Exhibit 10.18

 

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This First Amendment to the Employment Agreement by and among Citizens
Bancshares Corporation, a bank holding company organized under the laws of the
State of Georgia (“CBC”); Citizens Trust Bank, the wholly-owned bank subsidiary
of CBC (collectively, the “Employer”); and James E. Young, (the “Executive”) is
entered into on this        day of December, 2008.

 

W I T N E S S E T H

 

WHEREAS, the parties entered into that certain employment agreement dated
January 30, 1998 (the “Agreement”) as modified by Sections 3(d) and 8 of that
certain Change in Control Agreement between CBC and the Executive dated
December 1, 2005.

 

WHEREAS, the parties desire to amend the Agreement to comply with the final
regulations issued under Internal Revenue Code Section 409A.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree, effective as of the date first written above, to amend the
Agreement as follows:

 

1.                                       By deleting Section 1.7 in its entirety
and substituting therefor the following:

 

“1.7                           ‘Change in Control’ means any one of the
following events which may occur after January 30, 1998:

 

(a)                                  the acquisition by any one person, or more
than one person acting as a group (other than any person or more than one person
acting as a group who is considered to own more than fifty percent (50%) of the
total fair market of the stock of CBC prior to such acquisition), of stock of
the CBC 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 the CBC;

 

(b)                                 within any twelve-month period (beginning on
or after January 30, 1998) the date a majority of members of CBC’s board of
directors is replaced by directors whose appointment or election is not endorsed
by a majority of the members of CBC’s board of directors before the date of the
appointment or election;

 

(c)                                  within any twelve-month period (beginning
on or after January 30, 1998) the acquisition by any one person, or more than
one person acting as a group, of ownership of stock of CBC possessing thirty
percent (30%) or more of the total voting power of the stock of CBC;

 

(d)                                 within any twelve-month period (beginning on
or after January 1, 1998) the acquisition by any one person, or more than one
person acting as a group,

 

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of the assets of the Employer, that have a total gross fair market value of
eighty-five percent (85%) or more of the total gross fair market value of all of
the assets of the Employer, immediately before such acquisition or acquisitions;
provided, however, that transfers to the following entities or person(s) shall
not be deemed to result in a Change in Control under this subsection (d):

 

(i)                                     an entity that is controlled by the
shareholders of CBC or Citizens Trust Bank, as applicable, immediately after the
transfer;

 

(ii)                                  a shareholder (determined immediately
before the asset transfer) of CBC or Citizens Trust Bank, as applicable, in
exchange for or with respect to its stock;

 

(iii)                               an entity, fifty percent (50%) or more of
the total value or voting power of which is owned, directly or indirectly, by
CBC or Citizens Trust Bank, as applicable;

 

(iv)                              a person, or more than one person acting as a
group, that owns, directly or indirectly, fifty percent (50%) or more of the
total value or voting power of all the outstanding stock of CBC or Citizens
Trust Bank, as applicable; or

 

(v)                                 an entity, at least fifty percent (50%) of
the total value or voting power of which is owned, directly or indirectly, by a
person described in the above subsection (d)(iv).

 

For purposes of this Section 1.7, 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 CBC or Citizens Trust Bank, as applicable.  Notwithstanding the foregoing,
no Change in Control shall be deemed to have occurred for purposes of this
Agreement by reason of any actions or events in which the Executive participates
in a capacity other than in the Executive’s capacity as an employee or director
of CBC or Citizens Trust Bank or as a shareholder of CBC.”

 

2.                                       By deleting Section 1.10 in its
entirety and substituting therefor the following:

 

“1.10                     ‘Good Reason’ shall mean, with respect to termination
by the Executive, either:

 

(a)                                  a material diminution in the Executive’s
authority, responsibilities or duties; or

 

(b)                                 a material breach of the terms of this
Agreement by the Employer;

 

provided, however, that for a termination of employment by the Executive to be
for Good Reason, the Executive must notify the Employer in writing of the event

 

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giving rise to Good Reason within thirty (30) days following the occurrence of
the event (or if later the Executive’s knowledge of occurrence of the event) and
the event must remain uncured after the expiration of thirty (30) days following
the delivery of written notice of such event to the Employer by the Executive.”

 

3.                                       By adding the following new
Section 1.10A:

 

“1.10A           ‘Termination of Employment’ shall mean a termination of the
Executive’s employment that constitutes a separation from service under Treas.
Reg. Section 1.409A-1(h).”

 

4.                                       By deleting Section 4.1.2 in its
entirety and substituting therefor the following

 

“4.1.2                  Without Cause at any time, provided that the Employer
shall give the Executive sixty (60) days’ prior written notice of its intent to
terminate, in which event, if the termination constitutes a Termination of
Employment, the Employer shall be required to continue to meet its obligations
to the Executive under Section 5 for the twelve-month period immediately
following the effective date of the termination in the same manner had the
Executive’s employment not been terminated by the Employer (or, to the extent
applicable, as otherwise provided by the terms of any incentive compensation
program then in effect); provided, however, that the Employer’s obligations in
this regard shall be contingent upon the Executive timely signing a release
agreement in accordance with Section 4.7.”

 

5.                                       By deleting Section 4.2.1 in its
entirety and substituting therefor the following

 

“4.2.1                  With Good Reason, provided that the Executive shall give
the Employer prior written notice of his intent to terminate in accordance with
Section 1.10, in which event, if the termination constitutes a Termination of
Employment, the Employer shall be required to continue to meet its obligations
to the Executive under Section 5 for the twelve-month period immediately
following the effective date of the termination in the same manner had the
Executive not terminated his employment (or, to the extent applicable, as
otherwise provided by the terms of any incentive compensation program then in
effect); provided, however, that the Employer’s obligations in this regard shall
be contingent upon the Executive timely signing a release agreement in
accordance with Section 4.7.”

 

6.                                       By deleting Section 4.4 in its entirety
and substituting therefor the following:

 

“4.4                           On Change in Control.  If, within six (6) months
following a Change in Control, the Employer terminates the Executive’s
employment without Cause or the Executive resigns, regardless of the reason, and
such termination or resignation constitutes a Termination of Employment, the
Executive shall receive, as liquidated damages, in lieu of all other claims
under this Agreement a lump sum severance payment equal to two (2) times the
Executive’s Base Salary then in effect.  The lump sum amount

 

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shall be paid in full at a time determined by the Employer within the sixty (60)
day-period immediately following the effective date of the termination.”

 

7.                                       By deleting from Section 4.5 the
following clause “, but with respect to Incentive Compensation, the Employer
shall pay the Executive only for Delinquency Rating and Uniform Financial
Institution Rating Incentives which have been earned as of the date the
employment relationship terminates”.

 

8.                                       By deleting from Section 4.6 the
following clause “but with respect to Incentive Compensation, the Employer shall
pay the Executive only for Delinquency Rating and Uniform Financial Institution
Rating Incentives which have been earned as of the date the employment
relationship terminates”.

 

9.                                       By deleting in its entirety Section 4.7
and substituting therefor the following:

 

“4.7                           Effect of Termination.  Termination of the
employment of the Executive shall be without prejudice to any right or claim
which may have previously accrued to either the Employer or the Executive
hereunder and shall not terminate, alter, supersede or otherwise affect the
terms and covenants and the rights and duties prescribed in this Agreement. 
Notwithstanding any other provision of this Agreement to the contrary, as a
condition of the Employer’s payment of any amount in connection with a
termination of the Executive’s employment, the Executive must execute a release
agreement providing for the release and discharge of the Employer and related
persons and entities from any and all actions, suits, proceedings, claims,
demands or causes of action in any way directly or indirectly related to or
connected with the Executive’s employment with the Employer and/or the
termination of the employment of the Executive by the Employer, including, but
not limited to, claims relating to discrimination in employment; such execution
shall be within such period of time following the Termination of Employment as
is permitted by the Employer; and the Executive shall not timely revoke the
release agreement during any revocation period provided pursuant to the terms of
the release agreement.  All payments of severance under this Agreement shall
accrue from the date of the Termination of Employment and shall be made or
commence at the end of the revocation period provided pursuant to the terms of
the release agreement but no later than the sixtieth (60th) day following the
Executive’s Termination of Employment, with any accrued but unpaid severance
being paid on the date of the first payment.  Notwithstanding any provision in
the Agreement to the contrary, if the Executive is a ‘specified employee’ within
the meaning of Section 409A of the Internal Revenue Code (the ‘Code’) as of his
Termination of Employment, then such portion of the payments provided for in
this Section 4 that would result in a tax under Code Section 409A if paid during
the first six (6) months after termination of employment shall be withheld,
starting with the payments latest in time during such six (6) month period, and
paid to the Executive during the seventh month following the date of his
Termination of Employment.  Any termination of the Executive’s employment by CBC
or Citizens Trust Bank for Cause shall also be deemed a termination of the
Executive’s employment with the Citizens Trust Bank or CBC, as applicable, for
Cause regardless of whether the Citizens Trust Bank or CBC, as applicable, takes
any separate action with respect to the Executive’s termination.”

 

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10.                                 By deleting in its entirety Section 5.2 and
substituting therefor the following:

 

“5.2                           Incentive Compensation.  The Executive shall be
entitled to annual bonus compensation, if any, as determined by the Board of
Directors of the CBC or Citizens Trust Bank, as the case may be, pursuant to any
incentive compensation program as may be adopted from time to time by the
Employer.  Any annual bonus earned shall be payable in a lump sum in the year
following the year for which the bonus is payable in accordance with the
Employer’s normal practices for the payment of short-term incentives.”

 

11.                                 By deleting the last sentence of Section 5.8
and substituting therefor the following:

 

“Upon any Termination of Employment, regardless of the reason, the Employer will
pay the Executive for any vacation benefits earned, but unused, as of the
effective date of the termination of this Agreement.  Such payment will be made
in a lump sum within thirty (30) days following the effective date of the
Termination of Employment.”

 

12.                                 By adding the following new Section 5.12, as
follows:

 

“5.12                     Rules Governing Reimbursements and In-Kind Benefits. 
All expenses eligible for reimbursements described in Section 4.5 and this
Section 5 must be incurred during the Term of this Agreement, or the applicable
post-employment period described in Section 4, to be eligible for
reimbursement.  All in-kind benefits described in this Section 5 must be
provided by the Employer during the Term of this Agreement.  The amount of
taxable reimbursable expenses incurred, and the amount of in-kind benefits
provided, in one taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits provided, in any other taxable year.  Each
category of reimbursement shall be paid as soon as administratively practicable,
but in no event shall any such reimbursement be paid after the last day of the
calendar year following the calendar year in which the expense was incurred. 
Neither rights to reimbursement nor in-kind benefits are subject to liquidation
or exchanges for other benefits.”

 

13.                                 By deleting the phrase “promptly upon demand
by the prevailing party” in Section 16 and substituting therefor the phrase
“within sixty (60) days after a final determination (excluding any appeals) is
made with respect to the litigation.”

 

14.                                 By deleting Exhibit “A” in its entirety.

 

Except as provided herein, the terms of the Agreement, as modified by Sections
3(d) and 8 of that certain Change in Control Agreement between CBC and the
Executive dated December 1, 2005, shall remain in full force and effect.

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed as of the date first above written.

 

 

Citizens Bancshares Corporation

 

 

 

By:

 

 

Title:

 

 

 

 

 

Citizens Trust Bank

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

 

 

 

James E. Young

 

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