EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT
This Agreement, made and entered into this 28th day of December, 1998,
by and between Greater Rome Bank, a Bank organized and existing under the laws
of the State of Georgia, hereinafter referred to as "the Bank", and Xxxxxx X.
Xxxxxxxx, III, a Key Employee and the Executive of the Bank, hereinafter
referred to as "the Executive".
The Executive has been in the employ of the Bank for several years and
has now and for years past faithfully served the Bank. It is the consensus of
the Board of Directors of the Bank (the Board) that the Executive's services
have been of exceptional merit, in excess of the compensation paid and an
invaluable contribution to the profits and position of the Bank in its field of
activity. The Board further believes that the Executive's experience, knowledge
of corporate affairs, reputation and industry contacts are of such value and his
continued services are so essential to the Bank's future growth and profits that
it would suffer severe financial loss should the Executive terminate his
services.
Accordingly, it is the desire of the Bank and the Executive to enter
into this Agreement under which the Bank will agree to make certain payments to
the Executive upon the Executive's retirement and, alternatively, to the
Executive's beneficiary(ies) in the event of the Executive's death.
It is the intent of the parties hereto that this Agreement be
considered an arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, as a member of a select group of
management or highly-compensated employees of the Bank for purposes of the
Employee Retirement Security Act of 1974 (ERISA). The Executive is fully advised
of the Bank's financial status and has had substantial input in the decision and
operation of this benefit plan.
Therefore, in consideration of the Executive's services performed in
the past and those to be performed in the future and based upon the mutual
promises and covenants herein contained, the Bank and the Executive, agree as
follows:
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I. DEFINITIONS
A. Effective Date:
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The Effective Date of this Agreement shall be December 28, 1998.
B. Plan Year:
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Any reference to "Plan Year" shall mean a calendar year from January 1 to
December 31. In the year of implementation, the term "Plan Year" shall mean
the period from the effective date to December 31 of the year of the
effective date.
C. Retirement Date:
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Retirement Date shall mean retirement from service with the Bank which
becomes effective on the first day of the calendar month following the
month in which the Executive reaches the Executive's sixty-fifth (65th)
birthday or such later date as the Executive may actually retire.
D. Termination of Service:
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Termination of Service shall mean voluntary resignation of service by the
Executive or the Bank's discharge of the Executive without cause ("cause"
defined in Subparagraph III (E) hereinafter), prior to the Normal
Retirement Age (described in Subparagraph I (J) hereinafter).
E. Pre-Retirement Account:
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A Pre-Retirement Account shall be established as a liability reserve
account on the books of the Bank for the benefit of the Executive. Prior to
the Executive's Retirement Date [Subparagraph I (C)] such liability reserve
account shall be increased or decreased each Plan Year (including the Plan
Year in which the Executive ceases to be employed by the Bank) by an amount
equal to the annual earnings or loss for that Plan Year determined by the
Index (described in Subparagraph I (G) hereinafter), less the Cost of Funds
Expense for that Plan Year (described in Subparagraph I (H) hereinafter),
divided by a factor equal to 1.0 minus the marginal tax rate.
F. Index Retirement Benefit:
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The Index Retirement Benefit for the Executive for any year shall be equal
to the excess of the annual earnings (if any) determined by the Index
[Subparagraph I (G)] for that Plan Year less the Cost of Funds Expense
[Subparagraph I (H)] for that Plan Year, divided by a factor equal to 1.0
minus the marginal tax rate.
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G. Index:
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The Index for any Plan Year shall be the aggregate annual after-tax income
from the life insurance contracts described hereinafter as defined by FASB
Technical Bulletin 85-4. This Index shall be applied as if such insurance
contracts were purchased on the effective date hereof.
Insurance Company: Xxxxxxxxx Xxxxxxxx Life Insurance
Policy Form: Flexible Premium Adjustable Life
Policy Name: Executive Security Plan IV
Insured's Age and Sex: 45, Male
Riders: None
Ratings: None
Option: Level Death Benefit
Face Amount: $1,012,000
Premiums Paid: $350,000
Number of Premium Payments: One
Assumed Purchase Date: December 28, 1998
Insurance Company: Southland Life Insurance
Policy Form: Flexible Premium Adjustable Life
Policy Name: Max UL
Insured's Age and Sex: 45, Male
Riders: None
Ratings: None
Option: Level Death Benefit,
Face Amount: $1,141,649
Premiums Paid: $350,000
Number of Premium Payments: One
Assumed Purchase Date: January 19, 1999
If such contracts of life insurance are actually purchased by the Bank then
the actual policies as of the dates they were purchased shall be used in
calculations under this Agreement. If such contracts of life insurance are
not purchased or are subsequently surrendered or lapsed, then the Bank
shall receive annual policy illustrations that assume the above-described
policies were purchased from the above named insurance company(ies) on the
Effective Date from which the increase in policy value will be used to
calculate the amount of the Index.
In either case, references to the life insurance contract are merely for
purposes of calculating a benefit. The Bank has no obligation to purchase
such life insurance and, if purchased, the Executive and the Executive's
beneficiary(ies) shall have no ownership interest in such policy and shall
always have no greater interest in the
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benefits under this Agreement than that of an unsecured general creditor of
the Bank.
H. Cost of Funds Expense:
----------------------
The Cost of Funds Expense for any Plan Year shall be calculated by taking
the sum of the amount of premiums set forth in the Indexed policies
described above plus the amount of any after-tax benefits paid to the
Executive pursuant to this Agreement (Paragraph III hereinafter) plus the
amount of all previous years after-tax Costs of Funds Expense, and
multiplying that sum by the average after-tax cost of funds percentage rate
as calculated from the Bank's third quarter Call Report for the Plan Year
as filed with the Federal Reserve.
I. Change of Control:
--------------------
Change of Control shall be deemed to be any consummated transaction wherein
twenty-five percent (25%) of the shares of the Bank are directly or
indirectly transferred by sale, gift, merger, exchange or any other means
to new owners other than an Affiliate of such person or entity transferring
such shares, or if a majority of the members of the Board of Directors of
the Bank are replaced within any twelve month period.
J. Normal Retirement Age:
-----------------------
Normal Retirement Age shall mean the date on which the Executive attains
age sixty-five (65).
K. Disability:
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Disability shall mean a physical or mental condition that prevents the
performance of substantially all of the Executive's duties, as defined
hereinafter, for a period of ninety (90) consecutive days. Duties under
this paragraph are defined as those duties set forth in that certain
Employment Agreement dated September 1, 1997, between Greater Rome Bank,
Greater Rome Banshares, Inc., and Xxxxxx X. Xxxxxxxx, III, and contained in
both paragraph 2 and Exhibit "A" to said Agreement.
II. EMPLOYMENT
No provision of this Agreement shall be deemed to restrict or limit any
existing employment agreement by and between the Bank and the Executive,
nor shall any conditions herein create specific employment rights to the
Executive nor limit the right of the Employer to discharge the Executive
with or without cause. In a similar fashion, no provision shall limit the
Executive's rights to voluntarily sever his employment at any time.
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III INDEX BENEFITS
The following benefits provided by the Bank to the Executive are in the
nature of a fringe benefit and shall in no event be construed to effect nor
limit the Executive's current or prospective salary increases, cash bonuses
or profit-sharing distributions or credits.
A. Retirement Benefits:
--------------------
Should the Executive continue to be employed by the Bank until "Normal
Retirement Age" defined in Subparagraph I (J), the Executive shall be
entitled to receive the balance in his Pre-Retirement Account [as defined
in Subparagraph I (E)] in ten (10) equal annual installments commencing
thirty (30) days following the Executive's Retirement Date. In addition to
these payments, commencing thirty (30) days following the Executive's
Retirement Date, the Index Retirement Benefit (as (defined in Subparagraph
I (F) above) for each year shall be paid to the Executive until the
Executive's death.
B. Termination of Service:
-----------------------
Subject to Subparagraph III (E) hereinafter, should the Executive suffer a
Termination of Service [defined in Subparagraph I (D)], the Executive shall
be entitled to receive twenty percent (20%) times the number of full years
the Executive has served the Bank from the effective date of this agreement
(to a maximum of 100%), times the balance in the Pre-Retirement Account
paid over ten (10) years in equal installments commencing at the Normal
Retirement Age [Subparagraph I (J)]. In addition to these payments and
commencing thirty (30) days following the Executive's Normal Retirement
Age, twenty percent (20%) times the number of full years the Executive has
served the Bank from the effective date of this agreement (to a maximum of
100%), times the Index Retirement benefit for each year shall be paid to
the Executive until the Executive's death.
C. Disability Benefit:
--------------------
In the event the Executive becomes disabled, as defined in Subparagraph I
(K) above, prior to Termination of Service, and the Executive's employment
is terminated because of such disability, he shall immediately begin
receiving the benefits in Subparagraph III (A) above. Such benefit shall
begin without regard to the Executive's Normal Retirement Date and the
Executive shall be one hundred percent (100%) vested in the entire benefit
amount. If there is a dispute regarding whether the Executive is disabled,
such dispute shall be resolved by a physician selected by the Bank and such
resolution shall be binding upon all parties to this Agreement.
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D. Death:
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(i) Should the Executive die prior to having received the full balance of
the Pre-Retirement Account, the unpaid balance of the Pre-Retirement
Account shall be paid in a lump sum to the beneficiary selected by the
Executive and filed with the Bank; and
(ii) When the Executive dies, in addition to the payment the Executive's
designated beneficiary may receive described III(D)(i) hereinabove,
the Executive's designated beneficiary shall receive an amount of
money equal to what the Executive's Index Retirement Benefit would
have been had the Executive received ten (10) annual Index Retirement
Benefit payments after death, or had the Executive lived until age 85,
whichever amount is greater. This benefit shall be paid in the amount
and at the times the Executive would have received said Index
Retirement Benefits; and
(iii)In any event, in the absence of or a failure to designate a
beneficiary, the amounts described herein shall be paid to the
personal representative of the Executive's estate.
No other death benefit shall be payable under this Agreement.
E. Discharge for Cause:
--------------------
Should the Executive be discharged for cause as defined herein at any time,
all benefits under this Agreement shall be forfeited. As used herein, the
term "for cause" shall mean:
1. A material breach of the terms of the Agreement between the Executive
and Greater Rome Bank and Greater Rome Banshares, Inc. dated September
1, 1997, including, without limitation, failure by the Executive to
perform his duties and responsibilities in the manner and to the
extent required under said Agreement or a breach of any representation
or warranty of the Executive set forth in said Agreement which remains
uncured after the expiration of thirty (30) days following, the
delivery of written notice of such breach to the Executive;
2. Conduct by the Executive that amounts to fraud, dishonesty, or willful
misconduct in the performance of his duties and responsibilities under
said Agreement, or conduct involving moral turpitude;
3. The conviction of the Executive of a felony;
4. Conduct by the Executive that amounts to gross and willful
insubordination or inattention to his duties and responsibilities
under said Agreement which
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remains uncured after the expiration of thirty (30) days following
the delivery of written notice of such breach to the Executive; or
5. Conduct by the Executive that results in removal from his position as
an officer or employee of Greater Rome Bank or Greater Rome Banshares,
Inc. pursuant to a written order by any regulatory agency with
authority or jurisdiction over the Executive.
IV. RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its obligations under this Agreement. The
Executive, the Executive's beneficiary(ies) or any successor in interest to
the Executive shall be and remain simply a general creditor of the Bank in
the same manner as any other creditor having a general claim for matured
and unpaid compensation.
The Bank reserves the absolute right, at its sole discretion, to either
fund the obligations undertaken by this Agreement or to refrain from
funding the same and to determine the exact nature and method of such
funding. Should the Bank elect to fund this Agreement, in whole or in part,
through the purchase of life insurance, mutual funds, disability policies
or annuities, the Bank reserves the absolute right, in its sole discretion,
to terminate such funding at any time, in whole or in part. At no time
shall the Executive be deemed to have any lien or right, title or interest
in or to any specific funding investment or to any assets of the Bank.
If the Bank elects to invest in a life insurance, disability or annuity
policy upon the life of the Executive, then the Executive shall assist the
Bank by freely submitting to a physical exam and supplying such additional
information necessary to obtain such insurance or annuities.
V. CHANGE OF CONTROL
Upon a Change of Control (as defined in Subparagraph I (1) herein), if the
Executive's employment is subsequently terminated, except for cause, then
the Executive shall receive the benefits promised in this Agreement upon
attaining Normal Retirement Age, as if the Executive had been continuously
employed by the Bank until the Executive's Normal Retirement Age. The
Executive will also remain eligible for all promised death benefits in this
Agreement. In addition, no sale, merger or consolidation of the Bank shall
take place unless the new or surviving entity expressly acknowledges the
obligations under this Agreement and agrees to abide by its terms.
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VI. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
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Neither the Executive, his/her surviving spouse nor any other beneficiary
under this Agreement shall have any power or right to transfer, assign,
anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in
advance any of the benefits payable hereunder nor shall any of said
benefits be subject to seizure for the payment of any debts, judgments,
alimony or separate maintenance owed by the Executive or the Executive's
beneficiary(ies), nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation, transfer or
disposal of the benefits hereunder, the Bank's liabilities shall forthwith
cease and terminate.
B. Binding Obligation of Bank and any Successor in Interest:
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The Bank expressly agrees that it shall not merge or consolidate into or
with another bank or sell substantially all of its assets to another bank,
firm or person until such bank, firm or person expressly agrees, in
writing, to assume and discharge the duties and obligations of the Bank
under this Agreement. This Agreement shall be binding upon the parties
hereto, their successors, beneficiary(ies), heirs and personal
representatives.
C. Revocation:
-----------
It is agreed by and between the parties hereto that, during the lifetime of
the Executive, this Agreement may be amended or revoked at any time or
times, in whole or in part, by the mutual written assent of the Executive
and the Bank.
D. Gender:
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Whenever in this Agreement words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine or
neuter gender, whenever they should so apply.
E. Effect on Other Bank Benefit Plans:
-----------------------------------
Nothing contained in this Agreement shall affect the right of the Executive
to participate in or be covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental compensation or fringe
benefit plan constituting a part of the Bank's existing or future
compensation structure.
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F. Headings:
---------
Headings and subheadings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.
G. Applicable Law:
---------------
The validity and interpretation of this Agreement shall be governed by the
laws of the State of Georgia.
VII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
---------------------------------------
The "Named Fiduciary and Plan Administrator" of this Plan shall be Greater
Rome Bank until its removal by the Board. As Named Fiduciary and
Administrator, the Bank shall be responsible for the management, control
and administration of the Salary Continuation Agreement as established
herein. The Named Fiduciary may delegate to others certain aspects of the
management and operation responsibilities of the plan including the
employment of advisors and the delegation of ministerial duties to
qualified individuals.
B. Claims Procedure and Arbitration:
---------------------------------
In the event a dispute arises over benefits under this Agreement and
benefits are not paid to the Executive (or to his beneficiary in the case
of the Executive's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the Plan
Administrator named above within ninety (90) days from the date payments
are refused. The Plan Administrator shall review the written claim and if
the claim is denied, in whole or in part, they shall provide in writing
within ninety (90) days of receipt of such claim their specific reasons for
such denial, reference to the provisions of this Agreement upon which the
denial is based and any additional material or information necessary to
perfect the claim. Such written notice shall further indicate the
additional steps to be taken by claimants if a further review of the claim
denial is desired. A claim shall be deemed denied if the Plan Administrator
falls to take any action within the aforesaid ninety-day period.
If claimants desire a second review they shall notify the Plan
Administrator in writing within ninety (90) days of the first claim denial.
Claimants may review this Agreement or any documents relating thereto and
submit any written issues and comments they may feel appropriate. In its
sole discretion, the Plan Administrator shall then review the second claim
and provide a written decision within ninety (90) days of receipt of such
claim. This decision shall likewise state the specific reasons for the
decision and shall include reference to specific provisions of this
Agreement upon which the decision is based.
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If claimants continue to dispute the benefit denial based upon completed
performance of this Agreement or the meaning and effect of the terms and
conditions thereof, then claimants may submit the dispute to a Board of
Arbitration for final arbitration. Said Board shall consist of one member
selected by the claimant, one member selected by the Bank, and the third
member selected by the first two members. The Board shall operate under any
generally recognized set of arbitration rules. The parties hereto agree
that they and their heirs, personal representatives, successors and assigns
shall be bound by the decision of such Board with respect to any
controversy properly submitted to it for determination.
Where a dispute arises as to the Bank's discharge of the Executive "for
cause", such dispute shall likewise be submitted to arbitration as above
described and the parties hereto agree to be bound by the decision
thereunder.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Agreement and executed the original thereof on the 3rd day of
February, 1999 and that, upon execution, each has received a conforming, copy.
GREATER ROME BANK
/s/ Xxxxxx X. Xxxxx By: /s/ Bradford Xxx Xxxxxx, Vice Chairman
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Witness
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxx, III
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Witness Xxxxxx X. Xxxxxxxx, III