EXHIBIT 10.11
FORM OF DIRECTOR SUPPLEMENTAL RETIREMENT PLAN
DIRECTOR AGREEMENT
THIS AGREEMENT is made and entered into this ___ day of ________, by
and between Chattahoochee National Bank, a bank organized and existing under the
laws of the State of Georgia (hereinafter referred to as the "Bank"), and
___________, a member of the Board of Directors of the Bank (hereinafter
referred to as the "Director").
WHEREAS, the Director is now serving on the Board of the Bank
(hereinafter referred to as the "Board") and has for many years faithfully
served the Bank. It is the consensus of the Board of Directors that the
Director'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
Director's experience, knowledge of corporate affairs, reputation and industry
contacts are of such value, and the Director's continued services so essential
to the Bank's future growth and profits, that it would suffer severe financial
loss should the Director terminate his/her service on the Board;
ACCORDINGLY, the Board has adopted the Chattahoochee National Bank
Director Supplemental Retirement Plan (hereinafter referred to as the "Director
Plan") and it is the desire of the Bank and the Director to enter into this
Agreement under which the Bank will agree to make certain payments to the
Director upon the Director's retirement and to the Director's beneficiary(ies)
in the event of the Director's death pursuant to the Director Plan;
FURTHERMORE, it is the intent of the parties hereto that this Director
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Director, and be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Director is fully advised of the Bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW THEREFORE, in consideration of services the Director has 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 Director agree as
follows:
1. DEFINITIONS
A. Effective Date
The Effective Date of the Director Plan shall be August 21,
2002.
B. Plan Year
Any reference to the "Plan Year" shall mean a calendar year
from January 1st to December 31st. In the year of
implementation, the term "Plan Year" shall mean the period
from the Effective Date to December 31st of the year of the
Effective Date.
C. Retirement Date
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 Director reaches age
sixty-five (65) or such later date as the Director may
actually retire.
D. Termination of Service
Termination of Service shall mean the Director's voluntary
resignation from service on the Board or failure to be
re-elected to the Board, prior to the Normal Retirement Age
(Subparagraph I [K]).
E. Pre-Retirement Account
A Pre-Retirement Account shall be established as a liability
reserve account on the books of the Bank for the benefit of
the Director. Prior to the Director's Retirement Date,
whichever shall first occur, such liability reserve account
shall be increased each year by an amount equal to four and
forty eight one hundredths percent (4.48%) of the annual
earnings for the year determined by the Index (described in
Subparagraph I (G) hereinafter), less the Cost of Funds
Expense for that year (described in Subparagraph I (H)
hereinafter).
F. Index Retirement Benefit
The Index Retirement Benefit for each Director in the Director
Plan for each Plan Year shall be equal to the excess (if any)
of the Index (Subparagraph I [G]) for that Plan Year over the
Cost of Funds Expense (Subparagraph I [H]) for that Plan Year,
divided by a factor equal to 1.08 minus the marginal tax rate.
G. Index
The Index for any year shall be the aggregate annual after-tax
income from the life insurance contracts described in Exhibit
"A", attached hereto and fully incorporated herein by
reference, on the lives of the Participants (described in
Subparagraph I [L] 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.
If such contracts of life insurance are actually purchased by
the Bank then the actual policies as of the effective dates
listed for each policy on Exhibit "A" 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 policies described in Exhibit
"A" were purchased from the named insurance company(ies) on
the effective dates listed for each policy on Exhibit "A".
2
In either case, references to the life insurance contracts are
merely for purposes of calculating a benefit. The Bank has no
obligation to purchase such life insurance and, if purchased,
the Director and his beneficiary(ies) shall have no ownership
interest in such policy and shall always have no greater
interest in the 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 for the
life insurance policies described in the definition of "Index"
plus the amount of any after-tax benefits paid to the Director
pursuant to the Director Plan (Paragraph II hereinafter) plus
the amount of all previous years' after-tax Cost of Funds
Expense, and multiplying that sum by the Average After-Tax
Cost of Funds (Subparagraph I [K]).
I. Change of Control
Change of Control means the cumulative transfer of more than
fifty percent (50%) of the voting stock of the Bank or Holding
Company from the Effective Date of this Director Plan. For the
purposes of this Director Plan, transfers on account of deaths
or gifts, transfers between family members or transfers made
to a qualified retirement plan maintained by the Bank shall
not be considered in determining whether there has been a
Change of Control.
J. Normal Retirement Age
Normal Retirement Age shall mean the date on which the
Director attains age sixty-five (65).
K. Average After-Tax Cost of Funds
Average After-Tax Cost of Funds means, at any particular time,
a ratio, the numerator of which is the total annualized
interest expense as set forth on Schedule RI-income Statement
of the Bank's most recently filed Consolidated Report of
Condition and Income (the "Call Report") and the denominator
of which is an amount equal to: (i) the amount of deposits in
domestic offices (sum of total of columns A and C from
Schedule RC-E of the Call Report), plus (ii) the amount of
federal funds purchased and securities sold under agreements
to repurchase, as set forth on Schedule RC-Balance Sheet of
the Call Report, times the inverse of the Bank's combined
marginal income tax rate.
L. Number of Participants
The Number of Participants for any Plan Year shall be the
number of Participants (including those in retirement status)
participating in the Plan as of December 31st of the previous
year. Participants are those listed on the attached Exhibit B.
3
M. Modification of Exhibits A and B
For all purposes of this Agreement, in the event of a new plan
participant, death of a participant, termination of service of
a participant who is not fully vested in the plan, retirement
of a participant, or some other event, said Exhibits A and B
may be modified as follows:
(i) Exhibit A By substituting the "Premiums Paid"
for each participant with the cash
surrender value of each
participant's policy on the date(s)
of the aforestated event(s).
(ii) Exhibit B By adding or deleting a new or
existing plan participant.
II. INDEX BENEFITS
A. Retirement Benefits
Subject to Subparagraph II(D) hereinafter, a Director who
remains on the Board until the Normal Retirement Age
(Subparagraph I[J]) shall be entitled to receive the balance
in the Pre-Retirement Account in fifteen (15) equal annual
installments commencing thirty (30) days following the
Director's retirement. In addition to these payments and
commencing in conjunction therewith, the Index Retirement
Benefit (as defined in Subparagraph I[F] for each Plan Year
subsequent to the Director's retirement, and including the
remaining portion of the Plan Year following said retirement,
shall be paid to the Director until the Director's death.
B. Termination of Service
Subject to Subparagraph II(D), should a Director suffer a
Termination of Service, the Director shall be entitled to
receive twenty-five percent (25%) times the number of full
years of service on the Board of the Bank from the date of
first service on the Board of the Bank (to a maximum of 100%),
times the balance in the Pre-Retirement Account payable to the
Director in fifteen (15) equal annual installments commencing
thirty (30) days following the Director's Normal Retirement
Age (Subparagraph I[J] In addition to these payments and
commencing in conjunction therewith, twenty-five percent (25%)
times the number of full years of service on the Board of the
Bank from the date of first service on the Board of the Bank
(to a maximum of 100%), times the index Retirement Benefit for
each Plan Year subsequent to the year in which the Director
attains Normal Retirement Age, and including the remaining
portion of the Plan Year in which the Director attains Normal
Retirement Age, shall be paid to the Director until the
Director's death.
C. Death
Should the Director die while there is a balance in the
Director's Pre Retirement Account (Subparagraph I [E]) said
unpaid balance shall be paid in a lump sum to
4
the individual or individuals the Director may have designated
in writing and filed with the Bank. In the absence of any
effective beneficiary designation, the unpaid balance shall be
paid as set forth herein to the duly qualified executor or
administrator of the Director's estate. Said payment due
hereunder shall be made the first day of the second month
following the decease of the Director. Provided, however, that
anything hereinabove to the contrary notwithstanding, no death
benefit shall be payable hereunder if the Director dies on or
before the 21st day of August, 2004.
D. Discharge for Cause
Should the Director be Discharged for Cause at any time, all
benefits under this Director Plan shall be forfeited. The term
"for cause" shall mean any of the following that result in an
adverse effect on the Bank: (i) gross negligence or gross
neglect; (ii) the commission of a felony or gross misdemeanor
involving moral turpitude, fraud, or dishonesty; (iii) the
willful violation of any law, rule, or regulation (other than
a traffic violation or similar offense); (iv) an intentional
failure to perform stated duties; or (v) a breach of fiduciary
duty involving personal profit. If a dispute arises as to
discharge "for cause," such dispute shall be resolved by
arbitration as set forth in this Director Plan.
E. Death Benefit
Except as set forth above, there is no death benefit provided
under this Agreement.
F. Disability Benefit
In the event the Director becomes disabled prior to
Termination of Service, and the Director's service on the
Board is terminated because of such disability, the Director
shall immediately begin receiving the benefits in Subparagraph
II(A) above. Such benefit shall begin without regard to
Director's Normal Retirement Age and the Director shall be one
hundred percent (100%) vested in the entire benefit amount. If
there is a dispute regarding whether the Director 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.
III. DEFERRAL BENEFITS
A. Deferral Election
Any Director wishing to defer any portion or all of the
Director's fees may elect to defer up to one hundred percent
(100%) each year for a maximum of five (5) years. At the end
of the five-year period, the Board shall have the option of
extending the deferral period for any amount of time it shall
deem to be appropriate. The Director will make the election to
defer by filing with the Bank a written statement setting
forth the amount of the deferrals and the Director's
5
election of payment as set forth in Subparagraph III (C)
hereinafter. This statement must be filed prior to having
earned the deferred income.
B. Deferred Compensation Account
The Bank shall establish a Deferred Compensation Account in
the name of the Director and credit that account with the
deferrals. The Bank shall also credit interest to the Deferred
Compensation Account balance on December 31st of each year.
The interest rate credited shall be one hundred and fifty
percent (150%) of the average after-tax yield of a one- year
Treasury Xxxx.
C. Retirement, Termination of Service or Death
Upon the Director's Retirement Date or Termination of Service
from the Board [Subparagraphs I[C] and [D] hereinabove), the
balance of the Director's Deferred Compensation Account shall
be payable as elected by the Director one (1) year prior to
receiving said benefit payable to the Director thirty (30)
days following said event. If the Director fails to make said
payment election, then the Director shall be paid in ten (10)
equal annual installments as set forth herein. Should the
Director die while there is a balance in the Director's
Deferred Compensation Account, such balance shall be paid
pursuant to Subparagraph II(C) hereinabove.
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 Director Plan. The Directors, their
beneficiary(ies), or any successor in interest 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 Director
Plan or to refrain from funding the same and to determine the
extent, nature and method of such funding. Should the Bank
elect to fund this Director Plan, 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 any Director be deemed
to have any lien nor 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 Director, then the
Director 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 (Subparagraph I [I]) if the Director
subsequently suffers a Termination of Service (Subparagraph I
[D]) then the Director shall
6
receive the benefits promised in this Director Plan upon
attaining Normal Retirement Age, as if the Director had been
continuously serving the Bank until the Director's Normal
Retirement Age. The Director will also remain eligible for all
promised death benefits in this Director Plan. 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 Director Plan and agrees to abide by
its terms.
VI. MISCELLANEOUS
A. Alienability and Assignment Prohibition
Neither the Director, nor the Director's surviving spouse, nor
any other beneficiary(ies) under this Director Plan 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
Director or the Director's beneficiary(ies), nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Director 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 the Bank and any Successor in Interest
The Bank 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
agree, in writing, to assume and discharge the duties and
obligations of the Bank under this Director Plan. This
Director Plan shall be binding upon the parties hereto, their
successors, beneficiaries, heirs and personal representatives.
C. Amendment or Revocation
It is agreed by and between the parties hereto that, during
the lifetime of the Director, this Director Plan may be
amended or revoked at any time or times, in whole or in part,
by the mutual written consent of the Director and the Bank.
D. Gender
Whenever in this Director Plan 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 Director Plan shall affect the right
of the Director to participate in or be covered by any
qualified or non-qualified pension, profit-
7
sharing, group, bonus or other supplemental compensation or
fringe benefit plan constituting a part of the Bank's existing
or future compensation structure.
F. Headings
Headings and subheadings in this Director Plan are inserted
for reference and convenience only and shall not be deemed a
part of this Director Plan.
G. Applicable Law
The validity and interpretation of this Agreement shall be
governed by the laws of the State of Georgia.
H. 12 U.S.C. 1828(k)
Any payments made to the Director pursuant to this Director
Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. Section 1828(k) or any regulations
promulgated thereunder.
I. Partial Invalidity
If any term, provision, covenant, or condition of this
Director Plan is determined by an arbitrator or a court, as
the case may be, to be invalid, void, or unenforceable, such
determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and
the Director Plan shall remain in full force and effect
notwithstanding such partial invalidity.
J. Continuation as Director
Neither this Agreement nor the payment of any benefits
thereunder shall be construed as giving to the Director any
right to be retained as a member of the Board of Directors of
the Bank.
VII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator
The "Named Fiduciary and Plan Administrator" of this Director
Plan shall be Chattahoochee National Bank until its
resignation or removal by the Board. As Named Fiduciary and
Plan Administrator, the Bank shall be responsible for the
management, control and administration of the Director Plan.
The Named Fiduciary may delegate to others certain aspects of
the management and operation responsibilities of the Director
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
Director Plan and benefits are not paid to the Director (or to
the Director's beneficiary(ies) in the case of the
8
Director's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to
the Named Fiduciary and Plan Administrator named above within
sixty (60) days from the date payments are refused. The Named
Fiduciary and Plan Administrator shall review the written
claim and if the claim is denied, in whole or in part, it
shall provide in writing within sixty (60) days of receipt of
such claim the specific reasons for such denial, reference to
the provisions of this Director Plan 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 Named Fiduciary and Plan Administrator fail to
take any action within the aforesaid sixty-day period.
If claimants desire a second review they shall notify the
Named Fiduciary and Plan Administrator in writing within sixty
(60) days of the first claim denial. Claimants may review this
Director Plan or any documents relating thereto and submit any
written issues and comments it may feel appropriate. In their
sole discretion, the Named Fiduciary and Plan Administrator
shall then review the second claim and provide a written
decision within sixty (60) 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
the Plan Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Director Plan or the meaning and
effect of the terms and conditions thereof, then claimants may
submit the dispute to an arbitrator for final arbitration. The
arbitrator shall be selected by mutual agreement of the Bank
and the claimants. The arbitrator 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 arbitrator with respect to any controversy
properly submitted to it for determination.
Where a dispute arises as to the Bank's discharge of the
Director for "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.
VIII. TERMINATION OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE
LAW, RULES OR REGULATIONS
The Bank is entering into this Agreement upon the assumption that
certain existing tax laws, rules and regulations will continue in
effect in their current form. If any said assumptions should change and
said change has a detrimental effect on this Director Plan, then the
Bank reserves the right to terminate or modify this Agreement
accordingly. Provided, however, that the Director shall be entitled to
receive at least his/her Director's Deferred Compensation Account
including interest earned. Upon a Change of Control (Subparagraph I[I]
this paragraph shall become null and void effective immediately upon
said Change of Control.
9
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read
this Agreement and executed the original thereof on the first day set forth
hereinbelow, and that, upon execution, each has received a conforming copy.
CHATTAHOOCHEE NATIONAL BANK
Alpharetta, Georgia
By:
---------------------------------- ------------------------
Witness Title
---------------------------------- ---------------------------
Witness
10
