Document:

EXHIBIT 10.3

 

EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT is made as of July 24, 2009 (the “Effective
Date”), between State Bank and Trust Company, a banking
corporation organized under the laws of the State of Georgia (the “Bank”) and J. Daniel Speight, a
resident of the State of Georgia (the “Employee”).

 

RECITALS:

 

WHEREAS, the Bank desires to employ Employee and
Employee desires to be employed by the Bank; and

 

WHEREAS, Employee is willing to enter into this
Employment Agreement in consideration of the agreements set forth below.

 

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

 

1.                                      Definitions.

 

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

 

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

 

1.2                                 “Affiliate” shall mean any business
entity which controls the Bank or is controlled by or is under common control
with the Bank.

 

1.3                                 “Area” shall mean the geographic area
within the boundaries of Bibb, Fulton, Houston and Jones Counties,
Georgia.  It is the express intent of the
parties that the Area as defined herein is in the area where the Employee
performs services on behalf of the Bank under this Agreement as of the
Effective Date.

 

1.4                                 “Average Monthly Compensation” shall
mean the quotient determined by dividing the sum of the Employee’s then current
Base Salary (as defined in Section 4.1 hereof) and the greater of the most
recently paid Incentive Compensation (as defined in Section 4.2 hereof) or
the average of Incentive Compensation paid over the three most recent years by
twelve.

 

1.5                                 “Bank” shall mean the State Bank and
Trust Company or its successor(s).

 

1.6                                 “Business of the Bank” shall mean the
business conducted by the Bank, which is the business of banking, including the
solicitation of time and demand deposits and the making of residential,
consumer, commercial and corporate loans, provided, however,
that the Business 

 

 

of
the Bank shall not include (i) the origination, or purchase, of any loan which
at inception or purchase would be considered a criticized or classified loan by
bank regulatory authorities, (ii) the origination, or purchase, of any loan to
a borrower whose residence or domicile is not in the Area, or (iii) any loan
secured by real estate, where the real estate collateral securing the loan is
located outside of the Area, all of which activities are currently conducted by
Bankers’ Capital Group, LLC.

 

1.7                                 “Cause” shall mean:

 

1.7.1                        With respect to termination
by the Bank:

 

(a)                                  A material
breach of the terms of this Agreement by the Employee, including, without
limitation, failure by the Employee to perform the Employee’s duties and
responsibilities in the manner and to the extent required under this Agreement,
which breach remains uncured after the expiration of thirty (30) days following
the delivery of written notice of such breach to the Employee by the Bank;

 

(b)                                 Conduct by the
Employee that (i) constitutes fraud, dishonesty, gross malfeasance of duty or
conduct grossly inappropriate to the Employee’s office and (ii) is demonstrably
likely to lead to material injury to the Bank or resulted or was intended to
result in direct or indirect gain to or personal enrichment of the Employee;
provided, however, that such conduct shall not constitute “Cause” unless there
shall have been delivered to the Employee a written notice setting forth with
specificity the reasons that the Bank believes the Employee’s conduct meets the
standard set forth in this Section 1.7.1(b), the Employee shall have been
provided with an opportunity to be heard in person by the Board of Directors of
the Bank (with the assistance of counsel, if desired) and, in the event of any
such hearing, the decision of the Bank is confirmed by a vote of the membership
of the Board of Directors of the Bank as provided in Section 3.2.1;

 

(c)                                  Conduct
resulting in the conviction of the Employee of a felony; or

 

(d)                                 Conduct by the
Employee that results in the permanent removal of the Employee from his
position as an officer or employee of the Bank pursuant to a written order by
any regulatory agency with authority or jurisdiction over the Bank.

 

1.7.2                        With respect to termination
by the Employee:

 

(a)                                  a material
diminution in the powers, responsibilities, duties or total compensation of the
Employee hereunder by the Bank, which condition remains uncured after the
expiration of thirty (30) days following the delivery of written notice of such
condition to the Bank by the Employee;

 

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(b)                                 the failure of
the Board of Directors of the Bank to maintain the Employee’s appointment to
the offices of its Vice Chairman, Chief Operating Officer and Chief Financial
Officer; upon the Bank’s notice of non-renewal of this Agreement; or the
failure of the shareholders of the Bank to elect Employee as a director of the
Bank; or

 

(c)                                  a material breach
of the terms of this Agreement by the Bank, which breach remains uncured after
the expiration of thirty (30) days following the delivery of written notice of
such breach to the Bank by the Employee.

 

1.8                                 “Change in Control” means any one of
the following events occurring after the Effective Date:

 

(a)                                  the acquisition
by any person or persons acting in concert of the then outstanding voting
securities of the Bank, if, after the transaction, the acquiring person (or
persons) owns, controls or holds with power to vote more than twenty-five
percent (25%) of any class of voting securities of the Bank or such other
transaction as may be described under 12 C.F.R. § 225.41(c) or any
successor thereto;

 

(b)                                 within any
twelve-month period (beginning on or after the Effective Date) the persons who
were directors of the Bank immediately before the beginning of such
twelve-month period (the “Incumbent Directors”)
shall cease to constitute at least a majority of such Board of Directors;
provided that any director who was not a director as of the Effective Date
shall be deemed to be an Incumbent Director if that director was elected to
such Board of Directors by, or on the recommendation of or with the approval
of, at least two-thirds (2/3) of the directors who then qualified as Incumbent
Directors; and provided further that no director whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of directors shall be deemed to be an Incumbent Director;

 

(c)                                  the approval by
the stockholders of the Bank of a reorganization, merger or consolidation, with
respect to which persons who were the stockholders of the Bank immediately
prior to such reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined voting power
entitled to vote in the election of directors of the reorganized, merged or
consolidated company’s then outstanding voting securities; or

 

(d)                                 the sale,
transfer or assignment of all or substantially all of the assets of the Bank
and its subsidiaries to any third party.

 

1.9                                 “Confidential Information” means data
and information relating to the Business of the Bank (which does not rise to
the status of a Trade Secret) which is or has been disclosed to the Employee or
of which the Employee became aware as a consequence of or through the 

 

3

 

Employee’s
relationship to the Bank and which has value to the Bank and is not generally
known to its competitors.  Without
limiting the foregoing, Confidential Information shall include:

 

(a)                                  all items of
information that could be classified as a trade secret pursuant to Georgia law;

 

(b)                                 the names,
addresses and banking requirements of the customers of the Bank and the nature
and amount of business done with such customers;

 

(c)                                  the names and
addresses of employees and other business contacts of the Bank;

 

(d)                                 the particular
names, methods and procedures utilized by the Bank in the conduct and
advertising of its business;

 

(e)                                  application,
operating system, communication and other computer software and derivatives
thereof, including, without limitation, sources and object codes, flow charts,
coding sheets, routines, subrouting and related documentation and manuals of
the Bank; and

 

(f)                                    marketing
techniques, purchasing information, pricing policies, loan policies, quoting
procedures, financial information, customer data and other materials or
information relating to the Bank’s manner of doing business.

 

Confidential
Information shall not include any data or information that has been voluntarily
disclosed to the public by the Bank (except where such public disclosure has
been made by the Employee without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means.

 

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

 

1.11                           “Permanent Disability” shall mean a
condition for which benefits would be payable under any long-term disability
coverage (without regard to the application of any elimination period
requirement) then provided to the Employee by the Bank or, if no such coverage
is then being provided, the inability of the Employee to perform the material
aspects of the Employee’s duties under this Agreement for a period of at least
one hundred eighty (180) consecutive days as certified by a physician chosen by
the Employee and reasonably acceptable to the Bank.

 

1.12                           “Term” shall mean that period of time
commencing on the Effective Date and running until (a) the close of business on
the last business day immediately preceding the third (3rd) anniversary of the
thirtieth (30th) day following the date any notice of non-renewal of this
Agreement is received, or (b) any earlier termination of employment of the
Employee under this Agreement as provided for in Section 3.

 

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1.13                           “Trade Secrets” means information,
without regard to form, including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans or lists of actual or potential customers or suppliers which (a)
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and (b) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.

 

2.                                      Duties.

 

2.1                                 The Employee is
employed as the Vice Chairman, Chief Operating Officer and Chief Financial
Officer of the Bank, subject to the direction of the Chief Executive Officer
and the Board of Directors of the Bank or its designee(s).  The Employee shall perform and discharge well
and faithfully the authority, duties and responsibilities which may be assigned
to the Employee from time to time by the Board of Directors of the Bank in
connection with the conduct of the Business of the Bank; provided,
however, that, in making its assignments, the Board of Directors of
the Bank shall assign only such authority, duties and responsibilities assigned
to the Employee from time to time as are, in the aggregate, consistent with the
duties and responsibilities as would be customarily assigned to a person
occupying the positions held by the Employee pursuant to the terms of this
Agreement, including, but not limited to, those set forth on Exhibit A
attached hereto.

 

2.2                                 In addition to
the duties and responsibilities specifically assigned to the Employee pursuant
to Section 2.1 hereof and as set forth on Exhibit A attached
hereto, the Employee shall:

 

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

 

(b)                                 diligently
follow and implement all management policies and decisions communicated to the
Employee by the  Chief Executive Officer and the
Board of Directors of the Bank, which are consistent with this Agreement; and

 

(c)                                  timely prepare
and forward to the Board of Directors of the Bank, all reports and accounting
as may be requested of the Employee.

 

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

 

(a)                                  managing the
Employee’s personal assets and investing the Employee’s personal assets in
businesses, which (subject to clause (b) below) are 

 

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not in competition with the Business of the Bank and which will not
require any services on the part of the Employee in their operation or affairs
and in which the Employee’s participation is solely that of an investor;

 

(b)                                 purchasing
securities or other interests in any entity provided that such purchase shall
not result in the Employee’s collectively owning beneficially at any time five
percent (5%) or more of the equity securities of any business in competition
with the Business of the Bank;

 

(c)                                  serving on the
board of directors of other organizations so long as such service does not
materially interfere with the performance of the Employee’s duties under this
Agreement and are not in competition with the Business of the Bank; and

 

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

 

Notwithstanding anything to the contrary in this Section 2.3, the
Employee may serve as a principal of Bankers’ Capital Group, LLC.  For the avoidance of doubt, Bankers’ Capital
Group, LLC also serves as a general partner of Sagus Partners, LLC and intends
to do so following the date of this Agreement.

 

3.                                      Term
and Termination.

 

3.1                                 Term.  This Agreement shall remain in effect for the
Term.  While this Agreement remains in
effect, it shall automatically renew each day after the Effective Date such
that the Term remains a three-year term from day-to-day thereafter unless any
party gives written notice to the others of its or his intent that the
automatic renewals shall cease.  In the
event such notice of non-renewal is properly given, absent prior termination by
the Bank or the Employee pursuant to Section 3.2, this Agreement and the Term
shall expire on the third (3rd) anniversary of the thirtieth (30th) day
following the date such written notice is received.  Without limiting the foregoing, if the Bank
determines in any annual performance review that the Employee’s performance
under this Agreement is not satisfactory, the Bank may provide the Employee
with written notice of non-renewal of this Agreement.

 

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

 

3.2.1                        By the Bank:

 

(a)                                  For Cause,
following approval of such action by at least seventy-five (75%) of the
membership of the Board of Directors of the Bank and only after providing
Employee with at least thirty (30) days’ written notice, in which 

 

6

 

event the Bank shall have no further obligation to the Employee except
for the payment of any amounts earned and unpaid as of the effective date of
termination; or

 

(b)                                 Without Cause
at any time, following approval of such action by at least two-thirds (2/3) of
the disinterested directors of the Bank, provided that the Bank shall give the
Employee sixty (60) days’ prior written notice of its intent to terminate, in
which event the Bank shall be required to meet its obligations to the Employee
under Section 3.3.1 below.

 

3.2.2                        By the Employee:

 

(a)                                  For Cause, with
no prior notice except as provided in Section 1.7.2, in which event the
Bank shall be required to meet its obligations to the Employee under
Section 3.3.1 below; or

 

(b)                                 Without Cause,
provided that the Employee shall give the Bank sixty (60) days’ prior written
notice of the Employee’s intent to terminate, in which event the Bank shall
have no further obligation to the Employee except for payment of any amounts
earned and unpaid as of the effective date of the termination.

 

3.2.3                        By the Employee within the
period commencing three (3) months prior to and ending twelve (12) months after
a Change in Control of the Employer (the “Election Period”),
provided that the Employee shall give thirty (30) days’ written notice prior to
the end of the Election Period to the Employer of the Employee’s intention to
terminate this Agreement, in which event the Employer shall be required to meet
its obligations to the Employee under Section 3.3.2 below.

 

3.2.4                        At any time upon mutual,
written agreement of the parties, in which event the Bank shall have no further
obligation to the Employee except for the payment of any amounts earned and
unpaid as of the effective date of the termination.

 

3.2.5                        Notwithstanding anything in
this Agreement to the contrary, the Term shall expire automatically upon the
Employee’s death or Permanent Disability, and if the reason for termination is
the Employee’s death, the Bank shall have no further obligation to the Employee
except for the payment of any amounts earned and unpaid as of the effective
date of termination and, if the reason for termination is the Employee’s
Permanent Disability, the Bank shall pay to the Employee an amount equal to
Average Monthly Compensation for each full month following such termination
until the earlier of the month prior to the month for which the Employee’s
long-term disability benefits become payable or six (6) full months commencing
with the month following the month in which the date of termination occurs.

 

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3.3                                 Termination
Payments.

 

3.3.1                        In the event the Employee’s
employment is terminated under this Agreement prior to the expiration of the
Term pursuant to Section 3.2.1(b) or Section 3.2.2(a), the Bank shall pay
to the Employee as severance pay and liquidated damages a lump sum amount equal
to the (a) greater of (i) the current Base Salary divided by 12, or (ii) the
Average Monthly Compensation, multiplied by (b) 12.  In addition, from the effective date of the
termination pursuant to Section 3.2.1(b) or Section 3.2.2(a), the Bank shall
pay an amount equal to what would be the Employee’s cost of COBRA health
continuation coverage for the Employee and eligible dependents for the greater
of twelve (12) months or the period during which the Employee and those
eligible dependents are entitled to COBRA health continuation coverage from the
Bank.

 

3.3.2                        In the event the Employee’s
employment is terminated under this Agreement prior to the expiration of the
Term pursuant to Section 3.2.3, the Bank shall pay to the Employee as
severance pay and liquidated damages a lump sum amount equal to the (a) greater
of (i) the current Base Salary divided by 12, or (ii) the Average Monthly
Compensation, multiplied by (b) the number of months (including partial months)
from the effective date of the termination through the then unexpired portion
of the Term or, if greater, 24.  In
addition, from the effective date of the termination pursuant to Section 3.2.3,
through the then unexpired portion of the Term (or, if greater, for a period of
twenty-four (24) months following the effective date of the termination) (the “Severance Period”), the Bank shall
pay an amount equal to what would be the Employee’s cost of COBRA health
continuation coverage for the Employee and eligible dependents for the greater
of the Severance Period or the period during which the Employee and those
eligible dependents are entitled to COBRA health continuation coverage from the
Bank.

 

3.3.3                        Notwithstanding any other
provision of this Agreement to the contrary, if the aggregate of the payments
provided for in this Agreement and the other payments and benefits that the
Employee has the right to receive from the Bank (the “Total
Payments”) would constitute a “parachute payment,” as defined in
Section 280G(b)(2) of the Internal Revenue Code, as amended (the “Code”), the Employee shall receive
the Total Payments unless the (a) after-tax amount that would be retained by
the Employee (after taking into account all federal, state and local income
taxes payable by the Employee and the amount of any excise taxes payable by the
Employee under Section 4999 of the Code that would be payable by the
Employee (the “Excise Taxes”)) if the
Employee were to receive the Total Payments has a lesser aggregate value than
(b) the after-tax amount that would be retained by the Employee (after taking
into account all federal, state and local income taxes payable by the Employee)
if the Employee were to receive the Total Payments reduced to the largest
amount as would result in no portion of the Total Payments being subject to
Excise Taxes (the “Reduced Payments”), in which
case the Employee shall be entitled only to the Reduced Payments.  If the Employee is to receive the Reduced
Payments, the Employee shall be entitled to determine which of the Total
Payments, and the relative portions of each, are to be reduced.

 

8

 

In connection with the Total Payments contemplated in this Section
3.3.3, the parties agree that to the minimum extent necessary to comply with
Section 280G of the Code and to avoid the imposition of excise taxes under
Section 4999 of the Code, the Employee agrees to provide personal services on
behalf of the Bank following his termination of employment in exchange for
reasonable compensation for such services. 
If so required, a portion of the Total Payments shall be deemed to be
attributable to such post-termination services. 
The parties agree that any compensation attributable to such services
must comply with the requirements of Section 280G of the Code and the Treasury
Regulations promulgated thereunder, including, but not limited to, the
requirements set forth in Q/A-9 of Treasury Regulation 1.280G-1.  The parties agree to negotiate in good faith
at the time of Employee’s termination of employment to determine the scope and
duration of services to be rendered (if any) by Employee, and the related
compensation payable therefore, for the period following such termination of
employment, all with the objective of complying with Section 280G of the Code
and the intent of this paragraph.

 

4.                                      Compensation.

 

The
Employee shall receive the following salary and benefits during the Term:

 

4.1                                 Base Salary.  The Employee shall be compensated at a base
rate of Three Hundred Fifty Thousand Dollars ($350,000) per year, which may be
increased from time to time in accordance with the immediately succeeding
sentence (“Base Salary”).  The Employee’s salary shall be reviewed by
the Board of Directors of the Bank annually, and the Employee shall be entitled
to receive annually an increase in such amount, if any, as may be determined by
the Board of Directors of the Bank based upon the performance of the Bank and
its compliance with regulatory standards. 
Such salary shall be payable in accordance with the Bank’s normal
payroll practices.

 

4.2                                 Incentive
Compensation.  The
Employee shall be eligible for an annual bonus in an amount up to fifty percent
(50%) of the Employee’s Base Salary pursuant to any bonus, incentive or other
executive compensation programs as are made available to senior management of
the Bank from time to time (the “Incentive Compensation”);
provided, however, that any bonus to
which the Employee is entitled under such programs for the fiscal year 2010 is
subject to forfeiture pursuant to Section 4(e) of that certain Stock Purchase
Agreement dated July 14, 2009.

 

4.3                                 Stock Options.  The Bank may grant to the Employee stock
options from time to time commensurate with the Employee’s position.  Any such options shall be reflected by a
separate written award.

 

4.4                                 Benefits.  The Employee shall be entitled to such
benefits as may be available from time to time for senior executives of the
Bank similarly situated to the Employee. 
All such benefits shall be awarded and administered in accordance with
the Bank’s standard policies and practices. 
Such benefits may include, by way of example only, profit sharing plans,
retirement

 

9

 

or
investment funds, dental, health and life insurance benefits and such other
benefits as the Bank deems appropriate.

 

4.5                                 Business
Expenses.  The Bank
shall reimburse the Employee for reasonable business (including travel)
expenses incurred by the Employee in performance of the Employee’s duties
hereunder; provided, however, that the Employee shall, as a condition of
reimbursement, submit verification of the nature and amount of such expenses in
accordance with reimbursement policies from time to time adopted by the Bank
and in sufficient detail to comply with rules and regulations promulgated
by the Internal Revenue Service.

 

4.6                                 Professional
Associations.  The
Employee shall be entitled to attend such courses, annual meetings, conferences
and seminars of his selection at the Bank’s expense, provided that the Bank
shall only be required to cover reasonable expenses associated with the
Employee’s attendance at such courses, conferences and seminars that are
incurred consistent with the Bank’s budget operating plan and policies then in
effect.

 

4.7                                 Vacation.  On a non-cumulative basis the Employee shall
be entitled to a minimum of four weeks (4) weeks of vacation annually,
during which the Employee’s compensation shall be paid in full.

 

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

 

5.                                      Bank
Information.

 

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

 

5.2                                 Obligations of
the Employee.  The
Employee agrees (a) to hold Bank Information in strictest confidence, and (b) not
to use, duplicate, reproduce, distribute, disclose or otherwise disseminate
Bank Information or any physical embodiments thereof and may in no event take
any action causing or fail to take any action necessary in order to prevent any
Bank Information from losing its character or ceasing to qualify as
Confidential Information or a Trade Secret. 
In the event that the Employee is required by law to disclose any Bank
Information, the Employee will not make such disclosure unless (and then only
to the extent that) the Employee has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written
notice is given to the Bank when the Employee becomes aware that such
disclosure has been requested and is required by law.  This Section 5 shall survive for a
period of twelve (12) months following termination of this Agreement with
respect to Confidential Information, and shall survive termination of this Agreement
for so long as is permitted by the then-current Georgia Trade Secrets Act of
1990, O.C.G.A. §§ 10-1-760 to -767, with respect to Trade Secrets.

 

5.3                                 Delivery upon
Request or Termination.  Upon
request by the Bank, and in any event upon termination of the Employee’s
employment with the Bank, the Employee will 

 

10

 

promptly
deliver to the Bank all property belonging to the Bank, including without
limitation all Bank Information then in the Employee’s possession or control.

 

6.                                      Non-Competition.

 

The
Employee agrees that during his employment by the Bank hereunder and, in the
event of his termination other than by the Bank without Cause pursuant to
Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of thirty-six (36) months thereafter, the Employee will not (except on
behalf of or with the prior written consent of the Bank), within the Area,
either directly or indirectly, on his own behalf or in the service or on behalf
of others, as an executive employee or in any other capacity which involves
duties and responsibilities similar to those undertaken for the Bank, engage in
any business which is the same as or essentially the same as the Business of
the Bank.  Notwithstanding the foregoing,
the Bank agrees that the Employee may (a) own up to 5% of the voting
shares of any financial institution engaged in the Business of the Bank in the
Area, and (b) engage in the practice of law in the Area representing
institutions engaged in the Business of the Bank.

 

7.                                      Non-Solicitation
of Customers.

 

The
Employee agrees that during the Employee’s employment by the Bank hereunder
and, in the event of Employee’s termination other than by the Bank without
Cause pursuant to Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of twenty-four (24) months thereafter, the Employee will not (except on
behalf of or with the prior written consent of the Bank), on the Employee’s own
behalf or in the service or on behalf of others, solicit, divert or appropriate
or attempt to solicit, divert or appropriate, directly or by assisting others,
any business from any of the Bank’s customers, including actively sought
prospective customers, with whom the Employee has or had material contact
during the last twelve (12) months of the Employee’s employment, for purposes
of providing products or services that are competitive with those provided by
the Bank.

 

8.                                      Non-Solicitation
of Employees.

 

The
Employee agrees that during the Employee’s employment by the Bank hereunder
and, in the event of the Employee’s termination other than by the Bank without
Cause pursuant to Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of twenty-four (24) months thereafter, the Employee will not on the
Employee’s own behalf or in the service or on behalf of others, solicit,
recruit or hire away or attempt to solicit, recruit or hire away, directly or
by assisting others, any employee of the Bank or its Affiliates, whether or not
such employee is a full-time employee or a temporary employee of the Bank or
its Affiliates and whether or not such employment is pursuant to written
agreement and whether or not such employment is for a determined period or is
at will. Notwithstanding the foregoing, this Section 8 will not apply to
Lisa Lane or Cindy Cline.

 

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9.                                      Remedies.

 

The
Employee agrees that the covenants contained in Sections 5 through 8
hereof are of the essence of this Agreement; that each of the covenants is
reasonable and necessary to protect the business, interests and properties of
the Bank; and that irreparable loss and damage will be suffered by the Bank
should he breach any of the covenants. 
Therefore, the Employee agrees and consents that, in addition to all the
remedies provided by law or in equity, the Bank shall be entitled to a
temporary restraining order and temporary and permanent injunctions to prevent
a breach or contemplated breach of any of the covenants.  The Bank and the Employee agree that all
remedies available to the Bank or the Employee, as applicable, shall be cumulative.  In addition, in the event the Employee fails
to comply with any of the covenants contained in Section 5 hereof and such
failure shall not be cured to the reasonable satisfaction of the Bank within
thirty (30) days after receipt of written notice thereof from the Bank, the
Bank shall thereupon be relieved of liability for all obligations then
remaining under Section 3.3 hereof.

 

10.                               Severability.

 

The
parties agree that each of the provisions included in this Agreement is
separate, distinct and severable from the other provisions of this Agreement
and that the invalidity or unenforceability of any Agreement provision shall
not affect the validity or enforceability of any other provision of this
Agreement.  Further, if any provision of
this Agreement is ruled invalid or unenforceable by a court of competent
jurisdiction because of a conflict between the provision and any applicable law
or public policy, the provision shall be redrawn to make the provision
consistent with and valid and enforceable under the law or public policy.

 

11.                               No
Set-Off by the Employee.

 

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

 

12.                               Notice.

 

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

 

12

 

(a)                                  If to the Bank,
to the Bank at:

 

State
Bank and Trust Company

Attention:
Chief Executive Officer

321
Fullington Avenue

Pinehurst,
Georgia  31070

 

(b)                                 If to the
Employee, to the Employee at:

 

J.
Daniel Speight

1855
Liberty Church Road

Pinehurst,
Georgia 31070

 

13.                               Assignment.

 

Neither
party hereto may assign or delegate this Agreement or any of its rights and
obligations hereunder without the written consent of the other party hereto;
provided, however, that this Agreement shall be assumed by and shall be binding
upon any successor to the Bank.

 

14.                               Waiver.

 

A
waiver by the Bank of any breach of this Agreement by the Employee shall not be
effective unless in writing, and no waiver shall operate or be construed as a
waiver of the same or another breach on a subsequent occasion.

 

15.                               Arbitration.

 

Except
for any claim for injunctive relief, any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, which shall be conducted by a three-person
arbitration panel, one of whom shall be selected by each party and the third of
whom shall be selected jointly upon mutual agreement of both parties.  The place of arbitration shall be Fulton
County, Georgia and the Bank and the Employee agree that they will seek to
enforce any arbitration award in the Superior Court of Fulton County.  The decision of the arbitration panel shall
be final and binding upon the parties and judgment upon the award rendered by
the arbitration panel may be entered by any court having jurisdiction.  The Bank agrees to pay the fees and expenses
associated with the arbitration proceedings.

 

16.                               Attorneys’
Fees.

 

With
respect to arbitration of disputes and if litigation ensues between the parties
concerning the enforcement of an arbitration award, each party shall pay its
own fees, costs and expenses; provided, however, the Bank shall advance to the
Employee reasonable fees, costs and expenses incurred by the Employee in
preparing for and in initiating or defending against any 

 

13

 

proceeding
or suit brought to enforce rights or obligations set forth in this
Agreement.  Such advances shall be made
within thirty (30) days after receiving copies of invoices presented by the
Employee for such fees, costs and expenses. 
The Employee shall have the obligation to reimburse the Bank within
sixty (60) days following the final disposition of the matter (including appeals)
to the full extent of the aggregate advances unless the panel of arbitrators or
court, as the case may be, has ruled in favor of the Employee on the merits of
the substantive issues in dispute.

 

17.                               Applicable
Law.

 

This
Agreement shall be construed and enforced under and in accordance with the laws
of the State of Georgia.  The parties
agree that the Superior Court of Fulton County, Georgia, shall have
jurisdiction of any case or controversy arising under or in connection with
this Agreement and shall be a proper forum in which to adjudicate such case or
controversy.  The parties consent to the
jurisdiction of such courts.

 

18.                               Interpretation.

 

Words
importing any gender includes all genders. 
Words importing the singular form shall include the plural, and vice
versa.  The terms “herein,” “hereunder,” “hereby,
“hereto, “hereof” and any similar terms refer to this Agreement.  Any captions, titles or headings preceding
the text of any article, section or subsection herein are solely for
convenience of reference and shall not constitute part of this Agreement or
affect its meaning, construction or effect.

 

19.                               Entire
Agreement.

 

This
Agreement embodies the entire and final agreement of the parties on the subject
matter stated in the Agreement.  No
amendment or modification of this Agreement shall be valid or binding upon the
Bank or the Employee unless made in writing and signed by both parties.  All prior understandings and agreements
relating to the subject matter of this Agreement are hereby expressly terminated.

 

20.                               Rights
of Third Parties.

 

Nothing
herein expressed is intended to or shall be construed to confer upon or give to
any person, firm or other entity, other than the parties hereto and their
permitted assigns, any rights or remedies under or by reason of this Agreement.

 

14

 

21.                               Survival.

 

The
obligations of the Bank pursuant to Sections 3.2.5 and 3.3 and the
obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 shall survive
the termination of the employment of the Employee hereunder for the period
designated under each of those respective sections.

 

[Signatures Appear on the
Following Page.]

 

15

 

IN
WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement in
accordance with the provisions hereof.

 

	
   

  	
  STATE
  BANK AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  /s/
  Joseph W. Evans

  
	
   

  	
  Name:

  	
  Joseph
  W. Evans

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
  Date:

  	
  July 24,
  2009

  

 

 

	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/
  Kim M. Childers

  	
   

  
	
  Name:

  	
  Kim
  M. Childers

  	
   

  
	
  Title:

  	
  President
  and Chief Credit Officer

  	
   

  
	
  Date:

  	
  July 24,
  2009

  	
   

  

 

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/
  J. Daniel Speight

  
	
   

  	
  Name:

  	
  J.
  Daniel Speight

  
	
   

  	
  Date:

  	
  July 24,
  2009

  

 

Employment Agreement  Signature PageEXHIBIT 10.4

 

EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT is made as of July 19, 2010 (the “Effective
Date”), between State Bank and Trust Company, a banking
corporation organized under the laws of the State of Georgia (the “Bank”) and Stephen Winston Doughty,
a resident of the State of Georgia (the “Employee”).

 

RECITALS:

 

WHEREAS, the Bank desires to employ Employee and
Employee desires to be employed by the Bank; and

 

WHEREAS, Employee is willing to enter into this
Employment Agreement in consideration of the agreements set forth below.

 

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

 

1.                                      Definitions.

 

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

 

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

 

1.2                                 “Affiliate” shall mean any business
entity which controls the Bank or is controlled by or is under common control
with the Bank.

 

1.3                                 “Area” shall mean the geographic area
within the boundaries of Bibb, Fulton, Houston and Jones Counties,
Georgia.  It is the express intent of the
parties that the Area as defined herein is in the area where the Employee
performs services on behalf of the Bank under this Agreement as of the
Effective Date.

 

1.4                                 “Average Monthly Compensation” shall
mean the quotient determined by dividing the sum of the Employee’s then current
Base Salary (as defined in Section 4.1 hereof) and the greater of the most
recently paid Incentive Compensation (as defined in Section 4.2 hereof) or
the average of Incentive Compensation paid over the three most recent years by
twelve.

 

1.5                                 “Bank” shall mean the State Bank and
Trust Company or its successor(s).

 

1.6                                 “Business of the Bank” shall mean the
business conducted by the Bank, which is the business of banking, including the
solicitation of time and demand deposits and the making 

 

 

of
residential, consumer, commercial and corporate loans, provided,
however, that the Business of the Bank shall not include (i) the
origination, or purchase, of any loan which at inception or purchase would be
considered a criticized or classified loan by bank regulatory authorities, (ii) the
origination, or purchase, of any loan to a borrower whose residence or domicile
is not in the Area, or (iii) any loan secured by real estate, where the
real estate collateral securing the loan is located outside of the Area, all of
which activities are currently conducted by Bankers’ Capital Group, LLC.

 

1.7                                 “Cause” shall mean:

 

1.7.1                        With respect to termination
by the Bank:

 

(a)                                  A material
breach of the terms of this Agreement by the Employee, including, without
limitation, failure by the Employee to perform the Employee’s duties and
responsibilities in the manner and to the extent required under this Agreement,
which breach remains uncured after the expiration of thirty (30) days following
the delivery of written notice of such breach to the Employee by the Bank;

 

(b)                                 Conduct by the
Employee that (i) constitutes fraud, dishonesty, gross malfeasance of duty
or conduct grossly inappropriate to the Employee’s office and (ii) is
demonstrably likely to lead to material injury to the Bank or resulted or was
intended to result in direct or indirect gain to or personal enrichment of the
Employee; provided, however, that such conduct shall not constitute “Cause”
unless there shall have been delivered to the Employee a written notice setting
forth with specificity the reasons that the Bank believes the Employee’s
conduct meets the standard set forth in this Section 1.7.1(b), the
Employee shall have been provided with an opportunity to be heard in person by
the Board of Directors of the Bank (with the assistance of counsel, if desired)
and, in the event of any such hearing, the decision of the Bank is confirmed by
a vote of the membership of the Board of Directors of the Bank as provided in
Section 3.2.1;

 

(c)                                  Conduct
resulting in the conviction of the Employee of a felony; or

 

(d)                                 Conduct by the
Employee that results in the permanent removal of the Employee from his
position as an officer or employee of the Bank pursuant to a written order by
any regulatory agency with authority or jurisdiction over the Bank.

 

1.7.2                        With respect to termination
by the Employee:

 

(a)                                  a material
diminution in the powers, responsibilities, duties or total compensation of the
Employee hereunder by the Bank, which condition remains uncured after the
expiration of thirty (30) days following the delivery of written notice of such
condition to the Bank by the Employee;

 

2

 

(b)                                 the failure of
the Board of Directors of the Bank to maintain the Employee’s appointment to
the offices of its Vice Chairman (assuming
employee is ever elected to this office), Executive Risk Officer and
Chief Banking Officer; upon the Bank’s notice of non-renewal of this Agreement;
or the failure of the shareholders of the
Bank to elect Employee as a director of the Bank (assuming employee is ever
elected to the Bank’s board of directors);

 

(c)                                  a material
breach of the terms of this Agreement by the Bank, which breach remains uncured
after the expiration of thirty (30) days following the delivery of written
notice of such breach to the Bank by the Employee.

 

1.8                                 “Change in Control” means any one of
the following events occurring after the Effective Date:

 

(a)                                  the acquisition
by any person or persons acting in concert of the then outstanding voting
securities of the Bank, if, after the transaction, the acquiring person (or
persons) owns, controls or holds with power to vote more than twenty-five
percent (25%) of any class of voting securities of the Bank or such other
transaction as may be described under 12 C.F.R. § 225.41(c) or any
successor thereto;

 

(b)                                 within any
twelve-month period (beginning on or after the Effective Date) the persons who
were directors of the Bank immediately before the beginning of such
twelve-month period (the “Incumbent Directors”)
shall cease to constitute at least a majority of such Board of Directors;
provided that any director who was not a director as of the Effective Date
shall be deemed to be an Incumbent Director if that director was elected to
such Board of Directors by, or on the recommendation of or with the approval
of, at least two-thirds (2/3) of the directors who then qualified as Incumbent
Directors; and provided further that no director whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of directors shall be deemed to be an Incumbent Director;

 

(c)                                  the approval by
the stockholders of the Bank of a reorganization, merger or consolidation, with
respect to which persons who were the stockholders of the Bank immediately
prior to such reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined voting power
entitled to vote in the election of directors of the reorganized, merged or
consolidated company’s then outstanding voting securities; or

 

(d)                                 the sale,
transfer or assignment of all or substantially all of the assets of the Bank
and its subsidiaries to any third party.

 

1.9                                 “Confidential Information” means data
and information relating to the Business of the Bank (which does not rise to
the status of a Trade Secret) which is or has been disclosed to 

 

3

 

the
Employee or of which the Employee became aware as a consequence of or through
the Employee’s relationship to the Bank and which has value to the Bank and is
not generally known to its competitors. 
Without limiting the foregoing, Confidential Information shall include:

 

(a)                                  all items of
information that could be classified as a trade secret pursuant to Georgia law;

 

(b)                                 the names,
addresses and banking requirements of the customers of the Bank and the nature
and amount of business done with such customers;

 

(c)                                  the names and
addresses of employees and other business contacts of the Bank;

 

(d)                                 the particular
names, methods and procedures utilized by the Bank in the conduct and
advertising of its business;

 

(e)                                  application,
operating system, communication and other computer software and derivatives
thereof, including, without limitation, sources and object codes, flow charts,
coding sheets, routines, subrouting and related documentation and manuals of
the Bank; and

 

(f)                                    marketing
techniques, purchasing information, pricing policies, loan policies, quoting
procedures, financial information, customer data and other materials or
information relating to the Bank’s manner of doing business.

 

Confidential
Information shall not include any data or information that has been voluntarily
disclosed to the public by the Bank (except where such public disclosure has
been made by the Employee without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means.

 

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

 

1.11                           “Permanent Disability” shall mean a
condition for which benefits would be payable under any long-term disability
coverage (without regard to the application of any elimination period
requirement) then provided to the Employee by the Bank or, if no such coverage
is then being provided, the inability of the Employee to perform the material
aspects of the Employee’s duties under this Agreement for a period of at least
one hundred eighty (180) consecutive days as certified by a physician chosen by
the Employee and reasonably acceptable to the Bank.

 

1.12                           “Term” shall mean that period of time
commencing on the Effective Date and running until (a) the close of
business on the last business day immediately preceding the third (3rd) anniversary
of the thirtieth (30th) day following the date any notice of non-renewal of
this Agreement is received, or (b) any earlier termination of employment
of the Employee under this Agreement as provided for in Section 3.

 

4

 

1.13                           “Trade Secrets” means information,
without regard to form, including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans or lists of actual or potential customers or suppliers which (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (b) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.

 

2.                                      Duties.

 

2.1                                 The Employee is
employed as the Executive Risk Officer and Chief Banking Officer of the Bank,
subject to the direction of the Chief Executive Officer and the Board of
Directors of the Bank or its designee(s). 
The Employee shall perform and discharge well and faithfully the
authority, duties and responsibilities which may be assigned to the Employee
from time to time by the Board of Directors of the Bank in connection with the
conduct of the Business of the Bank; provided, however,
that, in making its assignments, the Board of Directors of the Bank shall
assign only such authority, duties and responsibilities assigned to the
Employee from time to time as are, in the aggregate, consistent with the duties
and responsibilities as would be customarily assigned to a person occupying the
positions held by the Employee pursuant to the terms of this Agreement,
including, but not limited to, those set forth on Exhibit A
attached hereto.

 

2.2                                 In addition to
the duties and responsibilities specifically assigned to the Employee pursuant
to Section 2.1 hereof and as set forth on Exhibit A attached
hereto, the Employee shall:

 

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

 

(b)                                 diligently
follow and implement all management policies and decisions communicated to the
Employee by the Chief Executive Officer and the Board of Directors of the Bank,
which are consistent with this Agreement; and

 

(c)                                  timely prepare
and forward to the Board of Directors of the Bank, all reports and accounting
as may be requested of the Employee.

 

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

 

(a)                                  managing the
Employee’s personal assets and investing the Employee’s personal assets in
businesses, which (subject to clause (b) below) are 

 

5

 

not in competition with the Business of the Bank and which will not
require any services on the part of the Employee in their operation or affairs
and in which the Employee’s participation is solely that of an investor;

 

(b)                                 purchasing
securities or other interests in any entity provided that such purchase shall
not result in the Employee’s collectively owning beneficially at any time five
percent (5%) or more of the equity securities of any business in competition
with the Business of the Bank;

 

(c)                                  serving on the
board of directors of other organizations so long as such service does not
materially interfere with the performance of the Employee’s duties under this
Agreement and are not in competition with the Business of the Bank; and

 

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

 

Notwithstanding anything to the contrary in this Section 2.3, the
Employee may serve as a principal of Bankers’ Capital Group, LLC.  For the avoidance of doubt, Bankers’ Capital
Group, LLC also serves as a general partner of Sagus Partners, LLC and intends
to do so following the date of this Agreement.

 

3.                                      Term
and Termination.

 

3.1                                 Term.  This Agreement shall remain in effect for the
Term.  While this Agreement remains in
effect, it shall automatically renew each day after the Effective Date such
that the Term remains a three-year term from day-to-day thereafter unless any
party gives written notice to the others of its or his intent that the
automatic renewals shall cease.  In the
event such notice of non-renewal is properly given, absent prior termination by
the Bank or the Employee pursuant to Section 3.2, this Agreement and the
Term shall expire on the third (3rd) anniversary of the thirtieth (30th) day
following the date such written notice is received.  Without
limiting the foregoing, if the Bank determines in any annual performance review
that the Employee’s performance under this Agreement is not satisfactory, the
Bank may provide the Employee with written notice of non-renewal of this
Agreement.

 

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

 

3.2.1                        By the Bank:

 

(a)                                  For Cause,
following approval of such action by at least seventy-five (75%) of the
membership of the Board of Directors of the Bank and only after providing
Employee with at least thirty (30) days’ written notice, in which 

 

6

 

event the Bank shall have no further obligation to the Employee except
for the payment of any amounts earned and unpaid as of the effective date of
termination; or

 

(b)                                 Without Cause
at any time, following approval of such action by at least two-thirds (2/3) of
the disinterested directors of the Bank, provided that the Bank shall give the
Employee sixty (60) days’ prior written notice of its intent to terminate, in
which event the Bank shall be required to meet its obligations to the Employee
under Section 3.3.1 below.

 

3.2.2                        By the Employee:

 

(a)                                  For Cause, with
no prior notice except as provided in Section 1.7.2, in which event the
Bank shall be required to meet its obligations to the Employee under
Section 3.3.1 below; or

 

(b)                                 Without Cause,
provided that the Employee shall give the Bank sixty (60) days’ prior written
notice of the Employee’s intent to terminate, in which event the Bank shall
have no further obligation to the Employee except for payment of any amounts
earned and unpaid as of the effective date of the termination.

 

3.2.3                        By the Employee within the
period commencing three (3) months prior to and ending twelve (12) months
after a Change in Control of the Employer (the “Election
Period”), provided that the Employee shall give thirty (30) days’
written notice prior to the end of the Election Period to the Employer of the
Employee’s intention to terminate this Agreement, in which event the Employer
shall be required to meet its obligations to the Employee under
Section 3.3.2 below.

 

3.2.4                        At any time upon mutual,
written agreement of the parties, in which event the Bank shall have no further
obligation to the Employee except for the payment of any amounts earned and
unpaid as of the effective date of the termination.

 

3.2.5                        Notwithstanding anything in
this Agreement to the contrary, the Term shall expire automatically upon the
Employee’s death or Permanent Disability, and if the reason for termination is
the Employee’s death, the Bank shall have no further obligation to the Employee
except for the payment of any amounts earned and unpaid as of the effective
date of termination and, if the reason for termination is the Employee’s
Permanent Disability, the Bank shall pay to the Employee an amount equal to
Average Monthly Compensation for each full month following such termination
until the earlier of the month prior to the month for which the Employee’s
long-term disability benefits become payable or six (6) full months
commencing with the month following the month in which the date of termination
occurs.

 

7

 

3.3                                 Termination
Payments.

 

3.3.1                        In the event the Employee’s employment is terminated under this Agreement
prior to the expiration of the Term pursuant to Section 3.2.1(b) or Section 3.2.2(a),
the Bank shall pay to the Employee as severance pay and liquidated damages a
lump sum amount equal to the (a) greater of (i) the current Base
Salary divided by 12, or (ii) the Average Monthly Compensation, multiplied
by (b) 12.  In addition, from the
effective date of the termination pursuant to Section 3.2.1(b) or Section 3.2.2(a),
the Bank shall pay an amount equal to what would be the Employee’s cost of
COBRA health continuation coverage for the Employee and eligible dependents for
the greater of twelve (12) months or the period during which the Employee and
those eligible dependents are entitled to COBRA health continuation coverage
from the Bank.

 

3.3.2                        In the event the Employee’s employment is terminated under this Agreement
prior to the expiration of the Term pursuant to Section 3.2.3, the Bank
shall pay to the Employee as severance pay and liquidated damages a lump sum
amount equal to the (a) greater of (i) the current Base Salary
divided by 12, or (ii) the Average Monthly Compensation, multiplied by (b) the
number of months (including partial months) from the effective date of the
termination through the then unexpired portion of the Term or, if greater,
24.  In addition, from the effective date
of the termination pursuant to Section 3.2.3, through the then unexpired
portion of the Term (or, if greater, for a period of twenty-four (24) months
following the effective date of the termination) (the “Severance
Period”), the Bank shall pay an amount equal to what would be
the Employee’s cost of COBRA health continuation coverage for the Employee and
eligible dependents for the greater of the Severance Period or the period
during which the Employee and those eligible dependents are entitled to COBRA
health continuation coverage from the Bank.

 

3.3.3                        Notwithstanding any other provision of this Agreement to the contrary, if
the aggregate of the payments provided for in this Agreement and the other
payments and benefits that the Employee has the right to receive from the Bank
(the “Total Payments”) would
constitute a “parachute payment,” as defined in Section 280G(b)(2) of
the Internal Revenue Code, as amended (the “Code”),
the Employee shall receive the Total Payments unless the (a) after-tax
amount that would be retained by the Employee (after taking into account all
federal, state and local income taxes payable by the Employee and the amount of
any excise taxes payable by the Employee under Section 4999 of the Code
that would be payable by the Employee (the “Excise
Taxes”)) if the Employee were to receive the Total Payments has
a lesser aggregate value than (b) the after-tax amount that would be
retained by the Employee (after taking into account all federal, state and
local income taxes payable by the Employee) if the Employee were to receive the
Total Payments reduced to the largest amount as would result in no portion of
the Total Payments being subject to Excise Taxes (the “Reduced
Payments”), in which case the Employee shall be entitled only to
the Reduced Payments.  If the Employee is
to receive the Reduced Payments, the Employee shall be entitled to determine
which of the Total Payments, and the relative portions of each, are to be
reduced.

 

In connection with the Total Payments
contemplated in this Section 3.3.3, the parties agree that to the minimum
extent necessary to comply with Section 280G of the Code and to avoid the
imposition of excise taxes under Section 4999 of the Code, the 

 

8

 

Employee agrees to provide personal services on behalf
of the Bank following his termination of employment in exchange for reasonable
compensation for such services.  If so
required, a portion of the Total Payments shall be deemed to be attributable to
such post-termination services.  The
parties agree that any compensation attributable to such services must comply
with the requirements of Section 280G of the Code and the Treasury
Regulations promulgated thereunder, including, but not limited to, the
requirements set forth in Q/A-9 of Treasury Regulation 1.280G-1.  The parties agree to negotiate in good faith
at the time of Employee’s termination of employment to determine the scope and
duration of services to be rendered (if any) by Employee, and the related
compensation payable therefore, for the period following such termination of
employment, all with the objective of complying with Section 280G of the
Code and the intent of this paragraph.

 

Notwithstanding the provisions in this Section 3.3.3,
the Bank and the Employee shall take all steps necessary (including with regard
to any post-termination services by the Employee) to ensure that any
termination described in Section 3 constitutes a “separation from service”
within the meaning of Section 409A of the Code.

 

3.3.4                        This Agreement is intended to comply with, or otherwise be exempt from, Section 409A
of the Code and any regulations and U.S. Department of Treasury guidance
promulgated thereunder.  If any provision
of this Agreement does not satisfy the requirements of Section 409A of the
Code, such provision shall nevertheless be applied in a manner consistent with
those requirements. If any provision of this Agreement would subject Employee
to additional tax or interest under Section 409A(a)(1) of the Code,
the Bank shall reform the provision, and the Bank and Employee agree that they
will execute any and all amendments to this Agreement as they mutually agree in
good faith may be necessary to ensure compliance with Section 409A of the
Code.  Notwithstanding any other
provision in this Agreement, if Employee is determined by the Bank, as of the
date of termination of employment with the Bank, to be a “specified employee,”
as such term is defined in Section 409A(a)(2)(B)(i) of the Code, and
if any benefits paid to Employee hereunder would be considered deferred
compensation under Section 409A of the Code, and finally if an exemption
from the six month delay requirement of Section 409A(a)(2)(B)(i) of
the Code is not available, then all severance payments and other payments,
other than as a result of death, that would normally be paid within six months
from the date of termination of employment shall be paid on the first day of
the seventh month following termination of employment.

 

4.                                      Compensation.

 

The
Employee shall receive the following salary and benefits during the Term:

 

4.1                                 Base Salary.  The Employee shall be compensated at a base
rate of Three Hundred Fifty Thousand Dollars ($350,000) per year, which may be
increased from time to time in accordance with the immediately succeeding
sentence (“Base Salary”).  The Employee’s salary shall be reviewed by
the Board of Directors of the Bank annually, and the Employee shall be entitled
to receive annually an increase in such amount, if any, as may be determined by
the 

 

9

 

Board
of Directors of the Bank based upon the performance of the Bank and its
compliance with regulatory standards. 
Such salary shall be payable in accordance with the Bank’s normal payroll
practices.

 

4.2                                 Incentive
Compensation.  The
Employee shall be eligible for an annual bonus in an amount up to fifty percent
(50%) of the Employee’s Base Salary pursuant to any bonus, incentive or other
executive compensation programs as are made available to senior management of
the Bank from time to time (the “Incentive Compensation”).

 

4.3                                 Stock Options.  The Bank may grant to the Employee stock
options from time to time commensurate with the Employee’s position.  Any such options shall be reflected by a
separate written award.

 

4.4                                 Benefits.  The Employee shall be entitled to such
benefits as may be available from time to time for senior executives of the
Bank similarly situated to the Employee. 
All such benefits shall be awarded and administered in accordance with
the Bank’s standard policies and practices. 
Such benefits may include, by way of example only, profit sharing plans,
retirement or investment funds, dental, health and life insurance benefits and
such other benefits as the Bank deems appropriate.

 

4.5                                 Business
Expenses.  The Bank
shall reimburse the Employee for reasonable business (including travel)
expenses incurred by the Employee in performance of the Employee’s duties
hereunder; provided, however, that the Employee shall, as a condition of
reimbursement, submit verification of the nature and amount of such expenses in
accordance with reimbursement policies from time to time adopted by the Bank
and in sufficient detail to comply with rules and regulations promulgated
by the Internal Revenue Service.

 

4.6                                 Professional
Associations.  The
Employee shall be entitled to attend such courses, annual meetings, conferences
and seminars of his selection at the Bank’s expense, provided that the Bank
shall only be required to cover reasonable expenses associated with the
Employee’s attendance at such courses, conferences and seminars that are
incurred consistent with the Bank’s budget operating plan and policies then in
effect.

 

4.7                                 Vacation.  On a non-cumulative basis the Employee shall
be entitled to a minimum of four weeks (4) weeks of vacation annually,
during which the Employee’s compensation shall be paid in full.

 

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

 

5.                                      Bank
Information.

 

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

 

10

 

5.2                                 Obligations of
the Employee.  The
Employee agrees (a) to hold Bank Information in strictest confidence, and (b) not
to use, duplicate, reproduce, distribute, disclose or otherwise disseminate
Bank Information or any physical embodiments thereof and may in no event take
any action causing or fail to take any action necessary in order to prevent any
Bank Information from losing its character or ceasing to qualify as
Confidential Information or a Trade Secret. 
In the event that the Employee is required by law to disclose any Bank
Information, the Employee will not make such disclosure unless (and then only
to the extent that) the Employee has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written
notice is given to the Bank when the Employee becomes aware that such
disclosure has been requested and is required by law.  This Section 5 shall survive for a
period of twelve (12) months following termination of this Agreement with
respect to Confidential Information, and shall survive termination of this
Agreement for so long as is permitted by the then-current Georgia Trade Secrets
Act of 1990, O.C.G.A. §§ 10-1-760 to -767, with respect to Trade Secrets.

 

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

 

6.                                      Non-Competition.

 

The
Employee agrees that during his employment by the Bank hereunder and, in the
event of his termination other than by the Bank without Cause pursuant to
Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of thirty-six (36) months thereafter, the Employee will not (except on
behalf of or with the prior written consent of the Bank), within the Area,
either directly or indirectly, on his own behalf or in the service or on behalf
of others, as an executive employee or in any other capacity which involves
duties and responsibilities similar to those undertaken for the Bank, engage in
any business which is the same as or essentially the same as the Business of
the Bank.  Notwithstanding the foregoing,
the Bank agrees that the Employee may own up to 5% of the voting shares of any
financial institution engaged in the Business of the Bank in the Area.

 

7.                                      Non-Solicitation
of Customers.

 

The
Employee agrees that during the Employee’s employment by the Bank hereunder
and, in the event of Employee’s termination other than by the Bank without
Cause pursuant to Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of twenty-four (24) months thereafter, the Employee will not (except on
behalf of or with the prior written consent of the Bank), on the Employee’s own
behalf or in the service or on behalf of others, solicit, divert or appropriate
or attempt to solicit, divert or appropriate, directly or by assisting others,
any business from any of the Bank’s customers, including actively sought
prospective customers, with whom the Employee has or had 

 

11

 

material
contact during the last twelve (12) months of the Employee’s employment, for
purposes of providing products or services that are competitive with those
provided by the Bank.

 

8.                                      Non-Solicitation
of Employees.

 

The
Employee agrees that during the Employee’s employment by the Bank hereunder
and, in the event of the Employee’s termination other than by the Bank without
Cause pursuant to Section 3.2.1(b), by the Employee for Cause pursuant to
Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a
period of twenty-four (24) months thereafter, the Employee will not on the
Employee’s own behalf or in the service or on behalf of others, solicit,
recruit or hire away or attempt to solicit, recruit or hire away, directly or
by assisting others, any employee of the Bank or its Affiliates, whether or not
such employee is a full-time employee or a temporary employee of the Bank or
its Affiliates and whether or not such employment is pursuant to written
agreement and whether or not such employment is for a determined period or is
at will.

 

9.                                      Remedies.

 

The
Employee agrees that the covenants contained in Sections 5 through 8
hereof are of the essence of this Agreement; that each of the covenants is
reasonable and necessary to protect the business, interests and properties of
the Bank; and that irreparable loss and damage will be suffered by the Bank
should he breach any of the covenants. 
Therefore, the Employee agrees and consents that, in addition to all the
remedies provided by law or in equity, the Bank shall be entitled to a
temporary restraining order and temporary and permanent injunctions to prevent
a breach or contemplated breach of any of the covenants.  The Bank and the Employee agree that all
remedies available to the Bank or the Employee, as applicable, shall be
cumulative.  In addition, in the event
the Employee fails to comply with any of the covenants contained in
Section 5 hereof and such failure shall not be cured to the reasonable
satisfaction of the Bank within thirty (30) days after receipt of written
notice thereof from the Bank, the Bank shall thereupon be relieved of liability
for all obligations then remaining under Section 3.3 hereof.

 

10.                               Severability.

 

The
parties agree that each of the provisions included in this Agreement is
separate, distinct and severable from the other provisions of this Agreement
and that the invalidity or unenforceability of any Agreement provision shall
not affect the validity or enforceability of any other provision of this
Agreement.  Further, if any provision of
this Agreement is ruled invalid or unenforceable by a court of competent
jurisdiction because of a conflict between the provision and any applicable law
or public policy, the provision shall be redrawn to make the provision
consistent with and valid and enforceable under the law or public policy.

 

12

 

11.                               No
Set-Off by the Employee.

 

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

 

12.                               Notice.

 

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

 

(a)                                  If to the Bank,
to the Bank at:

 

State
Bank and Trust Company

Attention:
Chief Executive Officer

4219
Forsyth Road

Macon,
Georgia 31210

 

(b)                                 If to the
Employee, to the Employee at:

 

Stephen
Winston Doughty

9050
Old Southwick Pass

Alpharetta,
Georgia 30022

 

13.                               Assignment.

 

Neither
party hereto may assign or delegate this Agreement or any of its rights and
obligations hereunder without the written consent of the other party hereto;
provided, however, that this Agreement shall be assumed by and shall be binding
upon any successor to the Bank.

 

14.                               Waiver.

 

A
waiver by the Bank of any breach of this Agreement by the Employee shall not be
effective unless in writing, and no waiver shall operate or be construed as a
waiver of the same or another breach on a subsequent occasion.

 

13

 

15.                               Arbitration.

 

Except
for any claim for injunctive relief, any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, which shall be conducted by a three-person
arbitration panel, one of whom shall be selected by each party and the third of
whom shall be selected jointly upon mutual agreement of both parties.  The place of arbitration shall be Fulton
County, Georgia and the Bank and the Employee agree that they will seek to
enforce any arbitration award in the Superior Court of Fulton County.  The decision of the arbitration panel shall
be final and binding upon the parties and judgment upon the award rendered by
the arbitration panel may be entered by any court having jurisdiction.  The Bank agrees to pay the fees and expenses
associated with the arbitration proceedings.

 

16.                               Attorneys’
Fees.

 

With
respect to arbitration of disputes and if litigation ensues between the parties
concerning the enforcement of an arbitration award, each party shall pay its
own fees, costs and expenses; provided, however, the Bank shall advance to the
Employee reasonable fees, costs and expenses incurred by the Employee in
preparing for and in initiating or defending against any proceeding or suit
brought to enforce rights or obligations set forth in this Agreement.  Such advances shall be made within thirty
(30) days after receiving copies of invoices presented by the Employee for such
fees, costs and expenses.  The Employee
shall have the obligation to reimburse the Bank within sixty (60) days
following the final disposition of the matter (including appeals) to the full
extent of the aggregate advances unless the panel of arbitrators or court, as
the case may be, has ruled in favor of the Employee on the merits of the
substantive issues in dispute.

 

17.                               Applicable
Law.

 

This
Agreement shall be construed and enforced under and in accordance with the laws
of the State of Georgia.  The parties
agree that the Superior Court of Fulton County, Georgia, shall have jurisdiction
of any case or controversy arising under or in connection with this Agreement
and shall be a proper forum in which to adjudicate such case or
controversy.  The parties consent to the
jurisdiction of such courts.

 

18.                               Interpretation.

 

Words
importing any gender includes all genders. 
Words importing the singular form shall include the plural, and vice
versa.  The terms “herein,” “hereunder,” “hereby,
“hereto,” “hereof” and any similar terms refer to this Agreement.  Any captions, titles or headings preceding
the text of any article, section or subsection herein are solely for
convenience of reference and shall not constitute part of this Agreement or
affect its meaning, construction or effect.

 

14

 

19.                               Entire
Agreement.

 

This
Agreement embodies the entire and final agreement of the parties on the subject
matter stated in the Agreement.  No
amendment or modification of this Agreement shall be valid or binding upon the
Bank or the Employee unless made in writing and signed by both parties.  All prior understandings and agreements
relating to the subject matter of this Agreement are hereby expressly
terminated.

 

20.                               Rights
of Third Parties.

 

Nothing
herein expressed is intended to or shall be construed to confer upon or give to
any person, firm or other entity, other than the parties hereto and their
permitted assigns, any rights or remedies under or by reason of this Agreement.

 

21.                               Survival.

 

The
obligations of the Bank pursuant to Sections 3.2.5 and 3.3 and the
obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 shall survive
the termination of the employment of the Employee hereunder for the period
designated under each of those respective sections.

 

[Signatures Appear on the
Following Page.]

 

15

 

IN
WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement in
accordance with the provisions hereof.

 

	
   

  	
  STATE
  BANK AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Joseph W. Evans

  
	
   

  	
  Name:

  	
  Joseph
  W. Evans

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
  Date:

  	
  July 19,
  2010

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/
  J. Daniel Speight

  	
   

  
	
  Name:

  	
  J.
  Daniel Speight

  	
   

  
	
  Title:

  	
  Vice
  Chairman, Chief Financial

  	
   

  
	
   

  	
  Officer
  and Chief Operating Officer

  	
   

  
	
  Date:

  	
  July 19,
  2010

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/
  Stephen Winston Doughty

  
	
   

  	
  Name:

  	
  Stephen
  Winston Doughty

  
	
   

  	
  Date:

  	
  July 19,
  2010

  

 

Employment Agreement  Signature Page

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