EXHIBIT 10.1
MOUNTAIN STATE BANK
CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT (the
“Agreement”), made as of the 4th day of August, 2005
(the “Effective Date”), by and between MOUNTAIN STATE
BANK (the “Bank”), and LYNN H. BARRON, a resident of
the State of Georgia (the “Employee”).
RECITALS:
WHEREAS, the Employee is currently
employed as the Chief Financial Officer of the Bank and the
Bank’s holding company, Mountain Bancshares, Inc. (the
“Company”) (collectively, the Bank and the Company
shall be referred to herein as the “Employer”),
and
WHEREAS, the Company and the Bank desire
to continue to employ the Employee and the Bank desires to enter
into an agreement to provide benefits to the Employee upon a Change
in Control (as defined below) of the Company or the
Bank.
NOW, THEREFORE, in consideration of the
mutual covenants herein contained, the parties agree as
follows:
AGREEMENT:
1.
Term . This
Agreement shall remain in effect until the earlier of (a) the first
anniversary of the Effective Date or (b) twelve (12) months
following a Change in Control. While this Agreement remains
in effect the Term, as defined by Section 1(a) above, shall
automatically renew each day after the Effective Date such that the
Term remains a one-year term from day-to-day thereafter unless
either party gives written notice to the other of its or her intent
that the automatic renewals shall cease or the Term expires
pursuant to Section 1(b) hereof. In the event notice of
non-renewal is properly given pursuant to this Section, the
Agreement and the Term shall expire on the first anniversary of the
thirtieth (30 th ) day following the date such written
notice is received, unless the Term expires earlier in accordance
with Section 1(b).
2.
Change in Control
Benefits .
(a)
If, within twelve (12) months following a
Change in Control, the Employee terminates employment with the
Employer for Good Reason or the Employer terminates the
Employee’s employment without Cause, the Bank shall provide
the Employee with the following compensation and
benefits:
(i)
Payment of an amount equal to one (1)
times the Employee’s “annualized includable
compensation for the base period” as that term is defined in
Section 280G(d) of the Internal Revenue Code of 1986 as amended
(“Code”) or any successor thereto;
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(ii)
Payment of an amount equal to the
Employee’s cost of COBRA health continuation coverage for
herself under the Bank’s group health plan for twelve (12)
months following termination of employment;
(iii)
Payment for each vacation day which the
Employee has not used during the calendar year in which occurs the
effective date of termination which amount shall be determined
based on a daily rate of the Employee’s base salary then in
effect assuming two-hundred sixty (260) business days in such year;
and
(iv)
Any unexercised stock options to purchase
shares of the Company’s common stock held by the Employee
shall become fully vested and exercisable as of the effective date
of the Change in Control.
(b)
Amounts payable pursuant to subparagraph
(a) of this Section shall not bear interest and shall be paid in
one (1) lump sum within thirty (30) days following the effective
date of termination. Amounts payable under this Section shall be
net of amounts required to be withheld under applicable law and
amounts requested to be withheld by the Employee.
(c)
Upon the Employee’s termination by
the Employer for Cause by either party due to the Employee’s,
Disability, the Employee’s voluntary or involuntary
termination under circumstances other than those described in
subsection (a) of this Section 2 or the Employee’s death, the
Employee shall not be entitled to the compensation and benefits
described in this Section 2.
(d)
Notwithstanding the above, in no event
shall the payment(s) described in this Section 2 exceed the amount
permitted by Section 280G of the Code. Therefore, if the
aggregate present value (determined as of the date of the Change in
Control in accordance with the provisions of Section 280G of the
Code) of both the payments under this Agreement and all other
payments to the Employee in the nature of compensation which are
contingent on a change in ownership or effective control of the
Company or the Bank or in the ownership of a substantial portion of
the assets of the Company or the Bank (the “Aggregate
Severance”) would result in a “parachute
payment,” as defined under Section 280G of the Code, then the
Aggregate Severance shall not be greater than an amount equal to
2.99 multiplied by Employee’s “base amount” for
the “base period,” as those terms are defined under
Section 280G of the Code. In the event the Aggregate
Severance is required to be reduced pursuant to this subparagraph
(d), the Employee shall have thirty (30) days in which to indicate
to the Bank the manner in which the Aggregate Severance shall be
reduced (i.e., whether the reduction shall be in cash, vesting of
stock options, etc.); provided, however, the Bank shall retain
complete discretion over the total amount of the reduction
necessary to avoid the operation of Code Section 280G as described
above. In the event the Employee does not make an election as
to the specific nature of the compensation to be reduced within the
time period indicated above, the Bank shall make such determination
in its sole discretion.
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3.
Confidentiality
.
(a)
All Confidential Information and Trade
Secrets and all physical embodiments thereof received or developed
by the Employee while employed by the Employer are confidential to
and are and will remain the sole and exclusive property of the
Employer. Except to the extent necessary to perform the
duties assigned to her by the Employer, the Employee will hold such
Confidential Information and Trade Secrets in trust and strictest
confidence, and will not use, reproduce, distribute, disclose or
otherwise disseminate the Confidential Information and Trade
Secrets or any physical embodiments thereof and may in no event
take any action causing or fail to take the action necessary to
prevent, any Confidential Information and Trade Secrets disclosed
to or developed by the Employee to lose its character or cease to
qualify as Confidential Information or Trade Secrets.
(b)
The covenants of confidentiality set
forth herein will apply during the Employee’s employment with
the Employer to any Confidential Information and Trade Secrets
disclosed by the Bank or developed by the Employee prior to or
after the date hereof. The covenants restricting the use of
Confidential Information will continue and be maintained by the
Employee for a period of twelve (12) months following termination
of this Agreement. The covenants restricting the use of Trade
Secrets will continue and be maintained by the Employee following
termination of her employment for so long as permitted by the
then-current Georgia Trade Secrets Act of 1990, O.C.G.A. §
10-1-760, et. seq.
4.
Nonsolicitation
. In the event that the Employee is entitled to
receive the Change in Control benefits described in Section 2 of
this Agreement, the Employee agrees that, for twelve (12) months
following the Employee’s termination of
employment:
(a)
the Employee will not (except on behalf
of or with the prior written consent of the Employer), on the
Employee’s own behalf or in the service or on behalf of
others, solicit, divert or appropriate or attempt to solicit,
divert or appropriate, for any Competing Business, any business
from any custome
