Exhibit
10.3


 


EMPLOYMENT AGREEMENT


 


THIS AGREEMENT is made as of the 10th
day of July, 2003, by and between NEW  SOUTHERN BANK (the “Bank”); and CAROL SOTO, a resident of the State of
Georgia (the “Executive”).


 


RECITALS:


 


The Bank desires to employ the Executive as
Chief Financial Officer and the Executive desires to accept such employment.


 


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


 


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


 


1.1          “Agreement”
shall mean this Agreement and any exhibits incorporated herein together
with any amendments hereto made in the manner described in this Agreement.


 


1.2          “Area”
shall mean the geographic area within the boundaries of Bibb, Jones, Monroe,
Crawford, Twiggs, Houston and Peach Counties, Georgia. 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.


 


1.3          “Bank Information” means
Confidential Information and Trade Secrets.


 


1.4          “Business
of the Bank” shall mean the business conducted by the Bank, which is
the business of commercial banking.


 


1.5          “Cause”
shall mean:


 


1.5.1        With
respect to termination by the Bank:


 


(a)           A
material breach of the terms of this Agreement by the Executive, including,
without limitation, failure by the Executive to perform her duties and
responsibilities in the manner and to the extent required under this Agreement;


 


(b)          Conduct
by the Executive that amounts to fraud, dishonesty or willful misconduct in the
performance of her duties and responsibilities hereunder;


 


(c)           Arrest
for, charged in relation to (by criminal information, indictment or otherwise),
or conviction of the Executive during the Term of this Agreement of a crime
involving breach of trust or moral turpitude or any felony;


 


(d)          Conduct
by the Executive that amounts to gross and willful insubordination or inattention
to her duties and responsibilities hereunder; or


 


(e)           Conduct
by the Executive that results in removal from her position as an officer or
executive of the Bank pursuant to a written order by any regulatory agency with
authority or jurisdiction over the Bank.


 


1.5.2        With
respect to termination by the Executive, a material diminution in the powers,
responsibilities or


 


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duties of the Executive hereunder or a material breach of the terms of this
Agreement by the Bank.


 


1.6          “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 Bank, 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 Bank;


 


(b)          within any twelve-month period (beginning on
or after the Effective Date) the persons who were directors of the Bank
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; provided that any director who was not a director as of the
Effective Date shall be deemed to be an Incumbent Director if that director
were elected to the Board of Directors of the Bank by, or on the recommendation
of or with the approval of, at least two-thirds 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 (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934) relating to the election
of directors shall be deemed to be an Incumbent Director;


 


(c)           a reorganization, merger or consolidation,
with respect to which persons who were the stockholders of the Bank immediately
prior to such reorganization, merger 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 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 Bank to any third party.


 


1.7          “Confidential Information”
means data and information
relating to the business of the Bank (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of which the Executive
became aware as a consequence of or through the Executive’s relationship to the
Bank and which has value to the Bank and is not generally known to its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Bank (except where
such public disclosure has been made by the Executive without authorization) or
that has been independently developed and disclosed by others, or that
otherwise enters the public domain through lawful means.


 


1.8          “Disability” shall mean the
inability of the Executive to perform each of her material duties under this
Agreement for the duration of the short-term disability period under the Bank’s
policy then in effect (or, if no such policy is in effect, a period of 90
consecutive days) as certified by a physician chosen by the Bank and reasonably
acceptable to the Executive.


 


1.9          “Effective Date” shall mean the
date the of this agreement.


 


1.10        “Initial Term” shall mean that
period of time commencing on the Effective Date and running until the earlier
of the close of business on the last business day immediately preceding the
third anniversary of the Effective Date or any earlier termination of
employment of the Executive under this Agreement as provided for in
Section 3.


 


1.11        “Term” shall mean the Initial Term and all
subsequent renewal periods.


 


1.12        “Trade Secrets” means Bank information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data,


 


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financial
plans, product plans or lists of actual or potential customers or suppliers
which:


 


(a)           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


 


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


 


2.             Duties.


 


2.1          Position.  The Executive is employed initially as Chief Financial Officer of the
Bank, subject to the direction of the Board of Directors of the Bank or its
designee(s), shall perform and discharge well and faithfully the duties which
may be assigned to him from time to time by the Bank in connection with the
conduct of its business.


 


2.2          Full-Time Status.  In addition to the duties and responsibilities specifically assigned to
the Executive pursuant to Section 2.1 hereof, the Executive shall:


 


(a)           devote substantially all of her time, energy
and skill during regular business hours to the performance of the duties of her
employment (reasonable vacations and reasonable absences due to illness
excepted) and faithfully and industriously perform such duties;


 


(b)          diligently follow and implement all
reasonable and lawful management policies and decisions communicated to her by
the President and CEO; and


 


(c)           timely prepare and forward to the President
and CEO all reports and accountings as may be requested of the Executive.


 


2.3          Permitted Activities.  The Executive shall devote her entire business time, attention and
energies to the Business of the Bank and shall not during the Term be engaged
(whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; but this shall not be construed as preventing the
Executive from:


 


(a)           investing her personal assets in businesses
which (subject to clause (b) below) are not in competition with the
Business of the Bank and which will not require any services on the part of the
Executive in their operation or affairs and in which her participation is
solely that of an investor;


 


(b)          purchasing securities in any corporation
whose securities are regularly traded provided that such purchase shall not
result in him collectively owning beneficially at any time five percent (5%) or
more of the equity securities of any business in competition with the Business
of the Bank; and


 


(c)           participating in civic and professional
affairs and organizations and conferences, preparing or publishing papers or
books or teaching so long as the Board of Directors of the Bank approves of
such activities prior to the Executive’s engaging in them.


 


3.             Term
and Termination.


 


3.1          Term. This Agreement shall remain in effect for the
Initial Term. At the end of the Initial Term and at the end of each
twelve-month extension thereof, this Agreement shall automatically be extended
for a successive twelve-month period unless either party gives written notice
to the other of its intent not to extend this Agreement with such written
notice to be given not less than sixty (60) days prior to the end of the
Initial Term or such twelve-month period. In the event such notice of
non-extension is properly given, this Agreement shall terminate at the end


 


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of
the remaining Term then in effect.


 


3.2          Termination.  During the Term, the employment of the Executive under this Agreement
may be terminated only as follows:


 


3.2.1        By the Bank:


 


(a)           For Cause pursuant to Section 1.5.1; or


 


(b)           Without Cause at any time, if such, the Bank shall be required to
continue to meet its obligations to the Executive under Section 4.1 for
twelve (12) months; or


 


(c)           Upon the Disability of Executive at any time, provided that the Bank
shall give the Executive thirty (30) days’ prior written notice of its intent
to terminate, in which event, the Bank shall be required to continue to meet
its obligations under Section 4.1 for three (3) months following the
termination or until the Executive begins receiving payments under the Bank’s
long-term disability policy, whichever occurs first.


 


3.2.2        By the Executive:


 


(a)           For Cause, in which event the Bank shall be required to continue to
meet its obligations under Section 4.1 for twelve (12) months; or


 


(b)           Without Cause or upon the Disability of the Executive, provided that
the Executive shall give the Bank sixty (60) days’ prior written notice of her
intent to terminate, in which event the Bank shall have no further obligation
to the Executive except future payment of any amounts due and owing under Section 4
on the effective date of the termination.


 


3.2.3        At any time upon mutual, written agreement of
the parties, in which event the Bank shall have no further obligation to the
Executive except for the payment of any amounts due and owing under
Section 4 of this Agreement on the effective date of termination unless
otherwise set forth in the written agreement.


 


3.2.4        Notwithstanding anything in this Agreement to
the contrary, the Term shall end automatically upon the Executive’s death, in
which event the Bank shall have no further obligation to the Executive except
for the payment of any amounts due and owing under Section 4 on the
effective date of termination.


 


3.3          Change of Control.  If the Executive terminates her employment with the Bank under this
Agreement for Cause or the Bank terminates Executive’s employment without Cause
within six (6) months following a Change in Control, the Executive, or in
the event of her subsequent death, her designated beneficiaries or her estate,
as the case may be, shall receive, as liquidated damages, in lieu of all other
claims, a severance payment equal to one (1) times the Executive’s then
current Base Salary, to be paid in full on the last day of the month following
the date of termination. In no event shall the payment(s) described in this Section 3.3
exceed the amount permitted by Section 280G of the Internal Revenue Code,
as amended (the “Code”). Therefore, if the aggregate present value (determined
as of the date of the Change of Control in accordance with the provisions of Section 280G
of the Code) of both the severance payment and all other payments to the
Executive in the nature of compensation which are contingent on a change in
ownership or effective control of the Bank or in the ownership of a substantial
portion of the assets of the Bank (the “Aggregate Severance”) would result in a
“parachute payment,” as defined under Section 280G of the Code, then the
Aggregate Severance shall not be greater than an amount equal to 2.99
multiplied by Executive’s “base amount” for the “base period, “ as those terms
are defined under Section


 


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280G. In the event the Aggregate Severance is required to be reduced
pursuant to this Section 3.3, the Executive shall be entitled to determine
which portions of the Aggregate Severance are to be reduced so that the
Aggregate Severance satisfies the limit set forth in the preceding sentence.
Notwithstanding any provision in this Agreement, if the Executive may exercise
her right to terminate employment under this Section 3.3 or under Section 3.2.2(a),
the Executive may choose which provision shall be applicable.


 


4.             Compensation.
 The Executive shall receive the
following salary and benefits:


 


4.1          Base
Salary.  During the Initial Term,
the Executive shall be compensated at an annual base rate of $78,000.00 (the “Base
Salary”).  The Executive’s Base Salary
shall be reviewed by the Bank President and the Board of Directors of the Bank
at least annually, and the Executive shall be entitled to receive annually an
increase in such amount, if any, as may be determined by the Bank President and
Board of Directors of the Bank based on its evaluation of Executive’s
performance. Base Salary shall be payable in accordance with the Bank’s normal
payroll practices.


 


4.2          Stock
Options.  The
Bank established a stock incentive plan and will grant to the Executive such stock
incentive plan an incentive stock option to purchase, at a per share purchase
price equal to $10.00 and $12.25. 6,500 options to purchase shares of the Bank’s
common stock were granted on 12/10/01 with a 5 year vesting period at a option
price of $10.00, and an additional 3,250 options to purchase shares were
granted on 12/10/02 with a 9 year vesting period at an option price of $12.25.
The options generally will become vested and exercisable in (1/5 per year for
the 6,500 options and 1/9 per year for the 3,250 options), commencing on the
first anniversary of the option grant date and continuing for the next
successive anniversaries; provided, however, that, subject to such restrictions
as may be imposed by the Bank’s primary regulator, the option shall be fully
vested and exercisable upon a Change in Control of the Bank or a termination of
the Executive’s employment by the Bank without Cause. If the Executive is
dismissed by the Bank for cause of the Executive ends her employment, only the
option fully vested shall survive, all other options shall not vest. The option
shall expire generally upon the earlier of three (3) months following
termination of employment or upon the tenth anniversary of the Bank. The
incentive stock option will be issued by the Bank pursuant to its stock
incentive plan and subject to the terms of a related stock option agreement.


 


4.3          Health Insurance.  The Bank shall pay for the
Executive the cost of premium payments for the Executive’s health insurance
covering the Executive. The Executive shall be responsible for all cost for any
dependent or spouse.


 


4.4          Vacation. On a non-cumulative basis, the Executive
shall be entitled to three (3) weeks of vacation in each successive twelve-month
period during the Term, during which her compensation shall be paid in full.


 


4.5          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 executives of the Bank similarly
situated to the Executive. All such benefits shall be awarded and administered
in accordance with the Bank’s standard policies and practices. Such benefits
may include, by way of example only, profit-sharing plans, retirement or
investment funds, dental, health, life and disability insurance benefits and
such other benefits as the Bank deems appropriate.


 


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


 


5.             Bank
Information.


 


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


 


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5.2          Obligations of the Executive.  The Executive agrees:


 


(a)           to hold Bank Information in strictest confidence;


 


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


 


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


 


In
the event that the Executive is required by law to disclose any Bank
Information, the Executive will not make such disclosure unless (and then only
to the extent that) the Executive has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written
notice is given to the Bank when the Executive becomes aware that such
disclosure has been requested and is required by law. This Section 5 shall
survive for a period of twelve (12) months following termination of this
Agreement for any reason with respect to Confidential Information, and shall
survive termination of this Agreement for any reason for so long as is permitted
by applicable law, with respect to Trade Secrets.


 


5.3          Delivery upon Request or
Termination.  Upon request by the Bank, and in any event
upon termination of her employment with the Bank, the Executive will promptly
deliver to the Bank all property belonging to the Bank, including, without
limitation, all Bank Information then in her possession or control.


 


6.             Non-Competition.  The Executive agrees that during her employment by the Bank hereunder
and, in the event of her termination:


 


•              by the Bank for Cause pursuant to Section 3.2.1
(a),


•              by the Executive without Cause pursuant to Section 3.2.2(b),
or


•              by the Executive in connection with a Change
of Control pursuant to Section 3.3,


 


for
a period of twelve (12) months thereafter, he will not (except on behalf of or
with the prior written consent of the Bank), within the Area, either directly
or indirectly, on her own behalf or in the service or on behalf of others, as
an executive employee or in any other capacity which involves duties and
responsibilities similar to those undertaken for the Bank (including as an
organizer or proposed executive officer of a new financial institution), engage
in any business which is the same as or essentially the same as the Business of
the Bank.


 


7.             Non-Solicitation
of Customers.  The Executive
agrees that during her employment by the Bank hereunder and, in the event of her termination:


 


•              by the Bank for Cause pursuant to Section 3.2.1(a),


•              by the Executive without Cause pursuant to Section 3.2.2(b),
or


•              by the Executive in connection with a Change
of Control pursuant to Section 3.3,


 


for
a period of twelve (12) months thereafter, he will not (except on behalf of or
with the prior written consent of the Bank), within the Area, on her 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 Bank’s
customers, including actively sought prospective customers, with whom the
Executive has or had material contact during the last two (2) years of her


 


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employment, for purposes of providing products or services that are
competitive with those provided by the Bank.


 


8.             Non-Solicitation
of Employees.  The Executive
agrees that during her employment by the Bank hereunder and, in the event of
her termination:


 


•              by
the Bank for Cause pursuant to Section 3.2.1(a),


•              by
the Executive without Cause pursuant to Section 3.2.2(b), or


•              by
the Executive in connection with
a Change of Control pursuant to Section 3.3,


 


for a period of twelve (12) months thereafter, he will not, within the
Area, on her 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 Bank, whether or not:


 


•              such
employee is a full-time employee or a temporary employee of the Bank,


•              such
employment is pursuant to written agreement, or


•              such
employment is for a determined period or is 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 be 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 a temporary restraining order and temporary
and permanent injunctions to prevent a breach or contemplated breach of any of
the covenants.  The Bank and the Executive
agree that all remedies available to the Bank or the Executive, as applicable,
shall be cumulative.


 


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
unenforceability 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 by the Executive.  The
existence of any claim, demand, action or cause of action by the Executive
against the Bank whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Bank of any of its rights
hereunder.


 


12.          Notice.  All notices and other communications required
or permitted under this Agreement shall be in writing and, if mailed by prepaid
first-class mail or certified mail, return receipt requested, shall be deemed
to have been received on the earlier of the date shown on the receipt or three (3) business
days after the postmarked date thereof. 
In addition, notices hereunder may be delivered by hand or overnight
courier, in which event the notice shall be deemed effective when delivered.
All notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:


 


(i)            If
to the Bank, to it at:


 


New Southern Bank

40770 Forsyth Street

Macon, Georgia 31210


 


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(ii)           If to the Executive, to him at:


 


602 Glencove Drive

Macon, Georgia 31210


 


13.          Assignment.
 Neither party hereto may assign or delegate
this Agreement or any of its rights and obligations hereunder without the
written consent of the other party to this Agreement.


 


14.          Waiver.  A
waiver by one party to this Agreement of any breach of this Agreement by the
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.          Arbitration.  Any
controversy or claim arising out of or relating to this contract, or the breach
thereof, shall be settled by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered only in a
state court of Bibb County or the federal court for the Middle District of
Georgia.  The Bank and the Executive
agree to share equally the fees and expenses associated with the arbitration
proceedings.


 


16.          Attorneys’ Fees.  In
the event that the parties have complied with this Agreement with respect to arbitration
of disputes and litigation ensues between the parties concerning the
enforcement of an arbitration award, the party prevailing in such litigation
shall be entitled to receive from the other party all reasonable costs and expenses,
including without limitation attorneys’ fees, incurred by the prevailing party
in connection with such litigation, and the other party shall pay such costs
and expenses to the prevailing party promptly upon demand by the prevailing
party.


 


17.          Applicable Law.  This
Agreement shall be construed and enforced under and in accordance with the laws
of the State of Georgia.


 


18.          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.


 


19.          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 both parties.  All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.


 


20.          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.


 


21.          Survival.  The
obligations of the Executive pursuant to Sections 5, 6, 7, 8 and 9 shall
survive the termination of the employment of the Executive hereunder for the
period designated under each of those respective sections.


 


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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.


 


 


	
   

  	
  THE BANK:

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW SOUTHERN BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Stevens

  	
   

  
	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mark A. Stevens

  	
   

  
	
   

  	
   

  	
  Print
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL
  SOTO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Carol W. Soto