EXHIBIT 10.3

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

THIS CHANGE OF CONTROL EMPLOYMENT AGREEMENT (the “Agreement”) by and between
Crescent Bank & Trust Company (together with its successors and assigns, the
“Bank”) and Suzanne T. Phipps (the “Employee”), is dated as of August 19, 2004,
and shall become effective as of the Effective Time of the Crescent Merger.

 

The Bank’s Board of Directors (the “Board”), has determined that it is in the
best interests of the Bank and its shareholders to assure that the Bank obtain
and preserve the continued service and dedication of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of Crescent Banking Company (the “Company”). The Employee,
immediately prior to becoming a Bank employee had an agreement (the “Futurus
Contract”) with Futurus Bank, N.A. (“Futurus Bank”) that provided benefits upon
a change in control of Futurus Bank. Futurus Bank is being acquired by the Bank
in the Crescent Merger which will result in a change of control of Futurus Bank
for purposes of the Futurus Contract. The Company and the Bank are paying the
Merger Consideration to the Futurus shareholders, including the Employee,
granting the Employee options to purchase shares of Crescent Common Stock, and
entering into this Agreement in consideration of the Employee entering into this
Agreement, irrevocably waiving and releasing all rights under his existing
Futurus Contract with respect to any benefits thereunder that could be
receivable in light of the Crescent Merger, and irrevocably terminating the
Futurus Contract upon the Effective Time of the Crescent Merger without the
payment of any amounts thereunder to the Employee with respect to the Crescent
Merger.

 

The Board believes it is important to diminish the inevitable distraction of the
Employee by virtue of the personal uncertainties and risks created by a pending
or threatened Change of Control of the Company and to encourage Employee’s full
attention and dedication to the Bank upon and following the Crescent Merger and
in the event of any threatened or pending Change of Control of the Company, and
to provide the Employee with compensation and benefits arrangements upon a
Change of Control of the Company in lieu of those the Employee had under the
Futurus Contract.

 

Capitalized terms used but not defined herein have the meanings provided in the
Acquisition Agreement.

 

In consideration of the promises and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Employee and the Bank,
intending to be legally bound, agree as follows:

 

1. Certain Definitions.

 

(a) “Acquisition Agreement” means the Agreement and Plan of Reorganization by
and among the Company, the Bank, Futurus and Futurus Bank, dated as of August
19, 2004.

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(b) “Affiliated Company” shall mean any company or entity controlled by,
controlling or under common control with the Company or the Bank.

 

(c) “Beneficially Own” and “Beneficial Owner” and correlative terms have the
meanings provided in SEC Rule 13d-3 under the 1934 Act.

 

(d) “Change of Control Period” means the period commencing on the Effective Date
and ending on the third anniversary of the Effective Date; provided that, the
Change of Control Period automatically shall be extended for one year on each
anniversary of the Effective Date unless the Company, not less than 60 days
prior to an anniversary, shall give notice of non-extension to the Employee.

 

(e) “Crescent Merger” means the mergers contemplated in the Acquisition
Agreement.

 

(f) “Effective Date” means the first date during the Employment Period on which
a Change of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs during the Employment Period and
if Employee’s employment with the Bank has been terminated either (i) by the
Bank without Cause or (ii) by the Employee for Good Reason (as such terms are
defined in Section 5 below) within six (6) months prior to the date on which the
Change of Control occurs, and unless it is reasonably demonstrated by the Bank
that such termination of employment (i) was not at the request of a third party
who has taken steps reasonably calculated to effect the Change of Control and
(ii) did not otherwise arise in connection with or anticipation of the Change of
Control, then for all purposes of this Agreement the Effective Date shall mean
the date immediately prior to the date of such termination of employment.

 

(g) “Effective Time” means the effective time of the first Crescent Merger as
provided by the Acquisition Agreement.

 

(h) “1933 Act” means the Securities Act of 1933, as amended.

 

(i) “1934 Act” means the Securities Exchange Act of 1934, as amended.

 

(j) “SEC” means the United States Securities and Exchange Commission and any
successors thereto.

 

2. Change of Control. For the purposes of this Agreement, a “Change of Control”
shall mean the occurrence of any of the following events:

 

(a) individuals who, at the Effective Time, constitute the board of directors
(the “Incumbent Directors”) of the Company cease for any reason to constitute at
least a majority of the Board of the Company, provided that any person becoming
a Board member after the Effective Time and whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent
Directors serving on the Company’s Nominating Committee (the “Nominating
Committee”) or if there is no Nominating Committee, by the Company’s Board or

 

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the shareholders, shall be an Incumbent Director. The immediately preceding
sentence notwithstanding, no individual initially nominated or elected as a
director of the Company as a result of an actual or threatened election contest
(as described in SEC Rule 14a-11 under the 1934 Act (“Election Contest”) or
other actual or threatened solicitation of proxies or consents by or on behalf
of any “Person” (as such term is used in Sections 13(d)(3) and 14(d)(2) of the
1934 Act) other than the Company’s Board or Nominating Committee (“Proxy
Contest”), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an Incumbent Director;

 

(b) any Person becomes a Beneficial Owner, directly or indirectly, of securities
of the Company representing 35% or more of the combined voting power of the
Company’s then outstanding securities eligible to vote for the election of the
Company’s Board (the “Company Voting Securities”). The immediately preceding
sentence notwithstanding, an event described in this subsection 2(b) shall not
be deemed to be a Change of Control of the Company by virtue of any of the
following: (A) any acquisition by a Person who is at the Effective Time the
Beneficial Owner of 15% or more of the outstanding Company Voting Securities,
(B) an acquisition by the Company which reduces the number of Company Voting
Securities outstanding and solely as a result thereof any Person has Beneficial
Ownership of more than 35% of the outstanding Company Voting Securities;
provided, that if after such acquisition, such Person becomes the Beneficial
Owner of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person by more
than 1%, a Change of Control of the Company shall then occur, (C) an acquisition
by any employee benefit plan (or related trust) (“Employee Plan”) sponsored or
maintained by the Company or any parent or subsidiary of the Company, (D) an
acquisition by an “underwriter” (as defined in Section 2(a)(11) of the 1933 Act)
temporarily holding securities pursuant to an offering of such securities, or
(E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in
subsection 2(c) below); or

 

(c) the consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company that
requires the approval of the Company’s shareholders, whether for such
transaction or the issuance of securities in the transaction, or the sale or
other disposition of all or substantially all of the Company’s assets to an
entity that is not an affiliate of the Company (a “Reorganization”), unless
immediately following such Reorganization: (A) more than 50% of the total voting
power of (x) the corporation resulting from such Reorganization (the “Surviving
Company”), or (y) if applicable, the ultimate parent corporation that directly
or indirectly Beneficial Owns 100% of the voting securities eligible to elect
directors of the Surviving Company (the “Parent Company”), is represented by the
Company Voting Securities that were outstanding immediately prior to such
Reorganization (or, if applicable, is represented by shares into which such
Company Voting Securities were converted pursuant to such Reorganization), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Reorganization, (B) no person (other
than (x) the Company, (y) any Employee Plan sponsored or maintained by the
Surviving Company, the Parent Company or any parent or subsidiary of either of
them, or (z) a person who immediately prior to the Reorganization was the
Beneficial Owner of 35% or more of the outstanding Company Voting Securities is
the Beneficial Owner, directly

 

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or indirectly, of 35% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Company or the
Surviving Company, and (C) at least a majority of the members of the board of
directors of the Parent Company or the Surviving Company following the
consummation of the Reorganization were Incumbent Directors at the time of the
Company Board’s approval of the initial agreement providing for such
Reorganization. Any Reorganization which satisfies all of the criteria specified
in clauses (A), (B) and (C) of this subsection 2(c) shall be deemed to be a
“Non-Qualifying Transaction”); or

 

(d) approval by the Company’s shareholders of a plan of liquidation or
dissolution of the Company.

 

3. Employment Period. The Employee agrees to become an Employee of the Bank at
the Effective Time of the Crescent Merger, and the Bank hereby agrees to employ
Employee as of such time, and the Employee and the Bank agree to maintain such
employment of Employee on an at-will basis, subject to compliance with this
Agreement and the Bank’s policies, practices and codes of conduct, and, subject
to the terms and conditions of this Agreement and the Bank’s policies,
practices, codes of conduct, from the Effective Time until the last day of the
Change of Control Period (the “Employment Period”).

 

4. Terms of Employment.

 

(a) Position and Duties.

 

(i) During the Employment Period, (A) Employee’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned immediately following
the Effective Time of the Crescent Merger, and (B) Employee’s services shall be
performed at the location where Employee was employed immediately preceding the
Effective Date or any office or location less than 50 miles from such location.

 

(ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which Employee is entitled, Employee shall devote his full
business attention and time during normal business hours to the business and
affairs of the Bank and shall use his reasonable best efforts to perform
faithfully and efficiently all responsibilities assigned to him and consistent
with applicable laws, regulations and requirements of applicable governmental
authorities, and the Company’s and the Bank’s policies, codes of conduct,
practices and progress. During the Employment Period it shall not be a violation
of this Agreement for Employee to (A) serve on a reasonable number of corporate,
civic or charitable boards or committees that promote the Bank’s interests in
serving its communities, (B) engage in other business activities that do not
represent a conflict of interest with the Company, the Bank or the Affiliated
Companies or the full execution of his duties to the Bank, and (C) manage
personal investments, so long as such activities do not materially interfere
with the performance of Employee’s responsibilities as an employee of the Bank
in accordance with this Agreement.

 

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(b) Compensation.

 

(i) Base Salary. During the Employment Period, Employee shall receive an annual
base salary (“Annual Base Salary”), which shall be paid at a monthly rate,
determined, in the sole discretion of the Board of the Company or the Bank or
the compensation committee thereof (the “Compensation Committee”); provided
that, during the Change of Control Period, Employee shall receive an Annual Base
Salary which shall be paid at a monthly rate at least equal to 12 times the
highest monthly base salary paid or payable, including any base salary which has
been earned but deferred, to Employee by the Bank and its Affiliated Companies
in respect of the 12-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed no more than 12 months after the last salary increase awarded
to Employee prior to the Effective Time and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to Employee under this Agreement or create any obligation on the Bank
to further increase the Annual Base Salary. Annual Base Salary shall not be
reduced after any such increase and the term Annual Base Salary as utilized in
this Agreement shall refer to Annual Base Salary as so increased.

 

(ii) Annual Bonus. For each fiscal year ending during the Employment Period,
beginning with the Bank’s 2005 fiscal year, in addition to Annual Base Salary,
Employee may be awarded, in the sole discretion of the Board of the Company or
the Bank or the Compensation Committee, an annual bonus (the “Annual Bonus”) in
cash in an amount determined in the judgment of such Board or the Compensation
Committee. The Annual Bonus, if any, shall be paid no later than the end of the
third month of the fiscal year next following the fiscal year for which the
Annual Bonus is awarded.

 

(iii) Incentive, Savings and Retirement Plans. During the Employment Period,
Employee shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to
officers of the Bank similarly situated with the Employee (“Peer Employees”),
including years of service with the Bank (including deemed service as provided
in the Acquisition Agreement and permitted under the applicable plan, practice,
program and policy of the Bank) (“Years of Service”).

 

(iv) Welfare Benefit Plans. During the Employment Period, Employee and/or
Employee’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Bank (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent applicable
generally to Peer Employees with the same number of Years of Service.

 

(v) Expenses. During the Employment Period, Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by Employee in
accordance with the policies, practices and procedures of the Bank applicable to
Peer Employees.

 

(vi) Fringe Benefits. During the Employment Period, Employee shall be entitled
to fringe benefits in accordance with the plans, practices, programs and
policies of the Bank applicable to Peer Employees with the same number of Years
of Service.

 

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5. Termination of Employment.

 

(a) Death or Disability. Employee’s employment shall terminate automatically
upon Employee’s death during the Employment Period. If the Bank determines in
good faith that the Disability of Employee has occurred during the Employment
Period, it may give Employee written notice in accordance with Section 14(f) of
this Agreement of its intention to terminate Employee’s employment. In such
event, Employee’s employment with the Bank shall terminate effective on the 30th
day after receipt of such notice by Employee (the “Disability Effective Date”);
provided that, within the 30 days after such receipt, Employee shall not have
returned to full-time performance of Employee’s duties. For purposes of this
Agreement, “Disability” shall mean the inability of Employee, as determined by
the Board, to perform the essential functions of his regular duties and
responsibilities, with or without reasonable accommodation, due to a medically
determinable physical or mental illness which has lasted (or can reasonably be
expected to last) for a continuous period of six (6) months during any twelve
(12) month period.

 

(b) Cause. The Bank may terminate Employee’s employment during the Employment
Period or any other time with or without Cause. For purposes of this Agreement,
“Cause” shall mean:

 

(i) the willful and continued failure of Employee to perform substantially all
of Employee’s duties with the Bank (other than any such failure resulting from
incapacity due to physical or mental illness, and specifically excluding any
failure by Employee, after reasonable efforts, to meet performance
expectations), after a written demand for substantial performance is delivered
to Employee by the Bank’s Board or Chief Executive Officer; or

 

(ii) any conduct inconsistent with applicable law or regulation, or any
violation of this Agreement, or any gross negligence or willful misconduct by
the Employee which is materially injurious to the Bank; or

 

(iii) any refusal or failure by Employee to comply with a lawful directive from
the Bank’s Board or Chief Executive Officer.

 

For purposes of this provision, no act or failure to act, on the part of
Employee, shall be considered “willful” unless it is done, or omitted to be
done, by Employee in bad faith or without reasonable belief that Employee’s
action or omission was in the best interests of the Bank. Any act, or failure to
act, based upon direction given pursuant to a resolution duly adopted by the
Board or based upon and consistent with the prior advice of counsel for the Bank
after being informed adequately of the action or failure to act, shall be
conclusively presumed to be done, or omitted to be done, by Employee in good
faith and in the best interests of the Bank. The cessation of employment of
Employee shall not be deemed to be for Cause, unless and until there shall have
been delivered to Employee a copy of a resolution duly adopted by the
affirmative vote of the Board at a meeting of such Board called and held for
such purpose (after reasonable notice is provided to Employee and Employee is
given an opportunity, together with counsel, to be heard before such Board),
finding that, in the business judgment of such Board, Employee may be terminated
consistent with subparagraphs (i) or (ii) above.

 

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(c) Good Reason. Employee’s employment may be terminated by Employee during the
Employment Period for Good Reason or for no reason. For purposes of this
Agreement, “Good Reason” shall mean:

 

(i) without the written consent of Employee, the assignment to Employee of any
duties inconsistent in any material respect with Employee’s position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as in effect on the Effective Date, or any other action by the
Bank which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Bank
promptly (which shall in no event be deemed to require action in less than
thirty (30) days) after receipt of notice thereof given by Employee;

 

(ii) the Bank’s requiring Employee, without his consent, to be based at any
office or location that is more than 50 miles from the location where Employee
was employed immediately prior to the Effective Date;

 

(iii) a material reduction in Employee’s Annual Base Salary or exclusion from
any benefits or plans to which Employee is entitled pursuant to subsections
4(b)(iii) through (vi), or as the same may be increased from time to time except
where such change is necessitated by law, regulation or action by applicable
governmental authorities, which is not remedied by the Bank promptly (which
shall in no event be deemed to require action in less than thirty (30) days)
after receipt of notice thereof given by Employee; and provided further, a
change in any compensation, plan or benefits generally or those provided to Peer
Employees shall not constitute “Good Reason”.

 

(iv) any failure by the Bank to comply with and satisfy Section 13(c) of this
Agreement which is not remedied by the Bank promptly (which shall in no event be
deemed to require action in less than thirty (30) days) after receipt of notice
thereof given by Employee; or

 

(v) the material breach of this Agreement by the Bank which is not remedied by
the Bank promptly (which shall in no event be deemed to require action in less
than thirty (30) days) after receipt of notice thereof given by Employee.

 

(d) Notice of Termination. Any termination by the Bank for Cause, or by Employee
for Good Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with this Agreement. A “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment under the provision so indicated and (iii)
specifies the termination date (which date shall be not less than 60 days after
the giving of such notice). If a dispute exists concerning the provisions of
this Agreement that apply to

 

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Employee’s termination of employment, the parties shall pursue the resolution of
such dispute with reasonable diligence. Within five (5) days of such a
resolution, any party owing any payments pursuant to the provisions of this
Agreement shall make all such payments together with interest accrued thereon at
the rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986,
as amended (the “Code”). The failure by either party to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of such party hereunder or preclude
such party from asserting such fact or circumstance in enforcing such party’s
rights hereunder.

 

(e) Date of Termination. “Date of Termination” means (i) if Employee’s
employment is terminated other than by reason of death or Disability, the date
of receipt of the Notice of Termination, or any later date specified therein, or
(ii) if Employee’s employment is terminated by reason of death or Disability,
the Date of Termination will be the date of death or the Disability Effective
Date, as applicable.

 

6. Obligations of the Bank upon Termination.

 

(a) Good Reason; Other Than for Cause, Death or Disability During the Change of
Control Period. If, during the Change of Control Period, the Bank shall
terminate Employee’s employment other than for Cause, death or Disability, or
Employee shall terminate employment for Good Reason, then in consideration of
Employee’s services rendered prior to such termination:

 

(i) the Bank shall pay to Employee the following:

 

A. an amount equal the sum of (1) Employee’s Annual Base Salary through the Date
of Termination to the extent not theretofore paid, and (2) any compensation
previously deferred by Employee (together with any accrued interest or earnings
thereon if any, then owed to Employee) to the extent not theretofore paid (the
sum of the amounts described in clauses (1) and (2) shall be hereinafter
referred to as the “Accrued Obligations”); and

 

B. an amount equal to one (1) times Employee’s Annual Base Salary at the rate in
effect on the Date of Termination payable over the one year following the Date
of Termination in accordance with Bank’s normal payroll;

 

(ii) for a period of one (1) year from the Date of Termination, the Bank shall
continue benefits to Employee and/or Employee’s family that are at least equal,
on an after-tax basis, to those which would have been provided to them in
accordance with the medical and other welfare plans described in Section
4(b)(iv) of this Agreement if Employee’s employment had not been terminated;
provided, however, that if Employee becomes re-employed with another employer
and is eligible to receive medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility;

 

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(iii) all unvested stock options to acquire capital stock of the Company and all
awards of restricted Company capital stock held by Employee as of the Date of
Termination shall be immediately and fully vested as of the Date of Termination
and, in the case of stock options, shall be fully exercisable as of the Date of
Termination; and

 

(iv) to the extent not theretofore paid or provided, the Bank shall timely pay
or provide to Employee any other amounts or benefits required to be paid or
provided or which Employee is eligible to receive under any plan, program,
policy, contract or agreement of the Bank (collectively, the “Other Benefits”).

 

(b) Good Reason; Other Than for Cause, Death or Disability During the Employment
Period (Other Than the Change of Control Period). If, during the Employment
Period (other than the Change of Control Period), the Bank shall terminate
Employee’s employment other than for Cause, death or Disability, or Employee
shall terminate employment for Good Reason, this Agreement shall terminate
without further obligations to Employee, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits, if any, when
due.

 

(c) Death or Disability. If Employee’s employment is terminated by reason of
Employee’s death or Disability during the Employment Period, this Agreement
shall terminate without further obligations to Employee or Employee’s personal
or legal representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits if any, as are
applicable to Employee at death or the Disability Effective Date. Accrued
Obligations shall be paid to Employee’s estate or beneficiary, as applicable, in
a lump sum in cash within 30 days of the Employee’s death or Disability
Effective Date, and shall pay Other Benefits, if any, when due.

 

(d) Cause or Voluntary Termination without Good Reason. If Employee’s employment
shall be terminated for Cause during the Employment Period, or if Employee
voluntarily terminates employment during the Employment Period without Good
Reason, this Agreement shall terminate without further obligations to Employee,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits, if any, when due.

 

(e) Expiration of Employment Period. If Employee’s employment shall be
terminated due to the normal expiration of the Employment Period, this Agreement
shall terminate without further obligations to Employee, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits, if
any, when due.

 

(f) Settlement and General Release. The Bank’s obligation to make the payments
provided for in this Section 6 is conditioned upon Employee’s execution of a
settlement agreement, including a general release of all claims, acceptable in
form and substance to the Bank, and Employee must execute and abide by such an
agreement in order to be entitled to, and to receive, any payments relating to
termination of employment hereunder.

 

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any plan, program, policy or
practice provided

 

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by the Bank or any of its Affiliated Companies and for which Employee may
qualify, nor, subject to Section 14(h), shall anything herein limit or otherwise
affect such rights as Employee may have under any contract or agreement with the
Bank or any of its Affiliated Companies. Amounts which are vested benefits or
which Employee is otherwise entitled to receive under any plan, policy, program
of or any contract or agreement with the Bank at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, program,
contract or agreement, except as explicitly modified by this Agreement.

 

8. Full Settlement. The Bank’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Bank may have against Employee or others. In no event shall
Employee be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Employee under any of the provisions of
this Agreement and, except as expressly provided herein, such amounts shall not
be reduced whether or not Employee obtains other employment.

 

9. Costs of Enforcement. In any action taken in good faith relating to the
enforcement of this Agreement or any provision herein, Employee shall be
entitled to be paid any and all costs and expenses incurred by him in enforcing
or establishing his rights thereunder, including, without limitation, reasonable
attorneys’ fees, whether suit be brought or not, and whether or not incurred in
trial, bankruptcy or appellate proceedings, in the event a claim by the Employee
is denied by the Company, but approved by a court of competent jurisdiction in a
final nonappealable decision. Such payments shall be made within five (5)
business days after delivery of Employee’s respective written requests for
payment accompanied with such evidence of fees and expenses incurred as the Bank
reasonably may require.

 

10. Nondisclosure of Trade Secrets and Confidential Information.

 

(a) Trade Secrets Defined. “Trade Secrets” means all secret, proprietary or
confidential information regarding Futurus, Futurus Bank, the Bank, the Company,
and their Affiliated Companies or any of their respective activities, that fits
within the definition of “trade secrets” under the Georgia Trade Secrets Act.
Without limiting the foregoing or any definition of Trade Secrets, Trade Secrets
protected hereunder shall include all source codes and object codes for software
and all website design information to the extent that such information fits
within the Georgia Trade Secrets Act. Nothing in this Agreement is intended, or
shall be construed, to limit the protections or remedies available to Futurus,
Futurus Bank, the Company, the Bank or their Affiliated Companies under the
Georgia Trade Secrets Act or any other applicable law protecting trade secrets
or other confidential information. “Trade Secrets” shall not include information
that has become generally available to the public by the act of one who has the
right to disclose such information without violating any right or privilege of
Futurus, Futurus Bank, the Company, the Bank or their Affiliated Companies,
including their rights under the Confidentiality Agreement with Futurus and/or
its representatives. This definition shall not limit any definition of “trade
secrets” or any equivalent term under the Georgia Trade Secrets Act or any other
state, local or federal law.

 

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(b) Confidential Information Defined. “Confidential Information” means all
information regarding Futurus, Futurus Bank, the Company, and their Affiliated
Companies and any of their respective activities, businesses or customers that
is not generally known to persons not employed (as employees or independent
agents) by Futurus, Futurus Bank, the Bank, the Company or their Affiliated
Companies, that is not generally disclosed publicly by regular practice or
authority to persons not employed by Futurus, Futurus Bank, the Company, the
Bank or their Affiliated Companies, except to their regulatory authorities and
pursuant to confidential or other relationships where there is no expectation of
public disclosure) and is the subject of reasonable efforts to keep it
confidential. Confidential Information shall include all customer information,
product code, product concepts, production techniques, technical information
regarding products or services, production processes and product/service
development, operations techniques, product/service formulas, information
concerning techniques for use and integration of websites and other
products/services, product pricing, current and future development and expansion
or contraction plans of Futurus, Futurus Bank, the Company, the Bank or their
Affiliated Companies, sale/acquisition plans and contacts, marketing plans and
contacts, information concerning the legal affairs of Futurus, Futurus Bank, the
Company, the Bank and their Affiliated Companies and certain information
concerning the strategy, tactics and financial affairs of Futurus, Futurus Bank,
the Company or the Bank and their Affiliated Companies. “Confidential
Information” shall not include information that has become generally available
to the public by the act of one who has the right to disclose such information
without violating any right or privilege of Futurus, Futurus Bank, the Company,
the Bank and their Affiliated Companies or any duty owed to any of them. This
definition shall not limit any definition of “confidential information” or any
equivalent term under the Georgia Trade Secrets Act or any other federal, state
or local law.

 

(c) Nondisclosure of Trade Secrets and Confidential Information. For a period of
two (2) years after the Employee is no longer employed by the Company, the Bank
or an Affiliated Company, Employee shall not directly or indirectly transmit or
disclose any Trade Secrets or Confidential Information to any person, concern or
entity, or make use of any such Confidential Information, directly or
indirectly, for himself or for others, without the prior express written consent
of the Chief Executive Officer of the Bank. During the term of this Agreement
and perpetually thereafter, for so long as the information remains a Trade
Secret, Employee shall not directly or indirectly, for himself or for others,
without the prior express written consent of the Chief Executive Officer of the
Bank, transmit or disclose any Trade Secrets to any person, concern or entity,
or make use of any such Trade Secrets. Employee warrants that he has not
disclosed or used for his own benefit or the benefit of anyone other than the
Bank any Confidential Information or Trade Secrets prior to the execution or
effectiveness of this Agreement.

 

(d) Enforceability of Covenants. Employee and the Bank agree that Employee’s
obligations under these nondisclosure covenants are separate and distinct from
other provisions of this Agreement, and a failure or alleged failure of the Bank
to perform their obligations under any provision of this Agreement or other
agreements with the Bank shall not constitute a defense to the enforceability of
these nondisclosure covenants. Nothing in this provision or this Agreement shall
limit any rights or remedies otherwise available to the Bank under federal,
state or local law.

 

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11. Nonrecruitment and Nonsolicitation Covenants.

 

(a) Nonrecruitment of Employees. In consideration of the Merger Consideration
being paid and to be paid to Employee pursuant to the Acquisition Agreement,
including the options to purchase shares of Crescent Common Stock granted
pursuant to Section 8.8 of the Acquisition Agreement, and this Agreement,
Employee hereby agrees that, for three (3) years following the Effective Time,
Employee shall not, without the prior written consent of the Chief Executive
Officer of the Bank, which consent may be withheld at the sole discretion of the
Chief Executive Officer of the Bank, directly or indirectly solicit or recruit
for employment or encourage to leave employment with the Bank, the Company the
Bank or any Affiliated Company, on his own behalf or on behalf of any other
person or entity other than the Bank, the Company or any Affiliated Company, any
employee of the Bank with whom Employee worked during the Employee’s employment
with Futurus, Futurus Bank, the Bank, the Company or any Affiliated Company and
who performed services for the Futurus, Futurus Bank, the Bank, the Company or
any Affiliated Company clients or worked on Futurus, Futurus Bank, the Bank, the
Company or any Affiliated Company products or services while employed by
Futurus, Futurus Bank, the Bank, the Company or any Affiliated Company and who
has not thereafter ceased to be employed by the Bank, the Company or any
Affiliated Company for a period of at least one (1) year. Employee will not
engage in such activities, directly or indirectly, or encourage or facilitate
any other Person with respect to such activities.

 

(b) Nonsolicitation of Customers. In consideration of the Merger Consideration
being paid and to be paid to Employee pursuant to the Acquisition Agreement,
including the options to purchase shares of Crescent Common Stock granted
pursuant to Section 8.8 of the Acquisition Agreement, and this Agreement,
Employee hereby agrees that, for three (3) years following the Effective Time,
Employee shall not, without the prior written consent of the Chief Executive
Officer of the Bank, which consent may be withheld at the sole discretion of the
Chief Executive Officer of the Bank, directly or indirectly, on behalf of
himself or of anyone other than the Bank, the Company or any Affiliated Company,
solicit or attempt to solicit for the purpose of providing any Business
Activities (as defined in Section 11(c) to any customer of the Bank whom
Employee actively solicited or with whom Employee worked, or otherwise had
material contact, in the course of Employee’s employment with Futurus, Futurus
Bank, the Bank or the Company. Employee will not engage in such activities,
directly or indirectly, or encourage or facilitate any other Person with respect
to such activities.

 

(c) Noncompetition. In consideration of the Merger Consideration being paid and
to be paid to Employee pursuant to the Acquisition Agreement, including the
options to purchase shares of Crescent Common Stock granted pursuant to Section
8.8 of the Acquisition Agreement, and this Agreement, Employee hereby agrees
that, for eighteen (18) months following the Effective Time, Employee shall not,
without the prior written consent of the Chief Executive Officer of the Bank,
which consent may be withheld at the sole discretion of the Chief Executive
Officer of the Bank, engage or participate in, as a business executive of any
business or enterprise that competes in the Restricted Area with the Bank, the
Business Activities. For purposes of this Section 11(c), the “Business
Activities” shall be any business activities conducted by the Bank, which
consist of commercial and consumer loans and extensions of

 

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credit, letters of credit, commercial and consumer deposits and deposit
accounts, securities repurchase agreements and sweep accounts, money transfer
and bill payment services, internet or electronic banking, automated teller
machines, IRA and retirement accounts, mortgage loans, and home equity lines of
credit. For purposes of this Section 11(c), the “Restricted Area” shall be Cobb
and Forsyth Counties, Georgia and that area of Fulton County, Georgia north and
west of Interstate 285 between Interstate 20 West of Atlanta and Interstate 85
North of Atlanta, together all of which are within the area over which Employee
had authority for Futurus and Futurus Bank, and within which Employee will
provide services to the Bank upon and following the Effective Time of the
Crescent Merger. Nothing in this Section 11(c) shall prohibit Employee from
acquiring or holding, for investment purposes only, less than one percent (1%)
of the outstanding securities of any corporation which may compete directly or
indirectly with the Bank or its Affiliated Companies. Furthermore, if during the
Employment Period the Bank terminates Employee without Cause or if Employee
terminates for Good Reason, this Section 11(c) shall terminate and have no
further force or effect.

 

(d) Enforceability of Covenants. Employee acknowledges and agrees that the
covenants in this Agreement are direct consideration for a sale of a business
and should be governed by standards applicable to restrictive covenants entered
into in connection with a sale of a business. Employee acknowledges that the
Bank has a current and future expectation of business within the geographic
areas served by Futurus and Futurus Bank and from the current and proposed
customers of the Bank that are derived from its merger with Futurus and Futurus
Bank. Employee acknowledges that the term, geographic area and scope of the
covenants set forth in this Agreement are reasonable, and agrees that he will
not, in any action, suit or other proceeding, deny the reasonableness of, or
assert the unreasonableness of, the premises, consideration or scope of the
covenants set forth herein. Employee agrees that his position with Futurus
and/or Futurus Bank involved duties and authority relating to all aspects of the
Business Activities and all of the Restricted Area and that he will continue to
have duties and authority for the Bank relating to all aspects of the Business
Activities and all of the Restricted Area. Employee further acknowledges that
complying with the provisions contained in this Agreement will not preclude him
from engaging in a lawful profession, trade or business, or from becoming
gainfully employed. Employee and the Bank agree that Employee’s obligations
under the above covenant are separate and distinct under this Agreement, and the
failure or alleged failure of the Bank to perform its obligations under any
other provisions of this Agreement shall not constitute a defense to the
enforceability of this covenant. Employee and the Bank agree that if any portion
of the foregoing covenants is deemed to be unenforceable because the geography,
time or scope of activities restricted is deemed to be too broad, the court
shall be authorized to substitute for the overbroad term an enforceable term
that will enable the enforcement of the covenants to the maximum extent possible
under applicable law. Employee agrees that any breach of this covenant will
result in irreparable damage and injury to the Bank and that the Bank will be
entitled to exercise all rights, including, without limitation, obtaining a
temporary restraining order, injunctive relief and other equitable relief,
including specific performance in the event of any breach or threatened breach
of this Agreement in any court of competent jurisdiction without the necessity
of posting any bond or security, and without limiting Bank’s ability to exercise
any other rights or remedies. Employee also agrees that he shall be responsible
for all damages incurred by the Bank due to his breach of this Agreement,
including, without limitation, damages. The Employee shall pay all costs and
attorneys’ fees and charges incurred by the Bank in enforcing the restrictive
covenants in this Agreement.

 

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12. Certain Additional Payments by the Bank. Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any benefit,
payment or distribution by the Company to or for the benefit of Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax
imposed by Sections 280G and 4999 of the Code (the “Excise Tax”), then the
Payments shall be limited to the extent necessary to avoid being subject to the
Excise Tax. In that event, Employee shall direct in writing which Payments are
to be modified or reduced.

 

13. Successors.

 

(a) This Agreement is personal to Employee and without the prior written consent
of the Bank shall not be assignable by Employee. This Agreement shall inure to
the benefit of and be enforceable by Employee’s personal and legal
representatives.

 

(b) This Agreement shall inure to the benefit of and be binding upon the Bank
and its successors and assigns.

 

(c) The Bank 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 Bank to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Bank would be
required to perform it if no such succession had taken place. As used in this
Agreement, the term “Bank” shall mean Crescent Bank & Trust Company including
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

 

14. Miscellaneous.

 

(a) 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.

 

(b) Severability. 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.

 

(c) Status Prior to Effective Date. Employee and the Bank acknowledge that,
except as may otherwise be provided under any other written agreement between
Employee and the Bank, the employment of Employee by the Bank is “at will,” and
prior to the Effective Date,

 

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Employee’s employment may be terminated by either Employee or the Bank at any
time, in which case Employee shall have no further rights under this Agreement,
except as expressly set forth herein. However, absent a voluntary termination of
employment by Employee, this Agreement may not be terminated by the Bank during
the Change of Control Period except for Cause or Disability. From and after the
Effective Time of the Crescent Merger, this Agreement shall supersede any other
agreement between the parties (or their predecessors) with respect to the
subject matter hereof, including without limitation the Futurus Contract or any
other then-current employment agreement between the Employee and Futurus Bank.

 

(d) Release. In consideration of the Merger Consideration being paid and to be
paid to Employee pursuant to the Acquisition Agreement, including the options to
purchase shares of Crescent Common Stock granted pursuant to Section 8.8 of the
Acquisition Agreement, and this Agreement, the Employee irrevocably waives and
releases all rights under the Futurus Contract with respect to any benefits
thereunder that could be receivable in light of the Crescent Merger, and
irrevocably terminates the Futurus Contract upon the Effective Time of the
Crescent Merger without the payment of any amounts under the Futurus Contract to
the Employee with respect to the Crescent Merger.

 

(e) Governing Law. Except to the extent preempted by federal law, and without
regard to conflict of laws principles, the laws of the State of Georgia shall
govern this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.

 

(f) 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 three days after mailing if mailed, first class, certified
mail, postage prepaid:

 

To the Bank:

   Crescent Bank & Trust Company      251 Highway 515      Jasper, Georgia 30143
     Attention: Chief Executive Officer

To Employee:

   Suzanne T. Phipps      5225 Windward Parkway      Alpharetta, GA 30004

 

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.

 

(g) 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.

 

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(h) Entire Agreement. Except as provided herein, this Agreement contains the
entire agreement between the Bank and the Employee with respect to the subject
matter hereof and, from and after the date hereof, this Agreement shall
supersede any other agreement between the parties (or their predecessors) with
respect to the subject matter hereof, including without limitation, the Futurus
Contract and any written or oral discussions, term sheets, letters of intent,
indications of interest or agreements or other documents prior to the date
hereof. Under any termination of this Agreement, Sections 7, 8, 9, 10, 11, 12,
13 and 14 shall survive and continue in full force and effect, except as
specifically provided otherwise herein.

 

(i) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument. A facsimile signature shall constitute and have the
same force and effect as an original signature for all purposes under this
Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Change of Control Employment Agreement as of the date first above written.

 

CRESCENT BANK & TRUST COMPANY

By:

 

/s/ J. Donald Boggus, Jr.

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    J. Donald Boggus, Jr.     President and Chief Executive Officer

 

EMPLOYEE:

/s/ Suzanne T. Phipps

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Suzanne T. Phipps

 

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