THIS
AGREEMENT is made and entered into on the 15
th
day of December, 2008
, by and between FIRST GEORGIA
BANKING COMPANY , a bank organized under the laws of the State
of Georgia (the “Bank”), and William B. Morgan
(hereinafter “Employee”).
WHEREAS ,
the Board of Directors of the Bank believes that it is in the best
interest of the Bank to arrange terms of employment for Employee so
as to reasonably induce Employee to remain in his capacities with
the Bank for the term hereof; and
WHEREAS ,
Employee is willing to provide services to the Bank in accordance
with the terms and conditions hereinafter set forth;
NOW,
THEREFORE , for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as
follows:
1.
EMPLOYMENT . For the Term of Employment, as hereinafter
defined, the Bank agrees to employ Employee as its Chief Lending
Officer , and Employee agrees to accept such employment and to
perform such duties and functions as the Board of Directors of the
Bank may assign to Employee from time to time. Employee agrees to
devote his full business time, attention, skill and efforts to the
business of the Bank, and shall perform his duties in a trustworthy
and businesslike manner, all for the purpose of advancing the
interests of the Bank.
2. TERM
OF EMPLOYMENT . The “Term of Employment” referred
to in Section 1 hereof and hereinafter shall be deemed to have
commenced as of the date first above mentioned and shall continue
for a period of three (3) years, unless sooner terminated
pursuant to this Agreement, and shall include any extension of the
period of employment in accordance with this paragraph. The period
of employment shall automatically be extended without further
action by the parties for an additional twelve (12) full
calendar months, on each anniversary hereof during the Term of
Employment, unless (i) either party shall have served written
notice upon the other of its intention that this Agreement shall
not be extended at least ninety (90) days before the
anniversary date on which this Agreement would have been
automatically extended for an additional year, or (ii) the
Employee’s employment hereunder shall have been terminated
pursuant to Section 4 hereof. In the event that Employee is a
member of the Board of Directors of the Bank or the Bank’s
holding company, if any, then Employee agrees that any termination
of this Agreement shall constitute a resignation by Employee from
these Boards of Directors.
3.1
Base Salary . During the Term of Employment, Employee shall
be paid an annual base salary (hereinafter “Base
Salary”) of $155,000, which shall be paid in equal
installments in accordance with the Bank’s normal pay
practices, but not less frequently than monthly. Employee’s
salary shall be reviewed by the Board of Directors of the Bank (or
a
compensation
committee of the Board) annually and may be adjusted as determined
by the Board of Directors of the Bank.
3.2
Management Incentives and Discretionary Bonuses . During the
Term of Employment, Employee shall be entitled, in an equitable
manner based on the terms of any bonus and incentive plans that
have been approved or may, from time to time, be approved by the
Board of Directors, with all other key management personnel of the
Bank, to such incentives and discretionary bonuses as may be
authorized, declared and paid by the Board of Directors to the
Bank’s key management employees. The incentive compensation
shall be based on meeting or exceeding the attainment of certain
criteria to be established by the Board of Directors. In
determining whether to grant incentive compensation, the Board of
Directors shall consider factors such as the Bank’s
profitability, its asset quality, its compliance with laws and
regulations, and its loan quality.
No
other compensation provided for in this Agreement shall be deemed a
substitute for the Employee’s right to such incentives and
discretionary bonuses when and as declared by the Board.
3.3
Stock Options . See Stock Option Grant Agreement for
details.
3.4
Additional Benefits . During the Term of Employment,
Employee shall be provided with such employee benefits and benefit
levels, including family health, dental, vision and life (including
a minimum of $310,000 term life insurance) and disability
insurance, a car allowance of $12,000 per year, and
membership in social, professional and civic clubs which the Board
of Directors in its discretion determines to be in keeping with a
level commensurate with a financial institution in a similar
environment. These benefits shall be provided and maintained at a
level of not less than what is in effect at the time this Agreement
is executed.
Throughout
the Term of Employment, Employee shall also be entitled to
reimbursement for reasonable business expenses incurred by him in
the performance of his duties hereunder.
During
the Employee’s Term of Employment hereunder, Employee shall
receive four ( 4 ) weeks paid vacation during each
year of employment.
3.5
Indemnification . In the event of any attempt by a former
employer or employee to enjoin or seeks damages for
Employee’s employment with the Bank whether by written demand
or by legal action, including but not limited to actions related to
restrictive covenants, trade secrets, and interference with
business relations, the Bank agrees to indemnify Employee in the
amount of any judgment, attorney’s fees, or costs incurred by
or against Employee arising out of such action.
4.1
Death or Disability . This Agreement may be terminated
before the expiration of the Term of Employment upon the occurrence
of any one of the following events:
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(a)
Upon Employee’s death, this Agreement shall terminate
immediately. Any salary and any other amounts that may be due
Employee from Bank at the time of his death (whether pursuant to
benefits plans or otherwise) shall be paid to the executor or
administrator of his estate.
(b)
The Bank may terminate this Agreement upon Employee’s
“Total Disability.” As used in this Agreement,
“Total Disability” means any physical or mental
disorder that renders Employee incapable of performing his normal
duties and services under this Agreement for a period of one
hundred twenty (120) days in any consecutive twelve
(12) month period, as determined by a licensed physician
selected by mutual agreement of the Bank and the Employee or the
Employee’s legal representative. If this Agreement is
terminated as a result of the Employee’s “Total
Disability,” the Employee’s compensation hereunder
shall terminate and the Employee shall be paid in accordance with
such long-term disability plans of the Bank as may be in effect at
that time. The Employee’s compensation, title and status
shall continue during any such period of disability until the date
of termination except that the Bank may provide disability
insurance to cover the Employee during any part of such disability
period and the Bank’s obligation for the Employee’s
compensation for any such period shall be reduced by the amount of
any such insurance proceeds which the Employee receives.
4.2
For Cause . This Agreement may be terminated by the Board of
Directors of the Bank for “Cause” for any of the
following reasons:
(a)
failure of Employee to follow reasonable written instructions or
policies of the Board of Directors of the Bank;
(b)
gross negligence or willful misconduct of Employee materially
damaging to the business of the Bank;
(c)
conviction of Employee of a crime involving breach of trust, moral
turpitude, theft or fraud;
(d)
the failure by the Employee to perform substantially his duties
other than any failure resulting from incapacity due to physical or
mental illness;
(e)
willful commission by Employee of (i) acts involving
dishonesty or fraud or (ii) acts causing harm to the
Bank;
(f)
a willful misrepresentation by the Employee to the stockholders or
the Board of Directors of the Bank which causes substantial injury
to the Bank; or
(g)
a request by any state or federal authority regulating the Bank
that the Employee be removed from his office as Chief Lending
Officer of the Bank.
4.3
Without Cause or for Good Reason .
(a)
The Bank may immediately terminate this Agreement at any time
“without Cause” by giving the Employee written notice
of the termination date.
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Employee may
immediately terminate this Agreement at any time upon the
occurrence of Good Reason (as defined below) by giving the Bank
written notice of the termination date. If this Agreement is
terminated pursuant to this Section 4.3, and subject to the
limitations set forth in Sections 9 and 10, then:
(i)
Employee shall be paid severance compensation in an amount equal to
100 % of his annual “Base Salary” (as defined in
Section 3.1) then in effect which shall be paid over a twelve
(12)-month period commencing from the termination date in such
installments and intervals as if the Employee had remained
employed; provided , however , that the payments
pursuant to this clause (i) shall only be made if Employee executes
a release substantially in the form of Exhibit A and
such release becomes effective pursuant to its terms;
(ii)
Employee shall be paid any other amounts owing to the Employee by
the Bank under this Agreement at such termination date, which
amounts shall be paid within a reasonable time, but no more than
thirty (30) days, after such termination date; and
(iii)
If and to the extent that the Employee timely elects COBRA
continuation coverage, the Bank will pay to Employee on a monthly
basis the cost of COBRA continuation coverage, less the amount of
premiums by active employees receiving the same coverage, for a
period of twelve (12) months from the termination date or, if
earlier, until Employee becomes eligible under another group health
plan or otherwise no longer continues to have COBRA
coverage.
Anything
in this Agreement to the contrary notwithstanding, upon a
termination pursuant to this Section 4.3, Employee’s
sole rights and remedies against the Bank arising out of any such
termination of his employment hereunder are to receive the
severance compensation and the other amounts and benefits as are
explicitly set forth in this Section 4.3. All of the
provisions of this Section 4.3 shall be subject to the
provisions of Section 5 below.
(b) For
purposes of this Section 4.3, “Good Reason” shall
mean, without the written consent of Employee:
(i)
a change in Employee’s title, position or responsibilities
which represents a material adverse change from his title, position
or responsibilities as described in Section 1 of this
Agreement; the assignment to Employee of any office or duties which
are inconsistent in any material respect with Employee’s
position, authority, duties or responsibilities as described in
Section 1 of this Agreement; or any other action by the Bank
which results in a material diminution in such position or
authority; provided , however , that any such change,
assignment or action that results from customary restructurings
attributable solely to the growth of the Bank shall not be
considered “Good Reason”;
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(ii)
a reduction by the Bank in Employee’s Base Salary as in
effect on the Effective Date or as the same may be increased from
time to time;
(iii)
the Bank’s requiring Employee, without his consent, to be
based at any office or location outside of Carrollton,
Georgia ; or
(iv)
the material breach of this Agreement by the Bank;
provided , however , that Good Reason shall not be
deemed to exist unless Employee first delivers written notice to
the Bank of the specific conditions that would constitute Good
Reason and the Bank shall have failed to remedy these conditions
within thirty (30) days following its receipt of such notice
or, in the event that the conditions are ones that are not
reasonably capable of being remedied within thirty (30) days,
the Bank shall have failed to commence such remedy within thirty
(30) days after receipt of written notice or thereafter shall
have failed to diligently pursue such remedy to
completion.
5. CHANGE
IN CONTROL OF THE BANK .
Subject
to the limitations set forth in Sections 9 and 10, in the
event of a “Change in Control” (as defined below)
during the Term of Employment, and the Employee (i) is
terminated by the Bank from his employment (except “for
Cause” as defined in Section 4.2 above) during the
one-year period after the Change in Control becomes effective;
(ii) voluntarily resigns during the 90 day period
following the Change in Control 1 ;
or (iii) resigns for Good Reason within 30 days after the
effective date the event giving rise to Good Reason (provided that
the resignation must also fall within the one-year period after the
Change in Control becomes effective), then Employee shall be
entitled to receive severance compensation in an amount equal to
two hundred percent ( 200 %) of his Base Salary then
in effect and any other amounts owing to Employee at the time of
such termination date, which shall be paid in a lump sum within
fourteen (14) days following the date of termination or
resignation.
For
purposes of this Section 5, “Change in Control” of
the Bank shall mean the occurrence of any of the following events
that does not also constitute a Non-Control Transaction:
(i)
During any twelve (12) month period the individuals who are
members of the Board of the Bank or, if applicable, the
Bank’s holding company (the “Holding Company”)
(the “Incumbent Board”), cease for any reason to
constitute at least 50% of the Board of Holding Company; provided,
however, that if the election, or nomination for election by the
Bank’s or the Holding Company’s shareholders, of any
new director was approved in advance by a vote of at least 50% of
the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board (this
Section (i) shall apply only with respect to the Holding
Company as long as it is the majority shareholder of the
Bank).
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(ii)
The acquisition (other than directly from the Bank or the Holding
Company) of any voting securities of the Bank or the Holding
Company (the “Voting Securities”) by any
“Person” (as the term “person” is used for
purposes of Section 13(d) or 14(d) of the Exchange Act) immediately
after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the combined voting power of the
Bank’s or the Holding Company’s then outstanding Voting
Securities.
(iii)
Any one Person, or more than one Person acting as a group, acquires
(or has acquired during the 12 month period ending of the date
of the most recent acquisition by such Person or Persons)
securities of the Company representing 30% or more of the Voting
Securities; provided, however, that the event described in this
paragraph (iii) shall not be deemed to be a Change in Control
by virtue of any of the following acquisitions: (A) by the
Bank or the Holding Company, (B) by any employee benefit plan
(or related trust) sponsored or maintained by the Bank or the
Holding Company, or (C) by an underwriter temporarily holding
securities pursuant to an offering of such securities.
(iv)
Any one Person, or more than one Person acting as a group, acquires
(or has acquired during the twelve (12)-month period ending on the
date of the most recent acquisition by such Person or Persons)
assets from the Bank or the Holding Company that have a total gross
fair market value equal to or more than 40% of the total gross fair
market value of all of the assets of such entity (determined
without regard to any liabilities associated with such assets)
immediately prior to such acquisition or acquisitions, without
regard to assets transferred to: (A) a shareholder or owner of
the entity (immediately before the asset transfer) in exchange for
or with respect to its stock, (B) an organization, 50% or more
of the total value or voting power of which is owned directly or
indirectly, by the entity immediately after the transfer,
(C) a Person, or more than one Person acting as a group, that
owns, directly or indirectly, 50% or more of the total value or
voting power of the entity immediately after the transfer or
(D) an organization, at least 50% of the total value or voting
power of which is owned, directly or indirectly, by a Person, or
more than one Person acting as a group, that owns, directly or
indirectly, 50% or more of the total value or voting power of the
entity immediately after the transfer.
A
“Non-Control Transaction” means any merger,
consolidation or reorganization or similar transaction in
which:
(i)
the shareholders of the Bank or the Holding Company immediately
before such merger, consolidation, reorganization or similar
transaction, own, directly or indirectly and in substantially the
same proportion as their ownership of the common stock of the Bank
or the Holding Company immediately before such transaction,
immediately following such transaction, at least 50% of the
combined voting power of the outstanding voting securities
of
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