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Confidentiality, Non-competition Agreement And Non-solicitation Agreement Franklin Financial Network, Inc. Confidentiality , N On -c Ompetition Agreement And Non -s Olicitation Agreement

NonSolicitation Agreement

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Governing Law: Tennessee     Date: 6/21/2016
Industry: SandLs/Savings Banks     Sector: Financial

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Exhibit 10.2






This Confidentiality, Non-Competition, and Non-Solicitation Agreement (this “Agreement”) is entered into as of this 21st day of June, 2016, between Franklin Financial Network, Inc. (the “Company”), a Tennessee corporation and Sarah Meyerrose (“Executive”).

WHEREAS , Executive is an employee of the Company, who has been employed to provide guidance, leadership, and direction in the growth, management, and development of the Company and has learned trade secrets, confidential procedures and information, and technical and sensitive plans of the Company,

WHEREAS , the Company desires to restrict, after the Executive’s Termination of Employment (as defined below) with the Company, the Executive’s availability to other companies or entities that compete with the Company,

NOW THEREFORE , in consideration of these premises, the mutual promises and undertakings set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Company hereby agree as follows:

1. Administration of this Agreement .

(a) Administrator duties . This Agreement shall be administered by the Company’s board of directors or by such committee or person as the board shall appoint (the “Administrator”). The Executive may not be a member of the Administrator. The Administrator shall have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions that may arise, including interpretations of this Agreement.

(b) Agents . In the administration of this Agreement, the Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Company.

(c) Binding effect of decisions . The decision or action of the Administrator concerning any question arising out of the administration, interpretation, and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

(d) Indemnity of Administrator . The Company shall indemnify and hold harmless the members of the Administrator against any and all claims, losses, damages,



expenses, or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Administrator or any of its members. No individual shall be liable while acting as Administrator for any action or determination made in good faith regarding this Agreement, and any such individual shall be entitled to indemnification and reimbursement in the manner provided in the Company’s Charter and Bylaws and under applicable law.

(e) Information . To enable the Administrator to perform its functions, the Company shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the Termination of Employment of the Executive and such other pertinent information as the Administrator may reasonably require.

(f) Action by the Administrator . In addition to acting at a meeting in accordance with applicable laws, any action of the Administrator concerning this Agreement may be taken by a written instrument signed by the Administrator (including, if the Company’s board of directors or a board committee serves as the Administrator, by written consent in accordance with Tennessee law and the Charter and Bylaws of the Company, and any such action so taken by written consent shall be effective as if it had been taken by a majority of the members at a meeting duly called and held).

2. Definitions

(a) Affiliate shall mean the Company and any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

(b) Change in Control shall mean: (i) a reorganization, merger, consolidation or sale of all or substantially all of the assets of the Company, or any similar transaction, in any case in which the shareholders of the Company prior to such transaction hold less than a majority of the voting power of the resulting entity; or (ii) individuals who constitute the Incumbent Board (as herein defined) of the Company cease for any reason to constitute a majority thereof. For these purposes, “Incumbent Board” means the Board of Directors of the Company on the date hereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a voting of a majority of the directors comprising the Incumbent Board, or whose nomination for election by members or shareholders was approved by the same nominating committee serving under an Incumbent Board, shall be considered as though he were a member of the Incumbent Board.

(c) Code shall mean the Internal Revenue Code of 1986, as amended, or any successor statute, rule or regulation of similar effect.

(d) Confidential Information shall mean all business and other information relating to the business of the Company, including without limitation, technical or nontechnical data, programs, methods, techniques, processes, financial data, financial plans, product plans, and lists of actual or potential customers, 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,



and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. Such information and compilations of information shall be contractually subject to protection under this Agreement whether or not such information constitutes a trade secret and is separately protectable at law or in equity as a trade secret. Confidential Information does not include confidential business information, which does not constitute a trade secret under applicable law one year after any expiration or termination of this Agreement.

(e) Customer shall mean any individual, joint venturer, entity of any sort, or other business partner of the Company with, for, or to whom the Company has provided financial products or services during the final two years of the Executive’s employment with the Company, or any individual, joint venturer, entity of any sort, or business partner whom the Company has identified as a prospective customer of financial products or services within the final year of the Executive’s employment with the Company.

(f) Disability or Disabled means the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) is by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

(g) Financial products or services shall mean any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Company, or an affiliate, on the date of the Executive’s Termination of Employment, including but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products or services of the type in which the Executive was involved during the Executive’s employment with the Company.

(h) Person shall mean any individual, corporation, limited liability company, company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or other entity.

(i) Specified Employee means an employee who at the time of Termination of Employment is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise. For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during the 12-month period ending on December 31 (the “identification period”). If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.



(j) Termination of Employment with the Company means that the Executive shall have ceased to be employed by the Company for reasons other than death, excepting a leave of absence approved by the Company. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Company and the Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding twenty-four (24) month period (or the full period of services to the Company if the Executive has been providing services to the Company less than twenty-four (24) months).

(k) Termination for Cause . The Company may terminate the Executive’s employment for Cause, upon written notice to the Executive which notice shall specify the reason for termination. In the event of termination for Cause, the Executive shall not be entitled to any further payment of benefits under the Agreement other than salary accruing up to the date of termination. For purposes of the Agreement, “Cause” shall mean; (i) the willful or repeated failure by the Executive to perform her duties hereunder or failure to abide by the policies set forth in the Employee Handbook, after at least one warning in writing from the Company identifying any such failure occurring not less than forty-five (45) days prior to the date notice of termination is given by the Company pursuant to this section; (ii) the willful misconduct of the Executive in the performance of her duties hereunder; (iii) conviction of a crime (other than a minor traffic violation); (iv) use of alcohol or other drugs which interferes with the performance by the Executive of Executive’s duties; (v) excessive absenteeism, other than for illness, after at least one warning in writing from the Company; (vi) the unauthorized disclosure or use of any confidential information or proprietary data of the Company or its Affiliates; (vii) the happening of any event or existence of any circumstances which would prevent the Executive from serving as an officer of the Company under the Tennessee or applicable Federal banking regulations; (viii) Executive’s conduct that brings public discredit on, or injures the reputation of, Company, in Company’s reasonable opinion.

(l) Voluntary Termination shall mean the termination by Executive of Executive’s employment, which is not for Cause.

3. Term

The term of this Agreement shall commence upon the date this Agreement is executed by all parties and will continue for two years. The term of this Agreement will automatically renew each day after the Effective Date for one additional day so that the term of the Agreement shall always be two years unless (i) terminated by the Employer and replaced by a mutually agreed upon arrangement; or (ii) the Board provides written notice of non-renewal to Executive; or, (iii) Executive provides written notice of non-renewal to Company. Each party shall negotiate in good faith the terms and conditions for any renewal of the Term or any Renewal Term of this Agreement.



4. Covenants Against Competition, Solicitation, or Disclosure of Confidential Information .

(a) Competition . In recognition of the considerations described in this Agreement, the Executive shall not, either separately, jointly, or in association with others, directly or indirectly, as an agent, employee, owner, partner, shareholder, or otherwise, compete with the Company or establish, engage in, or become interested in any business, trade, or occupation that competes with the Company in the financial products or services industry in any county in any of the States of the United States in which the Company’s business is currently being conducted or is being conducted when the Executive’s Termination of Employment occurs. The Company and the Executive acknowledge that during the term of the Executive’s employment the Executive has acquired special and confidential knowledge regarding the operations of the Company. Furthermore, although not a term or condition of this Agreement, the Company and the Executive acknowledge that the Executive’s services have been used and are being used by the Company in executive, managerial, and supervisory capacities throughout the areas in which the Company conducts business. Executive acknowledges that the non-compete restrictions contained herein are reasonable and fair in scope and necessary to protect the legitimate business interests of the Company.

(b) Solicitation . In recognition of the considerations described in this Agreement, the Executive shall not (i) directly or indirectly solicit or attempt to solicit any customer of the Company to accept or purchase financial products or services of the same nature, kind or variety currently being provided to the customer by the Company or being provided to the customer by the Company when the Executive’s Termination of Employment occurs, (ii) directly or indirectly influence or attempt to influence any customer, joint venturer, or other business partner of the Company to alter that pe

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