Document:

Exhibit 10.7
    

    
      EMPLOYMENT AGREEMENT
    

    
                THIS EMPLOYMENT AGREEMENT (the “Agreement”), is entered into
      as of the 21st day of July, 2010, by and between HERITAGEBANK
      OF THE SOUTH (the “Bank”) and T. HEATH FOUNTAIN (“Employee”).
    

    
                WHEREAS, the Employee is presently serving as “Chief Financial
      Officer” of the Bank;
    

    
                WHEREAS, the Bank desires to continue to employ Employee as
      its Chief Financial Officer;
    

    
                WHEREAS, the Bank and the Employee believe it to be in their
      mutual best interest to enter into this Agreement in order to insure
      continuity of Employee’s employment with the Bank and to reinforce and
      encourage the continued attention and dedication of the Employee to
      Employee’s assigned duties;
    

    
                WHEREAS, the Bank desires to provide fair and reasonable
      benefits to Employee for the services provided to the Bank on the terms
      and conditions set forth in this Agreement;
    

    
                WHEREAS, the Bank desires reasonable protection of its
      confidential business and customer information which has been developed
      over the years at substantial expense and to assure that the Employee
      will not compete with the Bank for a reasonable period of time after
      termination of employment with it, except as otherwise provided herein;
      and
    

    
                WHEREAS, this Agreement shall be deemed to replace and
      supersede any existing employment agreement between the Employee and the
      Bank.
    

    
                NOW THEREFORE, in consideration of these premises, as well as
      the mutual covenants and undertakings herein contained, the Bank and the
      Employee, each intending to be legally bound, do hereby covenant and
      agree as follows:
    

    
      1.
Employment
    

    
                Upon the terms and subject to the conditions set forth in this
      Agreement, the Bank employs Employee as its Chief Financial Officer and
      Employee hereby accepts such employment.
    

    
      2.
Position and Duties
    

    
                Employee agrees to serve as Chief Financial Officer and to
      perform such duties in that office as may be reasonably assigned to
      Employee by the Chief Executive Officer of the Bank. All such duties
      shall be performed in or from the offices of the Bank, and shall be of
      the same character as those generally associated with the position
      presently held by Employee.  During the term of this Agreement, Employee
      agrees that Employee will serve the Bank faithfully and to the best of
      Employee’s ability and that Employee will devote Employee’s full
      business time, attention and skills to its business; provided however,
      that the foregoing shall not be deemed to restrict Employee from
      devoting a reasonable amount of time and attention to the management of
      Employee’s personal affairs and investments, so long as such activities
      do not interfere with the responsible performance of Employee’s duties
      hereunder.  
    

    
      
        

        

      

      
        
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      3.
Term
    

    
                The term of this Agreement shall be for a period of two (2)
      years, commencing on July 21, 2010 (the “Effective Date”) and subject to
      earlier termination as provided herein (the “Term”).  Beginning on the
      first anniversary of the Effective Date and on each anniversary
      thereafter, the Term of this Agreement shall be extended for an
      additional period of two (2) years provided that (1) the Bank has not
      given notice to the Employee at least thirty (30) days prior to such
      anniversary that the Term of the Agreement shall not be so extended; and
      (2) prior to such anniversary, the Chief Executive Officer of the Bank
      has explicitly reviewed and approved such extension in
      writing.  Reference herein to the Term of this Agreement shall refer to
      the initial term as well as any such extended terms.  
    

    
      4.
Compensation
    

    
                (a)       Salary.  Employee
      shall receive an annual salary of ONE HUNDRED THIRTY-FIVE THOUSAND
      SEVENTEEN and NO/100 DOLLARS ($135,017.00) (“Base Compensation”) per
      year, payable in such increments as shall be specified by the Bank.  The
      amount of the Employee’s salary shall be reviewed by the Chief Executive
      Officer and the Board of Directors of the Bank (the “Bank Board”)
      annually during the Term of this Agreement.  
    

    
                (b)       Discretionary
      Bonuses.  The Employee shall be entitled to participate, in an
      equitable manner, as determined by the Chief Executive Officer and/or
      the Bank Board, in the Bank’s Performance Incentive Plan as authorized
      and declared, from time to time, by the Chief Executive Officer and the
      Bank Board.
    

    
                (c)       Expenses.  Employee
      shall be entitled to receive prompt reimbursement for all reasonable
      expenses incurred by the Employee in performing services under this
      Agreement in accordance with the policies and procedures applicable to
      other similarly-situated employees of the Bank, provided that the
      Employee accounts for such expenses as required under such policies and
      procedures.  Requests for reimbursement of expenses shall be submitted
      no more than thirty (30) days after such expenses are incurred.
    

    
      5.
Benefits
    

    
                (a)       Employee
      Benefit Plans.  The Employee shall be entitled to participate in all
      applicable plans relating to pension, thrift, profit sharing, group life
      insurance, medical and dental coverage, the Bank’s Performance Incentive
      Plan, and other retirement or employee benefits or combinations thereof
      as established by the Bank from time to time.
    

    
                (b)       Country
      Club or Other Dues.  The Bank shall pay all regularly-assessed
      monthly dues required to maintain a golfing membership at a country club
      to be selected by Employee, subject to approval by the Bank; provided,
      however, that the Employee shall be responsible for the payment of all
      food minimums and other charges made upon Employee’s account at said
      country club, other than those related to business development
      activities undertaken for the benefit of the Bank which are documented
      in accordance with the Bank’s policy regarding such expenses.
    

    
                (c)       PDA
      and laptop computer.  The Bank shall provide Employee with use of a
      PDA and a laptop computer to assist in performance of Employee’s duties
      hereunder.
    

    
      
        

        

      

      
        
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      6.
Vacation
    

    
                Employee shall be entitled to annual paid vacation of four (4)
      weeks per year in accordance with the policies established, from time to
      time, by the Bank.
    

    
      7.
Termination of Employment.
    

    
                (a)       Termination
      for Cause.  Employee’s employment with the Bank may be terminated
      for cause by the Bank.  In the event of a Termination for Cause, the
      Employee shall not be entitled to any severance compensation or benefits
      whatsoever, other than any compensation accrued through the Date of
      Termination.  For purposes of this Agreement, the phrase “Termination
      for Cause” shall mean termination of the employment of the Employee
      because of the Employee’s personal dishonesty, incompetence, willful
      misconduct, breach of fiduciary duty, failure to perform assigned
      duties, willful violation of any law, rule or regulation (other than
      traffic violations or similar offenses) or material breach of any
      provision of this Agreement.  The term “Date of Termination” shall, for
      purposes of this Agreement, mean the earlier of (1) the date upon which
      the Bank gives notice to the Employee of the termination of Employee’s
      employment with the Bank; or (2) the date upon which the Employee ceases
      to serve as Employee of the Bank.
    

    
                (b)       Voluntary
      Termination.  Employee’s employment may be voluntarily terminated by
      the Employee without good reason at any time upon one hundred twenty
      (120) days’ written notice to the Bank, or such shorter period as may be
      agreed upon between the Employee and the Chief Executive Officer of the
      Bank.  In the event of such voluntary termination, the Bank shall be
      obligated to continue to pay to the Employee the Employee’s salary and
      accrued benefits through the Date of Termination, at the time such
      payments are due, and the Bank shall thereafter have no further
      obligation to the Employee under this Agreement.
    

    
                (c)       Termination
      by Employee for Good Reason.  Employee, by written notice to the
      Chief Executive Officer of the Bank, may terminate Employee’s employment
      with the Bank immediately for “good reason.”  For purposes of this
      Agreement, “good reason” shall mean a good faith determination by
      Employee, in Employee’s reasonable judgment, that any one or more of the
      following events has occurred, without Employee’s prior written consent,
      within twenty-four (24) months of a Change of Control:
    

    
                          (1)       the Bank reduces the Employee’s salary,
      benefits, and/or the average annual discretionary bonus received by
      Employee during the term of Employee’s employment with the Bank, other
      than as part of an undertaking whereby the salary, benefits, and/or
      annual discretionary bonus of other similarly-situated employees of the
      Bank is reduced by an equivalent amount;
    

    
                          (2)       the Bank requires Employee to be based
      anywhere other than a job location within the boundaries of Dougherty
      and Lee Counties, Georgia; or
    

    
                          (3)       the Bank takes any action that would
      materially adversely affect the physical conditions existing at the time
      of the Change of Control in or under which Employee performs Employee’s
      employment duties, provided that the Bank may take action with respect
      to such conditions after a Change of Control, so long as such conditions
      are at least commensurate with the conditions in or under which Employee
      has customarily performed Employee’s employment duties;
    

    
      
        

        

      

      
        
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                          (4)       for purposes of this Agreement, a “Change
      of Control” shall mean any of the following events:
    

    
      (a)       the merger or consolidation of the Bank with, or a sale of all
      or substantially all of the assets of the Bank to, any person or entity
      or group of associated persons or entities;
    

    
      (b)       the direct or indirect beneficial ownership, in the aggregate,
      of securities of the Bank, or its parent company, representing
      twenty-five percent (25%) or more of the total combined voting power of
      the Bank’s, or its parent company’s, then issued and outstanding
      securities by any person or entity, or group of associated persons or
      entities acting in concert, not affiliated with the Bank or its parent
      company as of the Effective Date hereof; provided, however, that none of
      the securities of the Bank or its parent company which are now or
      hereafter offered for sale as part of a public offering shall be taken
      into consideration for purposes of determining the occurrence of a
      Change of Control and further provided that acquisition of the Bank by a
      newly-created parent or holding company as a part of a transaction
      whereby the stock of the parent company becomes fully publicly-traded
      shall not constitute a Change of Control; or
    

    
      (c)       the shareholders of the Bank approve any plan or proposal for
      the liquidation or dissolution of the Bank;
    

    
      provided, however, that a Change of Control shall be deemed to result
      from any transaction precipitated by the Bank’s insolvency, appointment
      of a conservator, or determination by a regulatory agency that the Bank
      is insolvent, nor from any transaction initiated by the Bank or its
      parent company, in regard to converting from a publicly-traded company
      to a privately-held company.
    

    
                In the event of termination by the Employee of Employee’s
      employment with the Bank for “good reason,” the Bank shall be obligated
      to continue to pay to the Employee the Employee’s annual salary and
      benefits, as the same may have been modified from time to time since the
      Effective Date, for a period of two (2) years after the Date of
      Termination and, at the end of each calendar year during that two year
      period, the Bank shall also pay to such Employee an amount equal to the
      average annual discretionary bonus, as a percentage of total annual
      compensation, which Employee received (if any) during the last three (3)
      calendar years of Employee’s employment with the Bank.  
    

    
                (d)       Termination
      By Bank Without Cause.  The Bank may, upon one hundred twenty (120)
      days written notice to Employee, terminate Employee’s employment
      hereunder without cause.  In the event that the Bank terminates the
      Employee’s employment hereunder without cause, the Bank shall be
      obligated to continue to pay to the Employee the Employee’s annual
      salary and benefits, as the same may have been modified from time to
      time since the Effective Date, for a period of two (2) years after the
      Date of Termination, and, at the end of each calendar year during that
      two year period, the Bank shall also pay to Employee an amount equal to
      the average annual discretionary bonus, as a percentage of total annual
      compensation, which Employee received (if any) during the last three (3)
      calendar years of Employee’s employment with the Bank.
    

    
                (e)       Death;
      Disability.  In the event of the death of the Employee while
      employed under this Agreement and prior to any termination of
      employment, the Employee’s estate, or such person as the Employee may
      have previously designated in writing, shall be entitled to receive from
      the Bank the salary of the Employee through the day on which the
      Employee died.  If the Employee becomes disabled, as defined in the
      Bank’s then current disability plan, if any, or if the Employee is
      otherwise unable to perform Employee’s duties in accordance with this
      Agreement, the Employee shall be entitled to receive group and other
      disability income benefits of the type, if any, then provided by the
      Bank.  The Bank shall be entitled to terminate this Agreement and the
      employment of the Employee at its discretion, after the Employee has
      been unable to serve as Chief Financial Officer due to disability for a
      period of 180 consecutive days.
    

    
      
        

        

      

      
        
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      8.
Confidential Information and Trade Secrets
    

    
                (a)  Prohibition
      Against Disclosure.  The Employee acknowledges that, in and as a
      result of employment by the Bank, the Employee will use, acquire, and
      develop Confidential Information and Trade Secrets. As a material
      inducement to the Bank to employ the Employee and to pay the Employee
      compensation for services to be rendered to the Bank by the Employee (it
      being understood and agreed by the parties hereto that such compensation
      shall also be paid and received in consideration hereof), the Employee
      covenants and agrees that the Employee shall not, except with the prior
      written consent of the Bank, directly or indirectly, use, divulge,
      reveal, report, publish, transfer or disclose for any purposes
      whatsoever, any Confidential Information or Trade Secrets.  The
      covenants of confidentiality set forth herein shall apply at any time
      during the Term of the Employee’s employment with the Bank and (i) with
      respect to Confidential Information, for a period of twenty four (24)
      months after the termination of such employment for any reason
      whatsoever; and (ii) with respect to Trade Secrets, at any and all times
      following the termination of such employment for any reason whatsoever.
    

    
                (b)       Return
      of Property.  All Confidential Information and Trade Secrets and all
      physical embodiments thereof received or developed by the Employee while
      employed by the Bank are confidential to and are and will remain the
      sole and exclusive property of the Bank.  Upon request by the Bank, and
      in any event upon termination of the employment of the Employee with the
      Bank for any reason whatsoever, the Employee shall promptly deliver to
      the Bank all property belonging to the Bank, including, without
      limitation, all Confidential Information and Trade Secrets (and all
      physical embodiments thereof) then in the Employee’s custody, control or
      possession.
    

    
                (c)       Confidential
      Information.  The term “Confidential Information” shall mean any and
      all materials, data and information, other than Trade Secrets, relating
      to the Bank (i) of which the Employee became aware as a consequence of
      or through employment with the Bank or any other arrangement or
      relationship with the Bank; (ii) which has value to the Bank and is not
      generally known to its competitors; and (iii) which is treated by the
      Bank as confidential (whether or not such material or information is
      marked “confidential”).  Confidential Information may include, but is
      not limited to, information relating to the financial affairs, customers
      (including without limitation customer data, customer site information,
      customer names and prospect customer names), services, pricing policies,
      loan policies and practices, employees, employees’ compensation,
      research, development, projects, business plans, inventions, purchasing,
      accounting, distribution systems and marketing of the Bank.
    

    
      
        

        

      

      
        
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                (d)       Trade
      Secrets.  The term “Trade Secrets” shall mean information, without
      regard to form, including, but not limited to, technical or nontechnical
      data, a formula, a pattern, a compilation, a program, a device, a
      method, a technique, a drawing, a process, financial data, financial
      plans, product plans, loan policies, loan procedures, or a list of
      actual or potential customers or suppliers which is not commonly known
      by or available to the public and which information: (i) 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 (ii) is
      the subject of efforts that are reasonable under the circumstances to
      maintain its secrecy.
    

    
      9.
Covenants Regarding Competition
    

    
                (a)       Covenant
      Not to Compete.  During the period of twelve (12) months immediately
      following the termination of Employee’s employment, for any reason
      whatsoever, the Employee shall not, on the Employee’s own behalf, or on
      behalf of any person, firm, partnership, association, corporation,
      limited liability company or any other business organization, entity or
      enterprise engage, directly or indirectly in any Competing Business
      within the Covenant Territory.  For purposes of this Agreement,
      “Competing Business” shall mean the business of any bank or other
      organization of whatever form which provides any product or service
      which is competitive or potentially competitive with any product or
      service provided by the Bank during the period of twenty four (24)
      months immediately preceeding the cessation of the Employee’s employment
      with the Bank and the term “Covenant Territory” shall mean those areas
      circumscribed by a line drawn at a radius of fifty (50) miles from the
      Bank’s primary office locations in Albany, Georgia and Valdosta, Georgia.
    

    
                (b)       Covenant
      Not to Solicit Employees.  During the term of the Employee’s
      employment by the Bank and for a period of twenty-four (24) months
      following the termination of such employment for any reason whatsoever,
      the Employee shall not, either directly or indirectly, on the Employee’s
      own behalf, or on behalf of others, solicit, divert, or hire, or attempt
      to solicit, divert, or hire, to or for any Competing Business, any
      person employed by the Bank in the Covenant Territory, whether or not
      the employment of any such person is pursuant to a written agreement,
      for a determined period, or at will.
    

    
                (c)       Remedies.  The
      Employee agrees that the covenants contained in Section 9 hereof are of
      the essence of this Agreement; that each of such covenants is reasonable
      and necessary to protect and preserve the interests and properties of
      the Bank and the business of the Bank; and that irreparable loss and
      damage will be suffered by the Bank should the Employee breach any of
      the covenants.  Therefore, the Employee agrees and consents that, in
      addition to all of the remedies provided at law or in equity, the
      Employee shall forfeit the right to any compensation after the Date of
      Termination to which the Employee would otherwise be entitled pursuant
      to the provisions of either Section 7(c) or 7(d) above and the Bank
      shall have the right to recoup from the Employee any such compensation
      previously paid to the Employee after the Date of Termination, with
      interest at the applicable legal rate, in addition to any and all
      damages which may have been suffered by the Bank as a result of the
      Employee’s breach of any of the covenants.  The Bank shall also be
      entitled to a temporary restraining order and temporary and permanent
      injunctions to prevent a contemplated or continued breach of any of the
      covenants.  The existence of any claim, demand, action or cause of
      action of the Employee against the Bank shall not constitute a defense
      to the enforcement by the Bank of any of the covenants or agreements
      herein.
    

    
                (d)       Severability.  The
      parties agree that each of the provisions included in this Section is
      separate, distinct and severable from the other and the remaining
      provisions of this Agreement, and that the invalidity or
      unenforceability of any provision of this Section shall not affect the
      validity or enforceability of any other provision or provisions of this
      Agreement.
    

    
      
        

        

      

      
        
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      10.
No Assignments
    

    
                This Agreement is personal to each of the parties hereto, and
      neither party may assign or delegate any of its rights or obligations
      hereunder without first obtaining the written consent of the other
      party; provided, however, that the Bank may require any successor or
      assign (whether direct or indirect, by purchase, merger, consolidation
      or otherwise) to all or substantially all of the business and/or assets
      of the Bank not otherwise bound by law to the terms of this Agreement,
      by an assumption agreement in form and substance satisfactory to the
      Employee, to expressly assume and agree to perform this Agreement in the
      same manner and to the same extent that the Bank would be required to
      perform it if no such succession or assignment had taken place.  This
      provision is not intended to modify the fact that this Agreement shall
      be binding upon successors in interest of the Bank to the extent
      provided under applicable law.
    

    
      11.
Heirs and Successors
    

    
                This Agreement and all rights of the Employee hereunder shall
      inure to the benefit of and be enforceable by the Employee’s personal
      and legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees.  If the Employee should die while
      any amounts would still be payable to the Employee hereunder if the
      Employee had continued to live, all such amounts, unless otherwise
      provided herein, shall be paid in accordance with the terms of this
      Agreement to the Employee’s devisee, legatee or other designee or if
      there is no such designee, to the Employee’s estate.
    

    
      12.
Notice
    

    
                For the purposes of this Agreement, notices and all other
      communications provided for in the Agreement shall be in writing and
      shall be deemed to have been duly given when personally delivered or
      sent by certified mail, return receipt requested, postage prepaid, to
      the Bank at its home office, to the attention of the Bank Board with a
      copy to the Secretary of the Bank, or, if to the Employee, to such home
      or other address as the Employee has most recently provided in writing
      to the Bank.
    

    
      13.
Amendments
    

    
                No amendments or additions to this Agreement shall be binding
      unless in writing and signed by both parties, except as herein otherwise
      provided.  
    

    
      14.
Headings
    

    
                The headings used in this Agreement are included solely for
      convenience and shall not affect, or be used in connection with, the
      interpretation of this Agreement.
    

    
      
        

        

      

      
        
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      15.
Severability
    

    
                The provisions of this Agreement shall be deemed severable and
      the invalidity or unenforceability of any provision shall not affect the
      validity or enforceability of the other provisions hereof.
    

    
      16.
Governing Law
    

    
                This Agreement shall be governed by the laws of the United
      States to the extent applicable and otherwise by the laws of the State
      of Georgia.
    

    
      17.
Arbitration
    

    
                Any dispute or controversy arising under or in connection with
      this Agreement shall be settled exclusively by arbitration in accordance
      with the rules of the American Arbitration Association then in effect,
      to the extent that said rules are not in conflict with the Georgia
      Arbitration Code, and provided that said arbitration need not be
      scheduled through the American Arbitration Association.  The legal and
      substantive provisions of the Georgia Arbitration Code shall control
      such arbitration proceedings.  Judgment may be entered on the
      arbitrator's award in any court having jurisdiction.
    

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

    

    

    
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      THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
      ENFORCED BY THE PARTIES.       
    

    
    	

        	
           
        	
          HERITAGEBANK OF THE SOUTH
        
	

        	

        	
           
        
	

        	

        	
          
            By: /s/ O. Leonard Dorminey
          

        
	

        	

        	
          Name: O. Leonard Dorminey
        
	

        	

        	
          Title: Chief Executive Officer
        
	
          Signed, sealed and delivered
        	

        	

        
	
          in the presence of:
        	

        	

        
	
          
             
          

        	

        	

        
	
          
            /s/ Patricia F. Maxwell
          

        	

        	

        
	
          Notary Public
        	

        	

        
	
          My Commission Expires: April 26, 2014
        	

        	

        
	

        	

        	
           
        
	

        	

        	
           
        
	

        	

        	
          EMPLOYEE:
        
	

        	

        	
           
        
	

        	

        	
           
        
	

        	

        	
          
            /s/ T. Heath Fountain (SEAL)
          

        
	

        	

        	
          T. HEATH FOUNTAIN, Employee
        
	
          Signed, sealed and delivered
        	

        	

        
	
          in the presence of:
        	

        	

        
	

        	

        	
           
        
	
          
            /s/ Patricia F. Maxwell
          

        	

        	

        
	
          Notary Public
        	

        	

        
	
          My Commission Expires: April 26, 2014
        	

        	

        

    

    

    

    
      Page 9Exhibit 10.8
    

    
      EMPLOYMENT AGREEMENT
    

    
                THIS EMPLOYMENT AGREEMENT (the “Agreement”), is entered into
      as of the 21st day of July, 2010, by and between HERITAGEBANK
      OF THE SOUTH (the “Bank”) and O. MITCHELL SMITH (“Employee”).
    

    
                WHEREAS, the Employee is presently serving as “Chief Credit
      Officer and Executive Vice President” of the Bank;
    

    
                WHEREAS, the Bank desires to continue to employ Employee as
      its Chief Credit Officer and Executive Vice President;
    

    
                WHEREAS, the Bank and the Employee believe it to be in their
      mutual best interest to enter into this Agreement in order to insure
      continuity of Employee’s employment with the Bank and to reinforce and
      encourage the continued attention and dedication of the Employee to
      Employee’s assigned duties;
    

    
                WHEREAS, the Bank desires to provide fair and reasonable
      benefits to Employee for the services provided to the Bank on the terms
      and conditions set forth in this Agreement;
    

    
                WHEREAS, the Bank desires reasonable protection of its
      confidential business and customer information which has been developed
      over the years at substantial expense and to assure that the Employee
      will not compete with the Bank for a reasonable period of time after
      termination of employment with it, except as otherwise provided herein;
      and
    

    
                WHEREAS, this Agreement shall be deemed to replace and
      supersede any existing employment agreement between the Employee and the
      Bank.
    

    
                NOW THEREFORE, in consideration of these premises, as well as
      the mutual covenants and undertakings herein contained, the Bank and the
      Employee, each intending to be legally bound, do hereby covenant and
      agree as follows:
    

    
      1.
Employment
    

    
                Upon the terms and subject to the conditions set forth in this
      Agreement, the Bank employs Employee as its Chief Credit Officer and
      Executive Vice President and Employee hereby accepts such employment.
    

    
      2.
Position and Duties
    

    
                Employee agrees to serve as Chief Credit Officer and Executive
      Vice President and to perform such duties in that office as may be
      reasonably assigned to Employee by the Chief Executive Officer of the
      Bank. All such duties shall be performed in or from the offices of the
      Bank, and shall be of the same character as those generally associated
      with the position presently held by Employee.  During the term of this
      Agreement, Employee agrees that Employee will serve the Bank faithfully
      and to the best of Employee’s ability and that Employee will devote
      Employee’s full business time, attention and skills to its business;
      provided however, that the foregoing shall not be deemed to restrict
      Employee from devoting a reasonable amount of time and attention to the
      management of Employee’s personal affairs and investments, so long as
      such activities do not interfere with the responsible performance of
      Employee’s duties hereunder.  
    

    
      
        

        

      

      
        
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      3.
Term
    

    
                The term of this Agreement shall be for a period of two (2)
      years, commencing on July 21, 2010 (the “Effective Date”) and subject to
      earlier termination as provided herein (the “Term”).  Beginning on the
      first anniversary of the Effective Date and on each anniversary
      thereafter, the Term of this Agreement shall be extended for an
      additional period of one (1) year provided that (1) the Bank has not
      given notice to the Employee at least thirty (30) days prior to such
      anniversary that the Term of the Agreement shall not be so extended; and
      (2) prior to such anniversary, the Chief Executive Officer of the Bank
      has explicitly reviewed and approved such extension in
      writing.  Reference herein to the Term of this Agreement shall refer to
      the initial term as well as any such extended terms.  
    

    
      4.
Compensation
    

    
                (a)       Salary.  Employee
      shall receive an annual salary of ONE HUNDRED THIRTY-NINE THOUSAND
      SEVENTY-FOUR and NO/100 DOLLARS ($139,074.00) (“Base Compensation”) per
      year, payable in such increments as shall be specified by the Bank.  The
      amount of the Employee’s salary shall be reviewed by the Chief Executive
      Officer and the Board of Directors of the Bank (the “Bank Board”)
      annually during the Term of this Agreement.  
    

    
                (b)       Discretionary
      Bonuses.  The Employee shall be entitled to participate, in an
      equitable manner, as determined by the Chief Executive Officer and/or
      the Bank Board, in the Bank’s Performance Incentive Plan as authorized
      and declared, from time to time, by the Chief Executive Officer and the
      Bank Board.
    

    
                (c)       Car
      Allowance.  The Employee shall be paid the sum of $1,100.00 per
      month as a car allowance, such car allowance payment to be subject to
      applicable withholdings.  Employee may determine, in Employee’s
      discretion, whether to expend such car allowance for purposes of the
      purchase and maintenance of an automobile to be utilized in connection
      with Employee’s employment hereunder or for other purposes. In any
      event, the Employee shall be required to provide a suitable vehicle
      which shall be available at all times during the Term of this Agreement
      to be utilized in connection with Employee’s employment duties.  In
      addition, the Employee shall have the right to utilize the credit card
      provided to the Employee by the Bank for payment of charges for fuel
      utilized for both business and personal travel.
    

    
                (d)       Expenses.  Employee
      shall be entitled to receive prompt reimbursement for all reasonable
      expenses incurred by the Employee in performing services under this
      Agreement in accordance with the policies and procedures applicable to
      other similarly-situated employees of the Bank, provided that the
      Employee accounts for such expenses as required under such policies and
      procedures.  Requests for reimbursement of expenses shall be submitted
      no more than thirty (30) days after such expenses are incurred.
    

    
      5.
Benefits
    

    
                (a)       Employee
      Benefit Plans.  The Employee shall be entitled to participate in all
      applicable plans relating to pension, thrift, profit sharing, group life
      insurance, medical and dental coverage, the Bank’s Performance Incentive
      Plan, and other retirement or employee benefits or combinations thereof
      as established by the Bank from time to time.
    

    
      
        

        

      

      
        
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                (b)       Country
      Club or Other Dues.  The Bank shall pay all regularly-assessed
      monthly dues required to maintain a golfing membership at a country club
      to be selected by Employee, subject to approval by the Bank; provided,
      however, that the Employee shall be responsible for the payment of all
      food minimums and other charges made upon Employee’s account at said
      country club, other than those related to business development
      activities undertaken for the benefit of the Bank which are documented
      in accordance with the Bank’s policy regarding such expenses.
    

    
                (c)       PDA
      and laptop computer.  The Bank shall provide Employee with use of a
      PDA and a laptop computer to assist in performance of Employee’s duties
      hereunder.
    

    
      6.
Vacation
    

    
                Employee shall be entitled to annual paid vacation of four (4)
      weeks per year in accordance with the policies established, from time to
      time, by the Bank.
    

    
      7.
Termination of Employment
    

    
                (a)       Termination
      for Cause.  Employee’s employment with the Bank may be terminated
      for cause by the Bank.  In the event of a Termination for Cause, the
      Employee shall not be entitled to any severance compensation or benefits
      whatsoever, other than any compensation accrued through the Date of
      Termination.  For purposes of this Agreement, the phrase “Termination
      for Cause” shall mean termination of the employment of the Employee
      because of the Employee’s personal dishonesty, incompetence, willful
      misconduct, breach of fiduciary duty, failure to perform assigned
      duties, willful violation of any law, rule or regulation (other than
      traffic violations or similar offenses) or material breach of any
      provision of this Agreement.  The term “Date of Termination” shall, for
      purposes of this Agreement, mean the earlier of (1) the date upon which
      the Bank gives notice to the Employee of the termination of Employee’s
      employment with the Bank; or (2) the date upon which the Employee ceases
      to serve as Employee of the Bank.
    

    
                (b)       Voluntary
      Termination.  Employee’s employment may be voluntarily terminated by
      the Employee without good reason at any time upon one hundred twenty
      (120) days’ written notice to the Bank, or such shorter period as may be
      agreed upon between the Employee and the Chief Executive Officer of the
      Bank.  In the event of such voluntary termination, the Bank shall be
      obligated to continue to pay to the Employee the Employee’s salary and
      accrued benefits through the Date of Termination, at the time such
      payments are due, and the Bank shall thereafter have no further
      obligation to the Employee under this Agreement.
    

    
                (c)       Termination
      by Employee for Good Reason.  Employee, by written notice to the
      Chief Executive Officer of the Bank, may terminate Employee’s employment
      with the Bank immediately for “good reason.”  For purposes of this
      Agreement, “good reason” shall mean a good faith determination by
      Employee, in Employee’s reasonable judgment, that any one or more of the
      following events has occurred, without Employee’s prior written consent,
      within twenty-four (24) months of a Change of Control:
    

    
                          (1)       the Bank reduces the Employee’s salary,
      benefits, and/or the average annual discretionary bonus received by
      Employee during the term of Employee’s employment with the Bank, other
      than as part of an undertaking whereby the salary, benefits, and/or
      annual discretionary bonus of other similarly-situated employees of the
      Bank is reduced by an equivalent amount;
    

    
      
        

        

      

      
        
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                          (2)       the Bank requires Employee to be based
      anywhere other than a job location within the boundaries of Dougherty
      and Lee Counties, Georgia; or
    

    
                          (3)       the Bank takes any action that would
      materially adversely affect the physical conditions existing at the time
      of the Change of Control in or under which Employee performs Employee’s
      employment duties, provided that the Bank may take action with respect
      to such conditions after a Change of Control, so long as such conditions
      are at least commensurate with the conditions in or under which Employee
      has customarily performed Employee’s employment duties;
    

    
                          (4)       for purposes of this Agreement, a “Change
      of Control” shall mean any of the following events:
    

    
      (a)       the merger or consolidation of the Bank with, or a sale of all
      or substantially all of the assets of the Bank to, any person or entity
      or group of associated persons or entities;
    

    
      (b)       the direct or indirect beneficial ownership, in the aggregate,
      of securities of the Bank, or its parent company, representing
      twenty-five percent (25%) or more of the total combined voting power of
      the Bank’s, or its parent company’s, then issued and outstanding
      securities by any person or entity, or group of associated persons or
      entities acting in concert, not affiliated with the Bank or its parent
      company as of the Effective Date hereof; provided, however, that none of
      the securities of the Bank or its parent company which are now or
      hereafter offered for sale as part of a public offering shall be taken
      into consideration for purposes of determining the occurrence of a
      Change of Control and further provided that acquisition of the Bank by a
      newly-created parent or holding company as a part of a transaction
      whereby the stock of the parent company becomes fully publicly-traded
      shall not constitute a Change of Control; or
    

    
      (c)       the shareholders of the Bank approve any plan or proposal for
      the liquidation or dissolution of the Bank;
    

    
       provided, however, that a Change of Control shall be deemed to result
      from any transaction precipitated by the Bank’s insolvency, appointment
      of a conservator, or determination by a regulatory agency that the Bank
      is insolvent, nor from any transaction initiated by the Bank or its
      parent company, in regard to converting from a publicly-traded company
      to a privately-held company.
    

    
                In the event of termination by the Employee of Employee’s
      employment with the Bank for “good reason,” the Bank shall be obligated
      to continue to pay to the Employee the Employee’s annual salary and
      benefits, as the same may have been modified from time to time since the
      Effective Date, for a period of two (2) years after the Date of
      Termination and, at the end of each calendar year during that two year
      period, the Bank shall also pay to such Employee an amount equal to the
      average annual discretionary bonus, as a percentage of total annual
      compensation, which Employee received (if any) during the last three (3)
      calendar years of Employee’s employment with the Bank.
    

    
                (d)       Termination
      By Bank Without Cause.  The Bank may, upon one hundred twenty (120)
      days written notice to Employee, terminate Employee’s employment
      hereunder without cause.  In the event that the Bank terminates the
      Employee’s employment hereunder without cause, the Bank shall be
      obligated to continue to pay to the Employee the Employee’s annual
      salary and benefits, as the same may have been modified from time to
      time since the Effective Date, for a period of two (2) years after the
      Date of Termination, and, at the end of each calendar year during that
      two year period, the Bank shall also pay to Employee an amount equal to
      the average annual discretionary bonus, as a percentage of total annual
      compensation, which Employee received (if any) during the last three (3)
      calendar years of Employee’s employment with the Bank.
    

    
      
        

        

      

      
        
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                (e)       Death;
      Disability.  In the event of the death of the Employee while
      employed under this Agreement and prior to any termination of
      employment, the Employee’s estate, or such person as the Employee may
      have previously designated in writing, shall be entitled to receive from
      the Bank the salary of the Employee through the day on which the
      Employee died.  If the Employee becomes disabled, as defined in the
      Bank’s then current disability plan, if any, or if the Employee is
      otherwise unable to perform Employee’s duties in accordance with this
      Agreement, the Employee shall be entitled to receive group and other
      disability income benefits of the type, if any, then provided by the
      Bank.  The Bank shall be entitled to terminate this Agreement and the
      employment of the Employee at its discretion, after the Employee has
      been unable to serve as Chief Credit Officer and Executive Vice
      President due to disability for a period of 180 consecutive days.
    

    
      8.
Confidential Information and Trade Secrets
    

    
                (a)  Prohibition
      Against Disclosure.  The Employee acknowledges that, in and as a
      result of employment by the Bank, the Employee will use, acquire, and
      develop Confidential Information and Trade Secrets.  As a material
      inducement to the Bank to employ the Employee and to pay the Employee
      compensation for services to be rendered to the Bank by the Employee (it
      being understood and agreed by the parties hereto that such compensation
      shall also be paid and received in consideration hereof), the Employee
      covenants and agrees that the Employee shall not, except with the prior
      written consent of the Bank, directly or indirectly, use, divulge,
      reveal, report, publish, transfer or disclose for any purposes
      whatsoever, any Confidential Information or Trade Secrets.  The
      covenants of confidentiality set forth herein shall apply at any time
      during the Term of the Employee’s employment with the Bank and (i) with
      respect to Confidential Information, for a period of twenty four (24)
      months after the termination of such employment for any reason
      whatsoever; and (ii) with respect to Trade Secrets, at any and all times
      following the termination of such employment for any reason whatsoever.
    

    
                (b)       Return
      of Property.  All Confidential Information and Trade Secrets and all
      physical embodiments thereof received or developed by the Employee while
      employed by the Bank are confidential to and are and will remain the
      sole and exclusive property of the Bank.  Upon request by the Bank, and
      in any event upon termination of the employment of the Employee with the
      Bank for any reason whatsoever, the Employee shall promptly deliver to
      the Bank all property belonging to the Bank, including, without
      limitation, all Confidential Information and Trade Secrets (and all
      physical embodiments thereof) then in the Employee’s custody, control or
      possession.
    

    
                (c)       Confidential
      Information.  The term “Confidential Information” shall mean any and
      all materials, data and information, other than Trade Secrets, relating
      to the Bank (i) of which the Employee became aware as a consequence of
      or through employment with the Bank or any other arrangement or
      relationship with the Bank; (ii) which has value to the Bank and is not
      generally known to its competitors; and (iii) which is treated by the
      Bank as confidential (whether or not such material or information is
      marked “confidential”).  Confidential Information may include, but is
      not limited to, information relating to the financial affairs, customers
      (including without limitation customer data, customer site information,
      customer names and prospect customer names), services, pricing policies,
      loan policies and practices, employees, employees’ compensation,
      research, development, projects, business plans, inventions, purchasing,
      accounting, distribution systems and marketing of the Bank.
    

    
      
        

        

      

      
        
          Page 5
        

        
          

        

      

      
        

        

      

    

    
      (d)       Trade Secrets.  The term
      “Trade Secrets” shall mean information, without regard to form,
      including, but not limited to, technical or nontechnical data, a
      formula, a pattern, a compilation, a program, a device, a method, a
      technique, a drawing, a process, financial data, financial plans,
      product plans, loan policies, loan procedures, or a list of actual or
      potential customers or suppliers which is not commonly known by or
      available to the public and which information: (i) 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 (ii) is the
      subject of efforts that are reasonable under the circumstances to
      maintain its secrecy.
    

    
      9.
Covenants Regarding Competition
    

    
                (a)       Covenant
      Not to Solicit Customers.  During the period of twelve (12) months
      immediately following the Date of Termination, for any reason
      whatsoever, the Employee shall not, on the Employee’s own behalf or on
      behalf of any person, firm, partnership, association, corporation,
      limited liability company or business organization, entity or
      enterprise, solicit, contact, call upon, communicate with or attempt to
      communicate with any customer or prospect of the Bank, or any
      representative of any customer or prospect of the Bank, with a view to
      sell or provide or attempt to sell or provide any product or service
      competitive or potentially competitive with any product or service sold
      or provided by the Bank during the period of twenty-four (24) months
      immediately preceeding cessation of the Employee’s employment with the
      Bank; provided, however, that the aforementioned restrictions set forth
      in this Section 9(a) shall apply only to customers or prospects of the
      Bank, or representatives of customers or prospects of the Bank, with
      which the Employee, or another employee of the Bank supervised by the
      Employee, had contact during such twenty four (24) month period
      immediately preceeding cessation of the Employee’s employment with the
      Bank.
    

    
                (b)       Covenant
      Not to Compete.  During the period of twelve (12) months immediately
      following the termination of Employee’s employment, for any reason
      whatsoever, the Employee shall not, on the Employee’s own behalf, or on
      behalf of any person, firm, partnership, association, corporation,
      limited liability company or any other business organization, entity or
      enterprise engage, directly or indirectly in any Competing Business
      within the Covenant Territory.  For purposes of this Agreement,
      “Competing Business” shall mean the business of any bank or other
      organization of whatever form which provides any product or service
      which is competitive or potentially competitive with any product or
      service provided by the Bank during the period of twenty four (24)
      months immediately preceeding the cessation of the Employee’s employment
      with the Bank and the term “Covenant Territory” shall mean those areas
      circumscribed by a line drawn at a radius of fifty (50) miles from the
      Bank’s primary office locations in Albany, Georgia and Valdosta, Georgia.
    

    
                (c)       Covenant
      Not to Solicit Employees.  During the term of the Employee’s
      employment by the Bank and for a period of twenty-four (24) months
      following the termination of such employment for any reason whatsoever,
      the Employee shall not, either directly or indirectly, on the Employee’s
      own behalf, or on behalf of others, solicit, divert, or hire, or attempt
      to solicit, divert, or hire, to or for any Competing Business, any
      person employed by the Bank in the Covenant Territory, whether or not
      the employment of any such person is pursuant to a written agreement,
      for a determined period, or at will.
    

    
                (d)       Remedies.  The
      Employee agrees that the covenants contained in Section 9 hereof are of
      the essence of this Agreement; that each of such covenants is reasonable
      and necessary to protect and preserve the interests and properties of
      the Bank and the business of the Bank; and that irreparable loss and
      damage will be suffered by the Bank should the Employee breach any of
      the covenants.  Therefore, the Employee agrees and consents that, in
      addition to all of the remedies provided at law or in equity, the
      Employee shall forfeit the right to any compensation after the Date of
      Termination to which the Employee would otherwise be entitled pursuant
      to the provisions of either Section 7(c) or 7(d) above and the Bank
      shall have the right to recoup from the Employee any such compensation
      previously paid to the Employee after the Date of Termination, with
      interest at the applicable legal rate, in addition to any and all
      damages which may have been suffered by the Bank as a result of the
      Employee’s breach of any of the covenants.  The Bank shall also be
      entitled to a temporary restraining order and temporary and permanent
      injunctions to prevent a contemplated or continued breach of any of the
      covenants.  The existence of any claim, demand, action or cause of
      action of the Employee against the Bank shall not constitute a defense
      to the enforcement by the Bank of any of the covenants or agreements
      herein.
    

    
      
        

        

      

      
        
          Page 6
        

        
          

        

      

      
        

        

      

    

    
                (e)       Severability.  The
      parties agree that each of the provisions included in this Section is
      separate, distinct and severable from the other and the remaining
      provisions of this Agreement, and that the invalidity or
      unenforceability of any provision of this Section shall not affect the
      validity or enforceability of any other provision or provisions of this
      Agreement.
    

    
      10.
No Assignments
    

    
                This Agreement is personal to each of the parties hereto, and
      neither party may assign or delegate any of its rights or obligations
      hereunder without first obtaining the written consent of the other
      party; provided, however, that the Bank may require any successor or
      assign (whether direct or indirect, by purchase, merger, consolidation
      or otherwise) to all or substantially all of the business and/or assets
      of the Bank not otherwise bound by law to the terms of this Agreement,
      by an assumption agreement in form and substance satisfactory to the
      Employee, to expressly assume and agree to perform this Agreement in the
      same manner and to the same extent that the Bank would be required to
      perform it if no such succession or assignment had taken place.  This
      provision is not intended to modify the fact that this Agreement shall
      be binding upon successors in interest of the Bank to the extent
      provided under applicable law.
    

    
      11.
Heirs and Successors
    

    
                This Agreement and all rights of the Employee hereunder shall
      inure to the benefit of and be enforceable by the Employee’s personal
      and legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees.  If the Employee should die while
      any amounts would still be payable to the Employee hereunder if the
      Employee had continued to live, all such amounts, unless otherwise
      provided herein, shall be paid in accordance with the terms of this
      Agreement to the Employee’s devisee, legatee or other designee or if
      there is no such designee, to the Employee’s estate.
    

    
      12.
Notice
    

    
                For the purposes of this Agreement, notices and all other
      communications provided for in the Agreement shall be in writing and
      shall be deemed to have been duly given when personally delivered or
      sent by certified mail, return receipt requested, postage prepaid, to
      the Bank at its home office, to the attention of the Bank Board with a
      copy to the Secretary of the Bank, or, if to the Employee, to such home
      or other address as the Employee has most recently provided in writing
      to the Bank.
    

    
      
        

        

      

      
        
          Page 7
        

        
          

        

      

      
        

        

      

    

    
      13.
Amendments
    

    
                No amendments or additions to this Agreement shall be binding
      unless in writing and signed by both parties, except as herein otherwise
      provided.  
    

    
      14.
Headings
    

    
                The headings used in this Agreement are included solely for
      convenience and shall not affect, or be used in connection with, the
      interpretation of this Agreement.
    

    
      15.
Severability
    

    
                The provisions of this Agreement shall be deemed severable and
      the invalidity or unenforceability of any provision shall not affect the
      validity or enforceability of the other provisions hereof.
    

    
      16.
Governing Law
    

    
                This Agreement shall be governed by the laws of the United
      States to the extent applicable and otherwise by the laws of the State
      of Georgia.
    

    
      17.
Arbitration
    

    
                Any dispute or controversy arising under or in connection with
      this Agreement shall be settled exclusively by arbitration in accordance
      with the rules of the American Arbitration Association then in effect,
      to the extent that said rules are not in conflict with the Georgia
      Arbitration Code, and provided that said arbitration need not be
      scheduled through the American Arbitration Association.  The legal and
      substantive provisions of the Georgia Arbitration Code shall control
      such arbitration proceedings.  Judgment may be entered on the
      arbitrator's award in any court having jurisdiction.
    

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

    

    

    
      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
    

    
      
        

        

      

      
        
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      THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
      ENFORCED BY THE PARTIES.  
    

    
    	

        	
           
        	
          HERITAGEBANK OF THE SOUTH
        
	

        	

        	
           
        
	

        	

        	
          
            By: /s/ O. Leonard Dorminey
          

        
	

        	

        	
          Name: O. Leonard Dorminey
        
	

        	

        	
          Title: Chief Executive Officer
        
	
          Signed, sealed and delivered
        	

        	

        
	
          in the presence of:
        	

        	

        
	

        	

        	
           
        
	
          
            /s/ Patricia F. Maxwell
          

        	

        	

        
	
          Notary Public
        	

        	

        
	
          My Commission Expires: April 26, 2014
        	

        	

        
	

        	

        	
           
        
	

        	

        	
           
        
	

        	

        	
          EMPLOYEE:
        
	

        	

        	
           
        
	

        	

        	
           
        
	

        	

        	
          
            /s/ O. Mitchell Smith (SEAL)
          

        
	

        	

        	
          O. MITCHELL SMITH, Employee
        
	
          Signed, sealed and delivered
        	

        	

        
	
          in the presence of:
        	

        	

        
	

        	

        	
           
        
	
          
            /s/ Patricia F. Maxwell
          

        	

        	

        
	
          Notary Public
        	

        	

        
	
          My Commission Expires: April 26, 2014
        	

        	

        

    

    

    

    
      Page 9

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