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, 


 

















 


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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