**Exhibit 10.2**

 

**EMPLOYMENT AGREEMENT**

 

This **EMPLOYMENT AGREEMENT** (this “Agreement”) is made and entered into effective as of the 15th day of September, 2005, by and among **MAIN STREET BANKS, INC**., a Georgia corporation (hereinafter, the “Company”), **MAIN STREET BANK**(hereinafter, “MSB”) and **GARY S. AUSTIN** (hereinafter, “Executive”), to be effective as of the Effective Date, as defined in Section 1. 

 

**BACKGROUND**

 

**WHEREAS**, the Company desires to employ Executive and Executive is willing to provide services to the Company in accordance with the terms andconditions hereinafter set forth; 

 

**NOW, THEREFORE**, inconsideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

 

1. Effective Date. The effective date of this Agreement (the“Effective Date”) will be September 15, 2005. 

 

2. Employment. Executive is hereby employed on the Effective Date as Executive Vice President, Risk Management of the Company and of Main Street Bank (“MSB”). In such capacity, Executive shall have such responsibilitiescommensurate with such positions as set forth in the bylaws of the Company and MSB and as shall be assigned to him by the Board of Directors, Chief Executive Officer or the Chief Operating Officer of the Company. Executive will report directly tothe Chief Executive Officer or Chief Operating Officer of the Company or the Chief Executive Officer of MSB. 

 

3. Employment Period. Unless earlier terminated herein in accordance with Section 6 hereof, Executive’s employment shall be for a twoyear term (the “Employment Period”), beginning on the Effective Date. Beginning on the second anniversary of the Effective Date and on each anniversary of the Effective Date, the Employment Period shall, without further action by Executiveor the Company, be extended by an additional one-year period; provided, however, that either party may, by notice to the other, cause the Employment Period to cease to extend automatically. Upon such notice, the Employment Period shallterminate upon the expiration of the then-current term, including any prior extensions. If the Company causes the Employment Period to cease to extend automatically then, in the absence of Cause (as defined in Section 6(b)), such action shallconstitute a termination without Cause and Executive shall be entitled to severance as set forth in Section 7(a). 

 

4. Extent of Service. During the Employment Period, and excluding any periods of vacation to which Executive is entitled, Executive agrees todevote his business time, 

attention, skill and efforts exclusively to the faithful performance of his duties hereunder; provided,however, that it shall not be a violation of this Agreement for Executive to (i) devote reasonable periods of time to charitable and community activities and, with the approval of the Company, industry or professional activities, and/or(ii) manage personal business interests and investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities under this Agreement. It is expressly understood and agreed that to theextent that any such activities have been conducted by Executive prior to date of this Agreement, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall notthereafter be deemed to interfere with the performance of Executive’s responsibilities hereunder. 

 

5. Compensation and Benefits. 

 

(a) Base Salary. During each year of the Employment Period, the Company will pay to Executive annual base salary in the amount equal to U.S.**$152,000**(“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Company’s payroll practices from time to time. The Compensation Committee of the Board ofDirectors of the Company shall review Executive’s Base Salary annually and in its sole discretion, subject to approval of the Board of Directors of the Company, may increase Executive’s Base Salary from year to year; provided that annualincreases of at least 3%, intended to approximate cost of living increases, shall be automatic. The annual review of Executive’s salary by the Board will consider, among other things, Executive’s own performance and the performance of theCompany and MSB, as well as any recommendations of an outside consulting firm that may be engaged by the Company, from time to time, to evaluate management compensation. 

 

(b) Incentive, Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participatein all incentive, savings and retirement plans, practices, policies and programs applicable generally to senior executive officers of the Company (“Peer Executives”), and on the same basis as such Peer Executives. 

 

(c) Welfare Benefit Plans. During the Employment Period, Executive andExecutive’s family shall be eligible for participation in, and shall receive all benefits under, the welfare benefit plans, practices, policies and programs provided by the Company (including, without limitation, medical, prescription, dental,disability, employee life, group life, accidental death and travel accident insurance plans and programs) (“Welfare Plans”) to the extent applicable generally to Peer Executives. 

 

(d) Expenses. During the Employment Period, Executive shall beentitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company to the extent applicable generally to Peer Executives. 

(e) Fringe Benefits. During the Employment Period, Executive shall be entitled to fringe benefitsin accordance with the plans, practices, programs and policies of the Company in effect for Peer Executives. Without limiting the foregoing, during the Employment Period, Executive shall be provided a car allowance or a Company-owned car of a modelappropriate to his position, as determined by the Compensation Committee of the Board of Directors of the Company. 

 

6. Termination of Agreement. 

 

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during theEmployment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or if there is no such retirement plan, “Retirement” shall mean voluntarytermination after age 65 with ten years of service. If the Company determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give toExecutive written notice of its intention to terminate Executive’s employment. In such event, Executive’s employment shall terminate effective on the 30th day after receipt of such written notice by Executive (the “DisabilityEffective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, “Disability” shall mean the inability ofExecutive, as determined by the Board, to substantially perform the essential functions of his regular duties and responsibilities, with or without reasonable accommodation, due to a medically determinable physical or mental illness which has lasted(or can reasonably be expected to last) for a period of six consecutive months. The foregoing determination of Disability will be made generally in accordance with disability insurance as provided by the Company at the then current time. At therequest of Executive or his personal representative, the Board’s determination that the Disability of Executive has occurred shall be certified by two physicians mutually agreed upon by Executive, or his personal representative, and theCompany. Failing such independent certification (if so requested by Executive), Executive’s termination shall be deemed a termination by the Company without Cause and not a termination by reason of his Disability. 

 

(b) Termination by the Company. The Company may terminateExecutive’s employment during the Employment Period with or without Cause. For purposes of this Agreement, “Cause” shall mean: 

 

(i) the failure of Executive to meet performance expectations or to perform substantially Executive’s duties with the Company (other than any suchfailure resulting from incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to Executive by the Chief Executive Officer, the Chief Operating Officer or the Board of Directors of the Companywhich specifically identifies the manner in which such officer or the Board believes that Executive has not substantially performed Executive’s duties, or 

 

(ii) the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to MSB or the Company; or

(iii) a requirement by any state or federal authority regulating the Company or MSB that Executive beremoved from his office. 

 

For purposes of this provision, noact or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the bestinterests of MSB or the Company and its shareholders and subsidiaries. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall beconclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of MSB and the Company, its shareholders and subsidiaries. The cessation of employment of Executive under subparagraph (i) or(ii) above shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board ofDirectors of the Company at a meeting of such Board called and held for such purpose (after reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel, to be heard before such Board), finding that, in thegood faith opinion of such Board, Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. 

 

(c) Termination by Executive. Executive’s employment may be terminated by Executive for “Good Reason asdefined below. For purposes of this Agreement, “Good Reason” shall mean: 

 

(i) without the written consent of Executive, a change in Executive’s status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from his status, title,position or responsibilities as in effect at the Effective Date or, if greater, at any time thereafter; the assignment to Executive of any duties or responsibilities which are inconsistent with his status, title, position or responsibilities as ineffect at the Effective Date or, if greater, at any time thereafter; or any other change in condition or circumstances that makes it materially more difficult for Executive to carry out the duties and responsibilities of his then-existing office;provided that Good Reason under this subparagraph (i) excludes an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

 

(ii) a reduction, without the written consent of Executive,in Executive’s Base Salary as in effect on the Effective Date or as the same may be increased from time to time, or any failure to pay Executive any compensation or benefits to which he is entitled within five (5) days of the date due;

 

(iii) the failure by the Company (a) to continue ineffect (without reduction in benefit level and/or reward opportunities) any compensation or employee benefit plan in which Executive participated as of the Effective Date, or at any time thereafter, that is 

material to Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute oralternative plan) has been made with respect to such plan, or (b) to continue Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefitsprovided and the level of Executive’s participation therein relative to other participants; or 

 

(iv) the Company’s requiring Executive, without his consent, to be based at any office or location other than in the Atlanta, Georgia metropolitanarea; 

 

(v) the insolvency or the filing by any party,including the Company or any of its subsidiaries, of a petition for bankruptcy of the Company or any such subsidiary, which petition is not dismissed within sixty (60) days; 

 

(vi) any failure by the Company to comply with and satisfy Section 14(c) of this Agreement; 

 

(vii) any purported termination by the Company of Executive’semployment otherwise than as expressly permitted by this Agreement; or 

 

(viii) the material breach by the Company of any provision of this Agreement. 

 

Good Reason shall not include Executive’s death or Disability. Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting GoodReason hereunder. 

 

(d) Notice of Termination. Anytermination by the Company for Cause, or by Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a“Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstancesclaimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specifies the termination date. If a dispute exists concerning the provisions of this Agreement that apply to Executive’stermination of employment, the parties shall pursue the resolution of such dispute with reasonable diligence. Within five (5) days of such a resolution, any party owing any payments pursuant to the provisions of this Agreement shall make allsuch payments together with interest accrued thereon at the rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). 

 

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminatedother than by reason of death or Disability, the date of receipt of the Notice of Termination, or any later date specified therein, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Terminationwill be the date of death or the Disability Effective Date, as the case may be. If Executive’s employment is terminated because of the Company’s action to stop the automatic extension of the Employment Period other than for Cause then theDate of Termination shall be the date of expiration of the then-current term of the Employment Period. 

7. Obligations of the Company upon Termination. 

 

(a) Termination by Executive for Good Reason; Termination by the CompanyOther Than for Cause; Cessation of Automatic Extension by Company Other Than for Cause. If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, or Executive shall terminate employment forGood Reason, or the Company shall stop the automatic extension of the Employment Period other than for Cause, then: 

 

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

 

A. the sum of (1) Executive’s BaseSalary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) Executive’s gross potential bonus under existing company bonus plans for the year in which the Date of Termination occurred (the“Target Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, and (3) any accrued vacation pay to theextent not theretofore paid, and (4) unless Executive has elected a different payout date in a prior deferral election, any compensation previously deferred by Executive (together with any accrued interest or earnings thereon) to the extent nottheretofore paid (the sum of the amounts described in clauses (1), (2), (3) and (4) shall be hereinafter referred to as the “Accrued Obligations”); 

 

B. the amount equal to two times the sum of (1) Executive’s Base Salary in effect as of the Dateof Termination, and (2) the Target Annual Bonus; 

 

(ii)for two years after the Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to Executive and/or Executive’s family at least equalto those which would have been provided to them in accordance with the Welfare Plans described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generallyat any time thereafter with respect to other Peer Executives and their families, provided, however, that if Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employerprovided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility; and 

 

(iii) all of Executive’s outstanding stock options and other incentive awards from the Company in the nature of rightsthat may be exercised shall become fully exercisable and all restrictions on Executive’s outstanding awards of restricted stock shall lapse; and 

(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide toExecutive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company (such other amounts and benefits shall behereinafter referred to as the “Other Benefits”). 

 

(b) Death; Disability or Retirement. If Executive’s employment is terminated by reason of Executive’s death, Disability or Retirement during the Employment Period, this Agreement shall terminate without further obligationsto Executive or his legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive’s estate or beneficiary, asapplicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 7(b) shall include, without limitation, and Executive’s estateand/or beneficiaries shall be entitled to receive, benefits under such plans, programs, practices and policies relating to death, disability or retirement benefits, if any, as are applicable to Executive on the Date of Termination. 

 

(c) Termination for Cause or Termination by Executive Except for GoodReason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the Employment Period (except for Good Reason), this Agreement shall terminate withoutfurther obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 7(a)(i)(A)) and the timely payment or provision of Other Benefits. 

 

8. Non-exclusivity of Rights. Nothing in this Agreement shall preventor limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company and for which Executive may qualify, nor, subject to Section 15(g), shall anything herein limit or otherwise affectsuch rights as Executive may have under any contract or agreement with the Company. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreementwith the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

 

9. Certain Additional Payments by the Company.

 

(a) Anything in this Agreement to the contrarynotwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms ofthis Agreement or otherwise, but determined without 

regard to any additional payments required under this Section 9) (a “Payment”) would be subject to theexcise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to asthe “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respectto such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the ExciseTax imposed upon the Payments. 

 

(b) All determinations requiredto be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a certified publicaccounting firm selected by Executive and reasonably acceptable to the Company as may be designated by Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within 15business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is reasonably requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-UpPayment, as determined pursuant to this Section 9, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Companyand Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by theCompany should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine theamount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. 

 

10. Costs of Enforcement. In any action taken in good faith relating to the enforcement of this Agreement or any provision herein, Executive shallbe entitled to be paid any and all costs and expenses incurred by him in enforcing or establishing his rights thereunder, including, without limitation, reasonable attorneys’ fees, whether suit be brought or not, and whether or not incurred intrial, bankruptcy or appellate proceedings. 

 

11.Representations and Warranties. Executive hereby represents and warrants to the Company that Executive is not a party to, or otherwise subject to, any covenant not to compete with any person or entity, and Executive’s execution of thisAgreement and performance of his obligations hereunder will not violate the terms or conditions of any contract or obligation, written or oral, between Executive and any other person or entity. 

 

12. Restrictions on Conduct of Executive. 

 

(a) General. Executive and the Company understand and agree that the

purpose of the provisions of this Section 12 is to protect legitimate business interests of the Company and MSB, asmore fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company or MSB per se, nor is it intended to impair or infringe upon Executive’s right to work, earn a living, or acquireand possess property from the fruits of his labor. Executive hereby acknowledges that the post-employment restrictions set forth in this Section 12 are reasonable and that they do not, and will not, unduly impair his ability to earn a livingafter the termination of this Agreement. Therefore, subject to the limitations of reasonableness imposed by law, Executive shall be subject to the restrictions set forth in this Section 12. 

 

(b) Definitions. The following capitalized terms used in thisSection 12 shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms: 

 

*“Competitive Position”* means any employment with a Competitor in which Executive will use or is likely to use any ConfidentialInformation or Trade Secrets, or in which Executive has duties for such Competitor that relate to Competitive Services and that are the same or similar to those services actually performed by Executive for the Company or MSB; 

 

*“Competitive Services”* means the provision of bankingproducts and services similar in scope to those provided by the Company and its subsidiaries as of the Effective Date. 

 

*“Competitor”* means any Person engaged, wholly or in part, in Competitive Services. 

 

*“Confidential Information”* means all information regardingthe Company and MSB, their activities, business or clients that is the subject of reasonable efforts by the Company or MSB to maintain its confidentiality and that is not generally disclosed by practice or authority to persons not employed by theCompany or MSB, but that does not rise to the level of a Trade Secret. “Confidential Information” shall include, but is not limited to, financial plans and data concerning the Company or MSB; management planning information; businessplans; operational methods; market studies; marketing plans or strategies; product development techniques or plans; customer lists; details of customer contracts; current and anticipated customer requirements; past, current and planned research anddevelopment; business acquisition plans; and new personnel acquisition plans. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose suchinformation without violating any right or privilege of the Company or MSB. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. 

 

*“Determination Date”* means the date of termination ofExecutive’s employment with the Company or MSB for any reason whatsoever or any earlier date (during the Employment Period) of an alleged breach of the Restrictive Covenants by Executive. 

*“Person”* means any individual or any corporation, partnership, joint venture, limitedliability company, association or other entity or enterprise. 

 

*“Principal or Representative”* means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative or consultant. 

 

*“Protected Customers”* means any Person to whom the Companyor MSB has sold its products or services or solicited to sell its products or services during the twelve (12) months prior to the Determination Date. 

 

*“Protected Employees”*means employees of the Company or MSB who were employed by the Company or MSB at any time within six(6) months prior to the Determination Date. 

 

*“Restricted Period”* means the Employment Period and a period extending two (2) years from the Date of Termination. 

 

*“Restricted Territory”* means the areas within a 25 mile radius of each banking office of the Company or its subsidiaries immediatelyafter the Effective Date. 

 

*“RestrictiveCovenants”* means the restrictive covenants contained in Section 9(c) hereof. 

 

*“Trade Secret”* means all information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, atechnique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers which is not commonly known by or available to the public and which information:(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 ofefforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory lawof the State of Georgia. 

 

(c) Restrictive Covenants.

 

(i) Restriction on Disclosure and Use of ConfidentialInformation and Trade Secrets. Executive understands and agrees that the Confidential Information and Trade Secrets constitute valuable assets of the Company and its affiliated entities, and may not be converted to Executive’s own use.Accordingly, Executive hereby agrees that Executive shall not, directly or indirectly, at any time during the Restricted Period reveal, divulge, or disclose to any Person not expressly authorized by the Company any Confidential Information, andExecutive shall not, directly or indirectly, at any time during the Restricted Period use or make use of any Confidential Information in connection with any business 

activity other than that of the Company or MSB. Throughout the term of this Agreement and at all times after the datethat this Agreement terminates for any reason, Executive shall not directly or indirectly transmit or disclose any Trade Secret of the Company or MSB to any Person, and shall not make use of any such Trade Secret, directly or indirectly, for himselfor for others, without the prior written consent of the Company. The parties acknowledge and agree that this Agreement is not intended to, and does not, alter either the Company’s rights or Executive’s obligations under any state orfederal statutory or common law regarding trade secrets and unfair trade practices. 

 

Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing or using Confidential Information that is required to be disclosed by law, court order or other legal process;provided, however, that in the event disclosure is required by law, Executive shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such requireddisclosure by Executive. 

 

(ii) Nonsolicitation of ProtectedEmployees. Executive understands and agrees that the relationship between the Company or MSB and each of their Protected Employees constitutes a valuable asset of the Company and may not be converted to Executive’s own use. Accordingly,Executive hereby agrees that during the Restricted Period Executive shall not directly or indirectly on Executive’s own behalf or as a Principal or Representative of any Person or otherwise solicit or induce any Protected Employee to terminatehis or her employment relationship with the Company or MSB or to enter into employment with any other Person. 

 

(iii) Restriction on Relationships with Protected Customers. Executive understands and agrees that the relationship between the Company or MSB andeach of their Protected Customers constitutes a valuable asset of the Company and may not be converted to Executive’s own use. Accordingly, Executive hereby agrees that, during the Restricted Period, Executive shall not, without the priorwritten consent of the Company, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, take away or attempt to solicit, divert or take away a Protected Customer for the purpose ofproviding or selling Competitive Services; provided, however, that the prohibition of this covenant shall apply only to Protected Customers with whom Executive had Material Contact on the Company’s or MSB’s behalf during thetwelve (12) months immediately preceding the termination of his employment hereunder. For purposes of this Agreement, Executive had “Material Contact” with a Protected Customer if (a) he had business dealings with the ProtectedCustomer on the Company’s or MSB’s behalf; (b) he was responsible for supervising or coordinating the dealings between the Company or MSB and the Protected Customer; or (c) he obtained Trade Secrets or Confidential Informationabout the customer as a result of his association with the Company or MSB. 

 

(iv) Noncompetition with the Company and MSB. The parties acknowledge: (A) that Executive’s services under this Agreement require special expertise and talent in the provision of Competitive Servicesand that Executive will have substantial contacts with customers of the Company and MSB; (B) that pursuant to this Agreement, 

Executive will be placed in a position of trust and responsibility and he will have access to a substantial amount ofConfidential Information and Trade Secrets and that the Company and MSB are placing him in such position and giving him access to such information in reliance upon his agreement not to compete with the Company or MSB during the Restricted Period;(C) that due to his management duties, Executive will be the repository of a substantial portion of the goodwill of the Company and MSB and would have an unfair advantage in competing with the Company or MSB; (D) that due toExecutive’s special experience and talent, the loss of Executive’s services to the Company or MSB under this Agreement cannot reasonably or adequately be compensated solely by damages in an action at law; (E) that Executive is capableof competing with the Company and MSB; and (F) that Executive is capable of obtaining gainful, lucrative and desirable employment that does not violate the restrictions contained in this Agreement. In consideration of the compensation andbenefits being paid and to be paid by the Company to Executive hereunder, Executive hereby agrees that, during the Restricted Period, Executive will not, without prior written consent of the Company, directly or indirectly seek or obtain aCompetitive Position in the Restricted Territory with a Competitor; provided, however, that the provisions of this Agreement shall not be deemed to prohibit the ownership by Executive of any securities of the Company or its affiliatedentities or not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended. 

 

(d) Enforcement of Restrictive Covenants. 

 

(i) Rights and Remedies Upon Breach. In the event Executivebreaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the right and remedy to enjoin, preliminarily and permanently, Executive from violating or threatening to violate theRestrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Companyand that money damages would not provide an adequate remedy to the Company. Such right and remedy shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. 

 

(ii) Severability of Covenants. Executive acknowledges and agreesthat the Restrictive Covenants are reasonable and valid in time and scope and in all other respects. The covenants set forth in this Agreement shall be considered and construed as separate and independent covenants. Should any part or provision ofany covenant be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement. If any portionof the foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, the territory, the definition of activities or the definition of information covered is considered to be invalid orunreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the intent of the Company and Executive in agreeing to the provisions of this Agreement will not be impaired and the provisionin question shall be enforceable to the fullest extent of the applicable laws. 

13. Arbitration. Any claim or dispute arising under this Agreement shall be subject toarbitration, and prior to commencing any court action, the parties agree that they shall arbitrate all controversies. The arbitration shall be conducted in Atlanta, Georgia, in accordance with the Employment Dispute Rules of the American ArbitrationAssociation and the Federal Arbitration Act, 9 U.S.C. §1, *et. seq.* The arbitrator(s) shall be authorized to award both liquidated and actual damages, in addition to injunctive relief, but no punitive damages. Such an award shall bebinding and conclusive upon the parties hereto, subject to 9 U.S.C. §10. Each party shall have the right to have the award made the judgment of a court of competent jurisdiction. 

 

14. Assignment and Successors. 

 

(a) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable byExecutive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. 

 

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 

 

(c) The Company will require any successor (whether direct or indirect, bypurchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place. 

 

15. Miscellaneous. 

 

(a) Waiver. Failureof any party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the futureperformance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making the waiver. 

 

(b) Severability. If any provision or covenant, or any part thereof, of this Agreement should be held by any court tobe invalid, illegal or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, of thisAgreement, all of which shall remain in full force and effect. 

 

(c) Other Agents.****Nothing in this Agreement is to be interpreted as limiting the Company from employing other personnel on such terms and conditions as may be satisfactory to it. 

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreementbetween the Company and Executive with respect to the subject matter hereof and, from and after the Effective Date, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof. 

 

(e) Governing Law. Except to the extent preempted by federal law, andwithout regard to conflict of laws principles, the laws of the State of Georgia shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise. 

 

(f) Notices. All notices, requests, demands and other communicationsrequired or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or three days after mailing if mailed, first class, certified mail, postage prepaid: 

 
To Company: Main Street Banks, Inc.  Samuel B. Hay III, Chief Executive Officer  1121 Floyd Street  Covington, Georgia 30014  (if hand-delivered)  P.O. Box 1098  Covington, Georgia 30015-1098  (if mailed)To Executive: Gary S. Austin  335 Glengarry Chase  Covington, Georgia 30014
 

Any party may change the address towhich notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein. 

 

(g) Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by both partieshereto, which makes specific reference to this Agreement. 

 

(h)Construction. Each party and his or its counsel have reviewed this Agreement and have been provided the opportunity to revise this Agreement and accordingly, the normal rule of construction to the effect that any ambiguities are to beresolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or againstany party. 

**IN WITNESS WHEREOF**, the parties hereto have duly executed and delivered this Agreement as of thedate first above written. 

 
**MAIN STREET BANKS, INC.**By: 
/s/ Samuel B. Hay III
  Samuel B. Hay III  Chief Executive Officer
 
**EXECUTIVE:**
/s/ Gary S. Austin

Gary S. Austin