<PAGE>
 
                          CHANGE OF CONTROL AGREEMENT

         This AGREEMENT is entered into by and between CNB BANCSHARES, INC., an
Indiana corporation ("Company"), and DOUGLAS R. HANKS ("Executive").

                                  Background
                                  ----------

         A.  Executive is an officer and key management employee of Company.

         B.  Company's Board of Directors ("Board") has determined that it is in
the best interests of Company and its shareholders to assure Executive's
continued dedication and undivided time, attention, and loyalty, notwithstanding
the possibility, threat, or occurrence of a Change of Control (as defined in
Section 2 below).

         C.  In furtherance of that goal, the Board wishes to provide Executive
with certain benefits, if his employment should terminate as a result of a
Change of Control.

         D.  In reliance on this Agreement, Executive is willing to continue his
employment with Company on the terms agreed to by Executive and Company from
time to time.

         In consideration of the premises, Company and Executive agree as
follows:


                                   Agreement
                                   ---------

         1.  Duration Of Agreement. This Agreement shall be effective May
             ---------------------   
23, 1997 ("Effective Date"), and shall continue until the end of the Term (as
defined in Section 2).

         2.  Definitions. The following words and phrases, when capitalized, 
             -----------   
shall have the following meanings for purposes of this Agreement:

             (a) Affiliate. "Affiliate" means an employer required to be
                 --------- 
         aggregated with Company pursuant to Section 414 (b) or (c) of the
         Internal Revenue Code.
<PAGE>
 
             (b) Anniversary Date. "Anniversary Date" means each anniversary 
                 ----------------
         of the Effective Date occurring during the Term.

             (c) Cause. "Cause" means and shall be limited to the
following:

                 (1) Executive's willful and continued failure to perform 
             (other than a failure resulting from Executive's illness or
             disability) his employment duties after a demand for substantial
             performance is delivered to Executive on behalf of the Board that
             specifically identifies the manner in which it alleges that
             Executive has failed to perform his duties and Executive's failure
             to take appropriate actions to correct such failure within thirty
             (30) days; or

                 (2) Executive's willful engaging in misconduct that has caused
             demonstrable and material injury, monetary or otherwise, to 
             Company or an Affiliate.


         For purposes of this Subsection (c), no act or failure to act on
         Executive's part shall be considered "willful" unless done, or omitted
         to be done, by Executive not in good faith and without reasonable
         belief that his action or omission was in the best interests of
         Company. Notwithstanding the foregoing, Executive shall not be deemed
         to have been terminated for Cause unless and until the Board has
         delivered to him a copy of a notice of termination, and after
         reasonable notice to him and an opportunity for him, together with
         counsel, to be heard before the Board, at least two-thirds of the Board
         finds, in its reasonable opinion, that Executive was guilty of conduct
         set forth above in clause (1) or (2) and specifying the particulars
         thereof in detail.

             (d) Change of Control. "Change of Control" shall be deemed to
                 -----------------
         have occurred upon the happening of any one or more of the following:


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<PAGE>
 
                 (1) any person, as that term is used in Section 13(d)(3) and 
         14(d)(2) of the Securities Exchange Act of 1934, as amended from time
         to time, becomes a beneficial owner, directly or indirectly, of
         securities of Company representing twenty percent (20%) or more of the
         combined voting power of Company's then outstanding securities;

                 (2) less than fifty-one percent (51%) of the members of the 
         Board are Incumbent Directors; 

                 (3) any corporation or group of associated persons acting in 
         concert, owns more than twenty-five percent (25%) of the outstanding
         shares of voting stock of Company coupled with or followed by the
         exercise of the voting power of such shares by the election of two (2)
         or more directors of Company in any one election at the instance of
         such corporation or group;

                 (4) Company becomes a party to an agreement of merger, 
         consolidation, or other reorganization pursuant to which Company will
         be a constituent corporation, and either (A) Company is not the
         surviving or resulting corporation, or (B) the transaction will result
         in less than eighty percent (80%) of the outstanding voting securities
         of the surviving or resulting entity being owned by the former
         shareholders of Company;

                 (5) Company becomes a party to an agreement providing for 
         Company's sale or other disposition of all or substantially all of its
         assets to any individual, partnership, joint venture, association,
         trust, corporation, or other entity or person which is not an
         Affiliate; or

                 (6) the occurrence of another event that the Board designates 
         a Change of Control.


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<PAGE>
 
                 (e) Change of Control Date. "Change of Control Date" means the
                     ----------------------      
         date as of which a Change of Control occurs.

                 (f) Change Period. "Change Period" means the period beginning
                     -------------   
         six months before the Change of Control Date and continuing for the
         number of months specified in Appendix A after the Change of Control
         Date. Notwithstanding the preceding sentence, if a Change of Control
         described in Paragraph (d)(4) or (d)(5) occurs, the Change Period shall
         begin when Company becomes a party to a legally binding agreement
         described in paragraph (d)(4) or (d)(5) but shall not end until the
         number of months specified in Appendix A after the effective date of
         the Change of Control transaction described in Paragraph (4) or (5).

                 (g) Confidential Information. "Confidential Information" means
                     ------------------------
         any information not in the public domain and not previously disclosed
         to the public by the Board or management of the Company or an Affiliate
         with respect to the products, facilities, and methods; trade secrets
         and other intellectual property; systems, procedures, manuals,
         confidential reports, customer lists, financial information, business
         plans, prospects, or opportunities of the Company or an Affiliate; or
         any information which the Company or an Affiliate has designated as
         Confidential Information.

                 (h) Disability. "Disability" means Executive's inability to
                     ----------
         perform the material duties of his employment because of physical or
         mental illness, which inability is likely to last for a period of one
         year or longer.

                 (i) Effective Date. "Effective Date" means the effective date
                     --------------
         of this Agreement, as specified in Section 1.




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<PAGE>
 
                 (j) Full Incentive Compensation. "Full Incentive Compensation"
                     ---------------------------
         means incentive compensation for a calendar year (including incentive
         compensation in the amount of zero), provided that such compensation is
         not reduced because Executive was employed by the Company for less than
         the entire calendar year.

                 (k) Good Reason. "Good Reason" means, (i) with respect to a
                     -----------
         Change of Control described in Section 2(d)(4) in which Company is the
         surviving or resulting corporation, and which results in less than
         eighty percent (80%) but more than fifty percent (50%) of the
         outstanding voting securities of the resulting or surviving corporation
         being owned by former shareholders of the Company, a material change in
         position, title, compensation, status, responsibilities, or working
         conditions in effect immediately before the Change of Control or
         relocation of the Executive's place of employment to a location more
         than fifty (50) miles from the Executive's place of employment
         immediately before the Change of Control, and, (ii) with respect to any
         Change of Control not described in Clause (i), Executive's
         determination, in his sole judgment, that the duties of his employment,
         compensation therefor, or the benefits or status associated therewith
         have been reduced during the Change Period or that he is unable to
         continue to perform the duties of his employment effectively because of
         circumstances that changed during the Change Period directly or
         indirectly as a result of the Change of Control.

                 (l) Incumbent Director. "Incumbent Director" means a director
                     ------------------
         serving on the Board who (i) was a director on the Effective Date or
         (ii) was later elected as a director (except a director whose initial
         assumption of office was in connection with an actual or threatened
         election contest, including but not limited to a consent solicitation,
         relating to the election of directors) and whose appointment, election,
         or 



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<PAGE>
 
         nomination for election was approved or recommended by a vote of at
         least two-thirds of the directors then still in office who either were
         directors on the Effective Date hereof or whose appointment, election,
         or nomination for election was previously so approved or recommended.

                 (m) Payment Period. "Payment Period" means the period 
                     --------------
         beginning on the later of the Change of Control Date or the date of
         Executive's termination of employment during the Change Period and
         continuing for the number of months specified in Appendix A; provided,
         however, if Executive's employment terminates after a Change of Control
         (or, in the case of a transaction described in Paragraph 2(d)(4) or
         2(d)(5), the later effective date of such transaction), the number of
         months in the Payment Period shall be reduced by one for each full
         calendar month before the effective date of Executive's termination of
         employment occurring after the most recent Change of Control Date (or,
         in the case of a transaction described in Paragraph 2(d)(3) or (4), the
         later effective date of such transaction) before such termination date.

                 (n) Term. "Term" means the period beginning on the Effective
                     ----
         Date and ending on the second anniversary of the Effective Date, as
         extended pursuant to the provisions of this Subsection. The period
         referred to in the preceding sentence shall automatically be extended
         for one additional year on each Anniversary Date, unless the Company
         has notified the Executive not fewer than thirty (30) days before that
         Anniversary Date that the Term will not automatically be extended
         further. Notwithstanding any provision of this Agreement, if one or
         more Changes of Control occur during the Term (as determined pursuant
         to the preceding provisions of this Subsection or as extended pursuant
         to this sentence to reflect a prior Change of Control),


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<PAGE>
 
         the Term shall not end before the end of the Payment Period with
         respect to the latest Change of Control occurring during the Term.

                 (o) Termination Compensation. "Termination Compensation" has
                     ------------------------
         the meaning specified in Paragraph 3(a)(1).

         3. Termination of Executive's Employment During Change Period.
            ----------------------------------------------------------

                 (a) If Executive terminates his employment for Good Reason
         during the Change Period, or if Company terminates Executive's
         employment during the Change Period for a reason other than Cause or
         Executive's death or Disability, Executive shall be entitled to the
         following benefits:

                     (1) An amount equal to Executive's Termination 
                 Compensation multiplied by the number of months in the Payment
                 Period. Executive's Termination Compensation shall be equal to
                 the sum of (i) his highest rate of base monthly salary
                 (unreduced by any elective salary deferrals or redirections)
                 during the twelve (12) month period immediately preceding his
                 termination of employment plus (ii) one-twelfth of his average
                 annual incentive compensation with respect to the shortest of
                 (A) the three calendar years immediately preceding the Payment
                 Period, provided Executive received Full Incentive
                 Compensation for all such years, (B) the calendar years
                 immediately preceding the Payment Period with respect to which
                 Executive received Full Incentive Compensation, or (C) the
                 total period of Executive's employment by Company. This amount
                 shall be paid to Executive in a lump sum between sixty (60)
                 and ninety (90) days after the later of (A) his termination of
                 employment or (B) the Change of Control Date. Executive may,
                 in his discretion, elect to reduce the amount payable to 



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<PAGE>
 
                  him pursuant to this Paragraph 3 to the extent necessary to
                  avoid excise taxes in Code Section 4999 of the Internal
                  Revenue Code.

                           (2) Throughout the Payment Period, Company shall
                  provide to Executive and his family medical, life insurance,
                  and other welfare benefits substantially similar to those
                  provided to active executive employees of the Company,
                  provided Executive pays any premiums charged by Company to
                  active executive employees receiving similar coverage.
                  Beginning at the end of the Payment Period, Company shall
                  provide medical coverage to Executive and his family that is
                  substantially similar to the coverage provided to active
                  employees of the Company, provided that Executive pays Company
                  the same premium as he would have been required to pay if such
                  coverage had been provided pursuant to the Consolidated
                  Omnibus Budget Reconciliation Act of 1985. Executive may elect
                  to purchase single coverage or family coverage pursuant to the
                  preceding sentence. Subject to Executive's payment of the
                  required premiums, post-Payment Period medical coverage for
                  Executive and his spouse shall continue until the earliest of
                  the following events: (i) the Executive's (or in the case of
                  coverage for the Executive's spouse, his spouse's) Medicare
                  eligibility, (ii) the Executive's (or in the case of coverage
                  for the Executive's spouse, his spouse's) death, or (iii)
                  medical coverage for the Executive (or in the case of coverage
                  for the Executive's spouse, his spouse) through another
                  employer. 

                  (b) The payment or provision of benefits to Executive pursuant
     to this Agreement shall not affect the obligations of Company or its
     successor under any plan, agreement, or arrangement generally applicable to
     Company's retired 

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<PAGE>
 
     management employees pursuant to which Executive is entitled to any
     retirement benefits, welfare benefits, stock, or other fringe benefits.

                  4.    Non-Competition. Executive shall not, while employed or
                        ---------------
     during the Payment Period, become an officer, director, or employee of,
     consultant to, or majority shareholder in any bank or bank holding company
     that substantially competes with Company, its subsidiaries, or Affiliates,
     or its successor or successors within one hundred (100) miles from
     Evansville, Indiana, or fifty (50) miles from the nearest banking office of
     Company or a subsidiary thereof.

                  5.    Non-Disclosure of Confidential Information. Executive
                        ------------------------------------------
     acknowledges that, by virtue of his employment, he has obtained or will
     obtain Confidential Information, the use or disclosure of which could cause
     Company immeasurable and substantial loss and damages for which no remedy
     at law would be adequate. Accordingly, Executive covenants and agrees with
     Company that, except as necessary to perform his obligations to Company or
     with the prior written consent of Company's Board, he will not at any time
     directly or indirectly disclose any Confidential Information that he may
     acquire or has acquired by reason of his association with Company. Without
     limiting the rights or remedies, both legal and equitable, available to
     Company in the event of an actual or threatened breach of Executive's
     obligations under this Section, Company shall be entitled to seek and
     obtain a temporary restraining order and/or a preliminary or permanent
     injunction against Executive, which shall prevent Executive from engaging
     in any activities prohibited by this Section, or to seek and obtain such
     other relief against Executive as may be required to enforce Executive's
     obligations hereunder. Executive's obligations set forth in this Section
     and Company's rights and remedies, whether legal or equitable, with respect
     thereto, shall extend indefinitely.

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<PAGE>
 
                  6.     Expenses. If Executive determines, in his absolute
                         --------
     judgment, that it is necessary or advisable for him to incur reasonable
     legal and/or accounting expenses, including but not limited to reasonable
     attorneys' and/or accountants' fees, to obtain full and effective
     enforcement of his rights under this Agreement or to determine the
     appropriate tax treatment of amounts paid pursuant to this Agreement,
     Company shall reimburse Executive for all such reasonable expenses and
     costs on a periodic basis. Company's obligation to reimburse Executive for
     these reasonable expenses or costs pursuant to this Section shall survive
     expiration of the Term and shall survive the termination of any later
     employment agreements between Executive and Company. Any reimbursement
     required by this Section shall be paid promptly to Executive after he
     submits a copy of the service provider's invoice for the covered expense.

                  7.     Company's Obligation to Provide Information. After
                         -------------------------------------------
     termination of Executive's employment, Company shall promptly provide
     Executive with reasonably requested information relating to his retirement,
     benefits and payments under this Agreement, and other post-employment
     benefits.

                  8.     Binding Effect And Assignment. This Agreement shall
                         -----------------------------
     inure to the benefit of and shall be binding upon the parties to this
     Agreement and their respective executors, administrators, heirs, personal
     representatives, successors, and assigns, but neither this Agreement nor
     any right created by this Agreement may be assigned or transferred by
     either party. Notwithstanding the foregoing, the Company shall assign this
     Agreement to any person or entity succeeding to substantially all of the
     business and assets of the Company upon a Change in Control, and upon such
     a Change in Control, the Company shall obtain the assumption of this
     Agreement by its successor.

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<PAGE>
 
                  9.     Notices. Any notice to a party required or permitted to
                         -------
     be given by this Agreement shall be in writing and shall be deemed given
     when mailed by registered or certified mail to the party at the party's
     address as specified in this Section:

                  If to the Company, to:    CNB Bancshares, Inc.
                                            Attention:  Corporate Secretary
                                            20 N.W. Third Street
                                            Evansville, Indiana 47708

     or such other address designated by Company in writing to Executive as
     provided in this Section.

         If to Executive, to:               Douglas R. Hanks
                                            1840 E. Boonville-New Harmony Road
                                            Evansville, IN  47711

     or such other address designated by Company in writing to Executive as 
     provided in this Section.

                 10.     Severability. If any term, provision, covenant, or
                         ------------
     restriction of this Agreement is held by a court of competent jurisdiction
     to be invalid, void, or unenforceable, the remainder of the terms,
     provisions, covenants, and restrictions of this Agreement shall remain in
     full force and effect and shall in no way be affected, impaired, or
     invalidated.

                 11.     Amendments. This Agreement may not be modified,
                         ----------
     amended, altered, or supplemented except upon the execution and delivery of
     a written agreement executed by Company and Executive.

                 12.     Governing Law. This Agreement shall be construed in
                         -------------
     accordance with the laws of the State of Indiana.

                 13.     Arbitration. Any dispute, claim, or controversy
                         -----------
     concerning the terms, meaning, application, or enforcement of any provision
     of this Agreement that cannot be 

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<PAGE>
 
     resolved through direct discussion or mediation shall be submitted to final
     and binding arbitration before a neutral arbitrator pursuant to the
     arbitration procedures set out in this Section ("Procedures") under the
     auspices of the American Arbitration Association (AAA) at Evansville,
     Indiana. The AAA Employment Dispute Resolution Rules in effect at the time
     of the arbitration shall govern arbitration proceedings, except insofar as
     these Procedures, as they may be amended from time to time, specifically
     provide otherwise. Executive may initiate a claim or case only by a written
     notice to Company as provided in this Agreement. Company may likewise
     initiate a claim or case by a written notice delivered to Executive, as
     provided in this Agreement. The written notice must set forth the matter in
     dispute in sufficient detail to advise the non-initiating party of the
     nature and amount of the dispute or claim, the date(s) of the underlying
     occurrence(s), and the relief requested. It shall also be the initiating
     party's responsibility to submit the claim and other required documents and
     fees to AAA in a timely manner; provided, however, if Executive is fully or
     partially successful, Company shall reimburse Executive for arbitration
     fees reasonably incurred. In conducting arbitration proceedings, the AAA-
     appointed arbitrator shall be authorized to award any relief available
     under the laws of the United States or the State of Indiana applicable to
     the claim, dispute, or controversy submitted, where such relief is
     warranted based on the evidence and the law. Any arbitration award shall be
     final and binding, and enforceable by an action in any court of competent
     jurisdiction. No award shall be set aside, or denied enforcement, by any
     court in any action unless the court finds that the arbitrator purported to
     resolve claims, disputes, or controversies not within the scope of these
     Procedures. Adherence to these Procedures, and the agreement of the parties
     to this Agreement to follow them, shall be enforceable in an action to
     compel or stay arbitration pursuant to the Federal Arbitration Act or the
     Indiana Uniform Arbitration Act in a court of competent jurisdiction.

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<PAGE>
 
                 14.     Integration. This Agreement supersedes all prior
                         -----------
     agreements between the parties with respect to the matters covered herein.

                 15.     Counterparts. This Agreement may be signed in two
                         ------------
     counterparts, each of which shall be deemed to be an original but which
     together shall constitute one and the same instrument. Effect Of Headings.
     The section headings in this Agreement are for convenience only and shall
     not affect the construction of this Agreement.

                 IN WITNESS WHEREOF, CNB Bancshares, Inc. has caused this
     Agreement to be executed on this 23rd day of May, 1997, and Executive has
     executed this Agreement on the date specified below.


     ATTEST:                                 CNB BANCSHARES, INC.



     /s/ Sallie A. Gore                      By  /s/ James J. Giancola
     ----------------------------                -------------------------------
                                             (Signature)

                                                   5/23/97
                                             -----------------------------------
                                               (Date)



                                             EXECUTIVE




                                             /s/ Douglas R. Hanks
                                             -----------------------------------
                                             (Signature)

                                                   May 23, 1997
                                             -----------------------------------
                                               (Date)

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<PAGE>
 
                                  APPENDIX A


     The Payment Period shall consist of 18 months.

     ATTEST:                                 CNB BANCSHARES, INC.



     /s/  Sallie A. Gore                     By  /s/ James J. Giancola
     ------------------------------              -------------------------------
                                             (Signature)


                                                 5/23/97
                                             -----------------------------------
                                               (Date)



                                             EXECUTIVE




                                             /s/ Douglas R. Hanks
                                             -----------------------------------
                                             (Signature)


                                                 May 23, 1997
                                             -----------------------------------
                                               (Date)

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