Document:

EX-10.7

 

Exhibit 10.7

NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT

TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT

NONCOMPETITION,

SEVERANCE AND EMPLOYMENT AGREEMENT

Between

THE SOUTH FINANCIAL GROUP, INC. and JAMES W. TERRY, JR.

     This Noncompetition, Severance and Employment Agreement (this “Agreement”) is made and entered
into as of this ___ day of ___,2001, by and between James W. Terry, Jr., an individual (the
“Executive”), and The South Financial Group, Inc., a South Carolina corporation and financial
institution holding company headquartered in Greenville, South Carolina (the “Company”). As used
herein, the term “Company” shall include the Company and any and all of its subsidiaries where the
context so applies.

W I T N E S S E T H

     WHEREAS the Company’s Board of Directors (the “Board”) believes that the Executive has been
instrumental in the past success of the Company;

     WHEREAS the Company desires to continue to employ the Executive as President of Carolina First
Bank and in such other capacities as the Executive is currently employed as of the date hereof;

     WHEREAS the terms hereof are consistent with the executive compensation objectives of the
Company as established by the Board;

     WHEREAS the Executive is willing to accept the employment contemplated herein under the terms
and conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

     1. Employment. Subject to the terms and conditions hereof, the Company hereby employs
the Executive and Executive hereby accepts such employment as President of Carolina First Bank
having such duties and responsibilities as are set forth in Section 3 below.

     2. Definitions. For purposes of this Agreement, the following terms shall have the
meanings specified below.

     “Cause” shall mean:

     (i) In the absence of a Change in Control: (a) fraud; (b) embezzlement; (c)
conviction of the Executive of any felony; (d) a material breach of, or the wilful failure
or

 

 

refusal by the Executive to perform and discharge the Executive=s duties,
responsibilities and obligations under this Agreement; (e) any act of moral turpitude or
wilful misconduct by the Executive intended to result in personal enrichment of the
Executive at the expense of the Company, or any of its affiliates or which has a material
adverse impact on the business or reputation of the Company or any of its affiliates (such
determination to be made by the Board in its reasonable judgment); (f) intentional material
damage to the property or business of the Company; (g) gross negligence; or (h) the
ineligibility of the Executive to perform his duties because of a ruling, directive or other
action by any agency of the United States or any state of the United States having
regulatory authority over the Company.

     (ii) After a Change in Control: (a) material criminal fraud, (b) gross negligence, (c)
material dereliction of duties, (d) intentional material damage to the property or business
of the Company, or (e) the commission of a material felony, in each case, as determined in
the reasonable discretion of the Board, but only if (1) the Executive has been provided with
written notice of any assertion that there is a basis for termination for cause which notice
shall specify in reasonable detail specific facts regarding any such assertion, (2) such
written notice is provided to the Executive a reasonable time before the Board meets to
consider any possible termination for cause, (3) at or prior to the meeting of the Board to
consider the matters described in the written notice, an opportunity is provided to the
Executive and his counsel to be heard before the Board with respect to the matters described
in the written notice, (4) any resolution or other Board action held with respect to any
deliberation regarding or decision to terminate the Executive for cause is duly adopted by a
vote of a majority of the entire Board of the Company at a meeting of the Board called and
held and (5) the Executive is promptly provided with a copy of the resolution or other
corporate action taken with respect to such termination. No act or failure to act by the
Executive shall be considered wilful unless done or omitted to be done by him not in good
faith and without reasonable belief that his action or omission was in the best interests of
the Company. The unwillingness of the Executive to accept any or all of a change in the
nature or scope of his position, authorities or duties, a reduction in his total
compensation or benefits, a relocation that he deems unreasonable in light of his personal
circumstances, or other action by or upon request of the Company in respect of his position,
authority, or responsibility that he reasonably deems to be contrary to this Agreement, may
not be considered by the Board to be a failure to perform or misconduct by the Executive.

     “Change in Control” shall mean:

     (i) The acquisition, directly or indirectly, by any Person of securities of the Company
(not including in the securities beneficially owned by such Person any securities acquired
directly from the Company) representing an aggregate of 20% or more of the combined voting
power of the
Company=s then outstanding voting securities other than an acquisition
by:

	 	(A)	 	any employee plan established by the Company;
	 
	 	(B)	 	the Company or any of its affiliates (as
defined in Rule 12b-2 promulgated under the Exchange Act);

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	 	(C)	 	an underwriter temporarily holding securities
pursuant to an offering of such securities;
	 
	 	(D)	 	a corporation owned, directly or indirectly, by stockholders of
the Company in substantially the same proportions as their ownership of
the Company; or
	 
	 	(E)	 	merger, consolidation, or similar transaction
of the Company with any other corporation which is duly approved by the
stockholders of the Company;

     (ii) During any period of up to two consecutive years, individuals who, at the
beginning of such period, constitute the Board cease for any reason to constitute at least a
majority thereof, provided that any person who becomes a director subsequent to the
beginning of such period and whose nomination for election is approved by at least
two-thirds of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so approved
(other than a director (A) whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act, or
(B) who was designated by a Person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii) or (iv) hereof) shall be deemed a
director as of the beginning of such period;

     (iii) The stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than (A) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of any Company,
at least 51% of the combined voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes the beneficial owner
(as defined in clause (i) above), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities acquired
directly from the Company) representing 25% or more of the combined voting power of the
Company=s then outstanding voting securities; or (C) a plan of complete liquidation of
the Company or an agreement for the sale or disposition of the Company of all or
substantially all of the Company=s assets; or

     (iv) The occurrence of any other event or circumstance which is not covered by (i)
through (iii) above which the Board determines affects control of the Company and, in order
to implement the purposes of this Agreement as set forth above, adopts a resolution that
such event or circumstance constitutes a Change in Control for the purposes of this
Agreement.

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     “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor statute,
rule or regulation of similar effect.

     “Confidential Information” shall mean all business and other information relating to
the business of the Company, including without limitation, technical or nontechnical data,
programs, methods, techniques, processes, financial data, financial plans, product plans, and lists
of actual or potential customers, which (i) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means by, other Persons,
and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy or confidentiality. Such information and compilations of information shall be contractually
subject to protection under this Agreement whether or not such information constitutes a trade
secret and is separately protectable at law or in equity as a trade secret. Confidential
Information does not include confidential business information which does not constitute a trade
secret under applicable law two years after any expiration or termination of this Agreement.

     “Disability” or “Disabled” shall mean the Executive’s inability as a result of physical or
mental incapacity to substantially perform his duties for the Company on a full-time basis, with or
without accommodation, for a period of six (6) months.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Involuntary Termination” shall mean the termination of Executive’s employment by the
Executive following a Change in Control which, in the sole judgment of the Executive, is due to (i)
a change of the Executive’s responsibilities, position (including status as President of Carolina
First Bank, its successor or ultimate parent entity, office, title, reporting relationships or
working conditions), authority or duties (including changes resulting from the assignment to the
Executive of any duties inconsistent with his positions, duties or responsibilities as in effect
immediately prior to the Change in Control); or (ii) a change in the terms or status (including the
rolling three year termination date) of this Agreement; or (iii) a reduction in the Executive’s
compensation or benefits; or (iv) a forced relocation of the Executive outside the Greenville,
South Carolina metropolitan area; or (v) a significant increase in the Executive’s travel
requirements.

     “Person” shall mean any individual, corporation, bank, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or other entity.

     “Voluntary Termination” shall mean the termination by Executive of Executive’s employment
following a Change in Control which is not the result of any of clauses (i) through (v) set forth
in the definition of Involuntary Termination above.

     3. Duties. During the Term hereof, the Executive shall have such duties and
authority as are typical of a president of a bank such as Carolina First Bank, including, without
limitation, those specified in the Company’s Bylaws. Executive agrees that during the Term hereof,
he will devote his full time, attention and energies to the diligent performance of his duties.
Executive shall not, without the prior written consent of the Company, at any time during the Term
hereof (i) accept employment with, or render services of a business, professional or commercial
nature to, any Person other than the Company, (ii) engage in any venture or activity which the
Company may in good faith

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consider to be competitive with or adverse to the business of the Company or of any affiliate of the Company,
whether alone, as a partner, or as an officer, director, employee or shareholder or otherwise,
except that the ownership of not more than 5% of the stock or other equity interest of any publicly
traded corporation or other entity shall not be deemed a violation of this Section, or (iii) engage
in any venture or activity which the Board may in good faith consider to interfere with Executive’s
performance of his duties hereunder.

     4 Term. Unless earlier terminated as provided herein, the Executive’s employment
hereunder shall be for a rolling term of three years (the “Term”) commencing on the date hereof.
This Agreement shall be deemed to extend each month for an additional month automatically without
any action on behalf of either party hereto; provided, however, that either party may, by written
notice to the other, cause this Agreement to cease to extend automatically and upon such notice,
the ATerm@ of this Agreement shall be the three years following the date of such
notice, and this Agreement shall terminate upon the expiration of such Term.

     5. Termination. This Agreement may be terminated as follows:

     5.1 The Company. The Company shall have the right to terminate Executive’s
employment hereunder at any time during the Term hereof (i) for Cause, (ii) if the Executive
becomes Disabled, (iii) upon the Executive’s death, or (iv) without Cause.

     5.1.1 If the Company terminates Executive’s employment under this Agreement
pursuant to clauses (i), (ii) or (iii) of Section 5.1, the Company’s obligations
hereunder shall cease as of the date of termination; provided, however, if Executive
is terminated for Cause after a Change in Control, then such termination shall be
treated as a Voluntary Termination as contemplated in and subject to the terms of
Section 5.2.3 below.

     5.1.2 If the Company terminates Executive pursuant to clause (iv) of Section
5.1 and there has been a Change in Control, Executive shall be entitled to receive
immediately as severance upon such termination, aggregate compensation and benefits
provided in Section 6 equal to three times Executive’s annual compensation being
paid at the time of termination. If the Company terminates Executive pursuant to
clause (iv) of Section 5.1 and in the absence of a Change in Control, Executive
shall be entitled to receive immediately in a lump sum as severance upon such
termination, an amount equal to the compensation and benefits that would otherwise
be provided to Executive in Section 6 hereof for the remaining Term of this
Agreement. For purposes of determining compensation which is not fixed (such as a
bonus), the annual amount of such unfixed compensation shall be deemed to be equal
to the average of such compensation over the three year period immediately prior to
the termination.

     5.1.3 In the event of such termination pursuant to clause (iv) of
Section 5.1, (A) all rights of Executive pursuant to awards of share grants or
options granted by

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the Company shall be deemed to have vested and shall be released from all
conditions and restrictions, except for restrictions on transfer pursuant to the
Securities Act of 1933, as amended, and (B) the Executive shall be deemed to be
credited with service with the Company for such remaining Term for the purposes of
the Company’s benefit plans; (C) the Executive shall be deemed to have retired from
the Company and shall be entitled as of the termination date, or at such later time
as he may elect to commence receiving the total combined qualified and non-qualified
retirement benefit to which he is entitled hereunder, or his total non-qualified
retirement benefit hereunder if under the terms of the Company=s qualified
retirement plan for salaried employees he is not entitled to a qualified benefit,
and (D) if any provision of this Section 5.1.3 cannot, in whole or in part, be
implemented and carried out under the terms of the applicable compensation, benefit,
or other plan or arrangement of the Company because the Executive has ceased to be
an actual employee of the Company, because the Executive has insufficient or reduced
credited service based upon his actual employment by the Company, because the plan
or arrangement has been terminated or amended after the effective date of this
Agreement, or because of any other reason, the Company itself shall pay or otherwise
provide the equivalent of such rights, benefits and credits for such benefits to
Executive, his dependents, beneficiaries and estate.

     5.2 By Executive. Executive shall have the right to terminate his employment
hereunder if (i) the Company materially breaches this Agreement and such breach is not cured
within 30 days after written notice of such breach is given by Executive to the Company;
(ii) there is a Voluntary Termination; or (iii) there is an Involuntary Termination.

     5.2.1 If Executive terminates his employment other than pursuant to clauses
(i), (ii) or (iii) of Section 5.2, the Company’s obligations under this Agreement
shall cease as of the date of such termination.

     5.2.2 If Executive terminates his employment hereunder pursuant to clause (i)
of Section 5.2 and there has been a Change in Control, or pursuant to clause (iii)
of Section 5.2, Executive shall be entitled to receive his base salary and other
benefits due him through the termination date, less applicable taxes and other
deductions, and receive immediately in a lump sum as severance, aggregate
compensation and benefits provided in Section 6 equal to three times Executive’s
annual compensation being paid at the time of termination. If the Executive
terminates his employment pursuant to clause (i) of Section 5.2 and in the absence
of a Change in Control, Executive shall be entitled to receive immediately in a lump
sum as severance upon such termination, an amount equal to one times
Executive=s annual compensation being paid at the time of termination. For
purposes of determining compensation which is not fixed (such as a bonus), the
annual amount of such unfixed compensation shall be deemed to be the equal to the
average of such compensation over the three year period immediately prior to the
termination.

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     5.2.3 If Executive terminates his employment pursuant to clause (ii) of Section
5.2, Executive shall be entitled to receive his base salary and other benefits due
him through the termination date less applicable taxes and other deductions and
receive immediately in a lump sum as severance aggregate compensation and benefits
provided in Section 6 equal to one times Executive’s annual compensation being paid
at the time of Voluntary Termination. For purposes of determining compensation
which is not fixed (such as a bonus), the annual amount of such unfixed compensation
shall be deemed to be equal to the average of such compensation over the three year
period immediately prior to the termination.

     5.2.4 In addition, in the event of such termination pursuant to any of clauses
(i) through (iii) of this Section 5.2, (A) all rights of Executive pursuant to
awards of share grants or options granted by the Company shall be deemed to have
vested and shall be released from all conditions and restrictions, except for
restrictions on transfer pursuant to the Securities Act of 1933, as amended, and (B)
the Executive shall be deemed to be credited with service with the Company for such
remaining Term for the purposes of the Company’s benefit plans, and (C) the
Executive shall be deemed to have retired from the Company and shall be entitled as
of the termination date, or at such later time as he may elect to commence receiving
the total combined qualified and non-qualified retirement benefit to which he is
entitled hereunder, or his total non-qualified retirement benefit hereunder if under
the terms of the Company=s qualified retirement plan for salaried employees he
is not entitled to a qualified benefit, and (D) if any provision of this Section
5.2.4 cannot, in whole or in part, be implemented and carried out under the terms of
the applicable compensation, benefit, or other plan or arrangement of the Company
because the Executive has ceased to be an actual employee of the Company, because
the Executive has insufficient or reduced credited service based upon his actual
employment by the Company, because the plan or arrangement has been terminated or
amended after the effective date of this Agreement, or because of any other reason,
the Company itself shall pay or otherwise provide the equivalent of such rights,
benefits and credits for such benefits to Executive, his dependents, beneficiaries
and estate.

     6. Compensation. In consideration of Executive’s services and covenants hereunder,
Company shall pay to Executive the compensation and benefits described below (which compensation
shall be paid in accordance with the normal compensation practices of the Company and shall be
subject to such deductions and withholdings as are required by law or policies of the Company in
effect from time to time, provided that his salary pursuant to Section 6.1 shall be payable not
less frequently than monthly):

     6.1 Annual Salary. During the Term hereof, the Company shall pay to Executive
a base established by the Board which for the first year of the Term shall be not less than
the highest annual salary of the Executive for the past three years. Executive’s salary will
be reviewed by the Board at the beginning of each of its fiscal years and, in the sole
discretion of the Board, may be increased for such year; provided, however, that following a
Change in

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Control, the base salary shall be increased annually by a percentage at least equal to
the average annual increase over the past three years.

     6.2 Annual Incentive Bonus. During the Term hereof, the Board may pay to
Executive an annual incentive cash bonus in accordance with the terms of the Short Term
Incentive Compensation Plan.

     6.3 Long Term Incentive Compensation Plan. During the Term hereof, the
Board may pay to Executive long term incentive cash bonuses in accordance with the Long
Term Incentive Compensation Plan.

     6.4 Supplemental Executive Benefit Plan. During the Term hereof, Executive
shall be entitled to participate in The South Financial Group Supplemental Executive Benefit
Plan.

     6.5 Stock Options and Restricted Stock. During the Term hereof, the Board
shall grant Executive options to purchase Company Common Stock and restricted stock in
accordance with the terms of the Company’s Long Term Incentive Compensation Plan.

     6.6 Other Benefits. Executive shall be entitled to share in any other employee
benefits generally provided by the Company to its most highly ranking executives for so long
as the Company provides such benefits. The Company also agrees to provide Executive with a
Company-paid automobile, reasonable club dues for one country club and two business club(s),
personal tax advisory services, and a $1,000,000 life insurance policy and such disability
insurance as may be purchased by $  per year in premiums. Executive shall also be
entitled to participate in all other benefits accorded general Company employees.

     7. Excess Parachute Payments. It is the intention of the parties hereto that the
severance payments and other compensation provided for herein are reasonable compensation for
Executive’s services to the Company and shall not constitute “excess parachute payments” within the
meaning of Section 280G of the Code and any regulations thereunder. In the event that the Company’s
independent accountants acting as auditors for the Company on the date of a Change in Control
determine that the payments provided for herein constitute “excess parachute payments,” then the
compensation payable hereunder shall be reduced to the point that such compensation shall not
qualify as “excess parachute payments.”

     8. Confidentiality. Executive shall hold in a fiduciary capacity for the benefit of
the Company all Confidential Information relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its affiliated companies. After termination of
Executive’s employment with the Company, the Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those designated by it.
Upon the termination or expiration of his employment hereunder, Executive agrees to deliver
promptly to the Company all Company files, customer lists, management reports,

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memoranda, research, Company forms, financial data and reports and other documents supplied to or created by him in
connection with his employment hereunder (including all copies of the foregoing) in his possession or
control and all of the Company’s equipment and other materials in his possession or control. In no
event shall an asserted violation of the provisions of this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

     9. Noncompetition and Nonsolicitation Agreement. If this Agreement is terminated by
the Company pursuant to Section 5.1(iv), or by Executive pursuant to Section 5.2(i) or Section
5.2.1, Executive shall not enter into an employment relationship or a consulting arrangement with
any other bank, thrift, lending or financial institution of any type headquartered or having a
physical presence in the State of South Carolina, or any county in the States of Florida or North
Carolina in which the Company or its affiliates has a physical presence or conducts business
operations (hereinafter a “competitor”) within three years of the anniversary of the date of the
termination of employment (the “Noncompete Period”). The obligations contained in this Section 9
shall not prohibit Executive from being an owner of not more than 5% of the outstanding stock of
any class of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation. In the event that Executive’s employment is
terminated for any reason following a Change in Control (whether by the Company or Executive), it
is expressly acknowledged that there shall be no limitation on any activity of Executive, including
direct competition with the Company or its successor, and Company shall not be entitled to
injunctive relief with respect to any such activities of Executive.

     9.1 During the Noncompete Period, Executive shall not directly or indirectly through
another entity, including but not limited to a competitor, (i) induce or attempt to induce
any employee of Company to leave the employ of Company or in any way interfere with the
relationship between Company and any employee thereof, (ii) hire any person who was an
employee of Company or any subsidiary at any time during the time that Executive was
employed by Company, or (iii) induce or attempt to induce any customer, supplier, or other
entity in a business relation with Company to cease doing business with Company, or in any
way interfere with the relationship between any such customer, supplier, or business
relation and Company or do business with a competitor.

     9.2 If, at the time of enforcement of this Section 9, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive agrees that the restrictions contained in this
Section 9 are reasonable.

     9.3 In the event of the breach or a threatened breach by Executive of any of the
provisions of this Section 9, Company, in addition and supplementary to other rights and
remedies existing in its favor, may apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce
or prevent any violations of the provisions hereof (without posting a bond or other
security). In

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addition, in the event of an alleged breach or violation by Executive of this
Section 9, the Noncompete Period shall be tolled until such breach or violation has been
duly cured.

     10. Trust. The Company shall establish an irrevocable trust to fund the
maximum amount of obligations which could reasonably be expected to become payable hereunder under
any circumstances (which may be a “rabbi trust” if so requested by Executive), which trust (i)
shall have as trustee an individual acceptable to Executive, (ii) shall be fully funded upon the
earlier of a Change in Control or the approval of any regulatory application filed by a potential
acquiror of the Company seeking to acquire control of the Company, and (iii) shall contain such
other terms and conditions as are reasonably necessary in Executive’s determination to ensure the
Company’s compliance with its obligations hereunder.

     11. Assignment. The parties acknowledge that this Agreement has been entered into due
to, among other things, the special skills of Executive, and agree that this Agreement may not be
assigned or transferred by Executive, in whole or in part, without the prior written consent of
Company.

     12. Notices. All notices, requests, demands, and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or
seven days after mailing if mailed, first class, certified mail postage prepaid:

	 	 	 	 	 
	 

	 	To the Company:
	 	The South Financial Group, Inc.

Poinsett Plaza

104 South Main Street

Greenville, South Carolina 29601

Attn: William S. Hummers, III
	 
	 	 	 	 
	 

	 	To Executive:
	 	James W. Terry, Jr.

236 Riverside Drive

Greenville, South Carolina 29601

Any party may change the address to which 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.

     13. Provisions Severable. If any provision or covenant, or any part thereof, of this
Agreement should be held by any court to be 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 this Agreement,
all of which shall remain in full force and effect.

     14. Remedies in the Absence of a Change in Control. The terms of this Section 14 will
apply in the absence of a Change in Control.

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     14.1 The Executive acknowledges that if he breaches or threatens to breach his
covenants and agreements in this Agreement, such actions may cause irreparable harm and
damage to the Company which could not be compensated in damages. Accordingly, if
Executive breaches or threatens to breach this Agreement, the Company shall be entitled
to injunctive relief, in addition to any other rights or remedies of the Company.

     14.2 All claims, disputes and other matters in question between the Executive
and the Company arising out of or related to the interpretation of this Agreement or the
breach of this Agreement, except as specifically governed by the foregoing provisions where
there may be irreparable harm and damage to the Company which could not be compensated in
damages, shall be decided by arbitration in accordance with the rules of the American
Arbitration Association. This agreement to arbitrate shall be specifically enforceable under
applicable law in any court having jurisdiction. The award rendered by the arbitrator shall
be final and judgment may be entered upon it in accordance with the applicable law of any
court having jurisdiction thereof.

     14.3 In the event that the Executive is reasonably required to engage legal counsel to
enforce his rights hereunder against the Company, Executive shall be entitled to receive
from the Company his reasonable attorneys= fees and costs; provided that Executive
shall not be entitled to receive those fees and costs related to matters, if any, which were
the subject of litigation and with respect to which a judgment is rendered against
Executive.

     15. Remedies in the Event of a Change in Control. The terms of this Section 15 shall
apply in the event of a Change of Control.

     15.1 The Executive acknowledges that if he breaches or threatens to breach his
covenants and agreements in this Agreement, such actions may cause irreparable harm and
damage to the Company which could not be compensated in damages. Accordingly, if Executive
breaches or threatens to breach this Agreement, the Company shall be entitled to injunctive
relief, in addition to any other rights or remedies of the Company. All claims, disputes and
other matters in question between the Executive and the Company arising out of or related to
the interpretation of this Agreement or the breach of this Agreement shall be decided under
and governed by the laws of the State of South Carolina.

     15.2 The Company is aware that upon the occurrence of a Change in Control, the
Board or a stockholder of the Company may then cause or attempt to cause the Company to
refuse to comply with its obligations under this Agreement, or may cause or attempt to cause
the Company to institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take, or attempt to take, other action to deny the Executive
the benefits intended under this Agreement. In these circumstances, the purpose of this
Agreement could be frustrated. It is the intent of the parties that the Executive not be
required to incur the legal fees and expenses associated with the protection or enforcement
of his rights under this Agreement by litigation or other legal action because such costs
would substantially detract from the benefits intended to be extended to the Executive
hereunder, nor be bound to negotiate any settlement of his rights hereunder under threat of
incurring such costs. Accordingly, if at any time after a Change of Control, it should
appear to the Executive that

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the Company is or has acted contrary to or is failing or has
failed to comply with any of its obligations under this Agreement for the reason that it
regards this Agreement to be void or unenforceable or for any other reason, or that the
Company has purported to terminate his
employment for cause or is in the course of doing so in either case contrary to this
Agreement, or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from the Executive the benefits provided or
intended to be provided to him hereunder, and the Executive has acted in good faith to
perform his obligations under this Agreement, the Company irrevocably authorizes the
Executive from time to time to retain counsel of his choice at the expense of the Company to
represent him in connection with the protection and enforcement of his rights hereunder,
including without limitation representation in connection with termination of his employment
contrary to this Agreement or with the initiation or defense of any litigation or other
legal action, whether by or against the Executive or the Company or any director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction. The reasonable
fees and expenses of counsel selected from time to time by the Executive as hereinabove
provided shall be paid or reimbursed to the Executive by the Company on a regular, periodic
basis upon presentation by the Executive of a statement or statements prepared by such
counsel representing other officers or key executives of the Company in connection with the
protection and enforcement of their rights under similar agreements between them and the
Company, and, unless in his sole judgment use of common counsel could be prejudicial to him
or would not be likely to reduce the fees and expenses chargeable hereunder to the Company,
the Executive agrees to use his best efforts to agree with such other officers or executives
to retain common counsel.

     16. Waiver. Failure of either 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 future
performance 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.

     17. Amendments and Modifications. This Agreement may be amended or modified only by a
writing signed by other parties hereto.

     18. Entire Agreement. This Agreement contains the complete agreement concerning the
employment of Executive by the Company and shall supercede all other agreements, whether written or
oral, related to the Executive=s employment by the Company.

     19. Governing Law. The validity and effect of this agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South Carolina.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

12

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	/s/ James W. Terry,
Jr.	 	 
	 	 	James W. Terry, Jr.	 	 
	 
	 	 	 	 	 	 
	 	 	THE SOUTH FINANCIAL GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William S. Hummers III	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

13<PAGE>

                                                                   EXHIBIT 10(d)

                          FIDELITY SOUTHERN CORPORATION
                                  FIDELITY BANK
                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 19th day
of January, 2006, by and among FIDELITY SOUTHERN CORPORATION ("Fidelity"), a
Georgia Corporation, FIDELITY BANK (the "Bank"), a Georgia banking corporation,
and JAMES B. MILLER, JR. ("Miller"). The Employment Agreement among Fidelity,
the Bank and Miller dated March 17, 2005 (the "2005 Agreement") is hereby
terminated and replaced by this Agreement effective as of January 1, 2006;
provided, however, that Miller shall retain all rights to any incentive
compensation payable under the 2005 Agreement which was earned and payable as of
the date hereof.

      WHEREAS, Miller is the Chairman, Chief Executive Officer and President of
Fidelity and Chairman and Chief Executive Officer of the Bank;

      WHEREAS, Fidelity and the Bank agree to continue to employ Miller as Chief
Executive Officer, subject to his election, to provide the services set forth
herein; and

      WHEREAS, Miller agrees to accept such employment and to continue to
provide such services in accordance with the terms and conditions of this
Agreement;

      NOW, THEREFORE, in consideration of the mutual promises herein made and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

      1. EMPLOYMENT/DUTIES.

            (a) Fidelity shall employ Miller as the President and Chief
Executive Officer and the Bank shall employ Miller as Chief Executive Officer
during the term of his employment as set forth in this Agreement and Miller
hereby accepts such employment. Miller also agrees to serve as the Chairman of
the Board of Directors of Fidelity (the "Board") and of the Bank upon his
election to such positions.

            (b) Miller shall be the senior executive officer of Fidelity and
shall be responsible for the day-to-day operations of the business of Fidelity
and shall have such authority consistent with such positions and necessary for
the conduct of such business under the general direction of the Board of
Directors of Fidelity.

            (c) Miller agrees that he will at all times and to the best of his
ability and experience faithfully perform all of the duties that may be required
of him pursuant to the terms of this Agreement and shall comply with all
policies and procedures adopted by the Board of Directors or any committee
thereof. Miller shall devote his full business time to the performance of his
obligations hereunder.

<PAGE>

            (d) The term of employment of Miller shall be for a term of three
(3) years, commencing as of January 1, 2005, and may be extended upon written
agreement of the parties.

            (e) Miller shall be prohibited from serving as a director of other
businesses and as a member of any committee of the board(s) of directors thereof
unless the Board formally has approved such service before Miller becomes any
such director or member of any committee of such board(s) of directors.

      2. COMPENSATION.

            (a) Base Salary. During the term of the employment of Miller
hereunder, Fidelity and the Bank will pay to Miller an aggregate base salary
("Base Salary") at the rate of $500,000 per year, payable in arrears in equal
semi-monthly payments, subject to applicable withholdings and deductions. In the
event of the disability of Miller, to the extent payments are received by him
under any employer sponsored disability program and/or under any disability
policy the premiums of which are paid by Fidelity or the Bank, the payments
hereunder are to be reduced by an amount equal to any such disability payments
that are intended to replace all or a portion of any compensation Miller loses
due to such disability.

            (b) Incentive Compensation. Fidelity and the Bank shall pay to
Miller the incentive compensation ("Incentive Compensation") determined as set
forth in Attachment A hereto. Miller shall be eligible to participate in
incentive plans and programs hereafter adopted as determined by the Board or the
Compensation Committee of the Board.

            (c) Employee Benefit Programs. Miller shall be eligible to
participate in all employee benefit programs, including medical, dental and
hospitalization programs, now or hereafter made available by Fidelity to its
employees and/or executives, subject to terms and conditions of such programs,
including eligibility. It is understood that Fidelity reserves the right to
modify and rescind any program or adopt new programs in its sole discretion.

            (d) Life Insurance for Fidelity. Fidelity may, in its sole
discretion, maintain key man life insurance on the life of Miller and designate
Fidelity as the beneficiary. Miller agrees to execute any documents necessary to
effect the issuance of such policy. Miller hereby acknowledges that he has
consented to the purchase and maintenance by Fidelity of the Split Dollar
Insurance Plan (the "Split Dollar Plan") in the face amount of $400,000 dated
October 3, 1984 (including all amendments and replacement and substitute
policies, as hereafter mutually agreed in writing). The policies purchased and
maintained by Fidelity under the Split Dollar Plan shall be maintained by
Fidelity at all times hereafter, including after the termination of this
Agreement or Miller's Termination of Employment. In addition, Fidelity and the
Bank agree to maintain three Flexible Premium Adjustable Life Insurance,
Universal Life policies issued by Great-West Life & Annuity Insurance Company
("Great-West") one in the face amount of $6 million, one issued by Life
Investors Insurance Company of America ("Life Investors") in the face amount of
$800,000 and one issued by Mass Mutual Financial Group ("Mass Mutual") in the
face amount of $800,000 each of which is payable to beneficiaries designated by
Miller or his estate or trust in lieu thereof, at all times hereafter

                                       2
<PAGE>

(except as provided in Section 3(e)), regardless of the termination of this
Agreement or Miller's Termination of Employment hereunder including a
Termination of Employment pursuant to Section 3.

            (e) Vacation. Miller is entitled to five (5) weeks vacation each
year. Vacation shall be taken at such times as not to materially interfere with
the business of Fidelity. The vacation time must be taken prior to the end of
each calendar year or as otherwise mutually agreed in writing, otherwise it
expires to the extent not taken.

            (f) Expenses. Fidelity shall pay all reasonable expenses incurred by
Miller in the performance of his responsibilities and duties for Fidelity,
including without limitation, dues payable to the Atlanta Athletic Club and the
Capital City Club and to such reasonable civic organizations of Miller's choice.
Miller shall submit to Fidelity periodic statements of all expenses so incurred
in accordance with the policies of Fidelity then in effect. Subject to such
reviews as Fidelity may deem reasonably necessary, Fidelity shall, promptly in
the ordinary course of business, reimburse Miller for the full amount of all
such expenses advanced by Miller.

            (g) Automobile. Fidelity will continue to provide Miller with an
appropriate automobile for his use and will maintain and insure it at Fidelity's
expense.

      3. EARLY TERMINATION.

            (a) For Cause. (i) Notwithstanding the foregoing, Miller may have a
Termination of Employment by the Board "for cause" (as hereinafter defined) at
any time upon 10 business days' prior written notice. The term "for cause" shall
mean (A) the commission of a felony or any other crime involving moral turpitude
or the pleading of nolo contendere to any such act, (B) the commission of any
act or acts of dishonesty when such acts are intended to result or result,
directly or indirectly, in gain or personal enrichment of Miller or any related
person or affiliated company and are intended to cause harm or damage to
Fidelity, the Bank or their subsidiaries, (C) the illegal use of controlled
substances, (D) the misappropriation or embezzlement of assets of Fidelity, the
Bank or their subsidiaries, (E) the breach of any other material term or
provision of this Agreement to be performed by Miller (other than pursuant to
Sections 4, 5, 6 or 7) which have not been cured within thirty (30) days of
receipt of written notice of such breach from the Board or the board of
directors of the Bank, or (F) the breach of any provision of Section 4, 5, 6 or
7 during his employment.

                  (ii) Upon a Termination of Employment for cause, Fidelity and
the Bank shall have no further obligation to pay any compensation to Miller or
make available to Miller participation under any employee benefit program for
periods after the effective date of the Termination of Employment for cause.
Upon such a Termination of Employment, the Base Salary which accrued as of the
termination date, the Incentive Compensation payable pursuant to Section 2(b)
for the periods of employment and accrued but unused vacation pay will be paid
after the effective date of termination on the next normal payroll payment date.

            (b) Other Termination by Fidelity.

                                       3
<PAGE>

                  (i) Miller may have a Termination of Employment by Fidelity or
the Bank for any reason (other than for cause, death or total disability (as
defined in Section 3(d)(iii) below)) at any time upon at least 90 days' prior
written notice. Upon such a Termination of Employment, the Base Salary which
accrued as of the termination date, the Incentive Compensation payable pursuant
to Section 2(b) for the periods of employment and accrued but unused vacation
pay will be paid after the effective date of termination on the next normal
payroll payment date. Miller's right to additional compensation after the
effective date of termination shall cease, except that if Miller executes a
"Release" (as defined below) within the time period specified by Fidelity or the
Bank, and does not revoke such Release, Miller will be paid severance equal to
the excess of (i) three times his then Base Salary over (ii) the aggregate
amount payable under Section 8 below. If Miller is not a Specified Employee (as
defined below) such severance benefit will be payable in 72 equal semi-monthly
installments commencing on the 15th or last day of the month immediately
following the date of the Termination of Employment, whichever date occurs
first, and then continuing on the 15th and last day of each calendar month
thereafter until all such installments are paid. If Miller is a Specified
Employee, such severance benefit shall not be payable until the first 15th or
last day of the month which is at least six months after Miller's Termination of
Employment. All installments, which would have otherwise been required to be
made over such six-month period if Miller had not been a Specified Employee
shall be paid to Miller in one lump sum payment as soon as administratively
feasible after the first 15th or last day of the month which is at least six
months after Miller's Termination of Employment. After the lump sum payment, the
remaining semi-monthly installments (each equal to 1/72 of the total severance
benefit) will continue on the 15th and last day of each calendar month until all
such installments are paid.

                  (ii) Additionally, if Miller timely executes and does not
revoke a Release and elects such continued participation, the employee welfare
benefits as provided in Section 2(c) shall be continued for eighteen (18) months
from the date of termination at a cost to Miller not to exceed the amounts paid
by executives for such employee welfare benefits; provided, however, that if
continued participation in any of such employee welfare benefit plans is not
possible under the terms of such plans or any provision of law would create any
adverse tax effect for Miller, Fidelity or the Bank, due to such participation,
Fidelity will provide substantially identical benefits directly or through an
insurance arrangement or pay Miller's costs for such welfare benefits if
continued by Miller, including as permitted under ERISA. Notwithstanding the
above, if Miller is a Specified Employee and if Fidelity or the Bank determines
that any portion of such employee welfare benefits are subject to Section 409A
of the Code, then to the extent necessary to avoid taxation under Section 409A,
Miller will be required to pay for such employee welfare benefits during the
six-month period following his Termination of Employment; provided; however,
that at the end of such six-month period, Fidelity or the Bank will reimburse
Miller for such payments.

                  (iii) For purposes of this Agreement, the term "Release" means
a general release that releases Fidelity, the Bank, their affiliates,
shareholders, directors, officers, employees, employee benefit plans,
representatives, and agents and their successors and assigns from any and all
employment related claims Miller or Miller's successors and

                                       4
<PAGE>

beneficiaries might then have against them (excluding any claims for vested
benefits under any employee pension plan of Fidelity or the Bank).

                  (v) If Miller violates any of the undertakings set forth in
Sections 4, 5, 6 and 7 of this Agreement after the Termination of Employment,
any additional compensation and benefits under Sections 3(b)(i) & 3(b)(ii) shall
cease.

                  (vi) Subsequent to the date of any written notice of
termination provided to Miller pursuant to Section 3(b) or by Miller to Fidelity
pursuant to Section 3(c)(ii), Fidelity shall engage the independent accounting
firm regularly utilized by Fidelity ("Accounting Firm") to provide to Fidelity
and Miller, at Fidelity's expense, a determination of whether any compensation
payable to Miller pursuant to Sections 3(b)(i) & 3(b)(ii) (alone or when added
to all other compensation paid or payable to Miller by Fidelity and the Bank)
constitutes a "parachute payment" ("Parachute Payment") as defined in Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"). If the
Accounting Firm determines that any compensation payable to Miller pursuant to
Sections 3(b)(i) & 3(b)(ii) (alone or when added to all other compensation paid
or payable to Miller by Fidelity and the Bank) constitutes a Parachute Payment,
the Accounting Firm shall also determine: (A) the amount of the excise tax to be
imposed under Section 4999 of the Code; (B) whether Miller would realize a
greater amount after Federal and Georgia income taxes (assuming the highest
marginal rates then in effect apply) if the compensation payable to Miller
pursuant to Sections 3(b)(i) & 3(b)(ii) were reduced (assuming latest payments
are reduced first) so that no amount payable to Miller hereunder (alone or when
added to all other compensation paid or payable to Miller by Fidelity and the
Bank) constitutes a Parachute Payment than he would realize after Federal and
Georgia income taxes (assuming the highest marginal rates then in effect apply)
and after imposition of the excise tax under Section 4999 of the Code if the
amounts payable to Miller hereunder were not so reduced; and (C), if the
Accounting Firm determines in (B) above that Miller would realize a higher
amount if the compensation payable to Miller were so reduced, the amount of the
reductions. All determinations shall be made on a present value basis. The
Accounting Firm shall provide to Fidelity and to Miller a written report of its
determinations hereunder no later than forty-five (45) days prior to the
termination date. No later than fifteen (15) days following his receipt of the
report from the Accounting Firm, Miller will notify Fidelity in writing of any
disagreement with said report, and, in such case, Fidelity shall direct the
Accounting Firm to promptly discuss its determinations with an accountant or
counsel designated by Miller in his written notice and seek to reach an
agreement regarding same no later than fifteen (15) days prior to the
termination date, with Fidelity and Miller, each bearing the cost of their own
accountants or counsel. If no agreement can be reached within thirty (30) days
after the expiration of said fifteen (15) day period, the matter shall be
promptly submitted to binding arbitration under Section 16 hereof by either
party. The determinations so made shall be binding on the parties. If it is
determined hereunder that Miller would realize a greater amount after Federal
and Georgia income taxes (assuming the highest marginal rates then in effect
apply) if the compensation payable to him pursuant to Sections 3(b)(i) &
3(b)(ii) were reduced (assuming latest payments are reduced first) so that no
amount payable to Miller hereunder constitutes a Parachute Payment, then the
amounts payable to Miller pursuant to Sections 3(b)(i) & 3(b)(ii) shall be so
reduced.

                                       5
<PAGE>

                  (vii) As a result of the uncertainty in the application of
Sections 280G and 4999 of the Code, it is possible that amounts will have been
paid or distributed to Miller that should not have been paid or distributed
under this Section 3(b) ("Overpayments"), or that additional amounts should be
paid or distributed to Miller under this Section 3(b) ("Underpayments"). If
based on either the assertion of a deficiency by the Internal Revenue Service
against Fidelity or Miller, which assertion has a high probability of success,
or controlling precedent or substantial authority, an Overpayment has been made,
that Overpayment will be treated for all purposes as a loan ab initio that
Miller must repay to Fidelity immediately together with interest at the
applicable Federal rate under Section 7872 of the Code; provided, however, that
no loan will be deemed to have been made and no amount will be payable by Miller
to Fidelity unless, and then only to the extent that, the deemed loan and
payment would either reduce the amount on which Miller is subject to tax under
Section 4999 of the Code or generate a refund of tax imposed under Section 4999
of the Code. If based upon controlling precedent or substantial authority, an
Underpayment has occurred, the amount of that Underpayment will be paid to
Miller promptly by Fidelity. Whether an Overpayment or Underpayment has occurred
may be determined in substantially the same manner as the original
determination.

                  (viii) Fidelity and Miller shall each provide the Accounting
Firm access to and copies of any books, records and documents in the possession
of Fidelity or Miller, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determinations and calculations
contemplated by this Section 3(b).

                  (ix) The Federal, state and local income or other tax returns
filed by Miller shall be prepared and filed on a consistent basis with the
determination with respect to the excise tax payable by Miller. Miller, at the
request of Fidelity, shall provide Fidelity true and correct copies (with any
amendments) of his Federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as filed
with the applicable taxing authority, and such other documents reasonably
requested by Fidelity, evidencing such conformity.

            (c) Termination by Miller. (i) Miller may have a Termination of
Employment by Miller at any time upon at least 90 days' prior written notice to
Fidelity and the Bank. Upon such Termination of Employment Miller's right to
compensation after the effective date of termination shall cease. Upon such a
Termination of Employment, the Base Salary which accrued as of the termination
date, the Incentive Compensation payable pursuant to Section 2(b) for the
periods of employment and accrued but unused vacation pay will be paid after the
effective date of termination on the next normal payroll payment date.

                  (ii) Notwithstanding the foregoing, if Fidelity or the Bank
fails to perform any of its material obligations hereunder and such failure
continues for sixty (60) days after written notice thereof by Miller to the
Board, termination by Miller of this Agreement for such failure shall be deemed
to constitute a Termination of Employment by Fidelity and the Bank without cause
under Section 3(b) of this Agreement. A reduction in the

                                       6
<PAGE>

responsibilities and authority of Miller as provided in Section l(b) shall
constitute a breach of a material obligation of Fidelity and the Bank hereunder.

            (d) Termination Upon Death or Disability.

                  (i) Miller shall have a Termination of Employment upon his
death, or (10) business days after written notice by Fidelity of termination
during the continuance of the total disability (as hereinafter defined) of
Miller.

                  (ii) Upon Termination of Employment upon death or by Fidelity
upon total disability, Miller's right to compensation after the effective date
of termination shall cease . Upon such a Termination of Employment, the Base
Salary which accrued as of the termination date, the Incentive Compensation
payable pursuant to Section 2(b) for the periods of employment and accrued but
unused vacation pay will be paid after the effective date of termination on the
next normal payroll payment date. Fidelity and the Bank shall have no obligation
to pay any compensation for periods after the effective date of such termination
under this Section 3(d).

                  (iii) The term "total disability" means the inability of
Miller to substantially perform his duties hereunder for a continuous period of
ninety (90) days unless such period is extended in writing by Fidelity, in which
event, for such greater period. Total disability shall be deemed to commence
upon the expiration of such continuous ninety (90) day period or such greater
period, if so extended. In the event of any dispute as to the "total disability"
of Miller or the expiration of said ninety (90) day period or such greater
period, if so extended, the matter shall be resolved by the decision of a single
physician, serving as an arbitrator, mutually selected or appointed in
accordance with the rules of the American Arbitration Association, Atlanta,
Georgia. The decision of the arbitrator shall be binding on all parties hereto.
Miller agrees to submit medical records requested and to submit to such
examination and testing reasonably requested by such physician.

            (e) Life Insurance Policies. Termination of this Agreement or the
benefits payable hereunder for any reason, including pursuant to Section 3(a),
(b), (c) or (d) hereof, shall not terminate the duty of Fidelity and the Bank to
maintain or continue the Split Dollar Plan, or the insurance policies with
Great-West, Life Investors and Mass Mutual pursuant to Section 2(d) hereof,
including any substitute plan or policy hereafter mutually agreed to.
Notwithstanding any other provision of this Agreement, if Miller is a Specified
Employee and if Fidelity determines that the maintenance of the Split Dollar
Plan, or the insurance policies with Great-West, Life Investors and Mass Mutual
is subject to Section 409A of the Code, then, to the extent necessary to avoid
taxation under Section 409A, Miller will be required to pay for the maintenance
of the Split Dollar Plan, and the insurance policies with Great-West, Life
Investors and Mass Mutual during the six-month period following his Termination
of Employment; provided; however, that at the end of such six-month period,
Fidelity or the Bank will reimburse Miller for such payments.

      4. COVENANT NOT TO COMPETE. Miller agrees that during his employment with
Fidelity or the Bank and for a period of eighteen (18) months after Miller's
Termination of

                                       7
<PAGE>

Employment for any reason , that Miller shall not, on his own behalf or on
another's behalf, work in any management or executive capacity in the business
of providing banking or banking related services. This restriction shall apply
only within a 50-mile radius of 3490 Piedmont Road, Atlanta, Georgia 30305.
Miller agrees that because of the nature of Fidelity's and the Bank's business,
the nature of Miller's job responsibilities, and the nature of the Confidential
Information and Trade Secrets of Fidelity and the Bank which Fidelity and the
Bank will give Miller access to, any breach of this provision by Miller would
result in the inevitable disclosure of Fidelity's and the Bank's Trade Secrets
and Confidential Information to its direct competitors.

      5. NON-SOLICITATIONS OF CLIENTS AND CUSTOMERS. Miller agrees that during
his employment with Fidelity or the Bank and for a period of eighteen (18)
months after Miller's Termination of Employment for any reason, Miller will not
directly or indirectly solicit, contact, call upon, communicate with or attempt
to communicate with any client or customer of Fidelity or the Bank for the
purpose of providing banking or banking related services. This restriction shall
apply only to any client or customer of Fidelity or the Bank with whom Miller
had material contact during the last twelve months of Miller's employment with
Fidelity or the Bank. "Material contact" means interaction between Miller and
the client or customer which takes place to further the business relationship.
"Clients" and "customers" include, but are not limited to, depositors and
commercial, SBA or construction loan customers.

      6. NON-SOLICITATIONS OF EMPLOYEES. Miller agrees that during his
employment with Fidelity or the Bank and for a period of eighteen (18) months
after Miller's Termination of Employment for any reason, Miller will not
recruit, hire or attempt to recruit or hire, directly or by assisting others,
any other employee of Fidelity or the Bank with whom Miller had material contact
during Miller's employment with Fidelity or the Bank. This restriction shall
apply only to recruiting, hiring or attempting to recruit or hire any employee
for the purpose of working in the business of providing banking or banking
related services.

      7. CONFIDENTIALITY, PROPRIETARY INFORMATION AND INVENTIONS.

            (a) During the term of Miller's employment with Fidelity or the
Bank, and at all times thereafter, Miller shall not use or disclose to others,
without the prior written consent of Fidelity and the Bank, any Trade Secrets
(as hereinafter defined) of Fidelity or the Bank, or any subsidiary thereof or
any of their customers, except for use or disclosure thereof in the course of
the business of Fidelity or the Bank (or that of any subsidiary), and such
disclosure shall be limited to those who have a need to know.

            (b) During the term of Miller's employment with Fidelity or the
Bank, and for eighteen (18) months after Miller's Termination of Employment for
any reason, Miller shall not use or disclose to others, without the prior
written consent of Fidelity and the Bank, any Confidential Information (as
hereinafter defined) of Fidelity or the Bank, or any subsidiary thereof or any
of their customers, except for use or disclosure thereof in the course of the
business of Fidelity or the Bank (or that of any subsidiary), and such
disclosure shall be limited to those who have a need to know.

                                       8
<PAGE>

            (c) Upon Miller's Termination of Employment for any reason, Miller
shall not take with him any documents or data of Fidelity or the Bank or any
subsidiary or of any customer thereof or any reproduction thereof and agrees to
return any such documents and data in his possession at that time.

            (d) Miller agrees to take reasonable precautions to safeguard and
maintain the confidentiality and secrecy and limit the use of all Trade Secrets
and Confidential Information of Fidelity, the Bank and all subsidiaries and
customers thereof.

            (e) Trade Secrets shall include only such information constituting a
"Trade Secret" within the meaning of subsection 10-1-761(4) of the Georgia Trade
Secrets Act of 1990, including as hereafter amended. Confidential Information
shall include all information and data which is protectable as a legal form of
property or non-public information of Fidelity or the Bank or their customers,
excluding any information or data which constitutes a Trade Secret.

            (f) Trade Secrets and Confidential Information shall not include any
information (A) which becomes publicly known through no fault or act of Miller;
(B) is lawfully received by Miller from a third party after Termination of
Employment without a similar restriction regarding confidentiality and use and
without a breach of this Agreement; or (C) which is independently developed by
Miller and entirely unrelated to the business of providing banking or banking
related services.

            (g) Miller agrees that any and all information and data originated
by Miller while employed by Fidelity or the Bank and, where applicable, by other
employees or associates under Miller's direction or supervision in connection
with or as a result of any work or service performed under the terms of Miller's
employment, shall be promptly disclosed to Fidelity and the Bank, shall become
Fidelity and/or the Bank's property, and shall be kept confidential by Miller.
Any and all such information and data, reduced to written, graphic, or other
tangible form and any and all copies and reproduction thereof shall be furnished
to Fidelity and the Bank upon request and in any case shall be returned to
Fidelity and the Bank upon Miller's Termination of Employment.

            (h) Miller agrees that Miller will promptly disclose to Fidelity and
the Bank all inventions or discoveries made, conceived, or for the first time
reduced to practice in connection with or as a result of the work and/or
services Miller performs for Fidelity or the Bank.

            (i) Miller agrees that he will assign the entire right, title, and
interest in any such invention or inventions and any patents that may be granted
thereon in any country in the world concerning such inventions to Fidelity and
the Bank. Miller further agrees that Miller will, without expense to Fidelity or
the Bank, execute all documents and do all acts which may be necessary,
desirable, or convenient to enable Fidelity and the Bank, at its expense, to
file and prosecute applications for patents on such inventions, and to maintain
patents granted thereon.

                                       9
<PAGE>

      8. CONSIDERATION FOR NON-COMPETE, NON-SOLICITATION AND NON-DISCLOSURE
PROVISIONS. In consideration of Miller's undertakings set forth in Sections 4,
5, 6 and 7 above, with respect to periods after Termination of Employment,
Fidelity or the Bank will pay Miller a "Non-Compete Benefit" as described below.
If Miller is not a Specified Employee, the Non-Compete Benefit will be payable
in 36 equal semi-monthly installments, each installment in an amount equal to
sixty percent (60%) of his Base Salary in effect immediately prior to the
Termination of Employment divided by 24, commencing on the 15th or last day of
the month immediately following the date of the Termination of Employment,
whichever date occurs first, and then continuing on the 15th and last day of
each calendar month thereafter until all such installments are paid. If Miller
is a Specified Employee, the Non-Compete Benefit shall not become payable until
the first 15th or last day of the month which is at least six months after
Miller's Termination of Employment. All installments which would have otherwise
been required to be made over such six-month period if Miller had not been a
Specified Employee, shall be paid to Miller in one lump sum payment as soon as
administratively feasible after the first 15th or last day of the month which is
at least six months after Miller's Termination of Employment. After the lump sum
payment, the remaining semi-monthly installments (each equal to sixty percent
(60%) of his Base Salary in effect immediately prior to Termination of
Employment divided by 24) will continue on the 15th and last day of each
calendar month until all such installments are paid. If Miller violates any of
the undertakings set forth in Sections 4, 5, 6 and 7 of this Agreement, Miller
waives and forfeits any and all rights to any further payments under this
Agreement, including but not limited to, any additional payments, compensation
or severance he may otherwise be entitled to receive under this Agreement,
whether pursuant to this Section or otherwise.

      9. SPECIFIC PERFORMANCE. Because of Miller's knowledge and experience,
Miller agrees that Fidelity shall be entitled to specific performance, an
injunction, temporary injunction or other similar relief without the posting of
a bond or other security in addition to all other rights and remedies it might
have for any violation of the undertakings set forth in Sections 4, 5, 6 and 7
of this Agreement. In any such court proceeding, Miller will not object thereto
and claim that monetary damages are an adequate remedy.

      10. MAXIMUM PAYMENTS. The total amount payable hereunder as severance pay
(as set forth in Sections 3(b)(i) & 3(b)(ii)) and consideration for the
non-compete, non-solicitation and non-disclosure provisions (as set forth in
Section 8) shall not exceed three times Miller's Base Salary.

      11. NO SETOFF. Nothing in this Agreement will limit or otherwise affect
such rights as Miller may have under any other contract or agreement with
Fidelity, the Bank or Affiliates, except as specifically set forth in such
contract or agreement. Amounts which constitute vested benefits or which Miller
is otherwise entitled to receive under any employee benefit plan, policy,
practice or program of or any contract or agreement (collectively, "programs")
with Fidelity or the Bank at or subsequent to Miller's Termination of Employment
will be payable in accordance with such programs.

      12. INDEMNIFICATION OF MILLER. Fidelity shall indemnify Miller and shall
advance reimbursable expenses incurred by Miller in any proceeding against
Miller, including a

                                       10
<PAGE>

proceeding brought in the right of Fidelity, as a director or officer of
Fidelity or any subsidiary thereof, except claims and proceedings brought
directly by Fidelity against Miller, to the fullest extent permitted under the
Articles of Incorporation and By-Laws of Fidelity and the Georgia Business
Corporation Code, as amended from time to time. Such indemnities and advances
shall be paid to Miller on the next normal payroll payment date after Miller's
rights to such amounts are no longer in dispute; provided, however, that if
Miller is a Specified Employee such payments shall not be made before the date
that is six months after the date of Miller's Termination of Employment.

      13. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been given upon receipt when delivered by hand or upon delivery to the address
of the party determined pursuant to this Section when delivered by express mail,
overnight courier or other similar method to such address or by facsimile
transmission (provided a copy is also sent by registered or certified mail or by
overnight courier), or five (5) business days after deposit of the notice in the
US mail, if mailed by certified or registered mail, with postage prepaid
addressed to the respective party as set forth below, which address may be
changed by written notice to the other party:

            If to Fidelity or the Bank:
                 Fidelity Southern Corporation
                 3490 Piedmont Road
                 Suite 1550
                 Atlanta, Georgia 30305
                 Attn: Board of Directors

            If to Miller:
                 James B. Miller, Jr.
                 c/o Fidelity Southern Corporation
                 3490 Piedmont Road, Suite 1550
                 Atlanta, Georgia 30305

      14. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon and enforceable by Miller and his estate, personal representatives
and heirs, and by Fidelity and the Bank and its successors and assigns. This
Agreement and the payments hereunder may not be assigned, pledged or otherwise
hypothecated by Miller.

      15. ENTIRE AGREEMENT. This Agreement, including the Split Dollar Plan, the
insurance policies with Great-West, Life Investors and Mass Mutual and the
Miller Management Continuity Agreement are intended by the parties hereto to
constitute the entire understanding of the parties with respect to the
employment of Miller as an employee and officer of Fidelity and election as
Chairman of the Board of Fidelity and the Bank and supersedes all prior
agreements and understandings, oral or written.

      16. BINDING ARBITRATION/ATTORNEY FEES. Except as otherwise specifically
provided herein, including as provided in Section 9 hereof, Specific
Performance, all disputes arising under this Agreement shall be submitted to and
settled by arbitration. Arbitration shall

                                       11
<PAGE>

be by one (1) arbitrator selected in accordance with the rules of the American
Arbitration Association, Atlanta, Georgia ("AAA") by the AAA. The hearings
before the arbitrator shall be held in Atlanta, Georgia and shall be conducted
in accordance with the rules existing on the date thereof of the AAA to the
extent not inconsistent with this Agreement. All reasonable costs and expense
incurred in connection with any such arbitration proceedings and those incurred
in any civil action to enforce the same shall be borne by the party against
which the decision is rendered. To the extent that Miller is entitled to
reimbursement of any such costs and expenses, such reimbursements shall be paid
to Miller on the next normal payroll payment date after Miller's rights to such
reimbursements are no longer in dispute; provided, however, that if Miller is a
Specified Employee such payments shall not be made before the date that is six
months after the date of Miller's Termination of Employment.

      17. AMENDMENTS. This Agreement may not be amended or modified except in
writing signed by both parties.

      18. WAIVERS. The failure of either party to insist upon the strict
performance of any provision hereof shall not constitute a wavier of such
provision. All waivers must be in writing.

      19. FUTURE EMPLOYERS. Fidelity or the Bank may notify anyone employing
Miller or evidencing an intention to employ Miller as to the existence and
provisions of this Agreement and may provide any such person or organization a
copy of this Agreement. Miller agrees that for a period of 18 months after
Miller's Termination of Employment for any reason, Miller will provide Fidelity
and the Bank the identity of any employer Miller goes to work for along with
Miller's job title and anticipated job duties with any such employer.

      20. GOVERNING LAW. This Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with
the laws of the State of Georgia, excluding its conflicts of laws.

      21. COMPLIANCE WITH SECTION 409A.

      22. This Agreement is intended to satisfy the requirements of Code Section
409A and shall be construed and interpreted in accordance therewith.

      23. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:

            (a) "Affiliate" means any entity with whom Fidelity or the Bank
would be considered a single employer under Code Sections 414(b) or 414(c).

            (b) "Specified Employee" means an employee who is (i) an officer of
Fidelity having annual compensation greater than $135,000 (with certain
adjustments for inflation after 2005), (ii) a five-percent owner of Fidelity or
(iii) a one-percent owner of Fidelity having annual compensation greater than
$150,000. For purposes of this Section, no more than 50 employees (or, if
lesser, the greater of three or 10 percent of the employees) shall be treated as
officers. Employees who (i) normally work less than 17 1/2 hours per week, (ii)
normally work not more than 6 months during any year, (iii) have not attained
age

                                       12
<PAGE>

21 or (iv) are included in a unit of employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement between
employee representatives and Fidelity (except as otherwise provided in
regulations issued under the Code) shall be excluded for purposes of determining
the number of officers. For purposes of this Section, the term "five-percent
owner" ("one-percent owner") means any person who owns more than five percent
(one percent) of the outstanding stock of Fidelity or stock possessing more than
five percent (one percent) of the total combined voting power of all stock of
Fidelity. For purposes of determining ownership, the attribution rules of
Section 318 of the Code shall be applied by substituting "five percent" for "50
percent" in Section 318(a)(2) and the rules of Sections 414(b), 414(c) and
414(m) of the Code shall not apply. For purposes of this Section, the term
"compensation" has the meaning given such term by Section 414(q)(4) of the Code.
The determination of whether Miller is a Specified Employee will be based on a
December 31 identification date such that if Miller satisfies the above
definition of Specified Employee at any time during the 12-month period ending
on December 31, he will be treated as a Specified Employee if he has a
Termination of Employment during the 12-month period beginning on the first day
of the fourth month following the identification date. This definition is
intended to comply with the specified employee rules of Section 409A(a)(2)(B)(i)
of the Code and shall be interpreted accordingly.

            (c) "Termination of Employment" means the termination of Miller's
employment with Fidelity, the Bank and all Affiliates; provided, however, that
Miller will not be considered as having had a Termination of Employment if (i)
Miller continues to provide services to Fidelity, the Bank or any Affiliate as
an employee at an annual rate that is at least equal to 20 percent of the
services rendered, on average, during the immediately preceding three full
calendar years of employment (or, if employed less than three years, such lesser
period) and the annual remuneration for such services is at least equal to 20
percent of the average annual remuneration earned during the final three full
calendar years of employment (or if less, such lesser period), (ii) Miller
continues to provide services to Fidelity, the Bank or any Affiliate in a
capacity other than as an employee and such services are provided at an annual
rate that is 50 percent or more of the services rendered, on average, during the
immediately preceding three full calendar years of employment (or, if employed
less than three years, such lesser period) and the annual remuneration for such
services is 50 percent or more of the annual remuneration earned during the
final three full calendar years of employment (or, if less, such lesser period)
or (iii) Miller is on military leave, sick leave or other bona fide leave of
absence (such as temporary employment by the government) so long as the period
of such leave does not exceed six months, or if longer, so long as the
individual's right to reemployment with Fidelity, the Bank or any Affiliate is
provided either by statute or by contract. If the period of leave exceeds six
months and Miller's right to reemployment is not provided either by statute or
by contract, the Termination of Employment will be deemed to occur on the first
date immediately following such six-month period. For purposes of this Section,
annual rate of providing services shall be determined based upon the measurement
used to determine Miller's base compensation.

                                       13
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                                      FIDELITY SOUTHERN CORPORATION

                                      By: /s/ David R. Bockel
                                          -----------------------------------
                                      Name: David R. Bockel
                                      Title: Chairman, Compensation Committee

                                      FIDELITY BANK

                                      By: /s/ David R. Bockel
                                          -----------------------------------
                                      Name: David R. Bockel
                                      Title: Chairman, Compensation Committee

                                      MILLER

                                          /s/ James B. Miller, Jr.
                                      ---------------------------------------
                                          James B. Miller, Jr.

                                       14
<PAGE>

                                  ATTACHMENT A
                             INCENTIVE COMPENSATION

      For each calendar year during the term of the Agreement, the Compensation
Committee ("Committee") of the Board of Directors of Fidelity will establish in
its sole discretion (after discussion with Miller) a target consolidated net
income of Fidelity Southern Corporation and Subsidiaries ("Fidelity") before the
Incentive Compensation provided herein, excluding extraordinary items
(determined in accordance with generally accepted accounting principles)
("Target Income") for such calendar year prior to the commencement of the
calendar year. Miller will be paid incentive compensation ("Incentive
Compensation") in cash depending upon the percentage in excess of Target Income
achieved for such calendar year.

      In the event the consolidated net income of Fidelity for any calendar year
before the Incentive Compensation provided herein and excluding extra-ordinary
items, determined in accordance with generally accepted accounting principles
("Income") achieved exceeds 100% of the Target Income, the Incentive
Compensation shall be the product of (i) $100,000 times (ii) the incremental
percentage of the Target Income between 100% of the Target Income and 105% of
the Target Income. For example, if the percentage of Income achieved is 104% of
the Target Income, the Incentive Compensation is $80,000. No Incentive
Compensation will be paid if the percentage of Target Income achieved is 100% or
less. The maximum Incentive Compensation shall be $100,000.

      The Compensation Committee may modify the Target Income for any calendar
year at any time during a calendar year to reflect changes resulting from
changes in accounting principles or practices of Fidelity and changes in the
business plan.

      In the event of any dispute as to the achieved Income, it shall be such
amount as set forth in Fidelity's certified financial statements less the amount
of this Incentive Compensation for such calendar year.

      The right of Miller to receive the Incentive Compensation hereunder
related to a calendar year shall vest on the last day of such calendar year. In
the event Miller is entitled pursuant to the Agreement to Incentive Compensation
for a period of less than a full year, the Incentive Compensation for such year
shall vest on the last day of his employment and the amount shall be determined
as set forth hereinabove for the calendar year prorated based upon the
percentage of the year Miller was employed under the Agreement.

<PAGE>

      Payment is to be made in cash promptly after the amount is determined but
in no event later than March 15 of the calendar year following the calendar year
for which the Incentive Compensation is earned. The Committee, in its sole
discretion, during a calendar year may make a non-refundable prepayment of a
portion of the Incentive Compensation to Miller if it believes that the partial
payment will not exceed the amount of the Incentive Compensation for that
calendar year.

                                        FIDELITY SOUTHERN CORPORATION

                                        By: /s/ David R. Bockel
                                            ------------------------------------
                                        Name: David R. Bockel
                                        Title: Chairman, Compensation Committee

                                        FIDELITY BANK

                                        By: /s/ David R. Bockel
                                            ------------------------------------
                                        Name: David R. Bockel
                                        Title: Chairman, Compensation Committee

                                        MILLER

                                            /s/ James B. Miller, Jr.
                                        ---------------------------------------
                                            James B. Miller, Jr.

                                        2

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