EX-10.4



 Exhibit 10.4 

Capstone Bank 
 Salary Continuation Agreement 

 
  

 

 Capstone Bank 

Salary Continuation Agreement 

This Salary Continuation Agreement (this “Agreement”) is adopted this 11 day of August, 2010, by and between Capstone Bank, a state
bank located in Tuscaloosa, Alabama, (the “Bank”), and Robert W. Kuhn (the “Executive”). 
 The purpose of this
Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Bank. This
Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time. 

Article I 
 Definitions

 Whenever used in this Agreement, the following words and phrases shall have the meanings specified: 

 

	1.1	“Accrual Balance” means the liability that should be accrued by the Bank, under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the Executive under this
Agreement, by applying Accounting Principles Board Opinion Number 12 as amended by Statement of Financial Accounting Standards Number 106 and the Discount Rate. Any one of a variety of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently applied. 

  

	1.2	“Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4. 


 

	1.3	“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more
Beneficiaries. 

  

	1.4	“Board” means the Board of Directors of the Bank as from time to time constituted. 

  

	1.5	“Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Code
Section 409A and regulations thereunder. 

  

	1.6	“Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date.



  








 Capstone Bank 

Salary Continuation Agreement 
  

 
  


	1.7	“Current Benefit Level” means the attained annual Normal Retirement Benefit amount determined as of the end of the year prior to the Executive’s death. 


 

	1.8	“Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Bank.
Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Bank provided that the definition of “disability” applied under
such insurance program complies with the requirements of the preceding sentence. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the
provider’s determination. 

  

	1.9	“Discount Rate” means the rate used by the Plan Administrator for determining the Accrual Balance. The initial Discount Rate is six percent (6%). However, the Plan Administrator, in its discretion, may
adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory guidance. 

  

	1.10	“Earlv Termination” means Separation from Service before attainment of Normal Retirement Age except when such Separation from Service occurs following a Change in Control or due to death, Disability or
Termination for Cause. 

  

	1.11	“Effective Date” means August 1, 2010. 

  

	1.12	“Normal Retirement Age” means age sixty-five (65). 

  

	1.13	“Normal Retirement Date” means the later of Normal Retirement Age or Separation from Service. 

  

	1.14	“Plan Administrator” means the Board or such committee or person as the Board shall appoint. 

  

	1.15	“Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and
end on the following December 31. 

  

	1.16	 “Separation from Service” means termination of the Executive’s employment with the Bank for
reasons other than death. Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Executive reasonably
anticipated 



  
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 Capstone Bank 

Salary Continuation Agreement 
  

 
  


	 	
that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent
contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than thirty-six
(36) months). 

  

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

  

	1.18	“Termination for Cause” means Separation from Service for: 

  

	 	(a)	Gross negligence or gross neglect of duties to the Bank; 

  

	 	(b)	Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or 


 

	 	(c)	Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.


 Article 2 

Distributions During Lifetime 
  

	2.1	Normal Retirement Benefit. Upon Separation from Service after attaining Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Article. 

  

	 	2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is Sixty Thousand Fifty-Seven Dollars and Forty-One Cents ($60,057.41). Commencing at the end of the first
Plan Year and each Plan Year thereafter, the annual benefit shall be increased four percent (4%) from the previous Plan Year to a projected annual benefit of One Hundred Thousand Dollars ($100,000) at Normal Retirement Age. 


 

	 	2.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement Date.
The annual benefit shall be distributed to the Executive for fifteen (15) years. 


  
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Salary Continuation Agreement 
  

 
  


	2.2	Early Termination Benefit. If Early Termination occurs, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.


  

	 	2.2.1	Amount of Benefit. The benefit under this Section 2.2 is the Accrual Balance determined as of the end of the Plan Year preceding Separation from Service subject to the Vesting Percentage shown below.
Interest shall be credited on the Accrual Balance from Separation from Service to Normal Retirement Age at a rate equal to the Discount Rate in effect at the time of Separation from Service. 


 

			
	 Date Which Separation from
Service
Occurs
	  	Vesting Percentage
	 Prior to 12/31/2010
	  	0%
	 12/31/2010 – 12/30/2011
	  	7.69%
	 12/31/2011 – 12/30/2012
	  	15.39%
	 12/31/2012 – 12/30/2013
	  	23.08%
	 12/31/2013 – 12/30/2014
	  	30.77%
	 12/31/2014 – 12/30/2015
	  	38.46%
	 12/31/2015 – 12/30/2016
	  	46.15%
	 12/31/2016 – 12/30/2017
	  	53.85%
	 12/31/2017 – 12/30/2018
	  	61.54%
	 12/31/2018 – 12/30/2019
	  	69.23%
	 12/31/2019 – 12/30/2020
	  	76.92%
	 12/31/2020 – 12/30/2021
	  	84.62%
	 12/31/2021 – 12/30/2022
	  	92.31%
	 On or after 12/31/2022
	  	100%

  

	 	2.2.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive in one hundred eighty (180) equal monthly installments commencing on the first day of the month following Normal Retirement
Age. Interest shall be credited on the Accrual Balance during the installment period at a rate equal to the Discount Rate in effect at the time of Separation from Service. 


 

	2.3	Disability Benefit. If the Executive experiences a Disability prior to Normal Retirement Age, which results in Separation from Service, the Bank shall distribute to the Executive the benefit described in this
Section 2.3 in lieu of any other benefit under this Article. 

  

	 	2.3.1	Amount of Benefit. The benefit under this Section 2.3 is one hundred percent (100%) of the Accrual Balance determined as of the end of the Plan Year preceding such Separation from Service. Interest shall be
credited on the Accrual Balance from Separation from Service to Normal Retirement Age at a rate equal to the Discount Rate in effect at the time of Separation from Service. 


  
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Salary Continuation Agreement 
  

 
  


	 	2.3.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive in one hundred eighty (180) equal monthly installments commencing on the first day of the month following Normal Retirement
Age. Interest shall be credited on the Accrual Balance during the installment period at a rate equal to the Discount Rate in effect at the time of Separation from Service. 


 

	2.4	Change in Control Benefit. If a Change in Control occurs prior to Normal Retirement Age, followed by Separation from Service, the Bank shall distribute to the Executive the benefit described in this
Section 2.4 in lieu of any other benefit under this Article. 

  

	 	2.4.1	Amount of Benefit. The benefit under this Section 2.4 is the projected Normal Retirement Benefit described in Section 2.1.1 at Normal Retirement Age. 


 

	 	2.4.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement Age.
The annual benefit shall be distributed to the Executive for fifteen (15) years. 

  

	2.5	Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.5 shall
govern all distributions hereunder. If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited because the Executive is a Specified Employee, then such distributions shall not be made during
the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh
month following Separation from Service. All subsequent distributions shall be paid in the manner specified. 

  

	2.6	Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the
amounts deferred hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code section 409A. Any such distribution will decrease the Executive’s benefits distributable under this
Agreement. 

  

	2.7	Change in Form or Timing of Distributions. For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or
change the form of distributions. Any such amendment: 

  

	 	(a)	may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A; 

  

	 	(b)	must, for benefits distributable under Sections 2.2, 2.3 and 2.4, be made at least twelve (12) months prior to the first scheduled distribution; 


  
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Salary Continuation Agreement 
  

 
  


	 	(c)	must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be
made; and 

  

	 	(d)	must take effect not less than twelve (12) months after the amendment is made. 

 Article
3 
 Distribution at Death 
  

	3.1	Death During Active Service. If the Executive dies prior to Separation from Service, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed
in lieu of any benefit under Article 2. 

  

	 	3.1.1	Amount of Benefit. The benefit under this Section 3.1 is the present value of the fifteen (15) year stream of payments using the Discount Rate in effect at death of the Current Benefit Level.


  

	 	3.1.2	Distribution of Benefit. The Bank shall distribute the benefit to the Beneficiary in a lump sum within sixty (60) days following the Executive’s death. The Beneficiary shall be required to provide to
the Bank the Executive’s death certificate. 

  

	3.2	Death During Distribution of a Benefit. If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the
Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. 

  

	3.3	Death Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled to
be made under this Agreement, the Bank shall distribute to the Beneficiary the present value of the fifteen (15) year stream of payments, using the Discount Rate in effect at Separation from Service, to which the Executive was entitled prior to
death, except that the benefit distributions shall be paid in a lump sum within sixty (60) days following the Executive’s death. The Beneficiary shall be required to provide to the Bank the Executive’s death certificate.


 Article 4 

Beneficiaries 
  

	4.1	In General. The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under
this Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive participates. 


  
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Salary Continuation Agreement 
  

 
  


	4.2	Designation. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. If the Executive names
someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the
Executive’s spouse and returned to the Plan Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the
marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.
Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by
the Executive and accepted by the Plan Administrator prior to the Executive’s death. 

  

	4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.


  

	4.4	No Beneficiary Designation. If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated
Beneficiary. If the Executive has no surviving spouse, any benefit shall be paid to the Executive’s estate. 

  

	4.5	Facility of Distribution. If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the
disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan
Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as
the case may be, and shall completely discharge any liability under this Agreement for such distribution amount. 

 Article
5 
 General Limitations 
  

	5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is
terminated by the Bank or an applicable regulator due to a Termination for Cause. 


  
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Salary Continuation Agreement 
  

 
  


	5.2	Suicide or Misstatement. No benefit shall be distributed if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy
covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason. 


 

	5.3	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued
by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. 

  

	5.4	Regulatory Restrictions. Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject upon compliance with 12 U.S.C. 1828 and FDIC
Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder. 

  

	5.5	Forfeiture Provision. The Executive shall forfeit any non-distributed benefits under this Agreement if within thirty-six
(36) months following a Separation from Service, the Executive, directly or indirectly, either as an individual or as a proprietor, stockholder, partner, officer, director, employee, agent, consultant or independent contractor of any
individual, partnership, corporation or other entity (excluding an ownership interest of three percent (3%) or less in the stock of a publicly-traded company): 

  

	    	(i) becomes employed by, participates in, or becomes connected in any manner with the ownership, management, operation or control of any bank, savings and loan or other similar financial institution if the
Executive’s responsibilities will include providing banking or other financial services within seventy-five (75) miles of any office maintained by the Bank as of the date of the termination of the Executive’s employment;


  

	    	(ii) participates in any way in hiring or otherwise engaging, or assisting any other person or entity in hiring or otherwise engaging, on a temporary, part-time or permanent basis, any individual who was employed by the
Bank as of the date of termination of the Executive’s employment; 

  

	    	(iii) assists, advises, or serves in any capacity, representative or otherwise, any third party in any action against the Bank or transaction involving the Bank; 


 

	    	 (iv) sells, offers to sell, provides banking or other financial services, assists any other person in selling or
providing banking or other financial services, or solicits or otherwise competes for, either directly or indirectly, any orders, contract, or accounts for services of a kind or nature like or substantially similar to the financial services performed
or 



  
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Salary Continuation Agreement 
  

 
  

 
financial products sold by the Bank (the preceding hereinafter referred to as “Services”), to or from any person or entity from whom the Executive or the Bank, to the knowledge of the
Executive provided banking or other financial services, sold, offered to sell or solicited orders, contracts or accounts for Services during the one (1) year period immediately prior to the termination of the Executive’s employment; 

(v) divulges, discloses, or communicates to others in any manner whatsoever, any confidential information of the Bank, to the knowledge of the
Executive, including, but not limited to, the names and addresses of customers or prospective customers, of the Bank, as they may have existed from time to time, of work performed or services rendered for any customer, any method and/or procedures
relating to projects or other work developed for the Bank, earnings or other information concerning the Bank. The restrictions contained in this subparagraph (v) apply to all information regarding the Bank, regardless of the source who provided
or compiled such information. Notwithstanding anything to the contrary, all information referred to herein shall not be disclosed unless and until it becomes known to the general public from sources other than the Executive. 

 

	5.6	Change in Control. The forfeiture provision detailed in Section 5.5 hereof shall not be enforceable following a Change in Control. 


Article 6 

Administration of Agreement 
  

	6.1	Plan Administrator Duties. The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise
of such discretion and authority does not conflict with Code Section 409A. 

  

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

  

	6.3	Binding Effect of Decisions. Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement
and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. 

  

	6.4	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act
with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator. 


  
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Salary Continuation Agreement 
  

 
  


	6.5	Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of
the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require. 

  

	6.6	Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under
this Agreement. 

 Article 7 

Claims And Review Procedures 
  

	7.1	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as
follows: 

  

	 	7.1.1	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the
claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination desired by the claimant. 

  

	 	7.1.2	Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances
require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, which
an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 


 

	 	7.1.3	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a
manner calculated to be understood by the claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

  

	 	(b)	A reference to the specific provisions of this Agreement on which the denial is based; 


  
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	 	(c)	A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; 


 

	 	(d)	An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and 

  

	 	(e)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. 


 

	7.2	Review Procedure. If the Plan Administrator denies part or the entire claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:


  

	 	7.2.1	Initiation – Written Request. To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written
request for review. 

  

	 	7.2.2	Additional Submissions – Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator
shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.


  

	 	7.2.3	Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination. 

  

	 	7.2.4	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines
that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty
(60) day period, which an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 


 

	 	7.2.5	Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

  

	 	(b)	A reference to the specific provisions of this Agreement on which the denial is based; 


  
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	 	(c)	A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits; and 

  

	 	(d)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a). 


Article 8 
 Amendments
and Termination 
  

	8.1	Amendments. This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank
from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A. 

  

	8.2	Plan Termination Generally. This Agreement may be terminated only by a written agreement signed by the Bank and the Executive. The benefit shall be the Accrual Balance as of the date this Agreement is terminated.
Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted
under Article 2 or Article 3. 

  

	8.3	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances: 


 

	 	(a)	Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of this Agreement and
further provided that all the Bank’s arrangements which are substantially similar to this Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred
under the terminated arrangements within twelve (12) months of such termination; 

  

	 	(b)	Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under this Agreement are included in the Executive’s gross income in the latest of (i) the
calendar year in which this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively
practical; or 

  

	 	(c)	 Upon the Bank’s termination of this and all other arrangements that would be aggregated with this Agreement
pursuant to Treasury Regulations Section 1.409A-l(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than 



  
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twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years
following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement; 
 the Bank may distribute the
Accrual Balance, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms. 

Article 9 
 Miscellaneous

  

	9.1	Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees. 


 

	9.2	No Guarantee of Employment. This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank nor interfere with the Bank’s right to discharge the
Executive. It does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time. 

  

	9.3	Non-Transferabilitv. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 


 

	9.4	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this
Agreement. The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities. The Bank shall satisfy all applicable reporting requirements, including those under
Code Section 409A. 

  

	9.5	Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of the State of Alabama, except to the extent preempted by the laws of the United States of America. 


 

	9.6	Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to
distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors. Any insurance on the Executive’s life or other
informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. 

  

	9.7	Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank,
firm or person agrees to assume and discharge the obligations of the Bank under this Agreement Upon the occurrence of such an event the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.



  
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 Capstone Bank 

Salary Continuation Agreement 
  

 
  


	9.8	Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than
those specifically set forth herein. 

  

	9.9	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes
the plural. 

  

	9.10	Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan
Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative act does not violate Code Section 409A.


  

	9.11	Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein. 


 

	9.12	Validity. If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and
enforced as if such illegal or invalid provision had never been included herein. 

  

	9.13	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail
to the address below: 

  

	
	  CAPSTONE BANK 
	  P.O. BOX 1488
	  TUSCALOOSA, AL 35403-1488

 Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification. 
 Any notice or filing required or permitted to be given to the
Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive. 
  

	9.14	Compliance with Section 409A. This Agreement shall be interpreted and administered consistent with Code Section 409A. 


  
 14 








 Capstone Bank 

Salary Continuation Agreement 
  

 
  

 IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have
signed this Agreement. 
  

							
	EXECUTIVE	 		 	BANK
				
	/s/ Robert W. Kuhn	 		 	By:	 	 /s/ William R. Blackmon

	Robert W. Kuhn	 		 	Title:	 	CFO


  
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