EXHIBIT 10.3
FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made
to be effective the 1st day of July, 2002, by and between CAPITAL BANK & TRUST
COMPANY, a Tennessee state-chartered bank, with principal offices located in
Nashville, Tennessee (the "Bank") and H. XXXXXX XXXXXXX, III, of Nashville,
Tennessee (the "Executive"). As used herein, "Effective Date" means July 1,
2002.
WITNESSETH:
WHEREAS, the Executive is an effective and highly-valued member of the
senior management of the Bank, currently serving as Executive Vice President of
the Bank as well as of its parent company, Capital Bancorp, Inc. (the
"Company"); and
WHEREAS, the Bank recognizes the value of the Executive's services and
desires to insure the Executive's continued employment with the Bank; and
WHEREAS, the Executive wishes to continue in the employment of the
Bank; and
WHEREAS, the Bank and the Executive mutually desire that their
employment relationship be set forth under the terms of a written employment
agreement;
NOW, THEREFORE, in consideration of the foregoing and of the promises
and mutual agreements set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree that:
1. EMPLOYMENT. The Bank agrees to continue to employ the
Executive, and the Executive agrees to continue to serve the Bank, on the terms
and conditions, set forth herein. The Executive shall have the right to resign
at any time and the Bank shall have the right to terminate the Executive's
employment and remove the Executive at any time, but such removal shall not
affect the Executive's right to recover unpaid salary for the remainder of the
term of this Agreement, nor shall any early resignation affect the Bank's right
to enforce the noncompetition, nonsolicitation, and nondisclosure provisions of
this Agreement. These terms are expressly set forth below.
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2. TERM OF EMPLOYMENT. The term of this Agreement ("Term") shall
commence on the Effective Date and continue for ten (10) consecutive years after
the Effective Date. If the Bank is not permitted to honor a contract of this
extended period, then the Company shall honor it.
3. POSITION AND DUTIES. The Executive shall be the Bank's Special
Projects Director, and shall be available to the Bank for the purposes of
special projects, particularly involving real estate matters of all types
including, without limitation, construction, branching, building, and real
estate lending. He will not be expected to be in the Bank on a daily basis, nor
would he maintain an office at the Bank. The Executive shall report and be
responsible to the Bank's President. The Executive shall devote an appropriate
amount of his time to the affairs of the Bank.
4. PLACE OF PERFORMANCE. In connection with the Executive's
employment hereunder, the Executive shall be deemed to be based at the Bank's
principal offices located in Nashville, Tennessee, subject to reasonable
business travel, as mutually agreed to by the Executive and the Bank.
5. COMPENSATION AND BENEFITS. In consideration of the Executive's
performance of his duties hereunder, the Bank shall provide the Executive with
the following compensation and benefits during the Term of his employment
hereunder.
(a) BASE SALARY. The Bank shall pay to the Executive a salary of
Twenty-Eight Thousand Seven Hundred Fifty Dollars ($28,750.00) per year. The
said salary shall be paid in arrears in equal installments as nearly as
practicable upon the last day of each calendar month during the Term. This base
salary shall be subject to reduction as provided in this Agreement.
(b) EXPENSES. The Bank shall promptly reimburse the Executive for
all reasonable out-of-pocket expenses incurred by the Executive in his
performance of services hereunder, including all reasonable expenses of travel
and living expense while away from home on business of the Bank, provided that
such expenses are incurred and accounted for in accordance with the generally
applicable, regular policies and procedures established by the Bank from time to
time. Such expenses must be pre-approved by the Bank.
(d) EMPLOYEE BENEFITS. The Executive shall participate in the
Bank's group health insurance plan, if offered by the Bank to
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its employees or officers, with the Bank paying the Executive's (but not the
family) premium. However, the Bank shall be free to make good faith,
non-discriminatory changes in (including terminations of) its employee benefit
plans and arrangements from time to time in the ordinary course of its business,
including such group health insurance plan.
(e) VACATIONS. The Executive shall be entitled to ten days paid
vacation each year.
(f) AUTOMOBILE. The Bank shall continue to pay the existing car
lease through the end of the term of that lease (October 2002). The Bank shall
permit the Executive to purchase the car at the end of the lease in October of
2002, if the Executive elects to purchase the car as permitted by the existing
car lease. To and through the end of the lease, the Bank shall pay for insurance
and all other routine expenses of operation (such as gas and oil), and for major
repairs. Minor repairs under the level of $100 in the aggregate for all such
expenses shall be paid by the Executive. The Executive shall be responsible for
all such expenses after his purchase. If he elects not to purchase the car at
the end of the lease, he shall return the car to the Bank on a date early enough
that the Bank can return the car to the leasing company without incurring
charges after the expiration of the lease.
6. DIRECTORSHIP. The Executive shall continue to serve as a
Director of the Bank at the Board's discretion. Executive acknowledges that he
may be removed from the Board with or without cause. However, the Executive may,
without violating this Agreement, decline to serve or resign from the Board of
the Bank at any time. In such event, if the Executive declines to serve or
resigns as a director of the Bank, the Bank shall have no further obligation to
nominate him for election as a director at any future meeting of shareholders at
which the election of directors is considered. The Executive shall be entitled
to Board fees but not to committee fees.
7. COMPENSATION AND BENEFITS IN THE EVENT OF TERMINATION; SALARY
REDUCTION. In the event of the termination of the Executive's employment by the
Bank for any reason other than cause, then the Executive shall be entitled to a
lump sum severance payment equal to Two Hundred Eighty-Seven Thousand Five
Hundred Dollars ($287,500.00) minus all amounts paid to the Executive as salary
during the term of this Agreement. Such payment shall be subject to all
withholding and comparable deductions. Thus, by way of example only, if the
Executive's employment were to be
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terminated by the Bank without cause after five full years during the Term, then
the Executive would be entitled to a lump sum severance payment equal to the
result of $287,500 minus $143,750 (that is, all amounts paid to the Executive as
salary during the Term of this Agreement for the assumed 5 years multiplied
times $28,750 per year equals $143,750), which equals $143,750. Or, by way of
further example, if the Executive had been working only three full years, the
calculation would be $287,500 minus $86,250, which would equal $201,250. Such
payment shall be subject to all withholding and comparable deductions.
(a) TERMINATION BY BANK FOR CAUSE; SALARY REDUCTION. The Bank may
terminate the Executive's employment under this Agreement for cause pursuant to
notice in writing to Executive, specifying such cause with reasonable
particularity. Executive shall have thirty (30) days from receipt thereof in
which to cure the act or omission complained of, unless the act or omission of
its very nature cannot be cured within such period, in which event if the
Executive shall have begun diligently working to cure such act or omission
during such period, then the Executive shall have a reasonable period of time to
effect such cure so long as the Executive continues to work diligently and in
good faith to accomplish such cure. If no cure has been or can reasonably be
expected to be effected within the time allowed, the Executive's rights, and the
Bank's obligations, under this Agreement shall thereupon terminate.
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For purposes hereof, "cause" shall be limited to:
(i) Deliberate falsification by Executive of any records or
reports, or any material act of self-dealing between Bank and
Executive which is not disclosed in full to, and approved by,
the Bank;
(ii) Fraud on the part of Executive against the Bank or any
subsidiary or affiliate; and/or theft, embezzlement or
misappropriation by Executive of any funds of Bank, or
conviction of any felony;
(iii) Deliberate breach of a Bank policy the result of which is to
materially damage or threaten the Bank and/or the Board,
including the execution of any document transferring, or
creating any material liens or encumbrance on, any material
property of the Bank, not in the ordinary course of business,
without authorization of the Bank's Executive Committee or the
Board of Directors of the Bank; and/or
(iv) Disability (as herein defined).
No breach of policy shall alone be the grounds for termination so long as it
does not, alone, constitute "cause" other than as a breach of policy or does not
subject the Bank or the Board of Directors (or one or more members thereof) to
unreasonable risk or damage.
As used herein, "Disability" means the substantial mental or physical
disability of the Executive for a period of more than six full, consecutive
calendar months or more than seven full calendar months in any twelve
consecutive month period. In the event of Executive's termination for cause for
the reasons set forth above, all compensation and benefits due to the Executive
under this Agreement shall terminate thirty (30) days from the effective date of
termination.
It is agreed, however, that except for an occasion in which the Bank,
in the exercise of its reasonable discretion, believes that Executive's removal
upon the aforesaid thirty (30) days' notice is necessary for the protection of
the Bank, the Bank shall give Executive written notice of the violation or
reason that it desires to terminate him and at least sixty (60) calendar days
(exclusive of Federal and State holidays) to reasonably cure any violation or
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to address any other ground stated by the Bank in its written notice. The Bank's
written notice shall describe the facts and circumstances of the alleged breach
or violation in reasonable detail. The Bank's determination in this regard, as
to whether the Executive needs to be removed immediately, shall be given great
deference if it is reasonable under circumstances perceived by the Bank at that
time. However, the Bank's determination of whether or not there has been a
breach by the Executive shall not be subject to such deference.
Any notice from the Bank to Executive concerning a "cause" for removal
shall be deemed a demand for cure of the asserted breach or violation. The Bank
may terminate the Executive for the reasons specified in subsections (a)(i) and
(a)(ii) of this Section 7 immediately upon sending the Executive written notice
describing the facts and circumstances of the breach or violation in reasonable
detail, but without giving Executive the opportunity to cure such violation(s)
or breach(es). If the Executive is acquitted, not convicted, or otherwise
prevails in respect of the charges described in such subsections, he shall be
entitled to the Termination Payment, and the noncompetition provisions of
Section 9 shall not apply.
In addition, the Bank shall reduce the employees' compensation to Twelve
Thousand Dollars ($12,000.00) per year if the employee becomes directly or
indirectly employed (as employee, consultant, or otherwise) in any capacity by
another Person. As used in this Agreement, a "Person" is any natural person or
any entity, business, agency, or organization of any type, whether for profit or
not-for-profit. This reduction in salary shall be effective sixty (60) days
after the date of such employment and it shall be the employees' duty to
immediately notify the Bank of such employment. This reduction in compensation
shall be permanent. In the event that this occurs, and the Executive becomes
employed by or goes to work for another Person, then the salary specified in
paragraph 5(a) shall be immediately and permanently amended, for the remaining
term of this Agreement, to Twelve Thousand Dollars ($12,000.00) per year and the
Termination Payment described in Paragraph 7 shall be adjusted to reflect that
the Termination Payment shall be a lump sum equal to $12,000 multiplied times
the number of remaining full years of the term of this Agreement. Death of the
Employee shall not be grounds for payment of any Termination Payment.
However, notwithstanding the foregoing provisions in the immediately
preceding grammatical paragraph, Executive's current
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employment as an officer or enlisted man in military service shall not
constitute cause for reduction of compensation by the Bank. However, this
exemption for military service shall expire at the earlier of the date that the
Executive leaves military service for any reason.
The following table reflects the foregoing salary and
reduction-in-salary provisions:
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ACTION SALARY REDUCED ANNUAL SALARY - BASIS FOR TERMINATION PAYMENT
-------------------------------------------------- -------------- ---------------------------------------------
Employed by Capital Bancorp, Inc. No $28,750
Employed as Officer or Enlisted Man in US Military No $28,750
Unemployed No $28,750
Employed by any other Person or entity
for profit or not for profit Yes $12,000
If the Bank terminates the Executive's employment for any reason not
specified in Section 7(a), or if the Executive terminates his employment for any
reason specified in Section 7(b), the Executive shall be entitled to the
Termination Payment (with interest at 10% if not paid within 45 days). Except as
otherwise expressly provided in this Agreement, if the Bank properly terminates
Executive pursuant to this Section for the reasons specified in subsection (a)
of this Section 7, the noncompetition provisions of Section 9 shall apply;
otherwise, those noncompetition provisions shall not apply. If the Executive
terminates his employment for any reason specified in Section 7(b), the
noncompetition provisions of Section 9 shall not apply.
(b) TERMINATION BY THE EXECUTIVE FOR CAUSE. The Executive shall be
authorized to terminate his employment under this Agreement "for cause" for the
following reasons:
(i) The Bank commits a material breach or violation of this
Agreement, including any attempt to reassign the Executive to
a different office or geographic area, which is not cured
before the expiration of thirty (30) calendar days after
written notice from Executive describing the facts and
circumstances of the breach or violation in reasonable detail.
Such notice shall be deemed a demand for cure of the breach or
violation; and/or
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(ii) The Bank persists, for a period of thirty (30) calendar days
after written notice from Executive describing in reasonable
detail the matter as to which he is complaining, in any
attempt to require Executive to perform (or omit to perform)
any act or engage (or omit to engage) in any conduct that
would constitute illegal conduct or omission. Such notice
shall be deemed a demand for the Bank to cease any such
attempt; and/or
(iii) There occurs a Change in Control (as herein defined) of the
Bank or the Company (if any). As used herein, a "Change in
Control" of the Bank and/or the Company shall be deemed to
have occurred if and when, with or without the approval of the
Board of the Bank incumbent prior to the occurrence: (1) more
than 35% of the outstanding securities entitled to vote in an
election of Directors of the Bank shall be acquired by any
person (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended); or (2) as
the result of a tender offer, merger, consolidation, sale of
assets or contested election or any combination of such
transactions, the persons who were Directors of the Bank
immediately before the transaction shall cease to constitute a
majority of the Board.
The interpretation of this Change in Control definition shall
be in accordance with the change in bank control regulations
and other applicable rules, regulations and interpretations of
the Federal Deposit Insurance Corporation (as to the Bank) and
the Board of Governors of the Federal Reserve System (as to
the Company) as in effect from time to time during the Term of
this Agreement. In addition, a Change in Control shall be
deemed to have occurred upon any merger, consolidation or
reorganization to which the Company is a party, but is not a
surviving entity; or upon the sale of all or substantially all
of the assets of the Bank or the Company. The Executive's
right to resign for cause as a result of a Change in Control
shall be operative when there has been, in fact, a change in
control from that in effect on the Effective Date of this
Agreement.
Any reorganization of the Bank or the Company that does not
result in a material change in the actual beneficial
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ownership of the Bank or the Company (such as the creation of
a second-tier holding company) shall not be deemed a Change in
Control.
The intent of this Change in Control provision is to provide
protection for Executive against changes in control and
ownership, Executive having contracted herein to be employed
by the Bank and having stated his desire to be protected
against changes in control.
Once a Change in Control has been finally consummated, then
the Executive shall have six months from the date of such
final consummation to terminate his employment under this
Agreement and, which resignation shall be deemed to be for
cause. By such resignation for cause, the Executive is
entitled to demand the Termination Payment due to him. If the
Executive does not resign within such six months, then the
particular Change in Control shall be deemed to have been
waived by the Executive. The Executive shall have a reasonable
degree of latitude and discretion in determining the effective
date of the consummation of a change in control.
Unless it reasonably appears that the resignation or
retirement of directors of the Bank or the Company is related
to a Change in Control transaction (such as, but not limited
to a merger, tender offer, reverse stock split or disposition
of assets), then the resignation or retirement of directors of
the Bank or the Company, and the related replacement of
directors, shall not alone be deemed to be a Change in Control
for purposes of this part of this Agreement.
Any written notice from the Executive to the Bank concerning a "cause"
for resignation by the Executive shall be deemed a demand for cure of the
asserted breach or violation. The notice shall describe the asserted breach or
violation by the Bank in reasonable detail. The Executive shall afford the Bank
a reasonable time, not to be less than thirty days, to cure any violation. If no
cure has been or can be effected within the time allowed, (a) the Bank's rights,
and the Executive's obligations, under this Agreement shall thereupon terminate
and (b) the Executive shall be entitled to the Termination Payment described in
this Section 7. Further, if Executive terminates his employment pursuant to this
subsection (b), the noncompetition provisions of Section 9 shall terminate and
shall not bind the Executive. By way of clarification, if the
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Executive resigns "for cause," he shall be entitled to the Termination Payment
specified in Section 7, subject to any adjustment in amount described in Section
7(a).
(c) TERMINATION BY EITHER PARTY FOR NON-CAUSE OR OTHER REASONS.
Either party may terminate this Agreement upon ninety (90) days written notice
to the other party for any reason. Termination pursuant to this section shall be
referred to as a "Non-Cause Termination." Specifically, a "Non-Cause
Termination" shall be any termination of the Executive's employment other than
by the Bank for cause, as defined in subsection (a), or by the Employee for
cause, as defined in subsection (b), of this Section 7.
(i) Non-Cause Termination by Executive. In the event of
termination pursuant to this subsection (c) by the Executive,
all compensation and benefits due under this Agreement shall
terminate on the effective date of termination. If the
Executive terminates his employment pursuant to this
subsection (c), the noncompetition provisions of Section 9
shall apply.
(ii) Non-Cause Termination by Bank. In the event of termination of
the Executive's employment by the Bank pursuant to this
subsection (c), the Bank shall pay the Executive liquidated
damages equal to the "Termination Payment" and all other
benefits specified in subsection (d) of this Section 7; and
the noncompetition provisions of Section 9 shall not apply.
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(d) COMPENSATION DURING INCAPACITY. In the event of the
Executive's failure to satisfactorily perform his duties hereunder on a
full-time basis by reason of his incapacity due to physical or mental illness
(as determined by the Executive's regular attending physician) for any period
not otherwise constituting Disability as defined under subsection (a) of this
Section 7, the Executive's employment hereunder shall not be deemed terminated
and he shall continue to receive the compensation and benefits provided under
Section 5 in accordance with the terms thereof.
(e) ADDITIONAL TIME TO CURE BREACHES. To the extent that a breach
is not cured by the breaching party within the specified time as provided
herein, such time period shall be deemed extended automatically for a reasonable
time (i) if the breach is reasonably subject to being cured within a reasonable
time, (ii) the breaching party is diligently and vigorously in good faith
pursuing a reasonable cure, and (iii) the non-breaching party is not being
materially damaged or subjected to unreasonable risk as a result of this
extension. This automatic extension shall terminate in the event that it becomes
clear that the breach cannot be cured within a reasonable time or if the
breaching party ceases to perform as set forth in (ii) above.
(f) TERMINATION BY DEATH. This Agreement shall automatically
terminate upon the death of Executive. In such event, all compensation and
benefits due under this Agreement shall terminate on Executive's death, except
for benefits (such as stock options) specified in separate written agreements or
plans. No Termination Payment shall be due upon death.
(g) EFFECT OF TERMINATION ON VESTED BENEFITS. Notwithstanding
anything contained in this Agreement, Executive's termination of employment
shall not affect the Bank's (or any Bank affiliate's) liability for the payment
of vested benefits pursuant to individual contracts, plans or arrangements, or
pursuant to state or federal law, requiring the payment of such benefits.
(h) EFFECT OF BANK'S FAILURE TO MAKE PAYMENTS. In the event that
the Bank fails to make any payment hereunder within ten (10) days of the due
date thereof, then unless such payment is less than $1,000.00 in the aggregate
with all other late payments then outstanding, the Executive is authorized to
seek immediate payment of all amounts then due to him. Executive shall deliver a
written demand for cure to the Chairperson of the Bank and the Bank shall have
fifteen (15) days from the first business day after receipt to
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cure such default or to demand arbitration if the Bank does not believe that it
is in default. The Executive shall submit his claim for relief to the
arbitration.
8. NONDISCLOSURE. During the term of his employment hereunder, or
at any time thereafter, the Executive shall not disclose or use (except in the
course of his employment hereunder) any confidential or proprietary information
or data of the Bank or any of its subsidiaries or affiliates regardless of
whether such information or data is embodied in writing or other physical form.
Of course, the Executive's knowledge and skills obtained during employment shall
remain his alone.
9. NONCOMPETITION.
(a) PARTICIPATION IN A COMPETING BUSINESS. Except as otherwise
expressly provided in this Agreement, during the Term and for one year after
termination of the Executive's employment (such one year being the "Post-Term
Period") (regardless of whether the Executive's employment ends at the end of
the Term or at some other point after the end of the Term, the Executive will
not become involved with a Competing Business (as defined below) or serve,
directly or indirectly, a Competing Business in any manner, including, without
limitation, as a shareholder, member, partner, director, officer, manager,
investor, employee, consultant, or agent; provided, however, that the Executive
may acquire and own an interest not to exceed 1% of the total equity interest in
any non-publicly traded entity, or not to exceed 2% of any publicly traded
entity, even if such publicly traded or non-publicly traded entity is a
Competing Business. However, the investment limitations of this paragraph shall
cease to be effective upon the date of a resignation by Executive or termination
of employment by the Executive for cause in accordance with Section 7(b).
The Executive's noncompetition obligations for the Post-Term Period
will not apply if (1) the Executive's employment during the Term is terminated
without a cause described in Section 7(a), (2) the Executive terminates his
employment during the Term for a cause described in subsection 7(b), or (3) the
Bank or its successor declines to employ the Executive after expiration of the
Term.
(b) NO SOLICITATION. During the Term and the Post-Term Period
(regardless of whether the Executive's employment ends at the end of the Term or
at some other point after the end of the Term the Executive will not directly or
indirectly solicit or attempt to solicit (1) any employees located in Davidson
County in the State
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of Tennessee, or in any other county or counties in Tennessee in which the Bank
or an affiliate of the Bank maintains an office during the Executive's
employment (the "Counties") of the Bank or any affiliate of the Bank, to leave
their employment or (2) any customers located in any of the Counties of the Bank
or any affiliate of the Bank to remove their business from the Bank or any
affiliate of the Bank, or to participate in any manner in a Competing Business.
Solicitation prohibited under this Section includes solicitation by any means,
including, without limitation, meetings, letters or other mailings, electronic
communications of any kind, and internet communications. The Executive's
non-solicitation obligations shall in all events be the same as for any
noncompetition period.
(c) EMPLOYMENT OUTSIDE THE COUNTIES. Nothing in this Agreement
prevents the Executive from accepting employment from a Competing Business,
after termination of the Executive's employment, outside the Counties, as long
as the Executive will not, either directly or indirectly, (a) act as an employee
or other representative or agent of the Competing Business within the Counties
or (b) have any responsibilities for the Competing Business' operations within
the Counties.
(d) COMPETING BUSINESS. "Competing Business" means any financial
institution or trust company that competes with, or will compete in any of the
Counties with, the Bank or any affiliate of the Bank. The term "Competing
Business" includes, without limitation, any start-up or other financial
institution or trust company in formation.
(e) EXECUTIVE ACKNOWLEDGMENT. The Executive specifically
acknowledges and agrees that the foregoing restrictions on competition with the
Bank will not prevent the Executive from obtaining gainful employment following
his termination of employment with the Bank, and is a reasonable restriction
upon the Executive's ability to compete with the Bank, given the economic
benefits offered the Executive under this Agreement.
(f) EQUITABLE RELIEF. The Executive acknowledges that the breach
or threatened breach of any of the provisions of this Section 9 of this
Agreement will cause immediate irreparable harm to the Bank and cannot be
adequately compensated by the payment of damages. Accordingly, the Executive
covenants and agrees that the Bank, in addition to any other rights or remedies
which it may have, will be entitled to such equitable and injunctive relief as
may be available from any court of competent jurisdiction to
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restrain the Executive from breaching or threatening to breach any of the
provisions of this Section without posting bond or other surety. Such right to
obtain injunctive relief may be exercised at the option of the Bank in addition
to, concurrently with, prior to, after, or in lieu of the exercise of any other
rights or remedies which the Bank may have as a result of such breach or
threatened breach.
(g) SUMMARY OF TERMS. By way of clarification of the
noncompetition and Termination Payment provisions of this Agreement, the parties
agree that:
(i) If the Executive resigns without cause, the Executive shall
not be entitled to the Termination Payment but he shall be
subject to the noncompetition provisions of this Section 9.
(ii) If the Executive is properly terminated by the Bank for cause,
the Executive shall not be entitled to the Termination Payment
but he shall be subject to the noncompetition provisions of
this Section 9.
(iii) If the Executive resigns for cause attributable to the Bank,
or if the Executive is terminated by the Bank in a Non-Cause
Termination, the Executive shall be entitled to the
Termination Payment but he shall not be subject to the
noncompetition provisions of this Section 9.
10. INDEMNIFICATION. The Bank shall indemnify and hold the
Executive harmless to the maximum extent permitted by law against judgments,
fines, amounts paid in settlement and reasonable expenses (including attorney's
fees) incurred by him in connection with the defense of, or as a result of any
action or proceeding (or appeal therefrom) in which he is made (or threatened to
be made) a party by reason of the fact that he is or was an officer or director
of the Bank, regardless of whether such action or proceeding is one brought by
or in the right of the Bank, or to procure a judgment in its favor. The Bank
further agrees that the Executive is or shall continue to be covered and insured
up to the maximum limits provided by all insurance maintained by the Bank to
indemnify its officers and directors (and the Bank in connection therewith), and
that the Bank will use its reasonable best efforts to maintain such insurance in
not less than its present limits throughout the term of the Executive's
employment hereunder. The Bank hereby warrants and represents that the
undertakings of this
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Section 10 are not in conflict with its charter or by-laws, or any other validly
existing agreement of the Bank.
11. WITHHOLDING. Any provision of this Agreement to the contrary
notwithstanding, all payments made by the Bank hereunder to the Executive or his
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Bank may accept other provisions to the
end that they have sufficient funds to pay all taxes required by law to be
withheld in respect of any or all such payments.
12. NOTICES. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
sufficiently given if and when mailed in the continental United States by
registered or certified mail, or personally delivered to the party entitled
thereto, at the address stated below or to such changed address as the addressee
may have given by a similar notice:
To the Bank: Capital Bank and Trust Company
Attn: Chairman of the Board
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
To the Executive: H. Xxxxxx Xxxxxxx, III
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
13. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisee and legatees. If the Executive should die while any accrued compensation
(such as salary for time that he has already worked or expenses that he has
already incurred) due to him has not been paid, all such amounts, except to the
extent otherwise provided under this Agreement, shall be paid in accordance with
the terms of this Agreement to his devisee, legatee or other designee, or if
there be no such designee, to the Executive's estate.
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14. MODIFICATION, WAIVER OR DISCHARGE. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by the executive and an authorized
representative of the Bank. No waiver by either party hereto at anytime of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement; provided,
however, that this Agreement shall not supersede or in any way limit the right,
duties or obligations that the Executive or the Bank may have under any other
written agreement between such parties, under any employee pension benefit plan
or employee welfare benefit plan as defined under the Employee Retirement Income
Security Act of 1974, as amended, and maintained by the Bank, or under any
established personnel practice or policy applicable to the Executive.
15. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Tennessee.
16. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which latter shall remain in full force and effect.
17. DISPUTE RESOLUTION. In the event of any dispute, claim,
questions or disagreement arising from or relating to this Agreement or the
breach thereof ("Dispute"), the parties hereto shall use their best efforts to
resolve the Dispute in a manner satisfactory to both parties through
consultation and negotiation with each other in good faith. If the Dispute
cannot be resolved through direct negotiations within a period of sixty (60)
days, the parties agree to attempt to settle the Dispute in an amicable manner
by mediation before resorting to arbitration. Thereafter, any unresolved Dispute
shall be resolved by arbitration. Any mediation or arbitration hereunder shall
be conducted in Nashville, Tennessee, in accordance with the Commercial
Mediation Rules or the Commercial Arbitration Rules, respectively, of the
American Arbitration Association ("Association"), as in effect at the time of
the mediation or arbitration. Unless the parties agree otherwise,
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such mediation or arbitration shall also be conducted under the auspices of, and
administered by, the Association. If arbitration is used, and if the amount in
controversy (including both claims and counterclaims) exceeds $50,000, then
either party may demand (within 90 days after the case is initially opened by
the Association) that the case be assigned to a panel of three neutral
arbitrators who may act in all cases by absolute majority of three). The
arbitrator(s) may award actual but not punitive damages and may award attorneys
fees, discretionary costs (as that term is understood under the Federal Rules of
Civil Procedure), and other expenses as the arbitrator(s) shall deem just and
appropriate. Limited deposition and document production discovery shall be
permitted. The arbitrator(s) shall issue the award or decision not later than
300 days after the Association first receives a demand for arbitration. Judgment
under any award may be entered by any Court of competent jurisdiction under the
Tennessee Arbitration Act, as the same shall be amended from time to time.
18. MISCELLANEOUS.
(a) NO RIGHT OF SET-OFF, RECOUPMENT, ETC. There shall be no right
of set-off, recoupment or counterclaim, in respect of any claim, debt or
obligation against any payments to the Executive, his beneficiaries or estates
provided for in this Agreement.
(b) NO ADEQUATE REMEDY AT LAW. The Bank and the Executive
recognize that each party will have no adequate remedy at law for breach by the
other of any of the agreements contained herein and, in the event of any such
breach, the Bank and the Executive hereby agree and consent that the other shall
be entitled to decree of specific performance, mandamus, or other appropriate
remedy to enforce performance of such agreements.
(c) NON-ASSIGNABILITY. No right, benefit, or interest hereunder
shall be subject to anticipation, alienation, sale, assignment, encumbrance,
charge, pledge, hypothecation, or set-off in respect of any claim, debt or
obligation, or to execution, attachment, levy or similar process, or assignment
by operation of law. Any attempt, voluntary or involuntary, to effect any action
specified in the immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect. Any of the foregoing to the
contrary notwithstanding, this provision shall not preclude the Executive from
designating one or more beneficiaries to receive any amount that may be payable
after his death, and shall not preclude the legal representative of the
Executive's estate from assigning any right hereunder to the person
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or persons entitled thereto under his will or, in the case of intestacy
applicable to his estate.
(d) CAPTIONS AND SECTION HEADINGS. Descriptive headings contained
in this Agreement are for convenience only and shall not control or affect the
meaning or construction of any provision hereof.
(e) ACTION BY THE BOARD. As used in this Agreement, the concept of
"action" by the Board of Directors means any lawful resolution or action of the
Board of the Bank as to which at least an absolute majority of the Directors
(other than the Executive) join.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
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20. PRIOR CONTRACTS; RESIGNATION. All prior employment agreements
between the parties are herby terminated and replaced by this Agreement. Any
claims by Executive under such prior agreements are hereby waived. Executive
hereby accepts the title of Special Projects Director and resigns from all other
officer positions held with the Bank or the Company.
21. GOOD FAITH AND FAIR DEALING. The parties shall deal with each
other fairly and in good faith.
IN WITNESS WHEREOF, the Executive and the Bank (by action of its duly
authorized officers) have executed this Agreement on the date first above
written.
CAPITAL BANK AND TRUST COMPANY
By: /s/ R. Xxxx Xxxx
-------------------------------------
R. Xxxx Xxxx, Chairman
EXECUTIVE:
/s/ H. Xxxxxx Xxxxxxx, III
----------------------------------------
H. XXXXXX XXXXXXX, III
JOINDER BY PARENT COMPANY
Capital Bancorp, Inc., joins in this agreement to consent to the
termination of the existing employment agreement and to agree to paragraph 2
hereof.
CAPITAL BANCORP, INC.
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By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, Director and
Chair of The Human Resources Committee
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