Document:

EX-10.3 AGREEMENT WITH JOHN W. BROTHERS

 

Exhibit (10)-3

AGREEMENT

     THIS AGREEMENT (this “Agreement”) is made and entered into this 31st day of August,
2006, by and between SUPERIOR BANK, a federal savings bank (“Company”), and JOHN W. BROTHERS
(“Executive”), and shall be effective immediately prior to the consummation of the Merger as
defined below.

Recitals

     WHEREAS, pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”) dated
April 29, 2006, between Company and Community Bancshares, Inc., a Delaware corporation (“CBI”), CBI
has agreed to be merged with and into Superior Bancorp (the “Merger”);

     WHEREAS, Executive has served as the Chief Operating Officer of CBI’s wholly-owned banking
subsidiary, Community Bank, an Alabama banking corporation (“Community Bank”); and

     WHEREAS, Executive and Company desire that Executive provide certain services to Company
following the Merger contemplated by the Merger Agreement on the terms and conditions set forth
herein.

Agreement

     NOW THEREFORE, in consideration of the mutual recitals and covenants contained herein, and for
other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:

     1. Executive’s Services. (a) During the Employment Period (as defined in Section 2(a) below),
Company agrees to employ Executive as its Merger Project Coordinator, and Executive agrees to be
employed as such by Company, subject to the terms and provisions of this Agreement.

     (b) Following the Employment Period, Executive shall provide consulting services to Company.
Notwithstanding anything to the contrary in this Agreement, any such services provided after the
Employment Period shall be provided by Executive in his capacity as an independent contractor of
Company and not as an employee.

     2. Term. (a) Executive will provide his services to Company as an employee of Company, as
provided in Section 1(a), commencing at the Effective Date as defined in the Merger Agreement (the
“Effective Date”) and continuing until the sixtieth (60th) day following the conversion
of Community Bank’s operating system to Company’s operating system, unless earlier terminated in
accordance with the provisions of Section 9 hereof; provided, however, that the obligations and
rights set forth in Sections 7 and 8 hereof shall survive the termination of Executive’s employment
as more particularly

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described herein. Such period of Executive’s employment hereunder is hereinafter referred to as
the “Employment Period.”

     (b) Following the Employment Period, Executive will provide consulting services to Company as
an independent contractor of Company, as provided in the Section 1(b), for a period of one year
commencing on the last day of the Employment Period, unless earlier terminated in accordance with
the provisions of Section 9 hereof; provided, however, that the obligations and rights set forth in
Sections 7 and 8 hereof shall survive the termination of Executive’s consulting services as an
independent contractor as more particularly described herein.

     3. Duties. (a) During the Employment Period, Executive will have the title “Merger Project
Coordinator,” and will perform for Company and its subsidiaries such services in connection
therewith as may be reasonably requested from time to time by the Chief Executive Officer of
Company or his designee(s). During the Employment Period, Executive shall use his best efforts,
and devote such time, attention and energy, to Company’s business as is necessary to perform the
services required of him.

     (b) Following the Employment Period, Executive will provide such consulting services to
Company as may be reasonably requested from time to time by the Chief Executive Officer of Company
or his designee(s).

     4. Compensation.

     (a) Base Compensation for Services During Employment Period. From the Effective Date through
the end of the Employment Period, Executive shall be paid a monthly salary equal to the monthly
salary Executive receives from Community Bank immediately prior to the Effective Date, subject to
all applicable withholding for taxes, for his services as an employee hereunder, payable in
accordance with Company’s normal payroll practices.

     (b) Benefits. During the Employment Period, Executive shall be entitled to vacation days,
paid holidays and sick days, and to participate in Company’s welfare benefit and pension benefit
plans, all as provided in Company’s personnel policies and procedures as such may be amended from
time to time. Company agrees to cause ownership of Executive’s company car to be transferred to
him as soon as practicable after the Effective Date. During the Employment Period, Executive shall
be entitled to office and administrative support and to reimbursement for ordinary and necessary
business expenses in accordance with Company’s policies and procedures. The health and life
insurance benefits coverage provided to Executive as of the last day of the Employment Period shall
be continued at the same level and in the same manner as if his employment had not terminated
(subject to the customary changes in such coverages if Executive retires or reaches age 65 or
similar events) beginning on the last day of the Employment Period and ending on the date thirty
six (36) months from such day. Any additional coverages Executive shall have as of the last day of
the Employment Period, including dependent coverage, will also be continued for such period at the
same level

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and on the same terms as provided to Executive as of the last day of the Employment Period, to the
extent permitted by the applicable policies or contract. Any costs Executive was paying for such
coverages as of the last day of the Employment Period shall be paid by separate check payable to
Company each month in advance. If the terms of any benefit plan referred to in this subsection (b)
do not permit continued participation by Executive, then Company will arrange for other coverage at
its expense providing substantially similar benefits as it can reasonably find for other officers
in similar positions. Notwithstanding the foregoing, any such continued coverage shall cease in
the event that Executive becomes eligible for comparable benefits from a new employer. Executive
shall not be entitled to any base salary, bonus, equity grants or other compensation or benefits of
any nature except as expressly provided herein.

     (c) Additional Compensation. In consideration of Executive’s consulting services contemplated
by Section 1(b) hereof following the Employment Period Executive shall be entitled to receive a
lump sum retainer payment of $50,000 payable during the fourth calendar quarter of 2007. In
consideration of Executive’s agreements under Section 8 hereof, Executive shall also be entitled to
receive the sum of $150,000 payable in a lump sum thirty (30) days following the last day of the
Employment Period. Executive hereby waives and releases all other rights, benefits and payments
specified in any other employment, severance or change in control severance agreement entered into
with CBI or Community Bank, including, without limitation, that certain Change in Control Agreement
dated November 10, 2005 between Executive and CBI. In consideration of the foregoing waiver and
release, Executive shall be entitled to receive the sum of $200,000 payable in a lump sum thirty
(30) days following the last day of the Employment Period. The compensation payable to Executive
under this Section 4(c) shall be absolute, subject to no contingencies and shall survive
Executive’s death or disability.

     5. Compliance with Rules and Policies. Executive shall comply with all of the rules,
regulations and policies of Company now or hereinafter in effect as applicable to him from time to
time as an employee or independent contractor.

     6. Representation of Executive. Executive represents to Company that he is not subject to any
rule, regulation or agreement, including without limitation, any non-compete agreement, that
purports to, or which reasonably could, be expected to limit, restrict or interfere with
Executive’s ability to engage in the activities provided for in this Agreement.

     7. Non-Disclosure of Information. Executive acknowledges that any documents and information,
whether written or not, that came or come into Executive’s possession or knowledge as a result of
Executive’s services to Company, whether during the Employment Period or thereafter, including
without limitation the financial and business conditions, business methods, goals, operations,
sales techniques or services of Company and its subsidiaries as the same may exist from time to
time (collectively, “Confidential Information”), are valuable, special and unique assets of
Company’s business. Executive will not, during or after the term of this Agreement: (a) disclose
any written Confidential

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Information to any person, firm, corporation, association, or other entity not employed by or
affiliated with Company for any reason or purpose whatsoever, or (b) use any written Confidential
Information for any reason other than to further the business of Company. Executive agrees to
return immediately any written Confidential Information, and all copies thereof, upon the
termination of Executive’s employment (whether hereunder or otherwise). In the event of a breach or
threatened breach by Executive of the provisions of this Section 7, in addition to all other
remedies available to Company, Company shall be entitled to an injunction restraining Executive
from disclosing any written Confidential Information or from rendering any services to any person,
firm, corporation, association or other entity to whom any written Confidential Information has
been disclosed or is threatened to be disclosed. In the event of any suit or arbitration with
respect to Executive’s obligations in this Section 7, Executive will pay all costs incurred by
Company in securing an injunction (or other equitable remedy) and/or damages, including reasonable
attorneys’ fees and expenses; provided, however, that if Company is not successful in securing such
an injunction, then Executive shall have no obligation to pay such fees and expenses.

     8. Competition.

     (a) During the period beginning on the Effective Date and ending on the first anniversary of
the termination of Executive’s employment hereunder, Executive shall not, directly or indirectly:
(i) solicit or do banking or similar business with any customer of Company or any of its
subsidiaries in the Territory (as defined below); or (ii) solicit any employee of Company or any of
its subsidiaries to leave his or her employment with Company or any of its subsidiaries for any
reason, or hire any such employee of Company or any of its subsidiaries, without the prior written
consent of Company. As used herein, “Territory” shall mean the counties in which the Company does
business at any time during the Employment Period.

     (b) In the event of any suit or arbitration with respect to Executive’s obligations set forth
in Section 8(a), Executive shall pay all costs incurred by Company in securing an injunction (or
other equitable remedy) and/or damages, including reasonable attorneys’ fees and expenses;
provided, however, that if Company is not successful in securing such an injunction, then Executive
shall have no obligation to pay such fees and expenses.

     (c) Executive and Company recognize that any subsidiaries of Company are third-party
beneficiaries to this Agreement that are intended to be protected by the covenants in this
Agreement and that any successor or assign of Company or one of the third-party beneficiaries to
this Agreement may enforce the covenants in this Agreement as if it were a party to these
covenants. Moreover, Executive and Company acknowledge and agree that Company has legitimate
business interests to protect relative to Executive, including trade secrets, other valuable
confidential and proprietary business information, substantial relationships with specific
customers, substantial relationships with other employees of Company, Company and customer goodwill
associated with Company’s trade name, and Company’s servicing of specific markets provided to
Executive.

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Executive agrees that the restrictions contained in this Section 8 are necessary and reasonable for
the protection of the legitimate business interests and goodwill of Company described above, and
Executive agrees that any breach of this Section 8 will cause Company substantial and irrevocable
damage and, therefore, Company shall have the right, in addition to any other remedies it may have,
to seek specific performance and injunctive relief. Executive agrees that the period during which
the covenant contained in this Section 8 shall be effective shall be computed by excluding from
such computation any time during which Employee is in violation of any provision of Section 8.
Executive agrees that if any covenant contained in Section 8 of this Agreement is found by a court
of competent jurisdiction to contain limitations as to time, geographical area, or scope of
activity that are not reasonable and impose a greater restraint than is necessary to protect the
goodwill or other business interest of Company, then the court shall reform the covenant to the
extent necessary to cause the limitations contained in the covenant as to time, geographical area,
and scope of activity to be restrained to be reasonable and to impose a restraint that is not
greater than necessary to protect the goodwill and other business interests of Company and to
enforce the covenant as reformed.

     (d) Executive specifically recognizes and affirms that each of the covenants contained in
Sections 7 and 8 of this Agreement is a material and important term of this Agreement which has
induced Company to provide for the award of the compensation and benefits provided hereunder and
the other promises made by Company herein.

     9. Termination of Services.

     (a) If Company terminates Executive’s employment hereunder “For Cause,” all rights and
obligations specified in Section 8(a) shall survive any such termination through the first
anniversary of such termination, and Executive shall not be entitled to any further compensation or
benefits from Company other than any remaining amounts owing under Section 4(c) hereof and other
than the continuation of health and life insurance benefits coverage specified in Section 4(b)
hereof. “For Cause” shall mean (i) abuse of or addiction to intoxicating drugs (including alcohol),
which has adversely affected or may adversely affect the business or reputation of Company; (ii)
any act or omission on the part of Executive which constitutes fraud, misrepresentation,
embezzlement, misappropriation of corporate assets or theft; (iii) a felony indictment of
Executive; (iv) a request by federal or state banking regulatory authorities to terminate
Executive’s services hereunder; (v) a material breach by Executive of any of the terms of this
Agreement; or (vi) the death or total disability of Executive. For purposes of this Section 9, the
term “total disability” shall mean Executive’s inability, as a result of illness or injury, to
perform the normal duties of his employment for a period of ninety (90) consecutive days.

     (b) During the Employment Period, Company may terminate Executive’s employment at any time for
any reason; provided, however, if Company terminates Executive’s employment other than For Cause,
Executive (i) shall continue to receive the compensation provided for in Section 4(a) until the end
of the Employment Period (to be paid with the same frequency as Executive’s compensation was paid
prior to termination),

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and (ii) shall be entitled to be paid the unpaid amounts specified in Section 4(c) hereof, and
shall be entitled to continuation of health and life insurance benefits coverage specified in
Section 4(b) hereof. Following the Employment Period, Company may terminate Executive’s
consulting services that are to be provided by Executive hereunder, at any time for any reason;
provided, however, if Company so terminates such services of Executive, Executive shall be entitled
to be paid the unpaid amount of the amounts specified in Section 4(c) hereof and shall be entitled
to continuation of health and life insurance benefits coverage specified in Section 4(b) hereof.
All rights and obligations specified in Section 8(a) shall survive any termination described in the
prior two sentences until the first anniversary of the last day of the Employment Period. Other
than any payment provided for in this Section 9(b), Executive acknowledges that he shall not be
entitled to any other payments, benefits or damages from Company in connection with a termination
of Executive’s employment other than For Cause, or post-employment consulting services by Company,
and Executive hereby waives all rights and claims with respect thereto.

     (c) If Executive terminates this agreement for any reason during the Employment Period, (i)
all rights and obligations specified in Section 8(a) shall survive any such termination until the
first anniversary of the last day of the Employment Period, (ii) Executive shall not be entitled to
any further compensation from Company other than any unpaid amount owing under Section 4(c) hereof,
and (iii) Company shall be entitled to all remedies available under this Agreement and applicable
law. If Executive terminates this agreement for any reason following the Employment Period during
which he is providing consulting services as an independent contractor, (i) all rights and
obligations specified in Section 8(a) shall survive any such termination until the first
anniversary of the last day of the Employment Period, (ii) Executive shall not be entitled to any
further compensation from Company other than any unpaid amount owing under Section 4(c) hereof and
other than continuation of health and life insurance benefits coverage specified in Section 4(b)
hereof, and (iii) Company shall be entitled to all remedies available under this Agreement and
applicable law.

     (d) The provisions of Section 7 and Section 8 shall in all cases survive the termination of
this Agreement and the termination of Executive’s employment, whether voluntary or involuntary.

     10. Notice. For the purposes of this Agreement, notices and demands shall be deemed given when
mailed by United States mail, addressed in the case of Company to Superior Bank, 17 North
20th Street, Birmingham, AL 35203, Attention: Chief Executive Officer with a copy to
Superior Bank, 17 North 20th Street, Birmingham, Alabama 35203, Attention: Human
Resources Director; or in the case of Executive, to the address last shown on Company’s records.

     11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless
such modification, waiver or discharge is agreed to in writing. The validity, interpretation,
construction and performance of this Agreement shall be

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governed by the laws of the State of Alabama without regard to principles of conflicts of laws.

     12. Arbitration; Prevailing Party.

     (a) Except as may otherwise hereinafter be provided, any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by binding arbitration in
Birmingham, Alabama, in accordance with the rules of the American Arbitration Association then in
effect. The agreement set forth herein to arbitrate shall be specifically enforceable under the
prevailing arbitration law. Notwithstanding the foregoing, Executive or Company shall have the
right to seek enforcement by preliminary injunction, specific performance or other equitable relief
of the provisions of Section 7 and/or 8 hereof in any state or federal court of competent
jurisdiction without regard to whether any such claim has been or can be referred to arbitration.
In the event legal or arbitration proceedings are necessary for either party to enforce the terms
of this Agreement, the prevailing party (by final judgment or other non-appealable order) shall be
entitled to recover the cost of said legal or arbitration proceedings, including, but not limited
to reasonable attorney fees.

     (b) The parties hereto (i) acknowledge that they have read and understood the provisions of
this Section regarding arbitration and (ii) that performance of this Agreement will be interstate
commerce as that term is used in the Federal Arbitration Act, and the parties contemplate
substantial interstate activity in the performance of this Agreement including, but not limited to,
interstate travel, the use of interstate phone lines, the use of the U.S. mail services and other
interstate courier services.

     (c) Notice of the demand for arbitration shall be filed in writing with the other party to
this Agreement and with the American Arbitration Association. The demand for arbitration shall be
made within a reasonable time after the claim, dispute or other matter in question has arisen, and
in no event shall it be made after the date when institution of legal or equitable proceedings
based on such claim, dispute or other matter in question would be barred by the applicable statute
of limitations. The award rendered by the arbitrator shall be final and judgment may be entered
upon it in accordance with applicable law in any court having jurisdiction thereof.

     13. Parties. This Agreement shall be binding upon and shall inure to the benefit of any
successors or assigns to Company. Executive may not assign any of his rights or delegate any of his
duties or obligations under this Agreement or any portion hereof.

     14. Waiver of Claims. In consideration of the obligations of Company hereunder, Executive,
except as otherwise provided in this Agreement, unconditionally releases Company, its directors,
officers, employees and shareholders, from any and all claims, liabilities and obligations of any
nature pertaining to Executive’s employment by CBI or Community Bank, including but not limited to
(a) any claims under federal, state or local laws prohibiting discrimination, including without
limitation the Age Discrimination in Employment Act of 1967, as amended, or (b) any claims growing
out of any alleged legal

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restrictions on Company’s right to terminate Executive’s employment, such as any alleged implied
contract of employment or termination contrary to public policy. Executive acknowledges that he has
been advised to consult with an attorney prior to signing this Agreement, that he has had no less
than 21 days to consider this Agreement prior to execution hereof, and that he may revoke this
Agreement at any time within 7 days following the execution hereof by written notice to Company.

     15. Withholding. Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.

     16. Section 409A. This Agreement is intended to comply with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) (to the extent applicable) and
Company agrees to interpret, apply and administer this Agreement in the least restrictive manner
necessary to comply with such requirements and without resulting in any diminution in the value of
payments or benefits to Executive. To the extent that any payments to be provided to Executive
under this Agreement result in the deferral of compensation under Section 409A of the Code, and if
Employee is a “Key Employee” as defined in Section 416(i) of the Code, then any such payments shall
instead be transferred to a rabbi trust (which shall be created by the Company) and such amounts
(together with earnings thereon in accordance with the terms of the trust agreement) shall be
transferred from the trust to Executive upon the earlier of (i) six months and one day after
Executive’s separation from service or (ii) any other date permitted under Section 409A(a)(2) and
409A(a)(3) of the Code.

     17. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be determined that any payment
or distribution by Company to or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 17) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing, if it shall be determined that Executive is entitled to a Gross-Up
Payment, then Company and Executive shall negotiate in good faith to cause this Agreement to be
amended, to the extent possible, such that the receipt of Payments would not give rise to any
Excise Tax.

     (b) Subject to the provisions of Section 17(c), all determinations required to be made under
this Section 17, including whether and when a Gross-Up Payment is

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required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by a certified public accounting firm reasonably acceptable to
Company as may be designated by Executive (the “Accounting Firm”) which shall provide detailed
supporting calculations both to Company and Executive within 15 business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is requested by
Company. All fees and expenses of the Accounting Firm shall be borne solely by Company. Any
Gross-Up Payment, as determined pursuant to this Section 17, shall be paid by Company to Executive
by the later of (i) the due date for the payment of the Excise tax or (ii) five days of the receipt
of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding
upon Company and Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that Company exhausts its remedies pursuant to Section 17, and Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be paid by Company to or for the
benefit of Executive five days after receipt of the Accounting Firm’s determination.

     (c) Executive shall notify Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by Company of a Gross-Up Payment (or an additional
Gross-Up Payment). Such notification shall be given as soon as practicable but no later than ten
business days after Executive is informed in writing of such claim and shall apprise Company of the
nature of such claim and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date on which it gives
such notice to Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive shall:

          (i) give Company any information reasonably requested by Company relating to such claim,

          (ii) take such action in connection with contesting such claim as Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by Company,

          (iii) cooperate with Company in good faith in order effectively to contest such claim, and

          (iv) permit Company to participate in any proceedings relating to such claim;

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provided, however, that Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation of the foregoing provisions of this Section 17(c),
Company shall control all proceedings taken in connection with such contest (to the extent
applicable to the Excise Tax and the Gross-Up Payment) and, at its sole option, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with the taxing authority
in respect of such claim and may, at its sole option, either direct Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees
to prosecute such contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as Company shall determine; provided,
however, that if Company directs Executive to pay such claim and sue for a refund, Company shall
advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of Executive with respect
to which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, Company’s control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

     (d) If, after the receipt by Executive of an amount advanced by Company pursuant to Section
17(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall
(subject to Company’s complying with the requirements of Section 17(c)) pay to Company the amount
of such refund (together with any interest paid or credited thereon after taxes applicable thereto)
five days after receipt of the Accounting Firm’s determination. If, after the receipt by Executive
of an amount advanced by Company pursuant to Section 17(c), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and Company does not notify
Executive in writing of its intent to contest such denial of refund prior to the expiration of 30
days after such determination, then such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

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     WITNESS the due execution hereof effective as of the foregoing Effective Date:

	 	 	 	 	 
	 	SUPERIOR BANK

 	 
	 	By:  	/s/ Rick Gardner 	 
	 	Name  	Rick Gardner 	 
	 	Title  	Chief Operating Officer 	 
	 
	 	 	 
	 	     /s/ John W. Brothers
 	 
	 	John W. Brothers 	 
	 	EXECUTIVE 	 
	 

11EX-10.4 AGREEMENT WITH WILLIAM H. CAUGHRAN, JR.

 

Exhibit (10)-4

AGREEMENT

     This Agreement (“Agreement”), dated as of August 31, 2006, is between Superior Bank, its
successors, assigns and affiliated companies (the “Company”) and William H. Caughran, Jr. (the
“Executive”).

     1. Replacement of Change in Control Agreement. This Agreement replaces and supersedes any
prior agreement between the Company and the Executive regarding a change in control of Community
Bancshares, Inc. or Community Bank or any other predecessor to the Company, including without
limitation the Change in Control Agreement dated December 4, 1999, as the same may have been
amended (the “Change in Control Agreement”). The Executive acknowledges and agrees that in the
instant immediately prior to the consummation of the merger of Community Bancshares, Inc. with and
into Superior Bancorp (the “Merger”), the Change in Control Agreement shall no longer be in effect
and the Executive shall have no remaining rights under the Change in Control Agreement.

     2. Continued Employment of Executive. Following the date of the consummation of the Merger
(the “Effective Date of the Merger”), Executive shall be employed on an at-will basis as the
General Counsel and Corporate Secretary of the Company and Superior Bancorp at a base salary which
shall be no less than Executive’s current base salary, and Executive shall be eligible for all
welfare benefit, pension benefit, and bonus and incentive compensation plans maintained by the
Company on the same basis as other employees at Executive’s level within the Company. Executive
shall perform those duties as are customarily associated with his positions and such other
reasonable duties as may be assigned to him. The Company may terminate Executive’s employment at
any time for any reason; provided however, if the Company terminates Executive’s employment, other
than For Cause (as defined in Section 4 below) or on account of the Executive’s death or total
disability (as defined in Section 4 below), prior to the first anniversary of the Effective Date of
the Merger, Executive shall, within thirty (30) days following the termination of his employment,
receive a lump sum payment, unreduced for early receipt, equal to his base salary for the period
from the date of termination of his employment to the first anniversary of the Effective Date of
the Merger.

     3. Bonus. The Executive shall receive a bonus payment in the amount of $215,099 in the first
payroll next following the first anniversary of the Effective Date of the Merger. The Company
shall make deductions from the bonus payment hereunder in accordance with its customary payroll
practices. The compensation payable to Executive under this Section 3 shall be absolute, subject
to no contingencies and shall survive the Executive’s death or disability.

     4. For Cause Defined. “For Cause” shall mean (i) abuse of or addiction to intoxicating drugs
(including alcohol), which has adversely affected or may adversely affect the business or
reputation of the Company; (ii) any act or omission on the part of the Executive which constitutes
fraud, misrepresentation, embezzlement,

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misappropriation of corporate assets or theft; (iii) a felony indictment of the Executive; (iv) a
request by federal or state banking regulatory authorities to terminate the Executive’s services
hereunder; or (v) a material breach by the Executive of any of the terms of this Agreement. For
purposes of this Agreement, the term “total disability” shall mean the Executive’s inability, as a
result of illness or injury, to perform the normal duties of his employment for a period of ninety
(90) consecutive days.

     5. Non-Disclosure of Information. The Executive acknowledges that any documents and
information, whether written or not, that came or come into the Executive’s possession or knowledge
during the Executive’s employment by the Company, including without limitation the financial and
business conditions, business methods, goals, operations, sales techniques or services of the
Company and its affiliates or subsidiaries as the same may exist from time to time (collectively,
“Confidential Information”), are valuable, special and unique assets of the Company’s business. The
Executive will not, during or after the term of this Agreement: (a) disclose any written
Confidential Information to any person, firm, corporation, association, or other entity not
employed by or affiliated with the Company for any reason or purpose whatsoever, or (b) use any
written Confidential Information for any reason other than to further the business of the Company.
The Executive agrees to return immediately any written Confidential Information, and all copies
thereof, upon the termination of the Executive’s employment. In the event of a breach or threatened
breach by the Executive of the provisions of this Section 5, in addition to all other remedies
available to the Company, the Company shall be entitled to an injunction restraining the Executive
from disclosing any written Confidential Information or from rendering any services to any person,
firm, corporation, association or other entity to whom any written Confidential Information has
been disclosed or is threatened to be disclosed, without the need to post bond or other security.
In the event of any suit or arbitration with respect to the Executive’s obligations in this Section
5, the Executive shall pay all costs incurred by the Company in securing an injunction (or other
equitable remedy) and/or damages, including reasonable attorneys’ fees and expenses; provided,
however, in the event the Company is unsuccessful in obtaining any such remedy, the Executive shall
have no liability for the Company’s costs in connection with such suit or arbitration.

     6. Competition.

     (a) During the period that the Executive is employed by the Company and ending on the first
anniversary of the termination of the Executive’s employment, the Executive shall not, directly or
indirectly: (i) solicit banking or similar business with any existing customer of the Company or
any of its subsidiaries or affiliates in the Territory (as defined below); or (ii) solicit any
employee of the Company or any of its subsidiaries or affiliates to leave his or her employment
with the Company or any of its subsidiaries or affiliates for any reason, or hire any such employee
of the Company or any of its subsidiaries or affiliates, without the prior written consent of the
Company. As used herein, “Territory” shall mean the counties in which the Company does business at
any time during the period that the Executive is employed by the Company.

2

 

     (b) In the event of any suit or arbitration with respect to the Executive’s obligations set
forth in Section 6(a), the Executive shall pay all costs incurred by the Company in securing an
injunction (or other equitable remedy) and/or damages, including reasonable attorneys’ fees and
expenses; provided, however, in the event the Company is unsuccessful in obtaining any such remedy,
the Executive shall have no liability for the Company’s costs in connection with such suit or
arbitration.

     (c) The Executive and the Company recognize that any subsidiaries or affiliates of the Company
are third-party beneficiaries to this Agreement that are intended to be protected by the covenants
in this Agreement and that any successor or assign of the Company or one of the third-party
beneficiaries to this Agreement may enforce the covenants in this Agreement as if it were a party
to these covenants. Moreover, the Executive and the Company acknowledge and agree that the Company
has legitimate business interests to protect relative to Executive, including trade secrets, other
valuable confidential and proprietary business information, substantial relationships with specific
prospective and existing customers, substantial relationships with other employees of the Company,
the Company and customer goodwill associated with the Company’s trade name, and the Company’s
servicing of specific markets provided to the Executive. The Executive agrees that the restrictions
contained in this Section 6 are necessary and reasonable for the protection of the legitimate
business interests and goodwill of the Company described above, and the Executive agrees to waive
any objection to the enforcement of this covenant and that any breach of this Section 6 will cause
the Company substantial and irrevocable damage and, therefore, the Company shall have the right, in
addition to any other remedies it may have, to seek specific performance and injunctive relief,
without the need to post a bond or other security. The Executive agrees that the period during
which the covenant contained in this Section 6 shall be effective shall be computed by excluding
from such computation any time during which the Employee is in violation of any provision of
Section 6. The Executive agrees that if any covenant contained in Section 6 of this Agreement is
found by a court of competent jurisdiction to contain limitations as to time, geographical area, or
scope of activity that are not reasonable and impose a greater restraint than is necessary to
protect the goodwill or other business interest of the Company, then the court shall reform the
covenant to the extent necessary to cause the limitations contained in the covenant as to time,
geographical area, and scope of activity to be restrained to be reasonable and to impose a
restraint that is not greater than necessary to protect the goodwill and other business interests
of the Company and to enforce the covenant as reformed.

     (d) The Executive specifically recognizes and affirms that each of the covenants contained in
Sections 5 and 6 of this Agreement is a material and important term of this Agreement which has
induced the Company to provide for the award of the compensation and benefits provided hereunder
and the other promises made by Company herein.

     7. Enforcement of the Company’s obligations. In the event of any suit or arbitration with
respect to the Company’s obligations under this Agreement, the Company shall pay all costs incurred
by the Executive in securing an injunction (or other

3

 

equitable remedy) and/or damages, including reasonable attorneys’ fees and expenses; provided,
however, in the event the Executive is unsuccessful in obtaining any such remedy, the Company shall
have no liability for the Executive’s costs in connection with such suit or arbitration.

     8. Choice of Law. This Agreement shall be governed by, and interpreted in accordance with,
the laws of the State of Alabama.

     9. Amendments. This Agreement may not be modified, amended or terminated except by a written
document executed by the Executive and a duly authorized representative of the Company.

     10. Entire Agreement. This Agreement sets forth the entire agreement between the Company and
the Executive with respect to the payments provided for herein.

     11. Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the
Company and the Executive, their respective heirs, successors, assigns, personal representatives
and affiliates; provided, however, that the Executive may not assign his right to any payment
hereunder.

     12. Severability. If any one or more of the provisions of this Agreement is held to be
invalid, illegal or unenforceable for any reason, then the invalidity, illegality or
unenforceability of that provision shall not affect any other provision of this Agreement. The
Company and the Executive intend that this Agreement shall be interpreted as if any invalid,
illegal or unenforceable provision were never included herein.

	 	 	 
	WILLIAM H. CAUGHRAN, JR.

	 	SUPERIOR BANK
	 
	 	 
	/s/ William H. Caughran, Jr.

	 	By:  /s/ C. Marvin Scott
	 

	 	 
	Executive
	 	 
	 
	 	 
	 

	 	President
	 

	 	 
	 

	 	Title
	 
	 	 
	August 31, 2006

	 	August 23, 2006
	 

	 	 
	Date

	 	Date

4

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