Exhibit 10.3
CHANGE IN CONTROL CONTINUITY AGREEMENT
THIS Change in Control CONTINUITY AGREEMENT (this “Agreement”) is made and entered into, as of April 21, 2022, by and among CapStar Financial Holdings, a Tennessee corporation (the “Company”), CapStar Bank, a Tennessee banking corporation and a direct, wholly-owned subsidiary of the Company (the “Bank” and, together with the Company, “CapStar”) and Timothy K. Schools (“Executive”).
WHEREAS, the Board of Directors of the Company (the “Board”) and the Board of Directors of the Bank (the “Bank Board”) have determined that it is in the best interests of the Company, the Bank and their respective stockholders to assure that CapStar will have the continued dedication of Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below); and
WHEREAS, the Board and the Bank Board believe it is imperative to diminish the inevitable distraction of Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change in Control and to encourage Executive’s full attention and dedication to CapStar and in the event of any threatened or pending Change in Control, and to provide Executive with compensation and benefits arrangements upon a Change in Control that are competitive with those of other companies.
NOW, THEREFORE, in order to accomplish the foregoing objectives and in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows.
[Change in Control Continuity Agreement Signature Page]
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For purposes of this provision, no act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of CapStar and its Affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, Bank Board (or a committee thereof), or if the Company is not the ultimate parent entity of the Company, the board of directors (or, for a non-corporate entity, equivalent governing body) of the ultimate parent of the Company (the “Applicable Board”), or based upon the advice of counsel for CapStar and its Affiliates shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of CapStar and its Affiliates. The cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding Executive if Executive is a member of the Applicable Board) at a meeting of the Applicable Board called and held for such purpose (after reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel for Executive, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable Board, Executive is guilty of the conduct constituting grounds for termination for “Cause”, and specifying the particulars thereof in detail.
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In order to invoke a termination for Good Reason, Executive shall provide written notice to CapStar of the existence of one or more of the conditions described in clauses (i) through (vi) within 90 days following Executive’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and CapStar shall have 30 days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition. In the event that CapStar fails to remedy the condition constituting Good Reason during the applicable Cure Period, Executive’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within two years following the initial existence of such condition or conditions in order for such termination as a result of such condition to constitute a termination for Good Reason. The Executive’s mental or physical incapacity following the occurrence of an event described above in clauses (i) through (vi) shall not affect Executive’s ability to terminate employment for Good Reason and Executive’s death following delivery of a Notice of Termination for Good Reason shall not affect Executive’s estate’s entitlement to severance payments benefits provided hereunder upon a termination of employment for Good Reason.
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If to Executive: To the most recent address on file with CapStar.
If to CapStar: CapStar Financial Holdings, Inc.
1201 Demonbreun St. Suite 700
Nashville, TN 37203
Attention: Secretary
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the Company, the Bank and Executive have caused this Agreement to be duly executed and delivered, effective as of the Effective Date.
Timothy K. Schools
/s/ Timothy K. Schools
[Change in Control Continuity Agreement Signature Page]
CAPSTAR FINANCIAL HOLDINGS
By: /s/ James S. Turner, Jr.
James S. Turner, Jr.
Chairman
CAPSTAR BANK
By: /s/ James S. Turner, Jr.
James S. Turner, Jr.
Chairman
[Change in Control Continuity Agreement Signature Page]