EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”) is hereby entered into by and between
X.
X. XXXXXX, III,
a
resident of the State of Georgia (the “Executive ”) and WEST
GEORGIA NATIONAL BANK,
a
national banking association (the “Bank”) and the Bank’s sole shareholder,
WGNB
CORP.,
a
Georgia Bank Holding Company (“WGNB”).
WHEREAS,
the
Executive is currently employed by the Bank and WGNB and his current employment
contract shall expire as of August 8, 2008; and
WHEREAS,
the
Bank, WGNB and the Executive desire to enter into a new written agreement to
replace his current employment agreement and document the complete terms and
conditions pursuant to which the Executive shall continue to be employed by
WGNB
and the Bank; and
WHEREAS,
the
Bank, WGNB and the Executive intend that this Agreement will supersede any
and
all previous oral or written employment agreements between WGNB, the Bank and
the Executive;
NOW,
THEREFORE,
in
consideration of the covenants and agreements hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS
As
used
in this Agreement, the following words and/or phrases shall have the meanings
set forth below unless a different meaning plainly is required by the
context:
1.1 Agreement shall
mean this Employment Agreement between the Bank, WGNB and the
Executive.
1.2 Affiliate shall
mean any parent, brother-sister or subsidiary corporation of the Bank or WGNB,
any joint venture in which the Bank or WGNB owns at least a 50 percent interest,
and any partnership, limited liability partnership or limited liability
corporation in which the Bank or WGNB or any of its wholly-owned subsidiaries
owns at least a 50 percent interest.
1.3 Bank
shall
mean West Georgia National Bank, a national banking association.
1.4 Base
Salary
shall
mean the annual base compensation paid to the Executive as provided in Section
3.1.
1.5 Board shall
mean the Board of Directors of WGNB and/or the Bank.
1.6 Business
of the Bank
shall
mean any and all operations incident to the business of banking.
1.7 Business
Opportunities
shall
mean any specialized information or plans of WGNB and/or the Bank concerning
the
business of WGNB and/or the Bank, including but not limited to, the financing
of
or investment in any target person or business, or the availability of any
such
business, by WGNB and/or the Bank, together with all related information
concerning the specifics of any contemplated acquisition, purchase or investment
(including price, terms, and the identity of such business) regardless of
whether WGNB or the Bank has entered any agreement, made any commitment, or
issued any bid or offer to such business.
1.8 Cause shall
mean (i) the Executive ’s willful failure to perform his material duties and
responsibilities; (ii) the Executive ’s unlawful or willful misconduct which is
economically injurious to WGNB or the Bank or to any entity in control of,
controlled by or under common control with WGNB, the Bank and its successors;
(iii) the Executive ’s conviction of, or a plea of guilty or nolo
contendere,
to a
felony charge; (iv) habitual drug or alcohol abuse that impairs the Executive
’s
ability to perform the essential duties of his position; (v) the initiation
of
suspension or removal proceedings against the Executive by federal or state
regulatory authorities acting under lawful authority; (vi) the Executive ’s
willful disclosure to unauthorized persons of Confidential Information or Trade
Secrets of WGNB or the Bank; or (vii) the Executive ’s failure to comply with
the Code of Ethics or other personnel policies of WGNB and/or the
Bank.
1.9 Change
in Control shall
mean the occurrence of any one of the following events:
(i) Change
in Ownership.
A
change in the ownership of WGNB or the Bank (each being individually referred
to
in this Section as a “Corporation”) that occurs on the date that any one person,
or more than one person acting as a group, acquires ownership of stock of a
Corporation that, together with stock held by such person or group, constitutes
more than fifty percent (50%) of the total fair market value or total voting
power of the stock of such Corporation. However, if any one person or more
than
one person acting as a group is considered to own more than fifty percent (50%)
of the total fair market value or total voting power of the stock of a
Corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of such Corporation (or
to
cause a change in the effective control of such Corporation (within the meaning
of subsection (ii) herein). An increase in the percentage of stock owned by
any
one person, or persons acting as a group, as a result of a transaction in which
a Corporation acquires its stock in exchange for property will be treated as
an
acquisition of stock for purposes of this section. This applies only when there
is a transfer of stock of a Corporation (or issuance of stock of a Corporation)
and stock in such Corporation remains outstanding after the
transaction.
(ii) Change
in Effective Control.
A change
in the effective control of a Corporation that occurs on the date that
either:
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(A) Any
one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition
by
such person or persons) ownership of stock of such Corporation possessing 35
percent or more of the total voting power of the stock of such Corporation;
or
(B) a
majority of members of the Board is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election.
(iii) Change
in Ownership of a Substantial Portion of Assets.
A change
in the ownership of a substantial portion of a Corporation’s assets shall occur
on the date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of
the
most recent acquisition by such person or persons) assets from such Corporation
that have a total gross fair market value equal to or more than 40 percent
of
the total gross fair market value of all of the assets of such Corporation
immediately prior to such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the Corporation, or the
value
of the assets being disposed of, determined without regard to any liabilities
associated with such assets.
In
determining whether a Change in Control has occurred, the following rules shall
apply:
(A)
Stock
Attribution Rules.
For
purposes of this section, Code Section 318(a) applies to determine stock
ownership. Stock underlying a vested option is considered owned by the
individual who holds the vested option (and the stock underlying an unvested
option is not considered owned by the individual who holds the unvested option).
For purposes of the preceding sentence, however, if a vested option is
exercisable for stock that is not substantially vested (as defined by Treasury
Regulation Sections 1.83-3(b) and (j)), the stock underlying the option is
not
treated as owned by the individual who holds the option. In addition, mutual
and
cooperative corporations are treated as having stock for purposes of this
subsection.
(B)
Persons
Acting as a Group.
For
purposes of this section, persons will not be considered to be acting as a
group
solely because they purchase or own stock of the same Corporation at the same
time or as a result of the same public offering. However, 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 one of the Corporations. If a person,
including an entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in
a
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.
(C)
Transfers
to a Related Person.
There
is no Change in Control event with respect to subsection (iii) when there is
a
transfer by a Corporation to an entity that is controlled by the shareholders
of
the transferring Corporation immediately after the transfer. A transfer of
assets by a Corporation is not treated as a change in the ownership of such
assets if the assets are transferred to:
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(1) A
shareholder of the Corporation (immediately before the asset transfer) in
exchange for or with respect to its stock;
(2) An
entity, 50 percent or more of the total value or voting power of which is owned,
directly or indirectly, by the Corporation;
(3) A
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Corporation; or
(4) An
entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in subsection
(3).
For
purposes of this subsection (C) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets. For example,
a transfer to a corporation in which the transferor Corporation has no ownership
interest before the transaction, but which is a majority owned subsidiary of
the
transferor Corporation after the transaction is not treated as a change in
the
ownership of the assets of the transferor Corporation.
1.10 Code shall
mean the Internal Revenue Code of 1986, as amended.
1.11 Committee
shall
mean the Executive Compensation and Management Succession Committee of the
Board, or such other committee to which the Board delegates authority regarding
executive compensation.
1.12 Confidential
Information
shall
mean, other than Trade Secrets, any data or information, which is material
to
the Bank and/or WGNB and not generally known by the public. Confidential
Information shall include, but not be limited to, the taking of deposits, making
loans and extensions of credit, cashing checks, and other Business of the Bank,
any information pertaining to the identity of customers, depositors, or
borrowers served by the Bank, Business Opportunities of the Bank, the details
of
this Agreement, WGNB’s and the Bank’s business, marketing and acquisition plans
and financial statements and projections, and the costs of the services the
Bank
may offer or provide to the customers, depositors or borrowers it serves, to
the
extent such information is material to WGNB and the Bank and not generally
known
to the public.
1.13 Disability
means
the Executive ’s eligibility to receive income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of WGNB or the Bank due to a medically-determinable physical or mental
impairment, or if no such plan is applicable, the Executive ’s inability to
engage in any substantial gainful activity due to a medically-determinable
physical or mental impairment, which can be expected to result in death or
can
be expected to last for a continuous period of not less than twelve (12) months.
1.14 Effective
Date shall
mean May 9, 2006.
1.15 ERISA shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
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1.16 Executive shall
mean X. X. Xxxxxx, III
1.17 Good
reason shall mean:
(a) A
reduction of the Executive’s Base Salary unless substantially similar reductions
are applicable to other executive officers of the Bank; or
(b) Without
the express written agreement of the Executive, any assignment or change in
duties that would require the relocation of the Executive’s work place to a
location that is either (i) more than fifty (50) miles from the Executive’s work
place immediately prior to such assignment; provided however, the relocation
of
the Executive’s work place must also increase the regular commute distance
between the Executive’s resident and work place by more than fifty (50) miles
(one-way); or (ii) inside the Interstate 285 perimeter around Atlanta, Georgia;
or
(c) The
assignment to the Executive of any duties inconsistent with the Executive’s
position (including offices and reporting relationships), authority, duties
or
responsibilities as contemplated by this Agreement, or any other action by
WGNB
or the Bank which results in a diminution in such position, authority, duties
or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Bank
or
WGNB promptly after receipt of notice thereof given by the Executive; or
(d) Any
failure by WGNB or the Bank to comply with any of the provisions of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Bank or WGNB promptly after
receipt of notice thereof given by the Executive; or
(e) Any
failure of the Bank to pay Base Salary, a Bonus (as defined in Section 3.2),
or
a Profit Sharing Bonus (as defined in Section 3.2), but only to the extent
that
such Base Salary, Executive Bonus or Profit Sharing Bonus has in fact become
due
and payable in accordance with the terms of the applicable bonus plan or program
or this Agreement; or
(f) After
the
date of a Change in Control, any material reduction by WGNB or the Bank in
the
basis and/or level of the plans, programs, policies and practices, and benefits,
that are described in this Agreement and that were maintained and/or provided
during the ninety (90) day period immediately preceding the date of the Change
in Control.
For
the
purposes of this Agreement, if the Executive’s title with WGNB is altered, such
alteration or change alone shall not constitute Good Reason.
1.18 Term shall
mean the period during which this Agreement is wholly effective, as more fully
described in Section 2.4.
1.19 Termination
Date shall
mean the last day of actual employment of the Executive by WGNB or the
Bank.
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1.20 Trade
Secret
shall
mean the whole or any portion or phase of any scientific or technical
information, design, process, procedure, formula or improvement of WGNB or
the
Bank that is valuable and secret (in the sense that it is not generally known
to
competitors of WGNB and the Bank) and any information that meets the definition
of “trade secret” under the Georgia Trade Secrets Act of 1990, O.C.G.A.
§10-1-760 through §10-1-767.
2.
DUTIES
AND AUTHORITY
2.1 Duties
and Authority.
The
Executive is engaged and agrees to perform services for and on behalf of the
Bank as its President and Chief Executive Officer and for and on behalf of
WGNB
Corp. as its Interim President and Chief Executive Officer and shall report
directly to the Board of Directors. The Executive shall have such duties and
authority as customarily performed by persons acting in such capacities or
as
may be assigned to him by the Bank’s or WGNB’s bylaws or by the Board of
Directors. The Executive agrees to perform such duties diligently and
efficiently and in accordance with the reasonable directions of the Board of
Directors of WGNB and the Bank. The Executive shall conduct himself at all
times
in a business-like and professional manner as appropriate for his position
and
shall represent WGNB and the Bank in all respects in compliance with good
business and ethical practices. In addition, the Executive shall be subject
to
and abide by the policies and procedures of WGNB and the Bank applicable to
personnel of WGNB and the Bank, as may be adopted from time to
time.
2.2 Best
Efforts.
During
the term of this Agreement, the Executive shall devote his full attention,
energies and best efforts to rendering services on behalf of WGNB and the Bank
(or subsidiaries or Affiliates thereof), and shall not engage in any outside
employment without the express written consent of the Board. Notwithstanding
the foregoing, the Executive is not prohibited from investing or trading in
stocks, bonds, commodities or other forms of investment, including real
property, so long as the Executive does not (i) own more than two percent (2%)
of the outstanding ownership interest of an entity, and (ii) “participate”
(within the meaning of Treas. Reg. §§1.469-5(f) and 1.469-5T(f), as in effect as
of the date this Agreement is executed) in such investments, unless such
investment is approved by the Board or the Executive Committee of the Board
in
advance and shown on Exhibit “B” hereto.
2.3 Outside
Activities.
The
Executive may pursue personal interests so long as such participation does
not
interfere with the Executive’s performance of his duties hereunder, and the
Executive may participate in industry, civic and charitable activities so long
as such activities do not materially interfere with the performance of his
duties hereunder. The Executive may also participate in any interest or activity
which is approved in writing by the Board of Directors of WGNB or the Bank.
At
least once each year during the term of this Agreement, and at any time upon
the
Board of Director’s request, the Executive shall provide a full disclosure to
the Board of Directors of his participation in any industry, civic and
charitable activities (including service on corporate or charitable boards
of
directors or trustees). Prior to pursuing or accepting any activity other than
those in which he is engaged on the Effective Date, the Executive agrees to
discuss such activity with the Board of Directors of WGNB and the
Bank.
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2.4 Term.
The
Term of this Agreement shall be the period during which this Agreement
(including any amendments and/or extensions of this Agreement) remains
effective. The initial Term of this Agreement shall commence on the execution
date hereof and shall continue until the close of business on the last day
of
the one-year period after the Effective Date hereof, subject to earlier
termination as provided in this Agreement. At least ninety (90) days prior
to
the end of the initial Term hereof and each subsequent Term period thereafter,
this Agreement shall be deemed to be extended automatically for an additional
one-year Term on the same terms and conditions, unless either the Bank or the
Executive provides a written notice of nonrenewal to the other party no less
than ninety (90) days prior to the date on which this Agreement would otherwise
be extended.
3.
COMPENSATION
AND BENEFITS
3.1 Annual
Base Salary.
The Bank
shall pay to the Executive as compensation for his services provided hereunder
a
base salary of
$180,000 per
year
(“Base Salary”), payable in accordance with the Bank’s normal payroll
procedures. The Committee shall review the Executive’s Base Salary annually, and
in its sole discretion, subject to approval of the Board, may increase the
Executive’s Base Salary from year to year. The Committee shall not decrease the
amount of the Executive’s Base Salary unless substantially similar decreases are
applicable to other executive officers of the Bank or WGNB. The annual review
of
the Executive’s salary by the Committee will consider, among other things, the
Executive’s own performance as well as WGNB’s and the Bank’s
performance.
3.2 Annual
Incentive Compensation.
The
Executive shall be eligible to participate in any annual short-term incentive
compensation program that the Committee and/or the Board shall approve for
him
for any particular year or period (the “Bonus”). In addition, the Executive
shall be eligible to participate in the annual profit sharing bonus program
that
is available to all employees of the Bank (the “Profit Sharing
Bonus”).
3.3 Long-Term
Incentive Compensation.
The
Executive shall be eligible to participate in any long-term incentive
compensation program and/or equity-based compensation program that the Committee
and/or the Board shall approve for him for any particular year or
period.
Any
grants or awards of equity-based compensation shall be governed by the terms
and
conditions of the plan or plans under which such grants are made.
3.4 Employee
Benefit Plans and Policies.
The
Executive shall be entitled to participate in each employee benefit plan, policy
or arrangement which is sponsored, maintained or contributed to by the Bank
and
in which current similarly-situated officers of the Bank may participate, in
accordance with the terms and provisions of such plans and on the same terms
and
conditions as other similarly-situated officers of the Bank. Contributions
by
the Executive to such plans shall be required only to the extent required of
other similarly-situated officers of the Bank.
3.5 Automobile
Allowance.
The
Bank
shall provide the Executive with a monthly cash allowance for the purpose of
reimbursement of expenses related to the use of his personal automobile for
business purposes, pursuant to a policy determined at the discretion of the
Committee. Unless otherwise determined by the Committee and specified in its
policy, the Executive shall be solely responsible for all costs and liabilities
related to such automobile, including but not limited to lease and/or purchase
payments, insurance, maintenance, gasoline/oil and repair costs.
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3.6 Club
Dues.
For
general business purposes (and not as compensation to the Executive ), the
Bank
shall pay the Executive’s periodic dues for membership in various civic clubs
and other organizations as approved by the Committee.
3.7 Expense
Reimbursement.
The Bank
shall reimburse the Executive for reasonable and necessary travel and other
business related expenses incurred by him in performance of the business of
the
Bank in accordance with the Bank’s standard expense reimbursement practices and
policies in existence from time to time, subject to such dollar limitations,
verification and record keeping requirements as may be established from time
to
time by the Bank.
3.8 Withholding,
FICA, FUTA, Etc.
Any
amount to be paid to the Executive under the provisions of this Agreement for
his services rendered as an employee and which represents taxable income to
him
shall be subject to, and reduced by, withholding for any applicable federal,
state or local taxes imposed by law, including, but not limited to, employment
taxes imposed under Subtitle C of the Code.
4.
RESTRICTIVE
COVENANTS
4.1 Confidentiality.
In the
Executive’s position as an Executive of WGNB and the Bank, the Executive has had
and will have access to Confidential Information, Trade Secrets and other
proprietary information of vital importance to WGNB and the Bank and has and
will also develop relationships with customers, employees and others who deal
with WGNB and the Bank which are of value to the Bank and WGNB. WGNB and the
Bank require as a condition of Executive’s employment that Executive agree to
certain restrictions on Executive’s use of the proprietary information and
valuable relationships developed during Executive’s employment with WGNB and the
Bank. WGNB, the Bank and the Executive therefore agree and acknowledge that
WGNB
and the Bank may entrust the Executive with highly sensitive confidential,
restricted and proprietary information concerning various Business
Opportunities, customer lists, and personnel matters. The Executive acknowledges
that he shall bear a fiduciary responsibility to WGNB and the Bank to protect
such information from use or disclosure that is not necessary for the
performance of Executive’s duties hereunder, as an essential incident of the
Executive’s employment with WGNB and the Bank.
4.2 Exclusions.
Notwithstanding the definitions of Trade Secrets, Confidential Information
and
Business Opportunities set forth in Section 1, Trade Secrets, Confidential
Information and Business Opportunities shall not include any information
that:
(a) is
or
becomes generally known to the public;
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(b) is
developed by Executive after termination of employment through entirely
independent efforts;
(c) the
Executive obtains from an independent source having a bona fide right to use
and
disclose such information;
(d) is
required to be disclosed by law, except to the extent eligible for special
treatment under an appropriate protective order; or
(e) the
Bank
or WGNB approves for unrestricted release by express written
authorization.
4.3 New
Developments.
Any
discovery, invention, process or improvement made or discovered by the Executive
during the term of this Agreement in connection with or in any way affecting
or
relating to the business of WGNB or the Bank or any of its Affiliates (as then
carried on or under active consideration) shall forthwith be disclosed to WGNB
and the Bank and shall belong to and be the absolute property of WGNB and the
Bank. The preceding sentence does not apply to any invention for which no
equipment, supplies, facility, or trade secret information of WGNB or the Bank
was used and which was developed entirely on the Executive’s own time, unless
the invention relates directly to the business of the Bank or WGNB or its
Affiliates or to its or their actual or demonstrably anticipated research or
development, or the invention results from any work performed by the Executive
for WGNB or the Bank.
4.4 Security
Measures.
During
the Executive’s employment with WGNB and the Bank, the Executive is required to
observe all security measures adopted to protect Trade Secrets, Confidential
Information and Business Opportunities of WGNB and the Bank.
4.5 Use
and Return of Documents and Property.
The
Executive acknowledges that in the course of his employment with WGNB and the
Bank, he will have the opportunity to inspect and use certain property, both
tangible and intangible, of WGNB and the Bank and its Affiliates. All such
property shall remain the exclusive property of WGNB, the Bank and its
Affiliates, and the Executive has and shall have no right or interest in such
property. The Executive shall use WGNB’s and the Bank’s property only during
employment and only in the performance of his job and to further WGNB’s and the
Bank’s interests, and he will not remove such property from the Bank’s premises
except to the extent necessary to perform his duties and to the extent approved
by the Bank and/or WGNB, either expressly or generally under its policies.
Upon
the request of WGNB or the Bank, and, in any event, promptly upon the
Executive’s Termination Date, the Executive shall return to the Bank all of the
Bank’s and WGNB’s memoranda, notes, records, data, books, manuals, computer
programs, audio-visual materials, correspondence, lists, every piece of
information recorded in any form, including all copies of such materials, and
all other tangible property.
4.6 Nonsolicitation
of Customers, Borrowers or Depositors.
The
Executive agrees that during the term of his employment with WGNB and the Bank,
he will not, directly or indirectly, without the Bank’s prior written consent,
contact any customer, depositor or borrower of the Bank or any of its Affiliates
for business purposes unrelated to furthering the Business of the Bank.
Executive further agrees that for a period of twenty-four (24) months following
his Termination Date, he will not directly or indirectly, (i) contact, solicit
or divert, or attempt to contact, solicit, divert or take away, any customer,
depositor or borrower of the Bank or its Affiliates for purposes of, or with
respect to, providing such customer, depositor or borrower services which
constitute the Business of the Bank; or (ii) take any affirmative action with
a
customer, depositor or borrower of the Bank or its Affiliates for the purposes
of providing a customer, depositor or borrower to a business competing with
the
Bank or its Affiliates. The prohibitions of the preceding sentence shall apply
only to customers, depositors or borrowers of the Bank with whom the Executive
had Material Contact during his term of employment. For purposes of this
Agreement, the Executive had “Material Contact” with a customer, depositor or
borrower if (a) he had business dealings with the customer, depositor or
borrower on the Bank’s behalf; (b) he was responsible for supervising or
coordinating the dealings between the Bank and the customer, depositor or
borrower; or (c) he obtained Confidential Information about the customer,
depositor or borrower as a result of his association with the Bank.
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4.7 Nonsolicitation
of Employees.
The
Executive agrees that during his employment with WGNB and the Bank and for
twenty-four (24) months after his Termination Date, the Executive will not,
directly or indirectly, solicit or attempt to recruit or hire any employee
of
WGNB or the Bank or its Affiliates to provide services similar to those
performed by the employee for WGNB or the Bank on behalf of another entity
or
person.
4.8 Nondisclosure
of Trade Secrets.
Except
to the extent reasonably necessary for the Executive to perform his duties
for
WGNB and the Bank, the Executive shall not, directly or indirectly, furnish
or
disclose to any person, use in any way, or negligently permit any unauthorized
person who is not an employee of WGNB or the Bank to use, disclose or gain
access to any Trade Secrets of WGNB or the Bank or its Affiliates, or any other
person or entity making Trade Secrets available for WGNB’s or the Bank’s use,
for so long as such Trade Secrets remain “trade secrets” under applicable state
law.
4.9 Nondisclosure
of Confidential Information.
During
the term of his employment with WGNB and the Bank and for a period of three
(3)
years following the Executive’s Termination Date, except to the extent
reasonably necessary for the Executive to perform his duties for WGNB and the
Bank, the Executive shall not, without the prior written consent of WGNB or
the
Bank, directly or indirectly, furnish or disclose to any person, use in any
way,
or negligently permit any unauthorized person who is not employed by the Bank
or
WGNB to use, disclose or gain access to, for personal benefit or the benefit
of
others, any Confidential Information of WGNB or the Bank or its Affiliates,
which remains competitively sensitive.
4.10 Covenant
Not to Compete.
(a) Territories:
WGNB
transacts business as a bank holding company with the Bank as its subsidiary
bank which accepts deposits, makes loans, cashes checks and otherwise engages
in
the business of banking (“Business of the Bank”). WGNB and the Bank do business
in the counties of Xxxxxxx, Xxxxxxx, Paulding and Haralson in the State of
Georgia, and Executive performs the duties described in Section 2.1 throughout
those counties. Executive has established business relationships and performs
the duties described in Section 2.1 in the geographic area covered by the
counties of Xxxxxxx, Xxxxxxx, Paulding and Haralson in the State of
Georgia.
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(b) Covenants:
For a
period of twenty-four (24) months after the termination of his employment with
WGNB and the Bank, Executive shall not directly or indirectly provide the duties
described in Section 2.1 of this Agreement (including as an advisor, consultant,
or independent contractor) for any entity or person conducting the Business
of
WGNB or the Bank within the counties of Xxxxxxx, Xxxxxxx, Paulding and Haralson
in the State of Georgia.
4.11 Notification
of Subsequent Employment.
During
a period of one (1) year after the termination of the Executive’s employment
with WGNB and the Bank, Executive shall notify WGNB and the Bank in writing
of
the name and address of the Executive’s new employer and the Executive’s
functions with his new employer within thirty (30) days after accepting
employment with any other corporation, partnership, association, person,
organization or other entity.
4.12 Reasonableness.
Executive has carefully considered the nature and extent of the restrictions
upon his rights and the rights and remedies conferred on the Bank under this
Agreement, and the Executive hereby acknowledges and agrees that:
(a) the
restrictions and covenants contained herein, and the rights and remedies
conferred upon WGNB and the Bank, are necessary to protect the goodwill and
other value of the business of WGNB and the Bank;
(b) the
restrictions placed upon the Executive hereunder are fair and reasonable in
time, will not prevent him from earning a livelihood, and place no greater
restraint upon the Executive than is reasonably necessary to secure the business
and goodwill of WGNB and the Bank;
(c) WGNB
and
the Bank are relying upon the restrictions and covenants contained herein in
continuing to make available to the Executive information concerning the
Business of the Bank and WGNB;
(d) Executive’s
employment hereunder places him in a position of confidence and trust with
WGNB
and the Bank and its employees, customers, depositors and borrowers;
and
(e) the
provisions of this section shall be interpreted so as to protect the
Confidential Information, and to secure for WGNB and the Bank the exclusive
benefits of the work performed on behalf of WGNB and the Bank by the Executive
under this Agreement, and not to unreasonably limit his ability to engage in
employment and consulting activities in noncompetitive areas which do not
endanger WGNB’s and the Bank’s legitimate interests expressed in this
Agreement.
4.13 Remedy
for Breach.
Executive acknowledges and agrees that his breach of any of the covenants
contained in this Article of this Agreement will cause irreparable injury to
WGNB and the Bank and that remedies at law available to WGNB and the Bank for
any actual or threatened breach by the Executive of such covenants will be
inadequate and that WGNB and the Bank shall be entitled to specific performance
of the covenants in this Article or injunctive relief against activities in
violation of this Article by temporary or permanent injunction or other
appropriate judicial remedy, writ or order, without the necessity or proving
actual damages. This provision with respect to injunctive relief shall not
diminish the right of WGNB and the Bank to claim and recover monetary damages
against the Executive for any breach of this Agreement, in addition to
injunctive relief. The Executive acknowledges and agrees that the covenants
contained in this Article shall be construed as agreements independent of any
other provision of this or any other contract between the parties hereto, and
that the existence of any claim or cause of action by the Executive against
WGNB
or the Bank, whether predicated upon this or any other contract, shall not
constitute a defense to the enforcement by WGNB and the Bank of said
covenants.
-11-
5.
TERMINATION
OF EMPLOYMENT
5.1 Termination
by WGNB or the Bank for Cause.
During
the Term of this Agreement, WGNB or the Bank may terminate the Executive’s
employment for Cause, effective immediately upon written notice to the
Executive. Upon such a termination for Cause, the Executive shall be entitled
to
any accrued but unpaid Base Salary, any earned but unpaid Bonus and Profit
Sharing Bonus for the fiscal year which ended prior to the Termination Date,
any
accrued but unused vacation, and any unreimbursed expenses through the
Termination Date. Executive shall not be entitled to any other compensation,
bonus, severance pay or post-termination benefits, other than as required by
law. Any outstanding equity-based compensation grants or awards held by the
Executive shall be governed by the terms of the plan under which such grants
or
awards were made.
5.2 Termination
by WGNB or the Bank Without Cause.
During
the Term of this Agreement , WGNB or the Bank may terminate the Executive’s
employment for any reason other than Cause, effective upon sixty (60) days’
written notice to the Executive. Upon such a termination, in addition to any
earned but unpaid Base Salary, any accrued but unused vacation, any earned
but
unpaid Bonus for the fiscal year which ended prior to the Termination Date,
any
unpaid Profit Sharing Bonus for the fiscal year which ended prior to the
Termination Date, and unreimbursed expenses through the Termination Date, the
Executive shall be entitled to:
(a) Severance
Pay: Executive
shall be entitled to severance pay in the amount of the greater of (i) the
Executive’s Base Salary, target Bonus and Profit Sharing Bonus for the remainder
of the then Term of the Agreement; or (ii) one and one-half times the
Executive’s annual Base Salary, target Bonus and Profit Sharing Bonus based on
his current Base Salary at the time of termination.
The
severance pay provided for in this subsection shall be paid in a single sum
cash
payment made as soon as administratively practicable following the Termination
Date, but in no event later than two and one-half (2½) months after his
Termination Date; provided that such payment shall be contingent upon the
Executive’s execution of a general release of all claims, as described in
Section 5.7.
(b) Equity
Compensation:
Any
outstanding equity-based compensation grants or awards held by the Executive
shall be governed by the terms of the plans under which they were granted.
-12-
(c) Group
Health Benefits:
Regardless of whether the Executive or his eligible qualified beneficiaries
actually elect COBRA continuation coverage under the Bank’s group health plan,
the Executive shall be entitled to a lump-sum payment equal to the full COBRA
premium amount (determined as of the Termination Date) for eighteen (18) months
of continued group health plan coverage (as in place as of the Termination
Date)
for the Executive, his spouse and eligible dependents. Such payment shall be
made as soon as administratively practicable following the Executive’s
termination of employment, but in no event later than two and one-half (2½)
months after the date his employment ends. In addition, if the Executive or
his
eligible qualified beneficiaries have elected COBRA continuation coverage under
the Bank’s group health plan and any one of them becomes eligible for COBRA
continuation coverage beyond the initial 18-month period due to a second
qualifying event, the Executive shall be entitled to a lump-sum payment equal
to
the full COBRA premium amount (determined as of the date of such second
qualifying event) for the additional period of continuation coverage (up to
a
maximum of an additional 18 months of continuation coverage). This additional
lump sum payment for the second qualifying event coverage shall be made as
soon
as administratively practicable following the Executive’s providing written
notice to the Bank of the second qualifying event, but no later than two and
one-half (2½) months after the date of such second qualifying
event.
The
severance pay provided for herein shall be in lieu of any and all other
payments, bonuses or other compensation to which the Executive may have been
entitled under any severance plan, policy or payroll practice of WGNB or the
Bank.
5.3 Termination
by Executive for Good Reason.
The
Executive may terminate his employment for “Good Reason” upon sixty (60) days’
written notice to the Bank and WGNB; provided, however, that prior to delivering
such 60-day notice, the Executive has provided an advance written notice to
WGNB
or the Bank that identifies the manner in which the Executive believes that
he
is eligible for Good Reason termination, and WGNB and the Bank have had at
least
fifteen (15) business days following delivery of the advance written notice
to
correct the situation and have not done so. Upon a termination for Good Reason,
the Executive shall be entitled to severance pay identical to, and subject
to
the same conditions applicable to, those provided in Section 5.2
above.
5.4 Termination
of Agreement by Reason of Executive’s Death or Disability.
This
Agreement shall terminate immediately upon the termination of the Executive’s
employment due to the death of the Executive or due to written notice from
WGNB
or the Bank to the Executive if he shall at any time become incapacitated by
reason of a Disability. Upon the Executive’s termination due to death or
Disability, the Executive, or his estate in the case of his death, shall be
entitled to any earned but unpaid Base Salary, any accrued but unused vacation,
any earned but unpaid Bonus and/or Profit Sharing Bonus for the fiscal year
which ended prior to the Termination Date, and unreimbursed expenses through
the
Termination Date. The monies due under this Section 5.4 shall be paid in a
single-sum cash payment made as soon as administratively practicable following
the Termination Date, but in no event later than two and one-half (2½) months
after the Termination Date. Upon the Executive’s termination due to death or
Disability, any outstanding equity-based compensation grants or awards held
by
the Executive shall be governed by the terms of the plans under which such
grants or awards were granted. WGNB and the Bank shall not have any further
obligations to the Executive, the Executive’s estate, heirs or other legal
representatives.
-13-
5.5 Termination
by Executive.
Executive may terminate this Agreement and his employment with WGNB and the
Bank
upon thirty (30) days’ written notice to each of the Bank and WGNB. Upon such a
termination, the Executive shall be entitled to any accrued but unpaid Base
Salary, any accrued but unused vacation, and any unreimbursed expenses through
the Termination Date. Executive shall not be entitled to any other compensation,
bonus, severance pay or post-termination benefits, other than as required by
law. Any outstanding equity-based compensation grants or awards held by the
Executive shall be governed by the terms of the plan under which such grants
or
awards were made.
5.6 Other
Benefits After Termination Date.
Except
for the payments and benefits, if any, provided under this Article 5, no other
benefits, compensation or other remuneration of any type, whether taxable or
nontaxable, shall be payable to the Executive after his Termination Date, except
as required by law or by the applicable terms and provisions of any employee
benefit plan applicable to the Executive .
5.7 General
Release.
The
Executive agrees that in the event of any termination of this Agreement that
results in a payment pursuant to any provision of this Section 5, prior to
the
payment, as a condition to the receipt of and as consideration for such payment,
the Executive (or if due to death, the executor or administrator of his estate)
shall sign a general release of any and all claims that the Executive, his
heirs
and assigns and/or his estate may have against WGNB or the Bank or its related
parties related to his employment and such payment in substantially the form
attached hereto as Exhibit “A”.
6.
CHANGE
IN CONTROL
6.1 Upon
Change in Control.
If
Executive is employed on the date a Change in Control occurs, or if the
Executive’s employment by the Bank or WGNB is terminated for any reason other
than Cause, Disability, death or voluntary quit without Good Reason, during
the
twelve (12) month period immediately preceding the date of the Change in
Control, the Bank and WGNB agree to pay to the Executive an amount equal
to:
(a) Two
times
the Executive’s annual Base Salary based on the greater of (a) his Base Salary
on the Termination Date (if applicable) or (b) his Base Salary for the fiscal
year immediately preceding the date of the Change in Control; plus
(b) Two
times
the amount of his Bonus and the Profit Sharing Bonus, for the fiscal year which
ended immediately preceding the earlier of (a) his Termination Date (if
applicable) or (b) the date of the Change in Control.
The
amounts provided for in this subsection shall be paid in a lump sum cash payment
within thirty (30) days after the date of the Change in Control. The payment
of
any amount under this subsection is contingent upon the Executive’s execution of
a general release as described in Section 5.7.
-14-
(i) Equity
Compensation:
Any
outstanding stock options, restricted stock, stock appreciation rights,
performance grants or other equity-based compensation grants or award held
by
the executive on the date of a Change in Control shall be governed by the terms
of the plans under which such grants or awards were made.
(c) Excess
Parachute Payment:
Notwithstanding anything herein to the contrary, neither WGNB nor the Bank
shall
pay to the Executive any amount which shall be deemed to constitute an “excess
parachute payment” in accordance with Code Section 180G. Either WGNB or the Bank
shall reduce any amount due hereunder by such minimum amount necessary to cause
the total amount payable to the Executive in the applicable year not to
constitute an “excess parachute payment”.
7.
MISCELLANEOUS
PROVISIONS
7.1 Invalidity
of Any Provision.
It is
the intention of the parties hereto that the provisions of this Agreement shall
be enforced to the fullest extent permissible under the laws of each state
and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws) of any provision hereof shall
not render unenforceable or impair the remainder of this Agreement which shall
be deemed amended to delete or modify, as necessary, the invalid or
unenforceable provisions. The parties further agree to alter the balance of
this
Agreement in order to render the same valid and enforceable. The terms of the
restrictive covenant provisions of this Agreement shall be deemed modified
to
the extent necessary to be enforceable and, specifically, without limiting
the
foregoing, if the term of the applicable restrictive covenant is too long to
be
enforceable, it shall be modified to encompass the longest term which is
enforceable and, if the scope of the geographic area of the applicable
restrictive covenant is too great to be enforceable, it shall be modified to
encompass the greatest area that is enforceable.
7.2 Applicable
Law.
This
Agreement shall be construed and enforced in accordance with the laws of the
State of Georgia.
7.3 Waiver
of Breach. The
waiver of a breach of any provision of this Agreement by a party hereto shall
not operate or be construed as a wavier of any subsequent breach by the other
party hereto.
7.4 Successors
and Assigns.
This
Agreement shall inure to the benefit of WGNB, the Bank and its Affiliates,
and
their respective successors and assigns. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s estate and/or legal
representatives.
7.5
Assignment
of Agreement.
This
Agreement may not be assigned by any of the parties without the express written
consent of the other parties to this Agreement; provided, however, that the
provisions of this Agreement shall inure to the benefit of and be binding upon
each successor of WGNB and/or the Bank, whether by merger, consolidation,
transfer of all or substantially all assets, or otherwise.
-15-
7.6
Notices.
All
notices, demands and other communications hereunder shall be in writing and
shall be delivered in person or deposited in the United States mail, certified
or registered, with return receipt requested, as follows:
|
(a)
|
If to the Executive: | Xx. X. X. Xxxxxx, III | |
| 0000 Xxxxxxxxx Xxxxxx Xxxx | |||
| Xxxxxxxxxx, Xxxxxxx 00000 | |||
|
(b)
|
If to the Bank: | West Georgia National Bank | |
|
X.X.
Xxx 000
Xxxxxxxxxx,
Xxxxxxx 00000
Attention:
Chairman
|
|||
| If to WGNB: | WGNB Corp. | ||
|
X.X.
Xxx 000
Xxxxxxxxxx,
Xxxxxxx 00000
Attention:
Chairman
|
7.7
Entire
Agreement.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof. All understanding and agreements heretofore made between
the parties hereto with respect to the subject matter of this Agreement are
merged into this document which alone fully and completely expresses their
agreement. This Agreement may not be changed orally but only by an agreement
in
writing signed by both parties.
7.8
Survival
of Provisions.
The
provisions of Section 4 “Restrictive Covenants” shall survive termination of
this Agreement.
7.9
Application
of Code Section 409A.
It is
the intent of the parties to this Agreement that this Agreement shall be
interpreted, construed and operated in compliance with any applicable provisions
of Code Section 409A. To the extent that future regulations issued pursuant
to
Code Section 409A require any amendments to this Agreement, the parties agree
that they will consent to, and make, such amendments.
7.10
Captions.
The
captions appearing in this Agreement are inserted only as a matter of
convenience and in no way define, limit, construe or describe the scope or
intent of any provisions of this Agreement or in any way affect this
Agreement.
-16-
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement under seal as of this 11th day
of
July, 2006.
| EXECUTIVE: | ||
| |
|
|
| /s/ X. X. Xxxxxx, III | ||
|
X. X. Xxxxxx, III |
||
| WEST GEORGIA NATIONAL BANK | ||
| |
|
|
| By: | /s/ R. Xxxxx Xxxxx | |
|
R. Xxxxx Xxxxx |
||
| Chairman, Executive Compensation Management Succession Committee | ||
| WGNB CORP. | ||
| |
|
|
| By: | /s/ X. X. Xxxxx, Xx. | |
|
X.
X. Xxxxx, Xx.
|
||
|
Chairman
of the Board
|
||
-17-
EXHIBIT
“A”
GENERAL
RELEASE
IN
ACCORDANCE WITH THE TERMS OF THAT CERTAIN EMPLOYMENT AGREEMENT DATED
________ ___,
0000, XXXXXXX
Xxxx
Xxxxxxx National Bank (THE
“BANK”) AND X. X. XXXXXX, III (THE “EXECUTIVE”), THE
EXECUTIVE HEREBY ENTERS INTO THIS GENERAL RELEASE, IN CONSIDERATION OF THE PAYMENTS AND BENEFITS THAT HE
WILL
RECEIVE AS
A
RESULT OF HIS TERMINATION OF EMPLOYMENT EFFECTIVE AS OF ________________,
20____, TO WHICH HE WOULD NOT OTHERWISE BE ENTITLED, AS FOLLOWS:
THE
EXECUTIVE AGREES, FOR HIMSELF, HIS SPOUSE, HEIRS, EXECUTOR OR ADMINISTRATOR,
ASSIGNS, INSURERS, ATTORNEYS AND OTHER PERSONS OR ENTITIES ACTING OR PURPORTING
TO ACT ON HIS BEHALF (THE “EXECUTIVE’S PARTIES”), TO IRREVOCABLY AND
UNCONDITIONALLY RELEASE, ACQUIT AND FOREVER DISCHARGE THE BANK AND WGNB, THEIR
AFFILIATES, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES, SHAREHOLDERS,
PARTNERS, AGENTS, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, ASSIGNS, INSURERS,
ATTORNEYS, BENEFIT PLANS SPONSORED BY THE BANK AND WGNB AND SAID PLANS’
FIDUCIARIES, AGENTS AND TRUSTEES (THE “BANK’S PARTIES”), FROM ANY AND ALL
ACTIONS, CAUSE OF ACTION, SUITS, CLAIMS, OBLIGATIONS, LIABILITIES, DEBTS,
DEMANDS, CONTENTIONS, DAMAGES, JUDGMENTS, LEVIES AND EXECUTIONS OF ANY KIND,
WHETHER IN LAW OR IN EQUITY, KNOWN OR UNKNOWN, WHICH THE EXECUTIVE’S PARTIES
HAVE, HAVE HAD, OR MAY IN THE FUTURE CLAIM TO HAVE AGAINST THE BANK’S PARTIES BY
REASON OF, ARISING OUT OF, RELATED TO, OR RESULTING FROM EXECUTIVE’S EMPLOYMENT
WITH THE BANK OR THE TERMINATION THEREOF. THIS RELEASE SPECIFICALLY INCLUDES
WITHOUT LIMITATION ANY CLAIMS ARISING IN TORT OR CONTRACT, ANY CLAIM BASED
ON
WRONGFUL DISCHARGE, ANY CLAIM BASED ON BREACH OF CONTRACT, ANY CLAIM ARISING
UNDER FEDERAL, STATE OR LOCAL LAW PROHIBITING RACE, SEX, AGE, RELIGION, NATIONAL
ORIGIN, HANDICAP, DISABILITY OR OTHER FORMS OF DISCRIMINATION, ANY CLAIM ARISING
UNDER FEDERAL, STATE OR LOCAL LAW CONCERNING EMPLOYMENT PRACTICES, AND ANY
CLAIM
RELATING TO COMPENSATION OR BENEFITS. THIS SPECIFICALLY INCLUDES, WITHOUT
LIMITATION, ANY CLAIM WHICH THE EXECUTIVE HAS OR HAS HAD UNDER TITLE VII OF
THE
CIVIL RIGHTS ACT OF 1964, AS AMENDED, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT,
AS AMENDED (“ADEA”), THE AMERICANS WITH DISABILITIES ACT, AS AMENDED, AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED. IT IS UNDERSTOOD
AND AGREED THAT THE WAIVER OF BENEFITS AND CLAIMS CONTAINED IN THIS SECTION
DOES
NOT INCLUDE A WAIVER OF THE RIGHT TO PAYMENT OF ANY VESTED, NONFORFEITABLE
BENEFITS TO WHICH THE EXECUTIVE OR A BENEFICIARY OF THE EXECUTIVE MAY BE
ENTITLED UNDER THE TERMS AND PROVISIONS OF ANY EMPLOYEE BENEFIT PLAN OF THE
BANK
WHICH HAVE ACCRUED AS OF THE SEPARATION DATE AND DOES NOT INCLUDE A WAIVER
OF
THE RIGHT TO BENEFITS AND PAYMENT OF CONSIDERATION TO WHICH THE EXECUTIVE MAY
BE
ENTITLED UNDER THE EMPLOYMENT AGREEMENT. THE EXECUTIVE ACKNOWLEDGES THAT HE
IS
ONLY ENTITLED TO THE SEVERANCE BENEFITS AND COMPENSATION SET FORTH IN THE
EMPLOYMENT AGREEMENT, AND THAT ALL OTHER CLAIMS FOR ANY OTHER BENEFITS OR
COMPENSATION ARE HEREBY WAIVED, EXCEPT THOSE EXPRESSLY STATED IN THE PRECEDING
SENTENCE.
This
paragraph shall apply only if the Executive has attained age 40 or over at
the
time of his termination of employment. The Executive hereby acknowledges that
he
is knowingly and voluntarily waiving and releasing any rights he may have under
ADEA and that the consideration given under the Employment Agreement for this
General Release is in addition to anything of value to which he was already
entitled. He further acknowledges that he has been advised by this writing,
as
required by the ADEA, that: (A) the waiver and release do not apply to any
rights or claims that may arise on or after the date he executes this Release;
(B) he has the right to consult with an attorney prior to executing this
Release; (C) he has twenty-one (21) days to consider this Release (although
he
may choose to voluntarily execute this Release earlier); (D) he has seven (7)
days following his execution of this Release to revoke the Release; and (E)
this
Release shall not be effective until the date upon which the revocation period
has expired, which shall be the eighth day after he executes this
Release.
Agreed
to, acknowledged and executed by the Executive this ___________ day of
____________________, 20______.
| |
|
|
|
X. X. XXXXXX, III |
||
-18-
EXHIBIT
“B”
APPROVED
INVESTMENTS PURSUANT TO SECTION 2.2
Fifty
(50%) Percent Ownership Interest in Budding tree, LLC (Apartment
Complex)
Twenty-Five
(25%) Percent Ownership Interest in Outstretched Hand, LLC ( Curves for Women
Franchise)
Twenty
(20%) Percent Ownership in Mountain Men Properties, LLC (Investment and Rental
Property
-19-
