Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 1, 2022, Capital Bank, N.A. (the "Bank"), the wholly-owned subsidiary
of Capital Bancorp, Inc. (the "Company"), entered into an employment agreement
with Scot R. Browning, President and Chief Lending Officer of the Bank. The
employment agreement replaces the prior employment agreement between the Bank
and Mr. Browning, dated as of January 1, 2013, which expired on December 31,
2021.
The employment agreement provides for a term of two years. Pursuant to the
employment agreement, Mr. Browning is entitled to an annual base salary of
$318,250 and is eligible to receive an annual incentive bonus of up to an
additional 50% of his base salary, which bonus is payable 25% in stock (which
will be subject to transferability restrictions, but not vesting restrictions)
and 75% in cash. Mr. Browning is eligible to receive benefits under any employee
benefit plans made available by the Bank to senior executives including, but not
limited to, retirement plans, supplemental retirement plans, medical,
disability, life insurance plans, and any other employee benefit plan or
arrangement made available by the Bank in the future to its senior executives.
The Bank also provides Mr. Browning with a $750 per month car allowance and
reimburses him for the membership fees of certain country clubs. The Bank will
also continue Mr. Browning's $250,000 term life insurance policy payable to his
designated beneficiaries on death.
Mr. Browning's employment agreement provides for certain severance benefits upon
the occurrence of an event of termination, if Mr. Browning resigns for good
reason, or upon an event of termination within one year following a change in
control of the Bank during the term of the employment agreement, in each case as
defined in his employment agreement. Following an event of termination or such
resignation, the Bank shall pay Mr. Browning as severance 18 months of continued
base salary. Any earned but unpaid incentive compensation for a prior completed
calendar year shall be paid to Mr. Browning in a lump sum no later than two and
one half months after the end of the calendar year in which it was earned.
Unless the Bank's Board of Directors determines otherwise, no prorated incentive
compensation shall be paid with respect to the year in which the event of
termination occurs and no acceleration of vesting of outstanding compensatory
equity awards shall be provided, except that if the date of termination is six
months or more into a calendar year, Mr. Browning shall be paid a prorated bonus
for the portion of the calendar year worked. Additionally, the Bank will
continue to cover Mr. Browning under its medical coverage, or under appropriate
substitute individual coverages, for 18 months.
The payment of all such severance amounts and benefits is contingent upon Mr.
Browning's timely execution, and non-revocation of, a release of all claims in a
form provided by the Bank, and the continued observance of all post-termination
obligations contained in the employment agreement.
The foregoing description of Mr. Browning's employment agreement is a summary
and is qualified in its entirety by reference to the employment agreement, which
is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated
into this Item 5.02 by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
Employment Agreement, dated January 1, 2022, by and between Capital Bank,
10.1 N.A. and Scot R. Browning (filed herewith)
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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