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Exhibit
10.3
CHANGE IN CONTROL
SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL
SEVERANCE AGREEMENT (“Agreement”) entered into this
17th day of October, 2007 (“Effective Date”), by and
between Heritage Bank (the “Bank”) and
(the “Employee”).
WHEREAS, the Employee is
currently employed by the Bank as Senior Vice President and is
experienced in all phases of the financial service industry and the
business of the Bank, and
WHEREAS, the Employee and the
Bank previously agreed to that certain change in control severance
agreement dated
, 200 (the “Prior
Agreement”); and
WHEREAS, the parties desire
by this writing to set forth the rights and responsibilities of the
Bank and Employee if the Bank should undergo a Change in Control
(as defined hereinafter in the Agreement) after the Effective Date
by amending and restating the Prior Agreement.
NOW, THEREFORE, it is AGREED
as follows:
1. Employment
.
The Employee is employed in
the capacity as a Senior Vice President of the Bank. The Employee
shall render such administrative and management services to the
Bank and CCF Holding Company (“Parent”) as are
currently rendered and as are customarily performed by persons
situated in a similar executive capacity. The Employee’s
other duties shall be such as the President or the Board of
Directors for the Bank (the “Board of Directors” or
“Board”) may from time to time reasonably direct,
including normal duties as an officer of the Bank and the Parent.
The Employee shall devote his full time and attention to the
performance of his duties 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 Bank or Parent.
2. Term of Agreement
.
The term of this Agreement
shall be for the period commencing on the Effective Date and ending
twelve (12) months thereafter (“Term”). Beginning
with the first day of the Term, the Term shall renew each day such
that the Term remains a twelve (12) month term from day-to-day
thereafter unless either party gives written notice to the other of
its or his intent that the automatic renewals shall cease. In the
event such notice of non-renewal is properly given, this Agreement
and the Term shall expire on the twelve (12) months following
the delivery of such notice of non-renewal.
3. Termination of
Employment .
(a) If the Employee’s
employment terminates as a result of (i) Employee’s
death, (ii) Employee’s disability which renders Employee
unable to perform the essential functions of his job even with
reasonable accommodation, (iii) expiration of the initial or
extended Term, as set forth above, (iv) mutual agreement
between Employee and the Bank, or (v) termination by the Bank
for Just Cause (defined below), then Employee shall be entitled to
receive his base salary through the termination date and thereafter
the Bank shall have no further
obligations under this Agreement, but
Employee shall continue to be bound by Section 8 below, and
all other post-termination obligations to which Employee is
subject, including, but not limited to, the obligations contained
in this Agreement.
(b) If the Employee’s
employment with the Bank and all its affiliates terminates for any
reason not stated in sub-clauses (i) - (v) of
Section 3(a) above and Section 4(a) below does not
apply, then provided that such termination of employment
constitutes a “separation from service” within the
meaning of Section 409A of the Internal Revenue Code of 1986,
as amended, (the “Code”) and the regulations and
related guidance thereunder (a “Separation from
Service”), the Bank shall pay Employee a separation payment
equal to six (6) months base salary in effect as of the date
of termination, payable in substantially equal periodic payments
over a period of six (6) months (the “Separation Pay
Period”) in accordance with the Company’s normal
payroll practices, to begin no later than sixty (60) days
following the termination of the Employee’s employment. The
Bank’s obligation to make the separation payments shall be
conditioned upon Employee: (i) executing (and not validly
revoking, if applicable) a Separation and Release Agreement in a
form prepared by the Bank whereby Employee releases the Bank from
any and all liability and claims of any kind, with such execution
occurring no later than forty-five (45) days following the
termination of the Employee’s employment; and
(ii) complying with the restrictive covenants (Section 8) and
all post-termination obligations to which Employee is subject,
including, but not limited to, the obligations contained in this
Agreement. The Bank’s obligation to make the separation
payments set forth in this Section 3(b) shall terminate
immediately upon any breach by Employee of any post-termination
obligations to which he is subject.
4. Termination of
Employment in Connection with or Subsequent to a Change in
Control .
(a) Notwithstanding any
provision herein to the contrary, in the event that, within six
(6) months before, or within twelve (12) months after, a
Change in Control of the Bank or Parent, the Bank terminates
Employee’s employment with the Bank and all its affiliates
for any reason not stated in sub-clauses (i) - (v) of
Section 3(a) above, then provided that such termination of
employment constitutes a Separation from Service, Employee shall be
paid an amount equal to 100% of the taxable compensation paid to
Employee by the Bank for the twelve month period prior to the date
of termination of employment (whether said amounts were received or
deferred by the Employee) and the monthly cost to the Bank
(exclusive of any amounts then being charged to the Employee)
associated with maintaining coverage for Employee and
Employee’s dependents under the Bank’s medical,
prescription drug, and dental insurance plans on the date of
termination of employment multiplied by twelve (12) (such
amounts to be referred to collectively as the “Change in
Control Payments”). The Change in Control Payments shall be
paid:
(1) if (A) within twelve
(12) months after the Change in Control, the Employee’s
employment with the Bank and all its affiliates is involuntarily
terminated for any reason not stated in sub-clauses (i) - (v) of
Section 3(a) and such termination constitutes a Separation
from Service and (B) the Change in Control is a “change
in ownership of a corporation,” a “change in effective
control of a corporation” or a “change in ownership of
a substantial portion of a corporation’s assets” each
as defined, and subject to the limitations, in Code
Section 409A and the regulations and related guidance
thereunder, in one (1) lump sum, or
(2) otherwise, in
substantially equal periodic payments over the next six
(6) months;
in either case, to begin no later than
sixty (60) days following the termination of the
Employee’s employment. Such payments shall be in lieu of any
other future payments which the Employee would be otherwise
entitled to receive. 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 Bank or the Parent shall
be deemed an “excess parachute payment” in accordance
with Code Section 280G and be subject to the excise tax
provided at Section 4999(a) of the Code. The Change in Control
Payments shall be provided to Employee in lieu of any benefits to
which Employee may be entitled to receive under Section 3(b)
above; provided, however, that Employee’s right to receive
the Change in Control Payments shall be conditioned upon Employee:
(i) executing (and not validly revoking, if applicable) a
Separation and Release Agreement in a form prepared by the Bank
whereby Employee releases the Bank from any and all liability and
claims of any kind, with such execution occurring no later than
forty-five (45) days following the termination of the
Employee’s employment; and (ii) complying with the
restrictive covenants (Section 8) and all post-termination
obligations to which Employee is subject, including, but not
limited to, the obligations contained in this Agreement. The
Bank’s obligation to make the Change in Control Payments
shall terminate immediately upon any breach by Employee of any
post-termination obligations to which he is subject. For purposes
of this Agreement, the term “Change in Control” shall
mean: (i) the execution of an agreement for the sale of all,
or a material portion, of the assets of the Bank or the Parent;
(ii) the execution of an agreement for a merger or
recapitalization of the Bank or the Parent or any merger or
recapitalization whereby the Bank or the Parent is not the
surviving entity; (iii) a change in control of the Bank or the
Parent, as otherwise defined or determined by the Georgia
Department of Banking and Finance or the Federal Deposit Insurance
Corporation or regulations promulgated by them; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in
Section 13(d) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder) of twenty-five
percent (25%) or more of the outstanding voting securities of
the Bank or the Parent by any person, trust, entity or group. 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 except as provided at
Sections 6(b), 6(c), 6(d), 6(e) and 7, Employee may voluntarily
terminate his employment with the Bank and all its affiliates under
this Agreement within twenty-four (24) months following a
Change in Control of the Bank or Parent, and, if such termination
constitutes a Separation from Service, Employee shall thereupon be
entitled to receive the payment and benefits described in
Section 4(a)(2) 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
the Bank or Parent should fail to maintain the Employee’s
base compensation in effect as of the date of the Change in Control
and existing employee benefits plans, including material fringe
benefit, stock option and retirement plans, except to the extent
that such reduction in benefit programs is part of an overall
adjustment in benefits for all employees of the Bank or Parent and
does not disproportionately adversely impact the Employee;
(iii) if Employee would be assigned duties and
responsibilities
other than those normally associated
with his position as referenced at Section 1, herein; or
(iv) if Employee’s responsibilities
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