Section 5 – Corporate Governance and Management
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 28, 2018, Claire W. Tucker entered into an Amendment to the Seventh Amended and Restated Executive Employment Agreement (the “Tucker Amendment”) with CapStar Financial Holdings, Inc. (the “Company”)and CapStar Bank (the “Bank”) that is effective as of December 28, 2018. Pursuant to the Tucker Amendment, Ms. Tucker’s base salary will increase to $525,000 per annum, effective January 1, 2019, and the parties anticipate that Ms. Tucker will continue employment with the Company through May 31, 2019.
On December 28, 2018, Robert B. Anderson entered into a Fourth Amended and Restated Executive Employment Agreement (the “Anderson Amended and Restated Agreement”) with the Company and the Bank that is effective as of December 28, 2018. Pursuant to the Anderson Amended and Restated Agreement, Mr. Anderson’s base salary will increase to $355,000 per annum, effective January 1, 2019, and he will be eligible to receive an annual bonus of up to 40% of his base salary, subject to the terms and conditions set forth annually by the Board of Directors of the Company (the “Board”) pursuant to any bonus plan that may be adopted by the Board. Additionally, as additional consideration for Mr. Anderson’s services to the Bank, the Bank has awarded to Mr. Anderson 5,600 shares of common stock of the Company, which is subject to repayment of the cash value on a pro rata basis if Mr. Anderson is terminated for cause or resigns within three years of the date of the Anderson Amended and Restated Agreement. Such award will be fully vested upon issuance and subject to the terms of the CapStar Financial Holdings, Inc. Stock Incentive Plan and a separate Restricted Stock Agreement between Executive and the Company, dated December 28, 2018, filed as Exhibit 10.3 hereto (the “Anderson Restricted Stock Agreement”). The Bank will advance funds necessary for payment of all taxes and withholdings due upon the issuance of the award under a three-year forgivable loan described in a separate Promissory Note between the Bank and Mr. Anderson, dated December 28,2018, that is filed as Exhibit 10.4 hereto (the “Anderson Promissory Note”). Pursuant to the terms of the Anderson Promissory Note, which is subject to the terms and provisions of the Anderson Amended and Restated Agreement, the principal sum of $29,600.00 will be paid by the Bank and forgiven on a pro rata basis over a period of three years.
Additional terms provided for under the Anderson Amended and Restated Agreement are as follows:
| | • | | Mr. Anderson, the Bank and the Company have the right to terminate the Anderson Amended and Restated Agreement at any time, with or without cause, subject to the potential for severance payments as discussed below. |
| | • | | Mr. Anderson is entitled to a severance payment equal to continued payment of base salary and benefits in the event the Company and the Bank terminates the Anderson Amended and Restated Agreement without cause or the executive resigns for good reason. The severance payment would be continued for 24 months. |
| | • | | For termination occurring within 12 months of a change in control, as defined in the Anderson Amended and Restated Agreement, Mr. Anderson would receive payments equal to two times his respective base salary (payable in 24 equal monthly installments) and continuation of benefits for 24 months, unless employment was terminated with cause or by reason of disability or the executive resigned without good reason. |
| | • | | Mr. Anderson has agreed to maintain the confidentiality ofnon-public information and trade secrets learned during the course of his employment and further agreed that the Company and the Bank maintain ownership over their work product. |
| | • | | Mr. Anderson is subject to a restrictive covenants relating to his ability to (i) solicit Company and Bank clients for or on behalf of a competing business, (ii) solicit employees of the Company or Bank for another business, or (iii) engage in a competing business that operates in any county in which CapStar operates. These restrictions apply for the duration of Mr. Anderson’s employment and following termination for a period of 12 months for Mr. Anderson. |
| | • | | The extended term of Mr. Anderson’s employment shall continue until May 21, 2021 with the option for a one year renewal. |
