**Exhibit 10.23**

 

 

**EMPLOYMENT AGREEMENT**

 

This **EMPLOYMENT AGREEMENT**(this “Agreement”) is made and entered into effective as of the 15th  day of May, 2002, by and among **MAIN STREET BANK**, a Georgia bank(hereinafter, the “Bank”), and **JOHN T. MONROE**(hereinafter, “Executive”), to be effective as of the Effective Date, asdefined in Section 1.

 

**BACKGROUND**

 

**WHEREAS**, the Bankdesires to employ Executive and Executive is willing to provide services to theBank in accordance with the terms and conditions hereinafter set forth;

 

**NOW, THEREFORE**, inconsideration of the foregoing and of the mutual covenants and agreements setforth herein, and other good and valuable consideration, the receipt andsufficiency 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 May 15, 2002. This Agreement is subject to the condition that as of the Effective Datethe Executive shall have terminated his employment with his previous employerand shall enter into the employment set forth herein.

 

2.             Employment.  Executive is hereby employed on theEffective Date as Chief Credit Officer of the Bank.  In such capacity, Executive shall have such responsibilitiescommensurate with such positions as set forth in the bylaws of the Bank and asshall be assigned to him by the Board of Directors, the Chief Executive Officeror the Chief Operating Officer of the Bank. Executive will report directly to the Chief Operating Officer of theBank.

 

3.             EmploymentPeriod.  Unless earlier terminatedherein in accordance with Section 6 hereof, Executive’s employment shallbe for a two year term (the “Employment Period”), beginning on the EffectiveDate.  Beginning on the firstanniversary of the Effective Date and on each anniversary of the EffectiveDate, the Employment Period shall, without further action by Executive or theBank, be extended by an additional one-year period; provided, however,that either party may, by notice to the other, cause the Employment Period tocease to extend automatically.  Uponsuch notice, the Employment Period shall terminate upon the expiration of thethen-current term, including any prior extensions.  If the Bank causes the Employment Period to cease to extendautomatically then, in the absence of Cause (as defined in Section 6(b)), suchaction shall constitute a termination without Cause and Executive shall beentitled to severance as set forth in Section 7(a).

 

1

----

 

4.             Extent ofService.  During the EmploymentPeriod, and excluding any periods of vacation to which Executive is entitled,Executive agrees to devote his business time, attention, skill and effortsexclusively to the faithful performance of his duties hereunder; provided,however, that it shall not be a violation of this Agreement forExecutive to (i) devote reasonable periods of time to charitable and communityactivities and, with the approval of the Bank, industry or professionalactivities, and/or (ii) manage personal business interests and investments, solong as such activities do not materially interfere with the performance ofExecutive’s responsibilities under this Agreement.  It is expressly understood and agreed that to the extent that anysuch activities have been conducted by Executive prior to date of thisAgreement, the continued conduct of such activities (or the conduct ofactivities similar in nature and scope thereto) subsequent to the EffectiveDate shall not thereafter be deemed to interfere with the performance ofExecutive’s responsibilities hereunder.

 

5.             Compensation andBenefits.

 

(a)           Base Salary.  During each year of the Employment Period,the Bank will pay to Executive annual base salary in the amount equal to U.S.$160,000 (“Base Salary”), less normal withholdings, payable in equal monthly ormore frequent installments as are customary under the Bank’s payroll practicesfrom time to time.  The CompensationCommittee of the Board of Directors of the Bank shall review Executive’s BaseSalary annually and in its sole discretion, subject to approval of the Board ofDirectors of the Bank, may increase Executive’s Base Salary from year to year;provided that annual increases of at least 3%, intended to approximate cost ofliving 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 theBank, as well as any recommendations of an outside consulting firm that may beengaged by the Bank, 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 programsapplicable generally to senior executive officers of the Bank (“PeerExecutives”), and on the same basis as such Peer Executives.

 

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

 

(d)           Expenses.  During the Employment Period, Executiveshall be entitled to receive prompt reimbursement for all reasonable expensesincurred by Executive in accordance with the policies, practices and proceduresof the Bank to the extent applicable generally to Peer Executives.

 

(e)           Fringe Benefits.  During the Employment Period, Executiveshall be entitled to fringe benefits in accordance with the plans, practices,programs and policies of the Bank in effect for Peer Executives.  Without limiting the foregoing, during theEmployment Period, Executive shall be provided a car allowance or a Bank-ownedcar of a model appropriate to his position, as determined by the CompensationCommittee of the Board of Directors of the Bank.

 

6.             Termination ofAgreement.

 

(a)           Death, Retirementor Disability.  Executive’semployment shall terminate automatically upon Executive’s death or Retirementduring the Employment Period.  Forpurposes of this Agreement, “Retirement” shall mean normal retirement asdefined in the Bank’s then-current retirement plan, or if there is no suchretirement plan, “Retirement” shall mean voluntary termination after age 65with ten years of service.  If the Bankdetermines in good faith that the Disability of Executive has occurred duringthe

 

2

----

 

Employment Period (pursuant to the definition of Disability set forthbelow), it may give to Executive written notice of its intention to terminateExecutive’s employment.  In such event,Executive’s employment shall terminate effective on the 30th day after receiptof such written notice by Executive (the “Disability Effective Date”), providedthat, within the 30 days after such receipt, Executive shall not have returnedto full-time performance of Executive’s duties.  For purposes of this Agreement, “Disability” shall mean theinability of Executive, as determined by the Board, to substantially performthe essential functions of his regular duties and responsibilities, with orwithout reasonable accommodation, due to a medically determinable physical ormental illness which has lasted (or can reasonably be expected to last) for aperiod of six consecutive months.  Atthe request of Executive or his personal representative, the Board’sdetermination that the Disability of Executive has occurred shall be certifiedby two physicians mutually agreed upon by Executive, or his personalrepresentative, and the Bank.  Failingsuch independent certification (if so requested by Executive), Executive’stermination shall be deemed a termination by the Bank without Cause and not atermination by reason of his Disability.

 

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

 

(i)            the willful andcontinued failure of Executive to perform substantially Executive’s duties withthe Bank (other than any such failure resulting from incapacity due to physicalor mental illness, and specifically excluding any failure by Executive, afterreasonable efforts, to meet performance expectations), after a written demandfor substantial performance is delivered to Executive by the Chief ExecutiveOfficer, the Chief Operating Officer or the Board of Directors of the Bankwhich specifically identifies the manner in which such officer or the Boardbelieves that Executive has not substantially performed Executive’s duties, or

 

(ii)           the willfulengaging by Executive in illegal conduct or gross misconduct which ismaterially and demonstrably injurious to the Bank; or

 

(iii)          a requirement byany state or federal authority regulating the Bank that Executive be removedfrom his office.

 

For purposes of this provision, no act or failure to act, on the partof Executive, shall be considered “willful” unless it is done, or omitted to bedone, by Executive in bad faith or without reasonable belief that Executive’saction or omission was in the best interests of the Bank and its shareholderand subsidiaries.  Any act, or failureto act, based upon authority given pursuant to a resolution duly adopted by theBoard or based upon the advice of counsel for the Bank shall be conclusivelypresumed to be done, or omitted to be done, by Executive in good faith and inthe best interests of the Bank, its shareholder and subsidiaries.  The cessation of employment of Executiveunder subparagraph (i) or (ii) above shall not be deemed to be for Cause unlessand until there shall have been delivered to Executive a copy of a resolutionduly adopted by the affirmative vote of not less than three-fourths of theentire membership of the Board of Directors of the Bank at a meeting of suchBoard called and held for such purpose (after reasonable notice is provided toExecutive and Executive is given an opportunity, together with counsel, to beheard before such Board), finding that, in the good faith opinion of suchBoard, Executive is guilty of the conduct described in subparagraph (i) or (ii)above, and specifying the particulars thereof in detail.

 

(c)           Termination byExecutive.  Executive’s employmentmay be terminated by Executive for “Good Reason” as defined below.  For purposes of this Agreement, “GoodReason” shall mean:

 

(i)            without the writtenconsent of Executive, a change in Executive’s status, title, position orresponsibilities (including reporting responsibilities) which, in Executive’sreasonable judgment, 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 orresponsibilities

 

3

----

 

which, in Executive’s reasonable judgment, are inconsistent with hisstatus, title, position or responsibilities as in effect at the Effective Dateor, if greater, at any time thereafter; or any other change in condition orcircumstances that in Executive’s reasonable judgment makes it materially moredifficult for Executive to carry out the duties and responsibilities of histhen-existing office; provided that Good Reason under this subparagraph (i)excludes an isolated, insubstantial and inadvertent action not taken in badfaith and which is remedied by the Bank promptly after receipt of noticethereof given by Executive;

 

(ii)           a reduction,without the written consent of Executive, in Executive’s Base Salary as ineffect 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 isentitled within five (5) days of the date due;

 

(iii)          the failure by theBank (a) to continue in effect (without reduction in benefit level and/orreward opportunities) any compensation or employee benefit plan in whichExecutive participated as of the Effective Date, or at any time thereafter,that is material to Executive’s total compensation, unless an equitablearrangement (embodied in an ongoing substitute or alternative plan) has beenmade with respect to such plan, or (b) to continue Executive’s participationtherein (or in such substitute or alternative plan) on a basis not materiallyless favorable, both in terms of the amount of benefits provided and the levelof Executive’s participation therein relative to other participants; or

 

(iv)          the Bank’s requiringExecutive, without his consent, to be based at any office or location otherthan in the Atlanta, Georgia metropolitan area;

 

(v)           the insolvency orthe filing by any party, including the Bank or any of its subsidiaries, of apetition for bankruptcy of the Bank or any such subsidiary, which petition isnot dismissed within sixty (60) days;

 

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

 

(vii)         any purportedtermination by the Bank of Executive’s employment otherwise than as expresslypermitted by this Agreement; or

 

(viii)        the material breachby the Bank of any provision of this Agreement.

 

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

 

(d)           Notice ofTermination.  Any termination by theBank for Cause, or by Executive for Good Reason shall be communicated by Noticeof Termination to the other party hereto given in accordance with Section 15(f)of this Agreement.  For purposes of thisAgreement, a “Notice of Termination” means a written notice which (i) indicatesthe specific termination provision in this Agreement relied upon, (ii) to theextent applicable, sets forth in reasonable detail the facts and circumstancesclaimed to provide a basis for termination of Executive’s employment under theprovision so indicated and (iii) specifies the termination date.  If a dispute exists concerning theprovisions of this Agreement that apply to Executive’s termination ofemployment, the parties shall pursue the resolution of such dispute with reasonablediligence.  Within five (5) days of sucha resolution, any party owing any payments pursuant to the provisions of thisAgreement shall make all such payments together with interest accrued thereonat the rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of1986, as amended (the “Code”).

 

4

----

 

(e)           Date ofTermination.  “Date of Termination”means (i) if Executive’s employment is terminated other than by reason of deathor Disability, the date of receipt of the Notice of Termination, or any laterdate specified therein, or (ii) if Executive’s employment is terminated byreason of death or Disability, the Date of Termination will be the date ofdeath or the Disability Effective Date, as the case may be.  If Executive’s employment is terminatedbecause of the Bank’s action to stop the automatic extension of the EmploymentPeriod other than for Cause then the Date of Termination shall be the date ofexpiration of the then-current term of the Employment Period.

 

7.             Obligations ofthe Bank upon Termination.

 

(a)           Termination byExecutive for Good Reason; Termination by the Bank Other Than for Cause;Cessation of Automatic Extension by Bank Other Than for Cause.  If, during the Employment Period, the Bankshall terminate Executive’s employment other than for Cause, or Executive shallterminate employment for Good Reason, or the Bank shall stop the automaticextension of the Employment Period other than for Cause, then:

 

(i)            the Bank shall payto Executive in a lump sum in cash within 30 days after the Date of Terminationthe aggregate of the following amounts:

 

A.            the sum of (1)Executive’s Base Salary through the Date of Termination to the extent nottheretofore paid, (2) the product of (x) Executive’s target annual bonus forthe 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 currentfiscal year through the Date of Termination, and the denominator of which is365, and (3) any accrued vacation pay to the extent not theretofore paid, and(4) unless Executive has elected a different payout date in a prior deferralelection, any compensation previously deferred by Executive (together with anyaccrued interest or earnings thereon) to the extent not theretofore paid (thesum of the amounts described in clauses (1), (2), (3) and (4) shall behereinafter referred to as the “Accrued Obligations”);

 

B.            the amount equal totwo times the sum of (1) Executive’s Base Salary in effect as of the Date ofTermination, and (2) the Target Annual Bonus;

 

(ii)           for two years afterthe Date of Termination, or such longer period as may be provided by the termsof the appropriate plan, program, practice or policy, the Bank shall continuebenefits to Executive and/or Executive’s family at least equal to those whichwould have been provided to them in accordance with the Welfare Plans describedin Section 5(c) of this Agreement if Executive’s employment had not beenterminated or, if more favorable to Executive, as in effect generally at anytime thereafter with respect to other Peer Executives and their families,provided, however, that if Executive becomes re-employed with another employerand is eligible to receive medical or other welfare benefits under anotheremployer provided plan, the medical and other welfare benefits described hereinshall be secondary to those provided under such other plan during suchapplicable period of eligibility; and

 

(iii)          all of Executive’soutstanding stock options and other incentive awards from the Bank in thenature of rights that may be exercised shall become fully exercisable and allrestrictions on Executive’s outstanding awards of restricted stock shall lapse;and

 

(iv)          to the extent nottheretofore paid or provided, the Bank shall timely pay or provide to Executiveany other amounts or benefits required to be paid or provided or whichExecutive is eligible to receive under any plan, program, policy or practice orcontract or agreement of the Bank (such other amounts and benefits shall behereinafter referred to as the “Other Benefits”).

 

5

----

 

(b)           Death; Disabilityor Retirement.  If Executive’semployment is terminated by reason of Executive’s death, Disability orRetirement during the Employment Period, this Agreement shall terminate withoutfurther obligations to Executive or his legal representatives under thisAgreement, other than for payment of Accrued Obligations and the timely paymentor provision of Other Benefits.  AccruedObligations shall be paid to Executive’s estate or beneficiary, as applicable,in a lump sum in cash within 30 days of the Date of Termination.  With respect to the provision of OtherBenefits, the term Other Benefits as used in this Section 7(b) shallinclude, without limitation, and Executive’s estate and/or beneficiaries shallbe entitled to receive, benefits under such plans, programs, practices andpolicies relating to death, disability or retirement benefits, if any, as areapplicable to Executive on the Date of Termination.

 

(c)           Termination forCause or Termination by Executive Except for Good Reason.  If Executive’s employment shall beterminated for Cause during the Employment Period, or if Executive voluntarilyterminates employment during the Employment Period (except for Good Reason),this Agreement shall terminate without further obligations to Executive, otherthan for payment of Accrued Obligations (excluding the pro-rata bonus describedin clause 2 of Section 7(a)(i)(A)) and the timely payment or provision of OtherBenefits.

 

(d)           No Offset orMitigation.  Executive shall beentitled, but not required, to seek and obtain other employment and/or workfollowing any termination of employment, and no amounts or monies earned byExecutive in such other employment or work shall be used to setoff or otherwisereduce the Bank’s payment obligations under this Section 7 or otherwise exceptas stated in Section 7(a)(ii) above.

 

8.             Non-exclusivityof Rights.  Nothing in this Agreementshall prevent or limit Executive’s continuing or future participation in anyplan, program, policy or practice provided by the Bank and for which Executivemay qualify, nor, subject to Section 15(g), shall anything herein limit orotherwise affect such rights as Executive may have under any contract oragreement with the Bank.  Amounts whichare vested benefits or which Executive is otherwise entitled to receive underany plan, policy, practice or program of or any contract or agreement with theBank or any of its affiliated companies at or subsequent to the Date ofTermination shall be payable in accordance with such plan, policy, practice orprogram or contract or agreement except as explicitly modified by thisAgreement.

 

9.             CertainAdditional Payments by the Bank.

 

(a)           Anything in thisAgreement to the contrary notwithstanding and except as set forth below, in theevent it shall be determined that any payment or distribution by the Bank to orfor the benefit of Executive (whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise, butdetermined without regard to any additional payments required under thisSection 9) (a “Payment”) would be subject to the excise tax imposed by Section4999 of the Code or any interest or penalties are incurred by Executive withrespect to such excise tax (such excise tax, together with any such interestand penalties, are hereinafter collectively referred to as the “Excise Tax”),then Executive shall be entitled to receive an additional payment (a “Gross-UpPayment”) in an amount such that after payment by Executive of all taxes(including any interest or penalties imposed with respect to such taxes),including, without limitation, any income taxes (and any interest and penaltiesimposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,Executive retains an amount of the Gross-Up Payment equal to the Excise Taximposed upon the Payments.

 

(b)           All determinationsrequired to be made under this Section 9, including whether and when a Gross-UpPayment is required and the amount of such Gross-Up Payment and the assumptionsto be utilized in arriving at such determination, shall be made by a certifiedpublic accounting firm selected by Executive and reasonably acceptable to theBank as may be designated by Executive (the “Accounting Firm”) which shallprovide detailed supporting calculations both to the Bank and Executive within15 business days of the receipt of notice from Executive that there has been aPayment, or such earlier time as is reasonably requested by the Bank.  All fees and expenses of the Accounting Firmshall be borne solely by the Bank.  Any

 

6

----

 

Gross-Up Payment, as determined pursuant to this Section 9, shall bepaid by the Bank to Executive within five days of the receipt of the AccountingFirm’s determination.  Any determinationby the Accounting Firm shall be binding upon the Bank and Executive.  As a result of the uncertainty in the applicationof Section 4999 of the Code at the time of the initial determination by theAccounting Firm hereunder, it is possible that Gross-Up Payments which will nothave been made by the Bank should have been made (“Underpayment”), consistentwith the calculations required to be made hereunder.  In the event that Executive thereafter is required to make apayment of any Excise Tax, the Accounting Firm shall determine the amount ofthe Underpayment that has occurred and any such Underpayment shall be promptlypaid by the Bank to or for the benefit of Executive.

 

10.           Costs ofEnforcement.  In any action taken ingood faith relating to the enforcement of this Agreement or any provisionherein, Executive shall be entitled to be paid any and all costs and expensesincurred 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 in trial, bankruptcy or appellate proceedings.

 

11.           Representationsand Warranties.  Executive herebyrepresents and warrants to the Bank that Executive is not a party to, orotherwise subject to, any covenant not to compete with any person or entity,and Executive’s execution of this Agreement and performance of his obligationshereunder will not violate the terms or conditions of any contract orobligation, written or oral, between Executive and any other person or entity.

 

12.           Restrictions onConduct of Executive.

 

(a)           General.  Executive and the Bank understand and agreethat the purpose of the provisions of this Section 12 is to protect legitimatebusiness interests of the Bank, as more fully described below, and is notintended to eliminate Executive’s post-employment competition with the Bank perse, nor is it intended to impair or infringe upon Executive’s right towork, earn a living, or acquire and possess property from the fruits of hislabor.  Executive hereby acknowledgesthat the post-employment restrictions set forth in this Section 12 arereasonable and that they do not, and will not, unduly impair his ability toearn a living after the termination of this Agreement.  Therefore, subject to the limitations ofreasonableness imposed by law, Executive shall be subject to the restrictionsset forth in this Section 12.

 

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

 

*“Competitive Position”*meansany employment with a Competitor in which Executive will use or is likely touse any Confidential Information or Trade Secrets, or in which Executive hasduties for such Competitor that relate to Competitive Services and that are thesame or similar to those services actually performed by Executive for the Bank;

 

*“Competitive Services”*means the provision of banking products and services similar in scope to thoseprovided by the Bank and its subsidiaries as of the Effective Date.

 

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

 

*“Confidential Information”*means all information regarding the Bank, its activities, business or clientsthat is the subject of reasonable efforts by the Bank to maintain itsconfidentiality and that is not generally disclosed by practice or authority topersons not employed by the Bank, but that does not rise to the level of aTrade Secret.  “ConfidentialInformation” shall include, but is not limited to, financial plans and dataconcerning the Bank; management planning information; business plans;operational methods; market studies; marketing plans or strategies; productdevelopment techniques or plans; customer lists; details of

 

7

----

 

customer contracts; current and anticipated customer requirements;past, current and planned research and development; business acquisition plans;and new personnel acquisition plans. “Confidential Information” shall not include information that has becomegenerally available to the public by the act of one who has the right todisclose such information without violating any right or privilege of theBank.  This definition shall not limitany definition of “confidential information” or any equivalent term under stateor federal law.

*“Determination Date”*means the date of termination of Executive’s employment with the Bank for anyreason whatsoever or any earlier date (during the Employment Period) of analleged breach of the Restrictive Covenants by Executive.

 

*“Person”*means anyindividual or any corporation, partnership, joint venture, limited liabilityBank, 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 orconsultant.

 

*“Protected Customers”*means any Person to whom the Bank has sold its products or services orsolicited to sell its products or services during the twelve (12) months priorto the Determination Date.

 

*“Protected Employees”*meansemployees of the Bank who were employed by the Bank 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 ofTermination.

 

*“Restricted Territory”*means the areas within a 25 mile radius of each banking office of the Bankimmediately after the Effective Date.

 

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

 

*“Trade Secret”* meansall 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, a technique, a drawing, a process, financial data,financial plans, product plans, distribution lists or a list of actual orpotential customers, advertisers or suppliers which is not commonly known by oravailable to the public and which information: (A) derives economic value, actual or potential, from not beinggenerally 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 tomaintain its secrecy.  Without limiting theforegoing, Trade Secret means any item of confidential information thatconstitutes a “trade secret(s)” under the common law or statutory law of theState of Georgia.

 

(c)           RestrictiveCovenants.

 

(i)            Restriction onDisclosure and Use of Confidential Information and Trade Secrets.  Executive understands and agrees that theConfidential Information and Trade Secrets constitute valuable assets of theBank and its affiliated entities, and may not be converted to Executive’s ownuse.  Accordingly, Executive herebyagrees that Executive shall not, directly or indirectly, at any time during theRestricted Period reveal, divulge, or disclose to any Person not expresslyauthorized by the Bank any Confidential Information, and Executive shall not,directly or indirectly, at any time during the Restricted Period use or makeuse of any Confidential Information in connection with any business activityother than that of the Bank.  Throughoutthe term of this Agreement and at all times after the date that this Agreementterminates for any reason, Executive shall not directly or indirectly transmitor disclose any Trade Secret of the Bank to any

 

8

----

 

Person, and shall not make use of any such Trade Secret, directly orindirectly, for himself or for others, without the prior written consent of theBank.  The parties acknowledge and agreethat this Agreement is not intended to, and does not, alter either the Bank’srights or Executive’s obligations under any state or federal statutory orcommon law regarding trade secrets and unfair trade practices.

 

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

 

(ii)           Nonsolicitationof Protected Employees.  Executiveunderstands and agrees that the relationship between the Bank and each of itsProtected Employees constitutes a valuable asset of the Bank and may not beconverted to Executive’s own use. Accordingly, Executive hereby agrees that during the Restricted PeriodExecutive shall not directly or indirectly on Executive’s own behalf or as aPrincipal or Representative of any Person or otherwise solicit or induce anyProtected Employee to terminate his or her employment relationship with theBank or to enter into employment with any other Person.

 

(iii)          Restriction onRelationships with Protected Customers. Executive understands and agrees that the relationship between the Bankand each of its Protected Customers constitutes a valuable asset of the Bankand may not be converted to Executive’s own use.  Accordingly, Executive hereby agrees that, during the RestrictedPeriod, Executive shall not, without the prior written consent of the Bank,directly or indirectly, on Executive’s own behalf or as a Principal orRepresentative of any Person, solicit, divert, take away or attempt to solicit,divert or take away a Protected Customer for the purpose of providing orselling Competitive Services; provided, however, that theprohibition of this covenant shall apply only to Protected Customers with whomExecutive had Material Contact on the Bank’s behalf during the twelve (12)months immediately preceding the termination of his employment hereunder.  For purposes of this Agreement, Executivehad “Material Contact” with a Protected Customer if (a) he had businessdealings with the Protected Customer on the Bank’s behalf; (b) he wasresponsible for supervising or coordinating the dealings between the Bank andthe Protected Customer; or (c) he obtained Trade Secrets or ConfidentialInformation about the customer as a result of his association with the Bank.

 

(iv)          Noncompetitionwith the Bank.  The partiesacknowledge: (A) that Executive’s services under this Agreement require specialexpertise and talent in the provision of Competitive Services and thatExecutive will have substantial contacts with customers of the Bank; (B) thatpursuant to this Agreement, Executive will be placed in a position of trust andresponsibility and he will have access to a substantial amount of ConfidentialInformation and Trade Secrets and that the Bank is placing him in such positionand giving him access to such information in reliance upon his agreement not tocompete with the Bank during the Restricted Period; (C) that due to hismanagement duties, Executive will be the repository of a substantial portion ofthe goodwill of the Bank and would have an unfair advantage in competing withthe Bank; (D) that due to Executive’s special experience and talent, the lossof Executive’s services to the Bank under this Agreement cannot reasonably oradequately be compensated solely by damages in an action at law; (E) thatExecutive is capable of competing with the Bank; and (F) that Executive iscapable of obtaining gainful, lucrative and desirable employment that does notviolate the restrictions contained in this Agreement.  In consideration of the compensation and benefits being paid andto be paid by the Bank to Executive hereunder, Executive hereby agrees that,during the Restricted Period, Executive will not, without prior written consentof the Bank, directly or indirectly seek or obtain a Competitive Position inthe Restricted Territory with a Competitor; provided, however,that the provisions of this Agreement shall not be deemed to prohibit theownership by Executive of any securities of the Bank or its affiliated entitiesfor not more than five percent (5%) of any class of securities of anycorporation having a class of securities registered pursuant to the SecuritiesExchange Act of 1934, as amended.

 

9

----

 

(d)           Enforcement ofRestrictive Covenants.

 

(i)            Rights andRemedies Upon Breach.  In the eventExecutive breaches, or threatens to commit a breach of, any of the provisionsof the Restrictive Covenants, the Bank shall have the right and remedy toenjoin, preliminarily and permanently, Executive from violating or threateningto violate the Restrictive Covenants and to have the Restrictive Covenantsspecifically enforced by any court of competent jurisdiction, it being agreedthat any breach or threatened breach of the Restrictive Covenants would causeirreparable injury to the Bank and that money damages would not provide an adequateremedy to the Bank.  Such right andremedy shall be in addition to, and not in lieu of, any other rights andremedies available to the Bank at law or in equity.

 

(ii)           Severability ofCovenants.  Executive acknowledgesand agrees that the Restrictive Covenants are reasonable and valid in time andscope and in all other respects.  Thecovenants set forth in this Agreement shall be considered and construed asseparate and independent covenants. Should any part or provision of any covenant be held invalid, void orunenforceable in any court of competent jurisdiction, such invalidity, voidnessor unenforceability shall not render invalid, void or unenforceable any otherpart or provision of this Agreement.  Ifany portion of the foregoing provisions is found to be invalid or unenforceableby a court of competent jurisdiction because its duration, the territory, thedefinition of activities or the definition of information covered is consideredto be invalid or unreasonable in scope, the invalid or unreasonable term shallbe redefined, or a new enforceable term provided, such that the intent of theBank and Executive in agreeing to the provisions of this Agreement will not beimpaired and the provision in question shall be enforceable to the fullestextent of the applicable laws.

 

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

 

14.           Assignment andSuccessors.

 

(a)           This Agreement ispersonal to Executive and without the prior written consent of the Bank shallnot be assignable by Executive otherwise than by will or the laws of descentand distribution.  This Agreement shallinure to the benefit of and be enforceable by the Executive’s legalrepresentatives.

 

(b)           This Agreement shallinure to the benefit of and be binding upon the Bank and its successors andassigns.

 

(c)           The Bank willrequire any successor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of the business and/orassets of the Bank to assume expressly and agree to perform this Agreement inthe same manner and to the same extent that the Bank would be required toperform it if no such succession had taken place.

 

15.           Miscellaneous.

 

(a)           Waiver.  Failure of any party to insist, in one ormore instances, on performance by the other in strict accordance with the termsand conditions of this Agreement shall not be deemed a waiver or relinquishmentof any right granted in this Agreement or of the future performance of any suchterm or condition or of any other term or condition of this Agreement, unlesssuch waiver is contained in a writing signed by the party making the waiver.

 

10

----

 

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

 

(c)           Other Agents.** **Nothingin this Agreement is to be interpreted as limiting the Bank from employingother personnel on such terms and conditions as may be satisfactory to it.

 

(d)           Entire Agreement.  Except as provided herein, this Agreementcontains the entire agreement between the Bank and Executive with respect tothe subject matter hereof and, from and after the Effective Date, thisAgreement shall supersede any other agreement between the parties with respectto the subject matter hereof.

 

(e)           Governing Law.  Except to the extent preempted by federallaw, and without regard to conflict of laws principles, the laws of the Stateof Georgia shall govern this Agreement in all respects, whether as to itsvalidity, construction, capacity, performance or otherwise.

 

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

 
| To Bank:      |   | Main Street Bank                           |
|---------------|--------|--------------------------------------------|
|          |   | 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: |   | John T. Monroe                             |
|          |   | 8295 High Hampton Chase                    |
|          |   | Alpharetta, Georgia  30022            |
|          |   |                                       |

 

Any party may change the address to which notices, requests, demandsand other communications shall be delivered or mailed by giving notice thereofto the other party in the same manner provided herein.

 

(g)           Amendments andModifications.  This Agreement maybe amended or modified only by a writing signed by both parties hereto, whichmakes specific reference to this Agreement.

 

(h)           Construction.  Each party and his or its counsel havereviewed this Agreement and have been provided the opportunity to revise thisAgreement and accordingly, the normal rule of construction to the effect thatany ambiguities are to be resolved against the drafting party shall not beemployed in the interpretation of this Agreement.  Instead, the language of all parts of this Agreement shall beconstrued as a whole, and according to its fair meaning, and not strictly foror against any party.

 

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

 

11

----

 

 
|   |   |   |   |   |   | **MAIN STREET BANK** |
|--------|--------|--------|--------|--------|--------|----------------------|
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   | By:                  | /s/ Samuel B. Hay III |   |
|   |   |   |   |   |   |                 | Samuel B. Hay III |
|   |   |   |   |   |   |                 | Chief Executive Officer |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   | **EXECUTIVE:**       |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   |                 |   |
|   |   |   |   |   |   | /s/ John T. Monroe   |   |
|   |   |   |   |   |   | John T. Monroe       |   |
|        |        |        |        |        |        |                      |  |  |  |

 

 

12

----

 

EXHIBIT A

Form of Release

 

 

THIS RELEASE (“Release”) is granted effective as of the        day of             ,      , by John T. Monroe (“Executive”) in favorof Main Street Bank (the “Bank”).  Thisis the Release referred to in that certain Employment Agreement dated as of        , 2002 by and between the Bankand Executive (the “Employment Agreement”). Executive gives this Release in consideration of the Bank’s promises andcovenants as recited in the Employment Agreement, with respect to which thisRelease is an integral part.

 

1.             Release of theBank.  Executive, for himself, hissuccessors, assigns, attorneys, and all those entitled to assert his rights,now and forever hereby releases and discharges the Bank and its respectiveofficers, directors, stockholders, trustees, employees, agents, parentcorporations, subsidiaries, affiliates, estates, successors, assigns andattorneys (“the Released Parties”), from any and all claims, actions, causes ofaction, sums of money due, suits, debts, liens, covenants, contracts,obligations, costs, expenses, damages, judgments, agreements, promises, demands,claims for attorney’s fees and costs, or liabilities whatsoever, in law or inequity, which Executive ever had or now has against the Released Parties,including any claims arising by reason of or in any way connected with anyemployment relationship which existed between the Bank or any of its parents,subsidiaries, affiliates, or predecessors, and Executive.  It is understood and agreed that thisRelease is intended to cover all actions, causes of action, claims or demandsfor any damage, loss or injury, which may be traced either directly orindirectly to the aforesaid employment relationship, or the termination of thatrelationship, that Executive has, had or purports to have, from the beginningof time to the date of this Release, whether known or unknown, that now exists,no matter how remotely they may be related to the aforesaid employmentrelationship including but not limited to claims for employment discriminationunder federal or state law, except as provided in Paragraph 2; claims arisingunder Title VII of the Civil Rights Act, 42 U.S.C. § 2000(e), etseq.or the Americans With Disabilities Act, 42 U.S.C. § 12101 etseq.;claims for statutory or common law wrongful discharge, including any claimsarising under the Fair Labor Standards Act, 29 U.S.C. § 201 etseq.;claims for attorney’s fees, expenses and costs; claims for defamation; claimsfor wages or vacation pay; claims for benefits, including any claims arisingunder the Executive Retirement Income Security Act, 29 U.S.C. § 1001, etseq.; and provided, however, that nothing herein shall release the Bankof its obligations to Executive under the Employment Agreement, the MergerAgreement or any other contractual obligations between the Bank or itsaffiliates and Executive, or any indemnification obligations to Executive underthe Bank’s bylaws, articles of incorporation, Georgia law or otherwise.

 

13

----

 

2.             Release ofClaims Under Age Discrimination in Employment Act.  Without limiting the generality of theforegoing, Executive agrees that by executing this Release, he has released andwaived any and all claims he has or may have as of the date of this Release forage discrimination under the Age Discrimination in Employment Act, 29 U.S.C. §621, et seq.  It is understoodthat Executive is advised to consult with an attorney prior to executing thisRelease; that he in fact has consulted a knowledgeable, competent attorneyregarding this Release; that he may, before executing this Release, considerthis Release for a period of twenty-one (21) calendar days; and that theconsideration he receives for this Release is in addition to amounts to whichhe was already entitled.  It is furtherunderstood that this Release is not effective until seven (7) calendar daysafter the execution of this Release and that Executive may revoke this Releasewithin seven (7) calendar days from the date of execution hereof.

 

Executive agrees that he has carefully read this Release and is signingit voluntarily.  Executive acknowledgesthat he has had twenty one (21) days from receipt of this Release to review itprior to signing or that, if Executive is signing this Release prior to theexpiration of such 21-day period, Executive is waiving his right to review theRelease for such full 21-day period prior to signing it.  Executive has the right to revoke thisrelease within seven (7) days following the date of its execution by him.  However, if Executive revokes this Releasewithin such seven (7) day period, no severance benefit will be payable to himunder the Employment Agreement and he shall return to the Bank any such paymentreceived prior to that date.

 

EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT ITCONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THECOMPANY UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT.  EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD AFULL OPPORTUNITY TO CONSULT WITH AN ATTORNEY OR OTHER ADVISOR OF HIS CHOOSINGCONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING THIS RELEASEVOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL SUCHCLAIMS.

 

 

 
|   |   | John T. Monroe |   |   |   |
|--------|--------|----------------|--------|--------|--------|
|   |   |           |   |   |   |
|   |   | Date:          |   |   |   |

 

 

14

----