Exhibit 10.4
New Southern Bank
Executive Bonus Agreement
NEW SOUTHERN BANK
EXECUTIVE BONUS
AGREEMENT
THIS AGREEMENT is adopted this 1st
day of January, 2005, by and between NEW SOUTHERN BANK a
state-chartered commercial bank located in Macon, Georgia (the
“Company”), and Brandon L. Mercer (the
“Executive”).
To encourage the Executive to remain
an employee of the Company, the Company is willing to provide to
the Executive a bonus opportunity. The Company will pay the
Executive’s bonus from the Company’s general
assets.
The Company and the Executive agree
as provided herein.
Article 1
Definitions
Whenever used in this Agreement, the
following words and phrases shall have the meanings
specified:
1.1
“ Accrual Balance
” means the liability that should be accrued by the Company,
under Generally Accepted Accounting Principles
(“GAAP”), for the Company’s obligation to the
Executive under this Agreement, by applying Accounting Principles
Board Opinion Number 12 (“APB 12”) as amended by
Statement of Financial Accounting Standards Number 106 (“FAS
106”) and the Discount Rate. Any one of a variety of
amortization methods may be used to determine the Accrual Balance.
However, once chosen, the method must be consistently applied. The
Accrual Balance shall be reported annually by the Company to the
Executive.
1.2
“ Beneficiary ”
means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the
Executive determined pursuant to Article 4.
1.3
“ Beneficiary Designation
Form ” means the form established from time to time by
the Plan Administrator that the Executive completes, signs, and
returns to the Plan Administrator to designate one or more
Beneficiaries.
1.4
“ Bonus Award ”
means only the cash bonus award paid to the Executive and does not
include any salary.
1.5
“ Change of Control
” means any one of the following events:
(a)
the acquisition by any person or
persons acting in concert of the then outstanding voting securities
of the Company, if, after the transaction, the acquiring person (or
persons) owns, controls or holds with power to vote forty percent
(40%) or more of any class of voting securities of the
Company;
(b)
within any twelve-month period
(beginning on or after the Effective Date) the persons who were
directors of the Company immediately before the beginning of such
twelve-month period (the “Incumbent Directors”) shall
cease to constitute at least a majority of the Board of Directors
of the Company; provided that any director who was not a director
as of the beginning of such twelve-month period shall be deemed to
be an Incumbent Director if that director were elected to the Board
of Directors of the Company by, or on the recommendation of or with
the approval of, at least two-thirds (2/3) of the directors who
then qualified as Incumbent Directors; and provided further that no
director whose initial assumption of office is in connection with
an actual or threatened election contest relating to the election
of directors shall be deemed to be an Incumbent
Director;
(c)
a reorganization, merger, share
exchange combination or consolidation, with respect to which
persons who were the stockholders of the Company immediately prior
to such reorganization, merger, share exchange combination or
consolidation do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote in the
election of directors of the reorganized, merged, combined or
consolidated company’s then outstanding voting securities;
or
(d)
the sale, transfer or assignment of
all or substantially all of the assets of the Company to any third
party.
1.6
“ Code ” means
the Internal Revenue Code of 1986, as amended.
1.7
“ Disability ”
means the Executive (i) is unable to engage in any substantial
gainful activity by reason of any 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 12
months, or (ii) is, by reason of any 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 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan
covering employees of the Company. Medical determination of
Disability may be made by either the Social Security Administration
or by the provider of an accident or health plan covering employees
of the Company. Upon the request of the Plan Administrator,
the Executive must submit proof to the Plan Administrator of the
Social Security Administration’s or the provider’s
determination.
1.8
“ Early Termination
” means the Executive’s Separation from Service before
completion of his fifth consecutive Year of Participation (whether
due to a Termination for Cause, an
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involuntary termination without
cause, or a voluntary resignation) for reasons other than death,
Disability, or following a Change of Control.
1.9
“ Effective Date
” mean January 1, 2005.
1.10
“ Plan Administrator
” means the plan administrator described in
Article 6.
1.11
“ Plan Year ”
means the calendar year.
1.12
“ Separation from
Service ” means that the Executive has experienced a
separation from service with the Company and its affiliates within
the meaning of Section 409A(a)(2)(i) of the
Code.
1.13
“ Termination for Cause
” means the Company terminating the Executive’s
employment for:
(a)
Gross negligence or gross neglect of
duties to the Company;
(b)
Commission of a felony or of a gross
misdemeanor involving moral turpitude in connection with the
Executive’s employment with the Company; or
(c)
Fraud, disloyalty, dishonesty or
willful violation of any law or significant Company policy
committed in connection with the Executive’s employment and
resulting in an adverse effect on the Company.
1.13
“ Years of
Participation ” means the consecutive 12-month period
beginning on the Effective Date of this Agreement and any 12-month
anniversary thereof, during the entirety of which time the
Executive is a participant in the Agreement.
Article 2
Bonus Award
2.1
Bonus Award
. Upon the Executive completing five
consecutive Years of Participation, the Company shall distribute to
the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this Article.
2.1.1
Amount of Benefit
. The amount of the Bonus Award
shall be $250,000.
2.1.2
Distribution of
Benefit . The Company
shall pay the Bonus Award in a lump sum within thirty (30) days
following completion of the five consecutive Years of
Participation.
2.2
Change in Control Bonus
Award . If a
Separation from Service occurs as a result of a Change in Control
at any time prior to the end of the Executive’s fifth
consecutive Year of
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Participation, the Company shall
distribute to the Executive the benefit described in this
Section 2.2 in lieu of any other benefit under this
Article.
2.2.1
Amount of Benefit
. The benefit under this
Section 2.2 is the Accrual Balance determined as of the
Executive’s Separation from Service following the Change in
Control.
2.2.2
Distribution of
Benefit . The
Company shall distribute the Accrual Balance to the Executive in a
lump sum commencing within thirty (30) days following the
Executive’s Separation from Service.
2.3
Disability Benefit
. If the Executive’s
Disability results in Separation from Service prior to the end of
the Executive’s fifth consecutive Year of Participation, the
Company shall distribute to the Executive the benefit described in
this Section 2.3 in lieu of any other benefit under this
Article.
2.3.2
Amount of Benefit
. The benefit under this
Section 2.3 is the Accrual Balance determined as of the date
of the Executive’s Separation from Service.
2.3.3
Distribution of
Benefit . The Company
shall pay the Accrual Balance in a lump sum within thirty (30) days
following the Executive’s Separation from Service.
2.4
Restriction on Timing of
Distribution .
Notwithstanding any provision of this Agreement to the contrary, if
the Executive is considered a “specified employee”
under Section 409A of the Code at the time of any Separation
from Service pursuant to which benefits become payable under
Sections 2.1, 2.2 or 2.4, all benefit payments otherwise due and
payable shall be suspended for a period of six (6) months
following the Separation from Service and the amounts so suspended
will be paid in a lump sum as soon as practicable following the
six-month anniversary of the Separation from Service.
Article 3
Distribution at
Death
3.1
Death During Active
Service . If the
Executive dies while in the active service of the Company and prior
to the end of the Executive’s fifth consecutive Year of
Participation, the Company shall distribute to the Beneficiary the
benefit described in this Section 3.1. This benefit shall be
distributed in lieu of the benefits under
Article 2.
3.1.1
Amount of Benefit
. The benefit under this
Section 3.1 is Accrual Balance determined as of the
Executive’s death.
3.1.2
Distribution of
Benefit . The
Company shall distribute the Accrual Balance to the
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Beneficiary in a lump sum commencing
within sixty (60) days following receipt by the Company of the
Executive’s death certificate.
3.2
Death After Separation from
Service But Before Benefit Distributions Commence
. If the Executive is entitled to
benefit distributions under this Agreement, but dies prior to the
commencement of said benefit distributions, the Company shall
distribute to the Beneficiary the same benefits that the Executive
was entitled to prior to death except that the benefit
distributions shall commence within sixty (60) days following
receipt by the Company of the Executive’s death
certificate.
Article 4
Beneficiaries
4.1
Beneficiary
. The Executive sh
