote his full time and attention to the
performance of his employment under this Agreement. During the term of
Employee's employment under this Agreement, the Employee shall not engage in any
business or activity contrary to the business affairs or interests of the
Association or Parent.
(b) Nothing contained in this Paragraph 6 shall be deemed to prevent or
limit the right of Employee to invest in the capital stock or other securities
of any business dissimilar from that of the Association or Parent, or, solely as
a passive or minority investor, in any business.
7. Standards. The Employee shall perform his duties under this Agreement in
accordance with such reasonable standards expected of employees with comparable
positions in comparable organizations and as may be established from time to
time by the Board of Directors.
8. Vacation and Sick Leave. At such reasonable times as the Board of
Directors shall in its discretion permit, the Employee shall be entitled,
without loss of pay, to absent himself
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voluntarily from the performance of his employment under this Agreement, with
all such voluntary absences to count as vacation time; provided that:
(a) The Employee shall be entitled to annual vacation leave in accordance
with the policies as are periodically established by the Board of Directors for
senior management employees of the Association.
(b) The Employee shall not be entitled to receive any additional
compensation from the Association on account of his failure to take vacation
leave and Employee shall not be entitled to accumulate unused vacation from one
fiscal year to the next, except in either case to the extent authorized by the
Board of Directors for senior management employees of the Association.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Association for such additional periods of time and
for such valid and legitimate reasons as the Board of Directors in its
discretion may determine. Further, the Board of Directors shall be entitled to
grant to the Employee a leave or leaves of absence with or without pay at such
time or times and upon such terms and conditions as the Board of Directors in
its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board of Directors for senior management employees
of the Association. In the event that any sick leave benefit shall not have been
used during any year, such leave shall accrue to subsequent years only to the
extent authorized by the Board of Directors for employees of the Association.
9. Termination and Termination Pay.
The Employee's employment under this Agreement shall be terminated upon
any of the following occurrences:
(a) The death of the Employee during the term of this Agreement, in which
event the Employee's estate shall be entitled to receive the compensation due
the Employee through the last day of the calendar month in which Employee's
death shall have occurred.
(b) The Board of Directors may terminate the Employee's employment at any
time, but any termination by the Board of Directors other than termination for
Just Cause, shall not prejudice the Employee's right to compensation or other
benefits under the Agreement. The Employee shall have no right to receive
compensation or other benefits for any period after termination for
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Just Cause. Termination for "Just Cause" shall include termination because of
the Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of the Agreement.
(c) Except as provided pursuant to Section 12 herein, in the event
Employee's employment under this Agreement is terminated by the Board of
Directors without Just Cause, the Association shall be obligated to continue to
pay the Employee the salary provided pursuant to Section 2 herein, up to the
date of termination of the term (including any renewal term) of this Agreement
and the cost of Employee obtaining all health, life, disability, and other
benefits which the Employee would be eligible to participate in through such
date based upon the benefit levels substantially equal to those being provided
Employee at the date of termination of employment.
(d) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Association under this
Agreement shall terminate, as of the effective date of the order, but the vested
rights of the parties shall not be affected.
(e) If the Association is in default (as defined in Section 3(x)(1) of
FDIA) all obligations under this Agreement shall terminate as of the date of
default, but this paragraph shall not affect any vested rights of the
contracting parties.
(f) All obligations under this Agreement shall be terminated, except to
the extent determined that continuation of this Agreement is necessary for the
continued operation of the Association: (i) by the Director of the Office of
Thrift Supervision ("Director of OTS"), or his or her designee, at the time that
the Federal Deposit Insurance Corporation ("FDIC") or the Resolution Trust
Corporation enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in Section 13(c) of FDIA; or (ii)
by the Director of the OTS, or his or her designee, at the time that the
Director of the OTS, or his or her designee approves a supervisory merger to
resolve problems related to operation of the Association or when the Association
is determined by the Director of the OTS to be in an unsafe or unsound
condition. Any rights of the parties that have already vested, however, shall
not be affected by such action.
(g) The voluntary termination by the Employee during the term of this
Agreement with the delivery of no less than 60 days written notice to the Board
of Directors, other than pursuant to Section 12(b), in which case the Employee
shall be entitled to receive only
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the compensation, vested rights, and all employee benefits up to the date of
such termination.
(h) Notwithstanding anything herein to the contrary, any payments made to
the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and any regulations
promulgated thereunder.
10. Suspension of Employment . If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Association's
affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)), the Association's obligations under the Agreement
shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Association shall,
(i) pay the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.
11. Disability. If the Employee shall become disabled or incapacitated to
the extent that he is unable to perform his duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
engaged by the Board of Directors, Employee shall nevertheless continue to
receive the compensation and benefits provided under the terms of this Agreement
as follows: 100% of such compensation and benefits for a period of 12 months,
but not exceeding the remaining term of the Agreement, and 65% thereafter for
the remainder of the term of the Agreement. Such benefits noted herein shall be
reduced by any benefits otherwise provided to the Employee during such period
under the provisions of disability insurance coverage in effect for Association
employees. Thereafter, Employee shall be eligible to receive benefits provided
by the Association under the provisions of disability insurance coverage in
effect for Association employees. Upon returning to active full-time employment,
the Employee's full compensation as set forth in this Agreement shall be
reinstated as of the date of commencement of such activities. In the event that
the Employee returns to active employment on other than a full-time basis, then
his compensation (as set forth in Paragraph 2 of this Agreement) shall be
reduced in proportion to the time spent in said employment, or as shall
otherwise be agreed to by the parties.
12. Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the event of
the involuntary termination of Employee's employment under this Agreement,
absent Just Cause, in connection with, or within twelve (12) months after, any
change in control of the Association or Parent, Employee shall be paid an amount
equal to the product of 2.99 times the Employee's "base amount" as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986, as
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amended (the "Code") and regulations promulgated thereunder. Said sum shall be
paid, at the option of Employee, either in one (1) lump sum within thirty (30)
days of such termination discounted to the present value of such payment using
as the discount rate the "prime rate" as published in the Wall Street Journal
Eastern Edition as of the date of such payment, or in periodic payments over the
next 36 months or the remaining term of this Agreement whichever is less, as if
Employee's employment had not been terminated, and such payments shall be in
lieu of any other future payments which the Employee would be otherwise entitled
to receive under Section 9 of this Agreement. Notwithstanding the forgoing, all
sums payable hereunder shall be reduced in such manner and to such extent so
that no such payments made hereunder when aggregated with all other payments to
be made to the Employee by the Association or the Parent shall be deemed an
"excess parachute payment" in accordance with Section 280G of the Code and be
subject to the excise tax provided at Section 4999(a) of the Code. The term
"control" shall refer to the ownership, holding or power to vote more than 25%
of the Parent's or Association's voting stock, the control of the election of a
majority of the Parent's or Association's directors, or the exercise of a
controlling influence over the management or policies of the Parent or
Association by any person or by persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934. The term "person" means an
individual other than the Employee, or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the contrary,
Employee may voluntary terminate his employment under this Agreement within
twelve (12) months following a change in control of the Association or Parent,
and Employee shall thereupon be entitled to receive the payment described in
Section 12(a) of this Agreement, upon the occurrence, or within ninety (90) days
thereafter, of any of the following events, which have not been consented to in
advance by the Employee in writing: (i) if Employee would be required to move
his personal residence or perform his principal executive functions more than
thirty-five (35) miles from the Employee's primary office as of the signing of
this Agreement; (ii) if in the organizational structure of the Association or
Parent, Employee would be required to report to a person or persons other than
the Board of the Association or Parent; (iii) if the Association or Parent
should fail to maintain Employee's base compensation in effect as of the date of
the Change in Control and the existing employee benefits plans, including
material fringe benefit, stock option and retirement plans; (iv) if Employee
would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; (v) if Employee
would not be elected or reelected to the Board of Directors of the Association;
or (vi) if Employee's responsibilities or authority have in any way been
materially diminished or reduced.
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(c) In the event any dispute shall arise between the Employee and the Bank
as to the terms or interpretation of this Agreement, including this Section 12,
whether instituted by formal legal proceedings or otherwise, including any
action taken by Employee to enforce the terms of this Section 12 or in defending
against any action taken by the Bank or Parent, the Bank or Parent shall
reimburse Employee for all costs and expenses, including reasonable attorneys'
fees, arising from such dispute, proceedings or actions following issuance of a
legal judgement by a court of competent jurisdiction finding in favor of the
Employee or the settlement of the dispute by the parties. Such settlement to be
approved by the Board of the Bank or the Parent may include a provision for the
reimbursement by the Bank or Parent to the Employee for all costs and expenses,
including reasonable attorneys' fees, arising from such dispute, proceedings or
actions, or the Board of the Bank or the Parent shall authorize such
reimbursement of such costs and expenses by separate action upon a written
action and determination of the Board that payment of such costs and expenses is
not detrimental to the Bank or the Parent. Such reimbursement shall be paid
within ten (10) days of Employee furnishing to the Bank or Parent evidence,
which may be in the form, among other things, of a canceled check or receipt, of
any costs or expenses incurred by Employee.
13. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Association or Parent which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Association or Parent.
(b) Since the Association is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Association.
14. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
15. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of Georgia, the extent that Federal law shall be deemed to
apply.
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16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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