EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT
(this “Agreement”), dated as of July 18, 2008, is
by and among Community First, Inc., a Tennessee corporation (the
“Company”), Community First Bank & Trust, a
Tennessee corporation and wholly-owned subsidiary of the Company
(the “Bank”) and Dianne Scroggins (the
“Executive”).
WHEREAS , the Executive
currently serves as an officer of the Bank in the position of Vice
President and Chief Financial Officer; and
WHEREAS , the Company has
determined that it is in the best interests of the Company and its
shareholders to secure the Executive’s continued services as
an officer of the Bank and to ensure the Executive’s
continued dedication and objectivity in the event of any threat or
occurrence of, or negotiation or other action that could lead to,
or create the possibility of, a Change in Control, without concern
as to whether the Executive might be hindered or distracted by
personal uncertainties and risks created by any such possible or
actual Change in Control, and to encourage the Executive’s
full attention and dedication to the Company and the Bank.
THEREFORE , intending to be
legally bound, the parties agree as follows:
1. Term . Subject to
termination pursuant to Sections 3 and 7 herein, the term of
this Agreement shall be for the period in which the Executive
serves as an officer of the Bank.
2. Definitions .
(a)
Cause . For purposes of this Agreement, “Cause”
shall include termination because of the Executive’s personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation
which negatively impacts the Company or the Bank (other than
traffic violations or similar offenses) or final cease-and-desist
order, or material breach of any provision of this Agreement. For
purposes of this Section, the term “willful” is defined
to include any act or omission which demonstrates an intentional or
reckless disregard for the duties and responsibilities owed to the
business of the Company or the Bank by Executive. Notwithstanding
the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to him/her a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths of the members of
the Board of Directors at a meeting of the Board of Directors
called and held for that purpose, finding that in the good faith
opinion of the Board of Directors, Executive was guilty of conduct
justifying termination for Cause and specifying the reasons
thereof. The Executive shall not have the right to receive
compensation or other benefits for any period after a Termination
for Cause. Any stock options granted to Executive under any stock
option plan or any unvested awards granted under any other stock
benefit plan of the Company, or any subsidiary or affiliate
thereof, shall become null and void effective upon
Executive’s receipt of Notice of Termination for Cause
pursuant to Section 12 hereof, and shall not be exercisable by
Executive at any time subsequent to such Termination for
Cause.
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(b)
Change in Control . For the purposes of this Agreement, a
“Change in Control” shall be deemed to occur if and
when:
(i) there
occurs an acquisition in one or more transactions of at least
15 percent but less than 25 percent of the
Company’s outstanding common stock by any person (as defined
in Section 3(a)(9) of the Securities Act of 1934, as amended, and
as used in Sections 13(d) and 14(d) thereof), or by two or more
persons acting as a group (excluding officers and directors of the
Company), and the adoption by the Board of Directors of a
resolution declaring that a change in control of the Company has
occurred;
(ii) there
occurs a merger, consolidation, reorganization, recapitalization or
similar transaction involving the securities of the Company upon
the consummation of which more than 50 percent in voting power of
the voting securities of the surviving corporation(s) is held by
persons other than former shareholders of the Company; or
(iii) 25 percent
or more of the directors elected by shareholders of the Company to
the Board of Directors are persons who were not listed as nominees
in the Company’s then most recent proxy statement.
(c)
Disability . For the purpose of this Agreement, Disability
shall have the same meaning as set forth in the Company’s or
the Bank’s then current long-term disability plan.
(d)
Good Reason . For the purpose of this Agreement, Good Reason
shall mean the Executive’s Separation from Service following
a Change in Control as a result of one of the following events:
(i) any material demotion, (ii) material loss of office
or authority; (iii) a material reduction in the
Executive’s annual compensation or benefits; or
(iv) relocation of Executive’s principal place of
employment by more than 40 miles from its location immediately
prior to the Change in Control. A termination under the
circumstances listed in (i) through (iv) above shall be
for “Good Reason” following a Change in Control only if
(A) Executive notifies the Company and the Bank of the
existence of the condition that otherwise constitutes Good Reason
within ninety (90) days of the initial existence of the
condition, (B) the Company and the Bank fails to remedy the
condition within thirty (30) days following it’s receipt
of Executive’s notice of Good Reason and (C) the
Executive experiences a Separation from Service from the Company
and the Bank due to the condition within twelve months of the
initial existence of such condition.
(e)
Involuntary Termination of Employment . For the purpose of
this Agreement, an Involuntary Termination of Employment shall mean
either (i) the Executive’s Separation from Service
initiated by the Company or the Bank without Cause at any time
during the term of this Agreement or (ii) the
Executive’s Separation from Service initiated by the
Executive for Good Reason. An Executive’s Separation from
Service due to his or her death, Retirement, termination for Cause,
or termination for Disability shall not be considered an
Involuntary Termination of Employment and shall not entitle the
Executive to any benefits under this Agreement.
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(f)
Retirement . For the purpose of this Agreement, Retirement
shall mean retirement at age 65 or in accordance with any
retirement arrangement established with Executive’s consent
with respect to him/her.
(g)
Separation from Service . For the purpose of this Agreement,
Separation from Service shall mean the date on which the Company
and the Bank and the Executive reasonably anticipate that no
further services will be performed by Executive after such date, or
that the level of bona fide services Executive will perform after
such date will permanently decrease to no more than 49% of the
average level of bona fide services performed over the immediately
preceding 36-month period. Whether a Separation from Service occurs
shall be interpreted consistent with Section 1.409A-1(h) of
the U.S. Treasury Regulations.
3. Benefits Pursuant to
Change in Control . Upon the Executive’s Involuntary
Termination of Employment from the Company and the Bank within one
year following the date of a Change in Control, the Company shall
pay Executive, or in the event of the Executive’s subsequent
death following his or her Involuntary Termination of Employment
within one year following the date of a Change in Control, his
beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to one
hundred fifty percent (150%) of the Executive’s “base
amount,” currently then in effect, within the meaning of
Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”). Such payment shall be made in a
lump sum paid within ten (10) days of the date of
Executive’s Involuntary Termination of Employment.
4. Excise Tax Payment
.
(a) Anything
in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any payment
or distribution by the Company or the Bank to or for the benefit of
Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under
this Section 4) (a “Payment”) would be subject to
the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, and taking account of any
withholding obligation on the part of the Bank, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) All
determinations
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