Exhibit 10.8
CITIZENS BANCSHARES
CORPORATION
CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT
(the “Agreement”) is made as of this 1 day of December,
2005 by and between Cynthia N. Day (the “Executive”)
and CITIZENS BANCSHARES CORPORATION, a corporation organized under
the laws of the State of Georgia (the
“Company”).
RECITALS:
WHEREAS, the Executive is currently
employed by the Company and/or one or more of its affiliates as the
Senior Executive Vice President/Chief Operating Officer;
and
WHEREAS, the Company desires to
enter into an agreement with the Executive to provide change in
control benefits to the Executive upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of
the mutual covenants herein contained, the parties agree as
follows:
1.
Definitions
. For purposes of this Agreement,
the following terms and conditions shall have the meanings set
forth in this Section 1:
(a)
“ Area ” means
the geographic area within the boundaries of Fulton and Dekalb
Counties in the State of Georgia. It is the express intent of the
parties that the Area as defined herein is the area where the
Executive performs services on behalf of the Company and its
affiliates as of the Effective Date.
(b)
“ Board of Directors
” means the Board of Directors of the Company.
(c)
“ Business of the
Company ” means the business of commercial
banking.
(d)
“ Cause ” means
the occurrence of any of the following events:
(i)
material dishonesty, gross
negligence or willful misconduct by Executive in the performance of
his duties hereunder which conduct results in material financial or
reputational harm to the Company or its affiliates;
(ii)
conviction (from which no appeal may
be, or is, timely taken) of Executive of a felony;
(iii)
initiation of suspension or removal
proceedings against Executive by federal or state regulatory
authorities acting under lawful authority pursuant to provisions of
federal or state law or regulation which may be in effect from time
to time;
(iv)
knowing violation by Executive of
federal or state banking laws or regulations; or
(v)
refusal by Executive to perform a
duly authorized and lawful written directive of the Chief Executive
Officer of the Company or the President of the Bank.
(e)
“ Change in Control
” means the occurrence of any of the following events on or
after the Effective Date:
(i)
the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the corporation where such
acquisition causes such person to own more than fifty percent (50%)
of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors; or
(ii)
individuals who as of the Effective
Date hereof, constitute the Board of Directors of the Company (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of such Board of Directors; provided, however,
that any individual becoming a director subsequent to the Effective
Date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member such
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board or Directors; or
(iii)
a reorganization, merger or
consolidation, (a “Business Combination”) with respect
to which persons who were the owners of the Company immediately
prior to such Business Combination do not, immediately thereafter,
own, directly or indirectly, more than fifty percent (50%) of the
then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting
from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries);
(iv)
the sale, transfer or assignment of
all or substantially all of the assets of the Company and its
affiliates to any third party; or
2
(v)
a complete liquidation or
dissolution of the Company.
(f)
“ Code ” means
the Internal Revenue Code of 1986, as amended.
(g)
“ Confidential
Information ” means data and information relating to the
business of the Company (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of
which the Executive became aware as a consequence of or through its
relationship to the Company and which has value to the Company and
is not generally known to its competitors. Confidential Information
shall not include any data or information that has been voluntarily
disclosed to the public by the Company (except where such public
disclosure has been made by the Executive without authorization) or
that has been independently developed and disclosed by others, or
that otherwise enters the public domain through lawful
means.
(h)
“ Disability ”
means a condition for which benefits would be payable under any
long-term disability coverage (without regard to the application of
any elimination period requirement) then provided to the Executive
by the Company or, if no such coverage is then being provided, the
inability of the Executive to perform the material aspects of the
Executive’s duties of employment for a period of at least one
hundred eighty (180) consecutive days as certified by a physician
chosen by the Executive and reasonably acceptable to the
Company.
(i)
“ Effective Date
” means the date on which this Agreement is made as evidenced
above.
(j)
“ Good Reason ”
means the occurrence of any of the following events and which is
not corrected by the Company within thirty (30) days after the
Executive’s written notice to the Company or one of its
affiliates of the same:
(i)
a material diminution in the
Executive’s responsibilities or duties in effect immediately
prior to the effective date of the Change in Control;
(ii)
a material reduction in the
Executive’s base salary, incentives and/or benefits in effect
immediately prior to the effective date of a Change in
Control;
(iii)
elimination of benefit or incentive
programs in which the Executive participates without availability
of comparable replacement programs; or
(iv)
a change of the location of the
Executive’s place of employment to more than fifty (50) miles
from the Executive’s principal business office as of the
effective date of a Change in Control.
3
(k)
“ Termination of
Employment ” means the Executive’s termination of
employment, for any reason, from the Company and all affiliates.
Notwithstanding the foregoing, an event shall not be deemed to be a
Termination of Employment if it would not qualify as a
“separation from service” pursuant to Code Section 409A
and the regulations promulgated thereunder.
(l)
“ Specified Employee
” shall mean a key employee (as defined in Code
Section 416(i) without regard to Code Section 416(i)(5)) of the
Company (or an entity which is considered to be single employer
with the Company under Code Section 414(b) or 414(c)) at any time
during the twelve (12) month period ending on December 31.
Notwithstanding the foregoing, any employee who is a key employee
determined under the preceding sentence will be deemed to be a
Specified Employee solely for the period of April 1 through March
31 following such December 31 or as otherwise required by the Code
Section 409A and the regulations promulgated thereunder.
(m)
“ Trade Secrets
” means information, without regard to form, including,
but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans
or lists of actual or potential customers or suppliers which
(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.
2.
Term
. This Agreement shall become effective as of the
Effective Date and shall remain in effect until the effective date
of the Executive’s Termination of Employment; provided,
however, if a Change in Control occurs prior to the
Executive’s Termination of Employment, this Agreement shall
remain in effect for two (2) years following the effective date of
such Change in Control.
3.
Severance Benefits Upon
Termination of Employment .
(a)
Amount of Severance
Benefits . If, within
three (3) months before or two (2) years following a Change in
Control, the Executive experiences a Termination of Employment due
to either (i) an involuntarily termination by the Company or one of
its affiliates without Cause or (ii) a resignation by the Executive
for Good Reason (no later than six (6) months after the occurrence
of the most recent event constituting Good Reason), the Company
shall pay to the E
