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;

 

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(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

 

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(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.

 

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(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
Executive an amount equal to one and a half (1.5) times the Executive’s annual
base salary in effect at the time of the Termination of Employment. In addition,
to the extent permitted by the applicable plan or program, the following
employee welfare benefits shall continue in effect at the same level as in
effect immediately prior to the Change in Control for a period of twelve (12)
months following the Termination of Employment (the “Severance Period”):

 

If on the last date of the Executive’s day of employment, the Executive has any
of the following benefits, those benefits should continue for a period of twelve
(12) months

 

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following the Termination of Employment (the “Severance Period) under the terms
listed below:

 

Medical, Vision, Prescription Drug, Dental, as limited by COBRA;

Stock Purchase Plan;

YMCA;

Prepaid Legal;

Sam Club; and

Accrued unused vacation time.

 

Finally, during the Severance Period, the Company shall pay to the Executive an
amount equal to the Executive’s cost of COBRA continuation health coverage for
the Executive and his eligible dependents for the Severance Period or if less,
the period during which the Executive and his eligible dependents are entitled
to COBRA continuation coverage. The payments described in this Section 3 shall
be collectively referred to in this Agreement as the “Severance Benefit.”  A
termination of the Executive’s employment due to his death or Disability will
not be deemed to be an involuntary termination of employment by the Company or
one of its affiliates without Cause or a resignation by the Executive for Good
Reason.

 

(b)           Golden Parachute Reduction. Notwithstanding Subsection (a), if the
aggregate of the Severance Benefit and other payments and benefits which the
Executive has the right to receive from the Company and its affiliates
(including the value of any equity rights which become vested upon a Change in
Control) (the “Total Payments”) would constitute a “parachute payment” as
defined in Section 280G(b)(2) of the Code, the Executive shall receive the Total
Payments unless the (a) after-tax amount that would be retained by the Executive
(after taking into account all federal, state and local income taxes payable by
the Executive and the amount of any excise taxes payable by the Executive under
Code Section 4999 that would be payable by the Executive (the “Excise Taxes”))
if the Executive were to receive the Total Payments has a lesser aggregate value
than (b) the after-tax amount that would be retained by the Executive (after
taking into account all federal, state and local income taxes payable by the
Executive) if the Executive were to receive the Total Payments reduced to the
largest amount as would result in no portion of the Total Payments being subject
to Excise Taxes (the “Reduced Payments”), in which case the Executive shall be
entitled only to the Reduced Payments. If the Executive is to receive the
Reduced Payments, the Executive shall be entitled to determine which of the
Total Payments, and the relative portions of each, are to be reduced.

 

(c)           Payment of Severance Benefit. The Severance Benefit shall be paid
to the Executive in a lump sum payment as soon as practicable following the
Executive’s Termination of Employment; provided, however, that if the Executive
is a Specified Employee at the time payment is due hereunder, then the lump sum
payment shall be deferred and paid as soon as practicable following the
expiration of six (6) months from the effective date of the Executive’s
Termination of Employment. The Company shall be

 

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entitled to withhold appropriate employment and income taxes, if required by
applicable law, if the Severance Benefit becomes payable.

 

4.             Confidentiality.

 

(a)           All Confidential Information and Trade Secrets and all physical
embodiments thereof received or developed by the Executive while employed by the
Company or any of its affiliates are confidential to and are and will remain the
sole and exclusive property of the Company or any of its affiliates. Except to
the extent necessary to perform the duties assigned to him by the Company, the
Executive will hold such Confidential Information and Trade Secrets in trust and
strictest confidence, and will not use, reproduce, distribute, disclose or
otherwise disseminate the Confidential Information and Trade Secrets or any
physical embodiments thereof and may in no event take any action causing or fail
to take the action necessary to prevent, any Confidential Information and Trade
Secrets disclosed to or developed by the Executive to lose its character or
cease to qualify as Confidential Information or Trade Secrets.

 

(b)           The covenants of confidentiality set forth herein will apply
during the Term of the Executive’s employment to any Confidential Information
and Trade Secrets disclosed by the Company or one of its affiliates or developed
by the Executive prior to or after the date hereof. The covenants restricting
the use of Confidential Information will continue and be maintained by the
Executive for a period of twelve (12) months following termination of this
Agreement. The covenants restricting the use of Trade Secrets will continue and
be maintained by the Executive following termination of this Agreement for so
long as permitted by the then-current Georgia Trade Secrets Act of 1990,
O.C.G.A. § 10-1-760, et. seq.

 

5.             Noncompetition. In the event that the Executive is entitled to
receive the Severance Benefit under this Agreement, the Executive agrees that,
for twelve (12) months following the Executive’s termination of employment, the
Executive will not (except on behalf of or with the prior written consent of the
Company), within the Area, either directly or indirectly, on his own behalf or
in the service or on behalf of others, as an employee or in any other capacity
which involves duties and responsibilities similar to those undertaken for the
Company or any of its affiliates, engage in any business which is the same as or
essentially the same as the Business of the Company.

 

6.             Nonsolicitation. In the event that the Executive is entitled to
receive the Severance Benefit under this Agreement, the Executive agrees that,
for twelve (12) months following the Executive’s termination of employment:

 

(a)           the Executive will not (except on behalf of or with the prior
written consent of the Company), on the Executive’s own behalf or in the service
or on behalf of others, solicit, divert or appropriate or attempt to solicit,
divert or appropriate, directly or by assisting others, any business from any of
the customers of the Company or its affiliates, including actively sought
prospective customers, with whom the Executive has or had material contact
during the last two (2) years of the Executive’s employment, for

 

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purposes of providing products or services that are competitive with those
provided by the Company and its affiliates; and

 

(b)           the Executive will not on the Executive’s own behalf or in the
service or on behalf of others, solicit, recruit or hire away or attempt to
solicit, recruit or hire away, directly or by assisting others, any employee of
the Company or its affiliates, whether or not such employee is a full-time
employee or a temporary employee of the Company or its affiliates and whether or
not such employment is pursuant to a written agreement and whether or not such
employment is for a determined period or is at will.

 

7.             Enforcement of Covenants and Remedies. The Executive agrees that
the covenants contained in Sections 4, 5, and 6 hereof are the essence of this
Agreement; that each of the covenants is reasonable and necessary to protect the
business, interest and properties of the Company, and that irreparable loss and
damage will be suffered by the Company should he breach any of the covenants. In
the event that the Company reasonably determines that the Executive has breached
any of his obligations pursuant to Sections 4, 5, and 6 hereof, which remain
uncured after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Executive by the Company, the Executive
will forfeit any amounts owed to the Executive under Section 3 hereof which have
not previously been paid to the Executive. The Executive also agrees and
consents that, in addition to all the remedies provided by law or in equity, the
Company shall be entitled to specific performance of this Agreement and to both
temporary and permanent injunctions to prevent a breach or contemplated breach
by the Executive of the covenants in Sections 4, 5 and 6 hereof.

 

8.             No Mitigation. No amounts or benefits payable to the Executive
hereunder shall be subject to mitigation or reduction by income or benefits the
Executive receives from other sources.

 

9.             Continued Employment. Nothing in this Agreement shall entitle
Executive to continued employment with the Company or any of its affiliates or
to continued tenure in any specific office or position. The Executive’s
employment with the Company or any of its affiliates shall be terminable at the
will of the Company, with or without Cause.

 

10.           Assignment. If the Company sells, assigns, or transfers a majority
of its business and assets to any person or entity, or if the Company merges
into or consolidates or otherwise combines with any person which is a continuing
or successor entity (such acquiring or successor entity to be referred to herein
as the “Acquiring Entity”), then the Company shall assign all of its right,
title and interest in this Agreement to the Acquiring Entity and the Acquiring
Entity shall assume and perform all of the terms, conditions and provisions
imposed by this Agreement upon the Company. In the event the Company assigns
this Agreement as permitted by this Agreement and the Acquiring Entity assumes
this Agreement, all further rights and obligations of the Company shall cease
and terminate and the “Company” as defined herein will refer to the Acquiring
Entity.

 

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11.           Dispute Resolution. The Company and the Executive agree that any
dispute between the Executive and the Company or its officers, directors,
employees, or agents in their individual or Company capacity relating to the
interpretation, enforcement or breach of this Agreement, shall be submitted to a
mediator for non-binding, confidential mediation. If the matter cannot be
resolved with the aid of the mediator, the Company and the Executive mutually
agree to arbitration of the dispute. The arbitration shall be in accordance with
the then-current Employment Dispute Resolution Rules of the American Arbitration
Association (“AAA”) before an arbitrator who is licensed to practice law in the
State of Georgia. The arbitration shall take place in or near Atlanta, Georgia.
The Company and the Executive agree that the procedures outlined in this
provision are the exclusive method of dispute resolution.

 

12.           Attorneys’ Fees. In the event of the use of any dispute resolution
program related to a controversy arising under or in connection with this
Agreement, the party prevailing in such dispute resolution program shall be
entitled to receive from the other party all reasonable costs and expenses,
including without limitation attorneys’ fees, incurred by the prevailing party
in connection with such dispute resolution program, and the other party shall
pay such costs and expenses to the prevailing party promptly upon demand by the
prevailing party. The amount of reasonable attorneys’ fees shall be determined
by the trier of fact in its sole discretion but, in any event, shall not exceed
$10,000.

 

13.           Notice. All notices, consents, waivers and other communications
required or permitted by this Agreement shall be in writing and shall be deemed
given to a party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by
facsimile with confirmation of transmission by the transmitting equipment; or
(c) received or rejected by the addressee, if sent by certified mail, return
receipt requested, in each case to the following addresses or facsimile numbers
and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number or person as a party may designate
by written notice to the other parties):

 

If to the Company, to the Company at:

 

Citizens Bancshares Corporation

 

 

ATTENTION: CHAIRMAN

 

 

Ray M. Robinson

 

 

75 Piedmont Ave., N.E.

 

 

Atlanta, Georgia 30303

 

 

 

If to the Executive, to the Executive at:

 

Mrs. Cynthia N. Day

 

 

3687 Spring Hill Road, S.E.

 

 

Smyrna, Georgia 30080

 

14.           Headings. Sections or other headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

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15.           Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof.

 

16.           Release. Prior to payment of any Severance Benefit pursuant to
this Section 3, the Company shall have the right to require the Executive to
sign, and the Executive hereby agrees to sign, a release, as described herein,
and the Company may withhold payment of such amount until the period during
which the Executive may revoke such waiver (normally seven (7) days) has
elapsed. The release shall provide the release and discharge of the Company and
related persons and entities from any and all such actions, suits, proceedings,
claims, demands or causes of action, in any way directly or indirectly related
to or connected with the Executive’s employment with the Employer and or the
termination of the employment with the Employer, including, but not limited to,
claims relating to discrimination in employment.

 

17.           Severability. In the event that one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

 

18.           Governing Law. To the full extent controllable by stipulation of
the parties, this Agreement shall be interpreted and enforced under Georgia law.

 

19.           Amendment. This Agreement may not be modified, amended,
supplemented or terminated except by a written agreement between the Company and
the Executive.

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the
date and year first above written.

 

 

CITIZENS BANCSHARES CORPORATION

 

 

 

By:

 

 

 

 

Print Name: James E. Young

 

 

 

 

Title: President & CEO

 

 

 

 

 

 

EMPLOYEE:

 

 

 

 

Date:

 

 

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