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EXHIBIT 10.2

AMENDED AND RESTATED
KEY OFFICER COMPENSATION AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of the 1st day of January, 2015 (the
“Effective Date”), by and between the Georgia Bank & Trust Company of Augusta, a
state bank organized under the laws of the State of Georgia (the “Bank”), and
Ronald L. Thigpen (the “Executive”).

BACKGROUND:

The Employer and Executive are parties to that certain Key Officer Compensation
Agreement originally entered into as of January 1, 2000 (the “Original Effective
Date”), as amended by the First Amendment thereto dated October 15, 2003 and the
Second Amendment thereto dated December 22, 2008 (the “Original Employment
Agreement”) pursuant to which the Executive is employed as the President and
Chief Operating Officer of the Bank.
 
The Bank and the Executive now desire to amend and restate the Original
Employment Agreement as hereinafter set forth and intend that this amended and
restated employment agreement embody the complete terms and conditions of the
Executive’s continuing employment with the Employer.
 
AGREEMENT:

In consideration of the above premises and the mutual agreements hereinafter set
forth, effective as of the Effective Date, the parties hereby agree as follows:

1.             Duties.
 
1.1          Positions. The Executive shall be employed as President and Chief
Operating Officer of the Bank and, subject to the direction of the Chief
Executive Officer, shall perform and discharge faithfully the duties and
responsibilities which reasonably may be assigned to the Executive from time to
time in connection with the conduct of the businesses. The duties and
responsibilities of the Executive shall be commensurate with similar positions
at other community banks of a similar size to the Bank. The Executive shall
report to the Chief Executive Officer of the Bank.
 
1.2          Full-Time Status. In addition to the duties and responsibilities
specifically assigned to the Executive pursuant to Section 1.1 hereof, the
Executive shall:
 
(a) subject to Section 1.2(b) and Section 1.3, devote substantially all of the
Executive’s time, energy and skill during regular business hours to the
performance of the duties of the Executive’s employment (reasonable vacations
and reasonable absences due to illness excepted) and faithfully and
industriously perform such duties;
 
(b) the Executive and the Bank may agree that the Executive may devote less than
substantially all of the Executive’s time, energy and skill during regular
business hours to the performance of the duties of the Executive’s employment in
which case the Executive’s Annual Base Salary shall be proportionately reduced;
 

 

 

 

 
(c) diligently follow and implement all reasonable and lawful management
policies and decisions communicated to the Executive by the Chief Executive
Officer; and
 
(d) timely prepare and forward to the Chief Executive Officer all reports and
accountings as may be requested of the Executive.
 
1.3          Permitted Activities. The Executive shall devote substantially all
of the Executive’s entire business time, attention and energies to the business
of the Employer and shall not during the Term be engaged (whether or not during
normal business hours) in any other significant business or professional
activity, whether or not such activity is pursued for gain, profit or other
pecuniary advantage, but as long as the following activities do not interfere
with the Executive’s obligations to the Bank, this shall not be construed as
preventing the Executive from:

(a)           investing the Executive’s personal assets in any manner which will
not require any services on the part of the Executive in the operation or
affairs of the entity and in which the Executive’s participation is solely that
of an investor; provided that such investment activity following the Effective
Date shall not result in his owning beneficially at any time five percent (5%)
or more of the equity securities of any Competing Business; or

(b)           participating in civic and professional affairs and organizations
and conferences, preparing or publishing papers or books, or teaching or serving
on the board of directors of an entity so long as any such participation does
not interfere with the ability of the Executive to effectively discharge his
duties hereunder; provided further, that the Chief Executive Officer may direct
the Executive in writing to resign from any such organization and/or cease such
activities should the Chief Executive Officer reasonably conclude that continued
membership and/or activities of the type identified would not be in the best
interests of the Employer.

2.             Term.  This Agreement shall remain in effect for the Initial
Term.  On each anniversary of the Effective Date, however, the Initial Term
shall be extended for an additional twelve-month period unless and until one
party gives written notice to the other of its or his intent not to extend this
Agreement with such written notice to be given not less than thirty (30) days
prior to the end of any such twelve-month period.  In the event such notice of
non-extension is properly given, this Agreement shall terminate at the end of
the remaining Term then in effect (i.e., two (2) years following the last day
for which a notice of non-extension may be provided), subject to earlier
termination in connection with the termination of the Executive’s employment
pursuant to Section 4 hereof.  In the event that either party provides notice of
the termination of the Agreement, but the Executive continues to provide
services to the Bank as an employee, such post-expiration employment shall be
deemed to be performed on an “at-will” basis and either party may thereafter
terminate such employment with or without notice and for any or no reason and
without any obligations determined by reference to this Agreement.
 

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3.             Compensation.  The Bank shall pay the Executive the following
during the Term, except as otherwise provided below:

3.1          Annual Base Salary.  The Executive shall be compensated at an
annual base rate of Four Hundred Twenty-Five Thousand and No/100 Dollars
($425,000.00) (the “Annual Base Salary”).  The Executive’s Annual Base Salary
shall be reviewed by the Employer at least annually for adjustments, as
determined by the Board of Directors based on an evaluation of the Executive’s
performance, with any such adjustment to be effective as of January 1st.  The
Executive’s Annual Base Salary shall be proportionately reduced in the event of
any circumstance contemplated by Section 1.2(b), with any such adjustment to be
effective as of the date of the change in the Executive’s level of service
commitment.  The Executive’s Annual Base Salary shall be payable in accordance
with the Bank’s normal payroll practices.

3.2          Incentive Compensation.

(a)           The Executive shall be eligible to receive annual bonus
compensation, if any, as may be determined by, and based on performance measures
established by, the Board of Directors of the Bank.  To the extent applicable,
any such annual bonus compensation opportunity shall be consistent with the
Bank’s strategic planning process pursuant to any incentive compensation program
as may be adopted from time to time by the Board of Directors of the Bank (an
“Annual Bonus”).   Any Annual Bonus earned shall be payable in cash in the
calendar year following the calendar year in which the bonus is earned in
accordance with the Bank’s normal practices for the payment of short-term
incentives and shall be paid no later than March 15th of the calendar year
following the calendar year in which the bonus is earned.

(b)           The Executive’s Annual Bonus opportunity shall not preclude the
Executive from eligibility for any other incentive compensation opportunity made
available by the Board of Directors of the Bank.

(c)           The payment of any incentive compensation shall be subject to any
approvals or non-objections required by any regulator of the Bank, and it is
understood by the parties that it is contemplated that Executive will not be
eligible to receive any incentive compensation while the Bank is subject to
restrictions imposed by any written agreements between the Employer and the
Federal Deposit Insurance Corporation (“FDIC”), the Georgia Department of
Banking and Finance, or any other bank-regulating authority, or otherwise
restricted under applicable law.

3.3          Equity Compensation.  The Executive shall be entitled to such other
equity incentive awards in the discretion of the Board of Directors of the
Company (or any committee thereof) based upon and/or subject to any performance
measures as may be established by the granting entity; provided, however, that,
in general, the Company shall make awards at such times and subject to such
terms and conditions that are no less favorable than awards granted to similarly
situated executives.
 

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3.4          Business and Professional Education Expenses; Memberships.  Subject
to the reimbursement policies from time to time adopted by the Board of
Directors of the Bank and consistent with the annual budget approved for the
period during which an expense was incurred, the Bank specifically agrees to
reimburse the Executive for reasonable and necessary business expenses incurred
by the Executive in the performance of his duties hereunder, including
membership dues approved in advance; provided, however, that as a condition of
any such reimbursement, the Executive submit verification of the nature and
amount of such expenses in accordance with such reimbursement policies and in
sufficient detail to comply with rules and regulations promulgated by the United
States Treasury Department.  The Executive acknowledges that the Bank makes no
representation with respect to the taxability or non-taxability of the benefits
provided under this Section 3.4.

3.5          Benefits.  In addition to the benefits specifically described in
this Agreement, the Executive shall be entitled to such benefits as may be
available from time to time to similarly situated employees of the Bank.  All
such benefits shall be awarded and administered in accordance with the Bank’s
standard policies and practices.

3.6          Withholding.  The Bank may deduct from each payment of compensation
under this Agreement all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.

3.7          Reimbursement of Expenses; In-Kind Benefits.  All expenses eligible
for reimbursements described in this Agreement must be incurred by the Executive
during the Term of this Agreement to be eligible for reimbursement.  Any in-kind
benefits provided by the Bank must be provided during the Term of this
Agreement.  The amount of reimbursable expenses incurred, and the amount of any
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.

3.8          Clawback of Incentive Compensation.  The Executive agrees to repay
any incentive compensation previously paid or otherwise made available to the
Executive under this Agreement that is subject to recovery under any applicable
law (including any rule of any exchange or service through which the securities
of the Company are then traded). The Executive agrees to return promptly any
such compensation identified by the Bank by written notice provided pursuant to
Section 12.  If the Executive fails to return such compensation promptly, the
Executive agrees that the amount of such compensation may be deducted from any
and all other compensation owed to the Executive by the Bank.  If the Executive
is then employed by the Bank, the Executive acknowledges that the Bank may take
appropriate disciplinary action (up to, and including, Termination of
Employment) if the Executive fails to return such compensation.  The Executive
acknowledges the Bank’s rights to engage in any legal or equitable action or
proceeding in order to enforce the provisions of this Section 3.8.  The
provisions of this Section 3.8 shall be modified to the extent, and remain in
effect for the period, required by applicable law.
 

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3.9          Obligations of Bank.  No Affiliate of the Bank shall bear any
responsibility or liability for the obligations of the Bank under this
Agreement.

4.             Termination; Suspension or Reduction of Benefits.

4.1          Termination of Employment.  During the Term, the Executive’s
Termination of Employment under this Agreement may only occur as follows:

(a)           By the Bank:

(1)           for Cause; provided that the Bank shall give the Executive any
prior written notice required by Section 22(f); or

(2)           without Cause at any time, provided that the Board of Directors of
the Bank shall give the Executive thirty (30) days prior written notice of its
intent; and provided further that the Bank shall meet its obligations to the
Executive under Section 4.2;

(b)           By the Executive:

(1)           for any reason (other than pursuant to Section 4.1(b)(2)),
provided that the Executive shall give the Bank thirty (30) days’ prior written
notice of the Executive’s intent to effect his Termination of Employment; or

(2)           for Good Reason following a Change of Control, provided that the
Executive shall give the Bank the prior written notice described in Section
22(p).

(c)           Upon the Executive becoming subject to a Disability.

(d)           At any time upon mutual, written agreement of the parties.

(e)           Upon expiration, including non-renewal, of the Term.

(f)           Notwithstanding anything in this Agreement to the contrary, the
Term shall end automatically upon the Executive’s death.

4.2          Severance.

(a)           Death.  If, during the Term the Executive experiences a
Termination of Employment due to death, the Bank will pay severance to the
Executive’s representative or estate, as liquidated damages, in lieu of all
other claims and payments (other than those provided for in this Section
4.2(a)), a lump sum payment in cash or cash equivalents equal to (1) fifty
percent (50%) of the Executive’s Annual Base Salary then in effect plus (2) any
earned but unpaid incentive compensation.
 

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(b)           Termination of Employment without Cause.  If, during the Term, the
Executive experiences a Termination of Employment by the Bank without Cause
pursuant to Section 4.1(a)(2); then, upon the Termination of Employment, the
Bank will provide the Executive, as liquidated damages, in lieu of all other
claims and payments (other than those provided for in this Section 4.2(b)), with
a continuation of his base salary at the monthly rate equal to one-twelfth of
his Annual Base Salary rate then in effect for a period equal to twenty-four
(24) months, with such base salary continuation payable in monthly installments
effective as of the first day of the calendar month immediately following the
effective date of the Termination of Employment.

(c)           Resignation for Good Reason Following a Change of Control.  If,
during the Term but only after a Change of Control, the Executive effects a
Termination of Employment for Good Reason pursuant to Section 4.1(b)(2); then,
upon the Termination of Employment, the Bank will provide the Executive, as
liquidated damages, in lieu of all other claims and payments (other than those
provided for in this Section 4.2(c)), with a continuation of pay at the monthly
rate equal to the sum of:  (1) his base salary at the monthly rate equal to
one-twelfth of his Annual Base Salary rate then in effect, plus (2) incentive
compensation at the monthly rate equal to one-twelfth of the Annual Bonus that
would have been payable to the Executive for target performance for the calendar
year in which the Termination of Employment is effective.  The continuation of
pay shall continue for a period equal to twenty-four (24) months, with such
continuation of pay being payable in monthly installments effective as of the
first day of the calendar month immediately following the effective date of the
Termination of Employment.

4.3          Change of Control.  In the event of a Change of Control during the
Term, the Executive shall be entitled to a lump sum payment in cash or cash
equivalents equal to the sum of two (2) times the sum of:  (a) the Executive’s
average Annual Base Salary over the three consecutive calendar-year period
ending immediately prior to the calendar  year in which the Change of Control is
effective, plus (b) the average annual incentive compensation, as contemplated
by Section 3.2, paid to the Executive during the three consecutive calendar-year
period ending immediately prior to the calendar year in which the Change of
Control is effective.  The cash payment provided for in this Section 4.3 shall
be paid by the Bank no later than (10) days after the date of the closing of the
transaction effecting the Change of Control.
 
4.4          Tax Gross-Up Payment.  In the event it shall be determined in a
written opinion by a firm of certified public accountants selected by the Bank
(such determination to be made within thirty (30) days of a request by the
Executive following a Change of Control) or by the Internal Revenue Service that
any payment or distribution by the Bank to or for the benefit of the Executive
under this Agreement would be subject to the excise tax imposed by Section 4999
of the Code (such excise tax, together with any interest and penalties accrued
due to the Executive’s  failure to pay or underpayment of such tax in reliance
on the opinion of the Bank’s firm of certified public accountants, are
hereinafter collectively referred to as the “Excise Tax”)), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  The
Executive shall promptly notify the Bank in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Bank of
the Gross-Up Payment.  The Executive shall provide the Bank with a reasonable
opportunity to contest such claim.  Any Gross-Up Payment, as determined pursuant
to this Section 4.4, shall be paid by the Bank to the Executive or to the
applicable taxing authorities on or before the date on which such taxes are due,
but, for purposes of Code Section 409A, in all events by the end of the
Executive’s taxable year following the Executive’s taxable year in which the
Executive remits or is required to remit the related taxes (however, this period
is by no means an outside payment date nor does it diminish the Executive’s
right to be paid promptly).
 

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4.5          Effect of Termination of Employment.
 
(a)           Upon Executive’s Termination of Employment hereunder for any
reason, the Bank shall have no further obligations to the Executive or the
Executive’s estate with respect to this Agreement, except for (1) the payment of
any amount earned and owing under this Agreement; (2) the reimbursement of any
expenses under Section 3.4; and (3) any payment set forth in Section 4.2(a), (b)
or (c), if and as applicable.
 
(b)           Notwithstanding any other provision of this Agreement to the
contrary, as a condition of the Employer’s payment of any amount in connection
with the Executive’s Termination of Employment, the Executive must execute and
not timely revoke during any revocation period provided therein, a release in
the form provided by the Employer.  The Employer shall provide the release to
the Executive in sufficient time so that if the Executive timely executes and
returns the release, the revocation period will expire no later than sixty (60)
days following the effective date of the Termination of Employment.  Any
payments of severance shall accrue from the date of the Executive’s Termination
of Employment, with any accrued but unpaid severance being paid on the date of
the first payment as otherwise provided.
 
(c)           If the Executive is a member of the Board of Directors of the
Company or of the Bank, or both, and the Executive’s employment is terminated by
the Employer or by the Executive pursuant to Section 4.1, the Executive shall
immediately resign from his position on such Board(s) of Directors, effective no
later than the date his employment is terminated, unless the Company or the Bank
and Executive mutually agree to the Executive’s continued service on such
Board(s) of Directors.
 
(d)           Notwithstanding any provision in the Agreement to the contrary, to
the extent necessary to avoid the imposition of tax on the Executive under Code
Section 409A, any payments that are otherwise payable to the Executive within
the first six (6) months following the effective date of Termination of
Employment, shall be suspended and paid as soon as practicable following the end
of the six-month period following such effective date if, immediately prior to
the Executive’s Termination of Employment, the Executive is determined to be a
“specified employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) of
the Employer (or any related “service recipient” within the meaning of Code
Section 409A and the regulations thereunder).  Any payments suspended by
operation of the foregoing sentence shall be paid as a lump sum within thirty
(30) days following the end of such six-month period.  Payments (or portions
thereof) that would be paid latest in time during the six-month period will be
suspended first.
 

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(e)           Notwithstanding anything contained in this Agreement to the
contrary, no payments shall be made pursuant to Section 4 or any other provision
herein in contravention of  the requirements of Section 2[18(k)] of the Federal
Deposit Insurance Act (“FDIA”) (12 U.S.C. 1828(k)). In particular, the
provisions of Section 4.2 pertaining to the potential for severance payments,
shall have no force or effect as long as either the agreement concerning the
potential for severance payments or the actual payment of severance amounts
would be considered a “golden parachute payment,” with the meaning of 12 C.F.R.
Section 359.1(f).
 
(f)           It is intended that (1) each payment or installment of payments
provided under this Agreement is a separate “payment” for purposes of Code
Section 409A, and (2) that the payments satisfy, to the greatest extent
possible, the exemptions from the application of Code Section 409A, including
those provided under Treasury Regulations Section 1.409A-1(b)(4) (regarding
short-term deferrals), Section 1.409A-1(b)(9)(iii) (regarding the severance pay
exception) and Section 1.409A-1(b)(9)(iv) (regarding reimbursements and other
separation pay).
 
4.6          Regulatory Action.

(a)           If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Employer’s affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate, as of the
effective date of such order, except for the payment of Annual Base Salary due
and owing under Section 3.1 on the effective date of said order, and
reimbursement under Section 3.4 of expenses incurred as of the effective date of
termination.

(b)           If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Employer’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all
obligations of the Bank under this Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings.  If the charges in the
notice are dismissed, the Bank shall reinstate any of its obligations which were
suspended to the extent permitted by applicable law.

(c)           If the Employer is in default (as defined in Section 3(x)(1) of
the FDIA), all obligations under this Agreement shall terminate as of the date
of default, but the vested rights of the parties shall not be affected.

(d)           If the FDIC is appointed receiver or conservator under Section
11(c) of the FDIA (12 U.S.C. 1821(c)) of the Company or any depository
institution controlled by the Company, the Bank shall have the right to
terminate all obligations of the Bank under this Agreement as of the date of
such receivership or conservatorship, other than any rights of the Executive
that vested prior to such appointment.  To the extent the Employer is or
encompasses a depository institution, any vested rights of the Executive may be
subject to such modifications that are consistent with the authority of the
FDIC.
 

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(e)           If the FDIC provides open bank assistance under Section 13(c) of
the FDIA (12 U.S.C. 1823(c)) to the Company or any depository institution
controlled by the Company, but excluding any such assistance provided to the
industry generally, the Bank shall have the right to terminate all obligations
of the Bank under this Agreement as of the date of such assistance, other than
any rights of the Executive that vested prior to the FDIC action.  To the extent
the Employer is or encompasses a depository institution, any vested rights of
the Executive may be subject to such modifications that are consistent with the
authority of the FDIC.

(f)           If the FDIC requires a transaction under Section 13(f) or 13(k) of
the FDIA (12 U.S.C. 1823(f) and (k)) by the Company or any depository
institution controlled by the Company, the Bank shall have the right to
terminate all obligations of the Bank under this Agreement as of the date of
such transaction, other than any rights of the Executive that vested prior to
the transaction.  To the extent the Employer is or encompasses a depository
institution, any vested rights of the Executive may be subject to such
modifications that are consistent with the authority of the FDIC.

(g)           Notwithstanding the timing for the payment of any severance
amounts described in Section 4.2, no such payments shall be made or commence, as
applicable, that require the concurrence or consent of the appropriate federal
banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the
receipt of such concurrence or consent.  Any payments suspended by operation of
this Section 4.6(g) shall be paid as a lump sum within thirty (30) days
following receipt of the concurrence or consent of the appropriate federal
banking agency of the Employer or as otherwise directed by such federal banking
agency.

(h)           All obligations under this Agreement are further subject to such
conditions, restrictions, limitations and forfeiture provisions as may
separately apply pursuant to any applicable state banking laws.

5.             Employer Information.

5.1          Ownership of Employer Information.   All Employer Information
received or developed by the Executive or by the Employer while the Executive is
employed by the Bank will remain the sole and exclusive property of the
Employer.

5.2          Obligations of the Executive.  The Executive agrees:

(a)           to hold Employer Information in strictest confidence;

(b)           not to use, duplicate, reproduce, distribute, disclose or
otherwise disseminate Employer Information or any physical embodiments of
Employer Information to any unauthorized recipient; and
 

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(c)           in any event, not to take any action causing or fail to take any
action necessary in order to prevent any Employer Information from losing its
character or ceasing to qualify as Confidential Information or a Trade Secret;

provided, however, that none of the foregoing obligations shall preclude the
Executive from making any disclosures of Employer Information required by
law.  This Section 5 shall survive the termination of this Agreement for any
reason for so long as is permitted by applicable law.
 
5.3          Delivery upon Request or Termination. Upon request by the Bank, and
in any event upon the Executive’s Termination of Employment with the Bank, the
Executive will promptly deliver to the Bank all property belonging to the Bank
and its Affiliates, including, without limitation, all Employer Information then
in the Executive’s possession or control.

6.             Non-Competition.  The Executive agrees that during the
Executive’s employment by the Employer hereunder, and for the duration of the
Post-Termination Period following a Termination of Employment for any reason,
within the Area, either directly or indirectly, on the Executive’s own behalf or
in the service or on behalf of others, perform for any Competing Business any
services which are the same as or essentially the same as the services the
Executive provided for the Employer.

7.             Non-Solicitation of Customers.  The Executive agrees that during
the Executive’s employment by the Employer hereunder, and in the event of the
Executive’s Termination of Employment for any reason for the duration of the
Post-Termination Period, the Executive will not (except on behalf of or with the
prior written consent of the Employer) on the Executive’s own behalf or in the
service or on behalf of others, solicit, divert, or appropriate or attempt to
solicit, divert, or appropriate, any business from any of the Employer’s
customers, including prospective customers actively sought by the Employer, with
whom the Executive has or had Material Contact during the twelve (12) months
prior to the Determination Date, for purposes of providing products or services
that are competitive with those provided by the Employer.

8.             Non-Solicitation of Employees.  The Executive agrees that during
the Executive’s employment by the Employer hereunder, and in the event of the
Executive’s Termination of Employment for any reason for the duration of the
Post-Termination Period, the Executive will not (except on behalf of or with the
prior written consent of the Employer) on the Executive’s own behalf or in the
service or on behalf of others, solicit, recruit or hire away or attempt to
solicit, recruit or hire away, any employee of the Employer with whom the
Executive had material contact during the Executive’s employment, whether or not
such employee is a full-time employee or a temporary employee of the Employer,
such employment is pursuant to written agreement, for a determined period, or at
will.

9.             Remedies.  The Executive agrees that the covenants contained in
Sections 5 through 8 of this Agreement are of the essence of this Agreement;
that each of the covenants is reasonable and necessary to protect the business,
interests and properties of the Bank, and that irreparable loss and damage will
be suffered by the Bank should the Executive breach any of the
covenants.  Therefore, the Executive agrees and consents that, in addition to
all the remedies provided by law or in equity, the Bank shall be entitled to
seek a temporary restraining order and temporary and permanent injunctions to
prevent a breach or contemplated breach of any of the covenants.  Furthermore,
in addition to any other remedies, the Executive agrees that any willful
violation of the covenants in Sections 5 through 8 that results in material harm
to the Bank will result in the immediate forfeiture of any remaining payments
that otherwise are or may become due under Section 4.2, 4.3 and/or 4.3, to the
extent applicable.  The Executive further agrees that should he breach any of
the covenants contained in Sections 5 through 8 of this Agreement, he shall
repay to the Employer any amounts previously received by the Executive pursuant
to Section 4 that are attributable to that portion of the pay continuation
period during which the Executive was in breach of any of the covenants in
Sections 5 through 8.  The Bank and the Executive agree that all remedies
available to the Bank or the Executive, as applicable, shall be cumulative.
 

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10.          Severability.  The parties agree that each of the provisions
included in this Agreement is separate, distinct and severable from the other
provisions of this Agreement and that the invalidity or unenforceability of any
Agreement provision shall not affect the validity or enforceability of any other
provision of this Agreement.  Further, if any provision of this Agreement is
ruled invalid or unenforceable by a court of competent jurisdiction because of a
conflict between the provision and any applicable law or public policy, the
provision shall be redrawn to make the provision consistent with, and valid and
enforceable under, the law or public policy.

11.          No Set-Off.  The existence of any claim, demand, action or cause of
action by one party against another that is not predicated upon this Agreement
shall not constitute a defense to the enforcement by the defending party of any
of its or his rights hereunder.

12.          Notice.  All notices, requests, waivers and other communications
required or permitted hereunder shall be in writing and shall be either
personally delivered, sent by reputable overnight courier service or mailed by
first class mail, return receipt requested, to the recipient at the address
below indicated:

If to the Bank:
Georgia Bank & Trust Company

 
Attn: Chairman, Compensation Committee of the Board of Directors

 
3530 Wheeler Road

 
Augusta, Georgia  30909

 
If to the Executive:
The address most recently on file with the Bank

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.  All
such notices, requests, waivers and other communications shall be deemed to have
been effectively given:  (a) when personally delivered to the party to be
notified; (b) when sent by confirmed facsimile to the party to be notified; (c)
five (5) business days after deposit in the United States Mail postage prepaid
by certified or registered mail with return receipt requested at any time other
than during a general discontinuance of postal service due to strike, lockout,
or otherwise (in which case such notice, request, waiver or other communication
shall be effectively given upon receipt) and addressed to the party to be
notified as set forth above; or (d) two (2) business days after deposit with a
national overnight delivery service, postage prepaid, addressed to the party to
be notified as set forth above with next-business-day delivery guaranteed. A
party may change its or his notice address given above by giving the other party
ten (10) days’ written notice of the new address in the manner set forth above.
 

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13.          Assignment.  The rights and obligations of the Bank under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Bank, including without limitation, a purchaser of all or
substantially all the assets of the Bank.  If the Agreement is assigned pursuant
to the foregoing sentence, the assignment shall be by novation and the Bank
shall have no further liability hereunder, and the successor or assign, as
applicable, shall become the “Bank” hereunder, but the Executive will not be
deemed to have experienced a Termination of Employment by virtue of such
assignment.  The Agreement is a personal contract and the rights and interest of
the Executive may not be assigned by the Executive.  This Agreement shall inure
to the benefit of and be enforceable by the Executive and the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

14.          Waiver.  A waiver by one party to this Agreement of any breach of
this Agreement by any other party to this Agreement shall not be effective
unless in writing, and no waiver shall operate or be construed as a waiver of
the same or another breach on a subsequent occasion.

15.          Mediation.  Except with respect to Sections 5 through 9 above, and
as provided in Section 16 hereof, if any dispute arises out of or relates to
this Agreement, or a breach thereof, and if the dispute cannot be settled
through direct discussions between the parties, the parties agree to first
endeavor to settle the dispute in an amicable manner by non-binding mediation
under the Commercial Mediation Rules of the American Arbitration Association
before resorting to any other process for resolving the dispute.

16.          Applicable Law and Choice of Forum.  This Agreement shall be
construed and enforced under and in accordance with the laws of the State of
Georgia.  The parties agree that any appropriate state court located in Richmond
County, Georgia or federal court for the Southern District of Georgia shall have
exclusive jurisdiction of any case or controversy arising under or in connection
with this Agreement shall be a proper forum in which to adjudicate such case or
controversy.  The parties consent and waive any objection to the jurisdiction or
venue of such courts.

17.          Interpretation.  Words importing any gender include all
genders.  Words importing the singular form shall include the plural and vice
versa.  The terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof” and any
similar terms refer to this Agreement.  Any captions, titles or headings
preceding the text of any article, section or subsection herein are solely for
convenience of reference and shall not constitute part of this Agreement or
affect its meaning, construction or effect.  To the extent any compensation
provided for hereunder constitutes nonqualifed deferred compensation, the
provisions of this Agreement are intended to be compliant with, and in the event
of any ambiguity, are to be construed to be consistent with, the requirements of
Section 409A of the Code

18.          Entire Agreement.  This Agreement embodies the entire and final
agreement of the parties on the subject matter stated in this Agreement.  No
amendment or modification of this Agreement shall be valid or binding upon the
Bank or the Executive unless made in writing and signed by all parties.  All
prior understandings and agreements relating to the subject matter of this
Agreement are hereby expressly terminated, including, but not limited to, the
Original Employment Agreement.
 

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19.          Rights of Third Parties.  Nothing herein expressed is intended to
or shall be construed to confer upon or give to any person, firm or other
entity, other than the parties hereto and their permitted assigns, any rights or
remedies under or by reason of this Agreement.

20.          Survival.  The obligations of the parties pursuant to Sections 3.8,
4.2, 4.3, 4.4, 5 through 9, 15, 16, and 21, as applicable, shall survive the
Executive’s Termination of Employment hereunder for the period designated under
each of those respective sections.

21.          Representation Regarding Restrictive Covenants.  The Executive
represents that the Executive is not and will not become a party to any
non-competition or non-solicitation agreement or any other agreement which would
prohibit the Executive from entering into this Agreement or providing the
services for the Bank contemplated by this Agreement on or after the Effective
Date.  In the event the Executive is subject to any such agreement, this
Agreement shall be rendered null and void and the Bank shall have no obligations
to the Executive under this Agreement.

22.          Definitions. Whenever used in this Agreement, the following terms
and their variant forms shall have the meanings set forth below:

(a)           “Affiliate” shall mean any entity which controls, is controlled
by, or is under common control with another entity.  For this purpose, “control”
means ownership of more than fifty percent (50%) of the ordinary voting power of
the outstanding equity securities of an entity.

(b)           “Agreement” shall mean this Agreement and any appendices
incorporated herein together with any amendments hereto made in the manner
described in this Agreement.

(c)           “Area” shall mean the geographic area encompassed by a twenty-five
(25) mile radius of the principal office of the Bank located at 3530 Wheeler
Road, Augusta, Richmond County, Georgia  30909.  It is the express intent of the
parties that the Area as defined herein is the area where the Executive performs
services on behalf of the Bank under this Agreement.

(d)           “Board of Directors” shall mean the Board of Directors of the Bank
or the Company or both, as the context indicates, and, where appropriate,
includes any committee thereof or other designee.

(e)           “Business of the Employer” shall mean the business conducted by
the Employer, which is the business of commercial and consumer banking.
 

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(f)           “Cause” shall mean:

(1)           a material breach of the terms of this Agreement by the Executive
not cured by the Executive within ten (10) business days after his receipt of
Employer’s written notice thereof, including, without limitation, failure by the
Executive to perform the Executive’s duties and responsibilities in the manner
and to the extent required under this Agreement;

(2)           any act by the Executive of fraud against, material
misappropriation from, or material dishonesty to either the Bank or an
Affiliate;

(3)           conviction of the Executive of a felony or any crime involving
breach of trust or moral turpitude;

(4)           conduct by the Executive that amounts to willful misconduct, gross
and willful insubordination, or gross neglect or inattention to the Executive’s
duties and responsibilities hereunder, including prolonged absences without the
written consent of the Board of Directors (other than as a result of illness or
bodily injury);

(5)           conduct in material violation of the rules of conduct set forth in
the Bank’s employee handbook, as the same may be in effect from time to time, or
any successor document;

(6)           willful disclosure by the Executive to an unauthorized person of
Confidential Information or Trade Secrets, which causes material harm to the
Bank or an Affiliate; provided, however, that disclosure of Employer Information
in connection with any legal process or in connection with any regulatory
examination or review shall not constitute Cause;

(7)           receipt of any form of written notice that any regulatory agency
having jurisdiction over the Employer intends to institute any form of formal
regulatory action against the Executive (including, without limitation, harm to
the Employer’s reputation or standing with applicable regulatory agencies); or

(8)           Executive’s removal and/or permanent prohibition from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)).

(g)           “Change of Control” means:

(1)           for purposes of Section 4.2(c), any one of the following events:

(i)           the acquisition by any person or persons acting in concert of the
then outstanding voting securities of either the Bank or the Company, if, after
the transaction, the acquiring person (or persons) owns, controls or holds with
power to vote fifty percent (50%) or more of any class of voting securities of
either the Bank or the Company, as the case may be; provided, however, that the
current and future holdings of any person who is a shareholder of the Company or
the Bank as of the Original Effective Date shall be disregarded in determining
whether the fifty percent (50%) threshold has been attained;
 

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(ii)           within any twelve-month period (beginning on or after the
Original Effective Date) the persons who were directors of either the Bank or
the Company immediately before the beginning of such twelve-month period (the
“Incumbent Directors”) shall cease to constitute at least a majority of such
Board of Directors; 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 such Board of Directors 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;

(iii)           a reorganization, merger, share exchange combination, or
consolidation, with respect to which persons who were the stockholders of the
Bank or the Company, as the case may be, 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

(iv)           the sale, transfer or assignment of all or substantially all of
the assets of the Company and its subsidiaries to any third party; and

(2)           for purposes of Section 4.3, (i) any transaction, whether by
merger, consolidation, asset sale, tender offer, reverse stock split or
otherwise, which results in the acquisition of “beneficial ownership” (as such
term is defined under the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended) by a person or entity or any group of persons
or entities acting in concert, of fifty percent (50%) or more of the outstanding
shares of Company common stock; (ii) the sale of all or substantially all of the
assets of the Company and/or the Bank; or (iii) the approval by Company
shareholders of a plan of liquidation of the Company or the Bank.

(h)           “Code” shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
 

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(i)           “Company” means Southeastern Bank Financial Corporation, a bank
holding company organized and existing under the laws of the State of Georgia,
and any successor thereto.

(j)           “Competing Business” shall mean any entity (other than the Company
and its Affiliates) that is conducting business that is the same or
substantially the same as the Business of the Employer.

(k)           “Confidential Information” means data and information: (1)
relating to the Business of the Employer, regardless of whether the data or
information constitutes a trade secret as that term is defined in Article 1 of
Chapter 10 of Title 10 of the Official Code of Georgia; (2) disclosed to the
Executive or of which the Executive became aware of as a consequence of the
Executive’s relationship with the Employer and/or any Affiliates; (3) having
value to the Employer and/or any Affiliates; (4) not generally known to
competitors of the Employer and/or any Affiliates; and (5) which includes trade
secrets, methods of operation, names of customers, price lists, financial
information and projections, route books, personnel data, and similar
information; provided, however, that such term shall not mean data or
information (A) which has been voluntarily disclosed to the public by the
Employer and/or any Affiliates, except where such public disclosure has been
made by the Executive without authorization from the Employer and/or any
Affiliates; (B) which has been independently developed and disclosed by others;
or (C) which has otherwise entered the public domain through lawful means.

(l)           “Determination Date” means (1) during the Executive’s employment,
the date from which compliance with Section 7 is being determined and (2)
following the Executive’s Termination of Employment, the date of the Executive’s
Termination of Employment.

(m)           “Disability” shall mean that the Executive suffers from a physical
or mental disability or infirmity that qualifies the Executive for long-term
disability benefits under any accident and health plan maintained by the
Employer that provides income replacement benefits due to disability or, if the
Employer does not then maintain such a plan, the Executive’s inability to
perform the essential functions of the Executive’s job for a period of ninety
(90) or more days, with or without reasonable accommodation, as a result of a
physical or mental disability or infirmity, as reasonably determined by the
Employer.

(n)           “Employer” shall mean, collectively, the Company and the Bank.

(o)           “Employer Information” shall mean Confidential Information and
Trade Secrets.
 

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(p)           “Good Reason” shall mean any of the following which occurs on or
after the Original Effective Date:
 
(1)           a material reduction in the Executive’s rate of Annual Base Salary
or Annual Bonus opportunity effected by the Employer, in either case, from its
level in effect immediately prior to the Change of Control;
 
(2)           the Executive is required by the Bank, or its successor, to
relocate the Executive’s primary office or worksite by the Employer to a
geographical area more than  fifty (50) miles from 3530 Wheeler Road, Augusta,
Georgia  30909; or
 
(3)           a material change effected by the Employer in the Executive’s
authority, duties or responsibilities under this Agreement;
 
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
giving rise to Good Reason within sixty (60) days following the occurrence of
the event (or, if later, sixty (60) days following the Executive’s knowledge of
occurrence of the event), the event must remain uncured after the expiration of
sixty (60) days following the delivery of written notice of such event to the
Employer by the Executive, and the Executive must resign effective no later than
sixty (60) days following the Employer’s failure to cure the event and must give
at least thirty (30) days advance written notice prior to the Executive’s
effective date of resignation.
 
(q)           “Initial Term” shall mean that period of time commencing on the
Effective Date and running until the earlier of (1) the close of business on the
last business day immediately preceding the third (3rd) anniversary of the
Effective Date, or (2) any earlier termination of employment of the Executive
under this Agreement as provided for in Section 4.
 
(r)           “Material Contact” means the contact between the Executive and
each customer or potential customer: (1) with whom or which the Executive dealt
on behalf of the Employer and/or any Affiliates; (2) whose dealings with the
Employer and/or any Affiliates were coordinated or supervised by the Executive;
(3) about whom the Executive obtained Confidential Information in the ordinary
course of business as a result of such Executive’s association with the Employer
and/or any Affiliates; or (4) who receives products or services authorized by
the Employer and/or any Affiliates, the sale or provision of which results or
resulted in compensation, commissions, or earnings for the Executive within two
years prior to the Determination Date.
 
(s)           “Post-Termination Period” shall mean the twenty-four (24) month
period immediately following the effective date of the Termination of
Employment.
 
(t)           “Term” shall mean the Initial Term and any subsequent extension
periods.
 

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(u)           “Termination of Employment” shall mean a termination of the
Executive’s employment where either (1) the Executive has ceased to perform any
services for the Bank and all affiliated companies that, together with the Bank,
constitute the “service recipient” within the meaning of Code Section 409A and
the regulations thereunder (collectively, the “Service Recipient”) or (2) the
level of bona fide services the Executive performs for the Service Recipient
after a given date (whether as an employee or as an independent contractor)
permanently decreases (excluding a decrease as a result of military leave, sick
leave, or other bona fide leave of absence if the period of such leave does not
exceed six months, or if longer, so long as the Executive retains a right to
reemployment with the Service Recipient under an applicable statute or by
contract) to no more than twenty percent (20%) of the average level of bona fide
services performed for the Service Recipient (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of service if the Executive has been providing services to the
Service Recipient for less than 36 months).
 
(v)           “Trade Secrets” shall mean Employer or Affiliate information
including, but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans or lists of actual or
potential customers or suppliers which:

(1)           derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; and

(2)           is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.

[Signatures Follow on Next Page]

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IN WITNESS WHEREOF, the Bank and the Executive have executed and delivered this
Agreement as of the date first shown above.

  Georgia Bank & Trust Company:        
By:
    /s/ Randolph R. Smith     Signature               Randolph R. Smith    
Print Name               Chairman     Title         Executive:               /s/
Ronald L. Thigpen     Ronald L. Thigpen

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