EXHIBIT 10.15
FORM OF EXECUTIVE SALARY CONTINUATION
PLAN AGREEMENT BY AND BETWEEN FIRST FEDERAL
SAVINGS BANK OF LAGRANGE and the following
individuals:
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FORM OF INDEXED EXECUTIVE SALARY
CONTINUATION PLAN AGREEMENT
This Agreement, made and entered into this 3rd day of February, 1995,
by and between First Federal Savings Bank of LaGrange, a Bank organized and
existing under the laws of the State of Georgia, hereinafter referred to as "the
Bank," and , 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 his retirement and, alternatively, to his beneficiary(ies) in
the event of his premature death while employed by the Bank.
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 design 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:
I. DEFINITIONS
A. Effective Date:
The Effective Date of this Agreement shall be February 3,
1995.
B. Plan Year:
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:
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 his
sixty-fifth (65th) birthday or such later date as the
Executive may actually retire.
D. Termination of Service:
Termination of Service shall mean voluntary resignation of
service by the Executive or the Bank's discharge of the
Executive without cause [as defined in subparagraph III (D)
hereinafter], prior to the Normal Retirement Age [described in
subparagraph I (J) hereinafter].
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 Executive. Prior to termination of service or the
Executive's retirement, such liability reserve account shall
be increased or decreased each Plan Year (including the Plan
Year in which the Executive ceases to serve on the Board) 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].
F. Index Retirement Benefit:
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 over the Cost of Funds Expense [subparagraph I (H)] for
that Plan Year.
G. Index:
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: Guardian Life Insurance Company
of America
Policy Form: Whole Life
Policy Name: Life Paid Up At Age 96
Insured's Age and Sex: __________
Riders: None
Ratings: None
Face Amount: $310,026.00
Premiums Paid: $66,000.00
Number of Premium Payments: Six
Assumed Purchase Date: February 22, 1995
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
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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 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 set
forth in the Indexed policies described above plus the amount
of any 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 of
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 the cumulative
transfer of more than fifty percent (50%) of the voting stock
of the Bank holding company from the Effective Date of this
Agreement. For the purposes of this Agreement, transfers on
account of deaths or gifts, transfers between family members
or transfers to a qualified retirement plan maintained by the
Bank shall not be considered in determining whether there has
been a change in control.
J. Normal Retirement Age:
Normal Retirement Age shall mean the date on which the
Executive attains age sixty-five (65).
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.
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
his "Normal Retirement Age" defined in subparagraph I (J), he
shall be entitled to receive the balance in his Pre-Retirement
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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 with the Plan Year in which the Executive attains
his Retirement Date, the Index Retirement Benefit [as defined
in subparagraph I (F) above] for each year shall be paid to
the Executive until his death.
B. Termination of Service:
Subject to subparagraph III (D) hereinafter, should the
Executive suffer a termination of service [defined in
subparagraph I (D)], he shall be entitled to receive twenty
percent (20%), times the number of full years [to a maximum of
one hundred percent (100%)] the Executive has served from the
date of first employment prior to attaining Normal Retirement
Age with the Bank, times the balance in the Pre-Retirement
Account paid over ten (10) years in equal installments
commencing at the Retirement Date [subparagraph I (C)]. In
addition to these payments, twenty percent (20%) times full
years of service with the Bank, times the Index Retirement
Benefit for each year shall be paid to the Executive until his
death.
C. Death:
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.
In the absence of or a failure to designate a beneficiary, the
unpaid balance shall be paid in a lump sum to the personal
representative of the Executive's estate.
D. Discharge for Cause:
Should the Executive be discharged for cause at any time prior
to his Retirement Date, all Index Benefits under this
Agreement [subparagraphs III (A), (B) or (C)] shall be
forfeited. The term "for cause" shall mean gross negligence or
gross neglect or the commission of a felony or gross
misdemeanor involving moral turpitude, fraud, dishonesty or
willful violation of any law that results in any adverse
effect on the bank. If a dispute arises as to discharge "for
cause", such dispute shall be resolved by arbitration as set
forth in this Agreement.
E. Death Benefit:
Except as set forth above, there is no death benefit provided
under this Agreement.
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, his beneficiary(ies) or any successor in interest to him
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
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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 (I) herein], if
the Executive's employment is subsequently terminated then he shall
receive the benefits promised in this Agreement upon attaining Normal
Retirement Age, as if he had been continuously employed by the Bank
until that time. 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.
VI. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, his widow 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 his beneficiary,
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:
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:
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.
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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.
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 The First Federal Savings Bank of LaGrange 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. He 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 fails 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, 1995 and that, upon execution, each has received a conforming copy.
FIRST FEDERAL SAVINGS BANK OF LAGRANGE
By:
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Witness Title
By:
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Witness
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