[Magna Group, Inc. Letterhead]
November 19, 1997
Charter Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have, today, entered into an Agreement and Plan of Merger (the
"Agreement") by and between Magna Group, Inc. ("Magna") and Charter Financial,
Inc. ("Charter"). Notwithstanding Section 9.8 of the Agreement, this
Supplemental Letter shall constitute the additional agreements and
understandings of Magna and Charter and, to the extent expressly set forth
herein, shall be in supplement thereof. All terms used herein without definition
have the same meanings as ascribed to such terms in the Agreement.
Accordingly, in consideration of the parties having entered into the
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is further agreed that:
1. The employment of ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") under that certain
Employment Agreement dated as of October 15, 1993 by and between Charter Bank,
S.B. ("Charter Bank") and ▇▇▇▇▇▇ shall terminate as of the Effective Time. As of
the Effective Time, Charter or Charter Bank will pay to ▇▇▇▇▇▇ cash in the
amount of $587,253, which shall be in full satisfaction of all obligations owed
to ▇▇▇▇▇▇ by Charter Bank under said employment agreement.
2. Magna shall honor and assume the financial obligations under (i) the
Employment Agreement dated as of April 17, 1997, as amended, by and between
Charter Bank and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), (ii) the Employment Agreement
dated as of April 17, 1997, as amended, by and between Charter Bank and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), and (iii) the Employee Severance Compensation Plan, as to
which Charter hereby represents that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") is and will be
the sole participant. ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall be referred to
collectively as the "Subject Employees." Upon the termination of employment with
Magna or any Magna affiliate for any reason (including death, disability, early
or normal retirement and voluntary termination) at any time during the initial
three-year term thereof, Magna or a Magna affiliate shall pay (a) in the case of
▇▇▇▇▇▇, cash in the amount of $311,979 to ▇▇▇▇▇▇; (b) in the case of ▇▇▇▇▇▇▇,
cash in the amount of $302,876 to ▇▇▇▇▇▇▇; and (c) in the case of ▇▇▇▇▇▇▇, cash
in an amount equal to two times her cash compensation for the 12 months ending
on the last day of the month next preceding her termination date to ▇▇▇▇▇▇▇.
3. For the period of time set forth below with respect to each Subject
Employee, Magna shall continue, at the sole cost of Magna, certain benefits for
each Subject Employee as such Subject Employee shall elect on or prior to ten
business days prior to the Effective Time (if no such election is made, Magna
shall provide the benefits consistent with subparagraph (i) below). Each Subject
Employee may elect benefits from one of the following two choices:
(i) life medical, dental and disability insurance and benefits provided
to employees of Magna of comparable positions immediately prior to the
Effective Time, or
(ii) life, medical, dental, and disability insurance and benefits
provided through insurance and benefit plans sponsored by the Illinois
League of Financial Institutions (the "Illinois League") and
substantially identical to coverage maintained by the Charter Entities
for such Subject Employee immediately prior to the Effective Time.
The time period for which Magna shall continue such elected coverage for each
Subject Employee is as follows:
Subject Employee Time Period
▇▇▇▇▇▇ 36 months following the Effective Time
▇▇▇▇▇▇ 36 months following his termination of
service from Magna or any Magna affiliate
▇▇▇▇▇▇▇ 36 months following her termination of
service from Magna or any Magna affiliate
▇▇▇▇▇▇▇ 6 months following her termination of
service from Magna or any Magna affiliate
4. At the Effective Time with respect to ▇▇▇▇▇▇ and the applicable
termination date with respect to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇, each of ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall, if requested by ▇▇▇▇▇, enter into appropriate
releases with respect to their termination of rights under their respective
employment arrangements, subject to Magna's obligations to provide continuing
life, medical, dental and disability insurance and benefits (or to pay for such
coverage provided by the Illinois League) as described herein. Notwithstanding
the foregoing, upon the death of any Subject Employee, ▇▇▇▇▇'s obligation to
continue such insurance and benefits with respect to such Subject Employee shall
terminate.
5. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Klondis ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall at the Effective Time be entitled to become
members of an Advisory Board of Merger Sub or another Magna affiliate (as
determined by ▇▇▇▇▇) for a term of four years following the Effective Time. Each
such member shall receive compensation of $200 per year for service on such
Advisory Board. In the event that ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ become employed by a
financial institution other than Magna Bank or another Magna Subsidiary, ▇▇▇▇▇▇
or ▇▇▇▇▇▇▇, as the case may be, shall as of the date of such employment, no
longer be entitled to continue as a member of such Advisory Board. Magna shall
not take any action to amend the RRP which would have the effect of excluding
future service as an advisory director from the definition of "Continuous
Service" under such plan.
IN WITNESS WHEREOF, the parties intending to be legally bound have
caused this Supplemental Letter to be executed.
MAGNA GROUP, INC.
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
G. ▇▇▇▇▇▇ ▇▇▇▇▇
Chairman and Chief Executive Officer
CHARTER FINANCIAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
Agreed to and confirmed this 19th day of November, 1997.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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