EXHIBIT 10.29

 

CHANGE IN CONTROL AGREEMENT

BETWEEN COMMUNITY BANK

AND PATRICK M. FRAWLEY

 

This CHANGE IN CONTROL AGREEMENT (this “Agreement”), dated this 12th day of
December, 2003 by and between Community Bank, an Alabama banking company (the
“Company”), and Patrick M. Frawley (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company wishes to assure itself and its key employees of continuity
of management and objective judgment in the event of any actual or contemplated
Change in Control of the Company, and the Executive is a key employee of the
Company and is an integral part of management of the Company (for purposes
hereof, employment with any present or future parent or subsidiary company of
the Company shall be considered employment by the Company); and

 

WHEREAS, this Agreement is not intended to materially alter the compensation and
benefits that the Executive could reasonably expect to receive in the absence of
a Change in Control of the Company, and this Agreement accordingly will be
operative only upon circumstances relating to any actual or anticipated change
in control of the Company.

 

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:

 

OPERATION OF AGREEMENT

 

This Agreement shall be effective immediately upon its execution by the parties
hereto, but anything in this Agreement to the contrary notwithstanding, neither
the Agreement nor any provision hereof shall be operative unless, during the
term of this Agreement, there has been a Change in Control of the Company during
the term of this Agreement, at which time all of the provisions hereof shall
become operative immediately.

 

II. TERM OF AGREEMENT

 

The term of this Agreement shall be for an initial three (3) year period
commencing on the date hereof, and shall be automatically extended at the end of
the first year of such initial three (3) year period and on each subsequent
anniversary thereafter, without further action by Executive or the Company, for
an additional one (1) year period, unless prior to any such renewal date, the
Company shall give written notice to the Executive of its desire to cause the
Agreement to cease to extend automatically. Upon such notice, the Employment
Period shall terminate upon the expiration of the then-current term, including
any prior extensions.

 

III. DEFINITIONS.

 

1. “Board” or “Board of Directors” – the Board of Directors of the Company.

 

2. “Cause” – either

 

(i) the willful engaging by Executive in any act that constitutes gross
malfeasance of duty and that directly results in material injury to the Company;
or

--------------------------------------------------------------------------------

(ii) Executive’s conviction of, pleading guilty to, or confession or admission
of committing any felony, or any act of fraud, misappropriation or embezzlement,
that directly results in a material injury to the Company;

 

provided, however, that in the case of (i) above, such conduct shall not
constitute Cause unless the Board shall have delivered to the Executive notice
setting forth specifically (A) the conduct deemed to qualify as Cause, (B)
reasonable action that would remedy such objection, and (C) a reasonable time
(not less than thirty (30) days) within which the Executive may take such
remedial action and the Executive shall not have taken such specified remedial
action within such specified reasonable time.

 

3. “Change in Control” - either

 

(i) the acquisition, directly or indirectly, by any “person” (as such term is
used in Section 13(d) and 14(d) of the Exchange Act) of securities of the
Company (or its parent company) representing an aggregate of twenty percent
(20%) or more of the combined voting power of the Company’s (or its parent
company’s) then outstanding securities; or

 

(ii) during any period of two (2) consecutive years individuals who, at the
beginning of such period, constitute the Board of the Company (or its parent
company) cease for any reason to constitute at least a majority thereof, unless
the election of each new director was approved in advance by a vote of at least
a majority of the directors then still in office who were directors at the
beginning of the period; or

 

(iii) consummation of (a) a merger, consolidation, statutory share exchange,
reorganization, or other business combination of the Company (or its parent
company) with any other “person” (as such term is used in Section 13(d) and
14(d) of the Exchange Act), other than a merger, consolidation, statutory share
exchange, reorganization, or other business combination which would result in
the outstanding common stock of the Company (or its parent company) immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into common stock of the surviving entity or a parent or
affiliate thereof) at least sixty (60%) percent of the outstanding common stock
of the Company or such surviving entity or parent thereof outstanding
immediately after such transaction, or (b) the sale or disposition by the
Company (or its parent company) of all or substantially all of the Company’s (or
its parent company’s) assets; or

 

(iv) approval by the stockholders of the Company (or its parent company) of a
complete liquidation or dissolution of the Company (or its parent company); or

 

(v) the occurrence of any other event or circumstances which is not covered by
(i) through (iv) above which the Board determines affects control of the Company
(or its parent company) and, in order to implement the purposes of this
Agreement as set forth above, adopts a resolution that such event or
circumstance constitutes a “Change in Control” for the purposes of this
Agreement.

 

4. “Code” – the Internal Revenue Code of 1986, as amended.

 

5. “Disability” – the Executive’s inability to perform the essential functions
of his regular duties and responsibilities, without reasonable accommodation, as
a result of medically determinable physical or mental incapacity for a period of
six (6) consecutive months. The determination of whether the Executive suffers a
Disability shall be made by a physician acceptable to both the Executive (or his
personal representative) and the Company.

 

6. “Exchange Act” – the term “Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended.

 

7. “Involuntary Termination” – termination of the Executive’s employment by the
Executive following a Change in Control which, in the reasonable judgment of the
Executive, is due to (i) a change of the

 

2

--------------------------------------------------------------------------------

Executive’s responsibilities, position (including status, office, title,
reporting relationships or working conditions), authority or duties (including
changes resulting from the assignment to the Executive of any duties
inconsistent with his positions, duties or responsibilities as in effect
immediately prior to the Change in Control); or (ii) a reduction in the
Executive’s compensation or benefits as in effect immediately prior to the
Change in Control; or (iii) the Company’s requiring Executive, without his
consent, to move his primary place of employment to a place more than fifty (50)
miles from the Executive’s primary place of employment immediately prior to the
Change in Control. Involuntary Termination does not include the death or
Disability of the Executive. Executive’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Involuntary Termination hereunder.

 

8. “Present Value” – the term “Present Value” shall have the same meaning as
provided in Section 280G(d)(4) of the Code.

 

IV. BENEFITS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL

 

1. Termination – The Executive shall be entitled to, and the Company shall pay
or provide to the Executive, the benefits described in Section 2 below if (a) a
Change in Control occurs during the term of this Agreement, and (b) the
Executive’s employment is terminated within thirty (30) months following the
Change in Control either (i) by the Company (other than for Cause or by reason
of the Executive’s death or Disability) or (ii) by the Executive pursuant to
Involuntary Termination; provided, however that if:

 

(a) during the term of this Agreement there is a public announcement of a
proposal for a transaction that, if consummated, would constitute a Change in
Control or the Board receives and decides to explore an expression of interest
with respect to a transaction which, if consummated, would lead to a Change in
Control (either transaction being referred to herein as the “Proposed
Transaction”); and

 

(b) the Executive’s employment is thereafter terminated by the Company other
than for Cause or by reason of the Executive’s death or Disability; and

 

(c) the Proposed Transaction is consummated within one (1) year after the date
of termination of the Executive’s employment;

 

then, for the purposes of this Agreement, a Change in Control shall be deemed to
have occurred during the term of this Agreement and the termination of the
Executive’s employment shall be deemed to have occurred within thirty (30)
months following a Change in Control.

 

2. Benefits to be Provided – If the Executive becomes eligible for benefits
under Article IV, Section 1 above, the Company shall pay or provide to the
Executive the benefits set forth in this Section 2.

 

(a) Accrued Obligations – The Company will pay to Executive, in a lump sum in
cash, within thirty (30) days following his termination of employment, the
Executive’s current salary through the date of termination to the extent not
theretofore paid.

 

(b) Severance – The Company will pay to Executive, in a lump sum in cash, within
thirty (30) days following his termination of employment, an amount (subject to
withholding of all applicable taxes) equal to the Present Value of Executive
continuing to receive his “current salary” for a period of twelve (12) months
from his date of termination in the same manner as it was being paid as of the
date of termination.

 

(c) Effect of Death or Disability – In the event Executive’s employment is
terminated as a result of his death or Disability, the Company shall pay to
Executive, his estate, named beneficiaries, or personal representative, as the
case may be, the benefits provided for in this Agreement.

 

3

--------------------------------------------------------------------------------

(d) Additional Limitation – In addition to the limits otherwise provided in this
Section 2, to the extent permitted by law, the Executive may in his sole
discretion elect to reduce any payments he may be eligible to receive under this
Agreement to prevent the imposition of excise taxes on the Executive under
Section 4999 of the Code.

 

(e) Obligation to Fund – The Agreement of the Company (or its successor) to make
payments to the Executive hereunder shall represent solely the unsecured
obligation of the Company (and its successor), except to the extent the Company
(or its successor) in its sole discretion elects in whole or in part to fund its
obligations under this Agreement pursuant to a trust arrangement or otherwise.

 

V. MISCELLANEOUS

 

1. Assignment and Successors – The parties acknowledge that this Agreement has
been entered into due to, among other things, the special skills of the
Executive, and agree that this Agreement may not be assigned or transferred by
the Executive, in whole or in part, without the prior written consent of the
Company. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes this Agreement by operation of law, or otherwise.

 

2. Other Agents – Nothing in this Agreement is to be interpreted as limiting the
Company from employing other personnel on such terms and conditions as may be
satisfactory to the Company.

 

3. Notices – All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered or seven days after mailing if mailed, first class, certified
mail, postage prepaid:

 

To the Company:

  

Community Bank

    

P.O. Box 1000

    

Blountsville, Alabama 35031

To the Executive

  

Patrick M. Frawley

    

630 Vinings Estates Drive

    

Mableton, Georgia 30126

 

Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

 

4. Provisions Severable – If any provision or covenant, or any part thereof, of
this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.

 

5. Waiver – Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of
this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.

 

6. Amendments and Modifications – This Agreement may be amended or modified only
by a writing signed by both parties hereto, which makes specific reference to
this Agreement.

 

4

--------------------------------------------------------------------------------

7. Governing Law – The validity and effect of this Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
Alabama.

 

8. Arbitration of Disputes; Expenses – The parties agree that all disputes that
may arise between them relating to the interpretation or performance of this
Agreement, including matters relating to any funding arrangements for the
benefits provided under this Agreement, shall be determined by binding
arbitration through an arbitrator approved by the American Arbitration
Association or other arbitrator mutually acceptable to the parties. The award of
the arbitrator shall be final and binding upon the parties, and judgment upon
the award rendered may be entered in any court having jurisdiction. In the event
the Executive incurs legal fees and other expenses in seeking to obtain or to
enforce any such rights or benefits through settlement, arbitration or
otherwise, the Company shall promptly pay the Executive’s reasonable legal fees
and expenses incurred in enforcing this Agreement.

 

9. Indemnity – During the term of this Agreement, and following any termination
of Executive’s employment during the term of this Agreement, Executive shall be
entitled to the benefits of the indemnity currently applicable to the Executive,
if any, as provided by the Company’s articles of incorporation or bylaws. Any
changes to the articles of incorporation or bylaws reducing the indemnity
granted to officers shall not affect the rights granted hereunder. The Company
may not reduce these indemnify benefits confirmed to the Executive hereunder
without the written consent of the Executive.

 

10. Termination of Prior Agreements – Except as provided herein, this Agreement
contains the entire agreement between the Company and Executive with respect to
the subject matter hereof and may be amended, modified, or canceled only
pursuant to Article V, Section 6 hereof. The Executive hereby agrees to a mutual
termination, effective as of the effective date of this Agreement, of any prior
existing change in control agreements (by whatever name) providing benefits to
the Executive upon a termination of employment following a Change in Control of
the Company, to which he and the Company are parties, and as to such prior
agreements, if any, the Executive releases all claims, rights and entitlements.

 

11. Regulatory Approvals – This Agreement, and the rights and obligations of the
parties hereto, shall be subject to approval of the same by any and all
regulatory authorities having jurisdiction over the Company, to the extent such
approval is required by law, regulation or order.

 

12. Regulator Intervention – Notwithstanding any term of this Agreement to the
contrary, this Agreement is subject to the following terms and conditions:

 

(a) The Company’s obligations to provide compensation or other benefits to
Executive under this Agreement may be suspended if the Company has been served
with a notice of charges by the appropriate federal banking agency under
provisions of Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818)
directing the Company to cease making payments required hereunder; provided,
however, that:

 

(i) the Company shall seek in good faith with its best efforts to oppose such
notice of charges as to which there are reasonable defenses;

 

(ii) in the event the notice of charges is dismissed or otherwise resolved in a
manner that will permit the Company to resume its obligations to provide
compensation or other benefits hereunder, the Company shall immediately resume
such payments and shall also pay Executive the compensation withheld while the
contract obligations were suspended, except to the extent precluded by such
notice; and

 

(iii) during the period of suspension, the vested rights of the contracting
parties shall not be affected, except to the extent precluded by such notice.

 

(b) The Company’s obligations to provide compensation or other benefits to
Executive under this Agreement shall be terminated to the extent a final order
has been entered by the appropriate federal banking agency under provisions of
Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) directing the
Company not to make the payments required hereunder; provided, however, that the
vested rights of the contracting parties shall not be affected by such order,
except to the extent precluded by such order.

 

5

--------------------------------------------------------------------------------

(c) The Company’s obligations to provide compensation or other benefits to
Executive under this Agreement shall be terminated or limited to the extent
required by the provisions of any final regulation or order of the Federal
Deposit Insurance Company promulgated under Section 18(k) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(k)) limiting or prohibiting any “golden parachute
payment” as defined therein, but only to the extent that the compensation or
payments to be provided under this Agreement are so prohibited or limited.

 

(d) Notwithstanding the foregoing, the Company shall not be required to make any
payments under this Agreement prohibited by law.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officers and the Executive has hereunto set his
hand, as of the date and year first above written.

 

COMMUNITY BANK

By:

 

/s/ Stacey W. Mann

--------------------------------------------------------------------------------

Name:

 

Stacey W. Mann

Title:

 

President

 

Attest:

 

/s/ William H. Caughran

--------------------------------------------------------------------------------

Name:

 

William H. Caughran

Title:

 

Secretary

 

EXECUTIVE:    

/s/ Patrick M. Frawley

--------------------------------------------------------------------------------

  (SEAL)

Patrick M. Frawley

   

 

6