Exhibit 10.5
FORM OF SUPPLEMENTAL EXECUTIVE
RETIREMENT BENEFIT AGREEMENT
This Supplemental Executive Retirement Benefit Agreement (this
"Agreement") is made as of the 1st day of January, 2002 (the "Effective Date"),
by and between Gateway Bank & Trust, a Georgia bank (the "Bank"), and
, an individual (the "Executive").
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R E C I T A L S:
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WHEREAS, Executive is currently an employee of Bank and is a valued
employee of Bank;
WHEREAS, Bank desires to retain Executive as an employee of Bank and
desires to provide Executive with an incentive to remain in the employ of the
Bank; and
WHEREAS, Bank desires to make available to Executive certain
supplemental retirement benefits, and Executive desires to enter into an
arrangement for such supplemental retirement benefits;
NOW, THEREFORE, the parties hereto, for and in consideration of the
mutual promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, do agree as follows:
1. Supplemental Retirement Benefit Obligation. Bank hereby
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establishes an unfunded retirement arrangement, the obligations under which
shall be reflected on the general ledger of the Bank (the "Retirement Account").
The Retirement Account shall be an unsecured liability of the Bank to Executive,
payable only as provided herein from the general funds of the Bank. The
Retirement Account is not a deposit or insured by the Federal Deposit Insurance
Corporation and does not constitute a trust account or any other special
obligation of the Bank and does not have priority of payment over- any other
general obligations of the Bank.
2. Payment of Benefits.
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(a) Normal Retirement. If Executive remains in the continual
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employment of the Bank (except for such breaks in service prescribed by law,
such as the Family and Medical Leave Act, or as otherwise agreed in a writing
expressly authorized by the Board of Directors of the Bank) until at least age
62 of Executive (the "Normal Retirement Date"), then upon the Normal Retirement
Date or such later date (the "Retirement Date") on which Executive's employment
with the Bank is terminated for any reason, the Bank shall pay to Executive the
Normal Retirement Benefit (as hereinafter defined) annually, payable quarterly
beginning on the first business day of the first calendar quarter falling on or
after the Retirement Date and on the first business day of each calendar quarter
thereafter until (but including) the tenth (10th) anniversary of the Retirement
Date. For the purposes of this agreement, the annual amount of the "Normal
Retirement Benefit" shall be $ .
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(b) Early Retirement. If the Executive retires prior to the
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Normal Retirement Date, but has been continuously employed by the Bank (except
for such breaks in service prescribed by law, such as the Family and Medical
Leave Act, or as otherwise agreed in a writing expressly authorized by the Board
of Directors of the Bank) until at least age 60 (the "Early Retirement Date"),
the Bank shall pay to Executive the Early Retirement Benefit (as hereinafter
defined) annually, payable quarterly beginning on the first business day of the
first calendar quarter falling on or after the Early Retirement Date and on the
first business day of each calendar quarter thereafter until (but including) the
tenth (10th) anniversary thereof. For the purposes of this Agreement, the
"Early Retirement Benefit" shall mean the vested portion of each quarterly
payment of the Normal Retirement Benefit, as determined in accordance with the
vesting schedule set forth in Section 2(c) below, with each such payment
discounted to a present value amount from the date it would have become payable
if the Executive had retired on his Normal Retirement Date using an interest
rate equal to the interest rate in effect for ten-year U.S. Treasury Securities
on the Early Retirement Date.
(c) Vested Termination. If Executive voluntarily resigns
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from the employ of Bank or if the Bank discharges Executive other than for Cause
(as defined in Section 2(f) below), in either case, prior to an Early Retirement
Date, the Bank shall pay to Executive, at the discretion of the Bank, either (1)
a lump sum amount equal to the Vested Benefit (as hereinafter defined), payable
the first business day of the first calendar quarter falling on or after such
resignation or termination (the "Vested Benefit Date"), or (2) in installments
in quarterly payments over ten (10) years, commencing on the first business day
of the calendar quarter falling on or after the Vested Benefit Date. For the
purposes of this Agreement, the "Vested Benefit" shall mean that portion, if
any, of the aggregate sum of each quarterly payment of the Normal Retirement
Benefit determined in accordance with the Vesting Schedule below with each such
payment first discounted to a present value amount as of the Normal Retirement
Date and then discounted to a present value amount from the Normal Retirement
Date to the Vested Benefit Date, with each discount calculation using an
interest rate equal to the interest rate in effect for ten-year U.S. Treasury
Securities on the Vested Benefit Date:
Vested Portion of Years of Continuous Service
Normal Retirement Benefit Following the Effective Date
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0% 2 or less
20% 3
40% 4
60% 5
80% 6
100% 7
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(d) Disability. If Executive becomes Permanently Disabled
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(as hereinafter defined) and terminates employment on account of such disability
before an Early Retirement Date, Executive shall be treated as though Executive
retired and shall receive the Normal Retirement Benefit, payable over ten (10)
years, commencing on the first business day of the calendar quarter falling on
or after such termination of employment. For purposes of this Agreement, the
term "Permanently Disabled" shall mean the substantial physical or mental
impairment of Executive which materially diminishes Executive's ability to
perform the services theretofore performed by Executive for a period of six
months or more, taking into consideration and compliance by Bank with the
reasonable accommodation provisions of the Americans with Disabilities Act. The
determination of whether Executive is Permanently Disabled shall be made by a
licensed physician selected by Bank.
(e) Death. If Executive dies before any benefit payments are
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scheduled to begin under any other provision of this Agreement, the beneficiary
of the Executive shall be paid, at the sole discretion of Bank, either in (1) a
lump sum amount equal to the aggregate sum of the ten annual payments of the
Normal Retirement Benefit, or (2) in installments in quarterly payments over ten
(10) years, commencing on the first business day of the calendar quarter falling
on or after the date of death. If paid in a lump sum, the lump sum payment
shall be made as soon as practicable after the Executive's date of death. If
Executive dies after any benefit payments are scheduled to begin under any other
provision of this Agreement, the beneficiary of the Executive shall receive the
amounts that otherwise would have been paid to the Executive in the same amount
and at the same time as payment would have been made to the Executive had the
Executive not died. The Executive shall designate his or her beneficiary in
writing to the Bank pursuant to procedures as may be established from time to
time; provided, however, if no such designation has been made or if the
beneficiary predeceases the Executive, the beneficiary of the Executive under
this Agreement shall be the Executive's estate.
(f) Discharge for Cause. Notwithstanding any other provision
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of this Agreement, if Executive's employment by Bank is involuntarily terminated
as a result of, or in connection with: (i) regulatory suspension or removal of
Executive from duty with the Bank; (ii) gross and consistent dereliction of duty
by Executive; (iii) breach of fiduciary duty involving personal profit by
Executive; (iv) willful violation of any banking law or regulation; or (v)
conviction of a felony or crime of moral turpitude (any of the foregoing
referred to collectively as "Cause"), prior to the commencement of payment of
the Vested Benefit, then Executive shall not be entitled to any benefits
provided for in this Agreement and this Agreement may be terminated by Bank
without any liability whatsoever. The obligation of Bank to commence any
payments of any Vested Benefit contemplated under this Agreement shall be
suspended during the pendency of any indictment, information or similar charge
regarding a felony or crime of moral turpitude, during any regulatory or other
adjudicative proceeding concerning regulatory suspension or removal or, for a
reasonable time (not to exceed ninety days), while the Board of Directors of
Bank seeks to determine whether Executive could have been terminated for Cause
even though Executive may have previously resigned or have been discharged other
than for Cause. If, during such period, the Board of Directors of the Bank
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determines that the Executive could have been discharged for Cause, this
Subsection (f) shall be applicable: as if the Executive had been discharged for
Cause.
3. Intent of Parties. The Bank and Executive intend that this
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Agreement shall primarily provide supplemental retirement benefits to 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, as
amended ("ERISA").
4. ERISA Provisions.
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(a) The following provisions in this Agreement are part of
this Agreement and are intended to meet the requirements of ERISA.
(b) The "Named Fiduciary" is Gateway Bank & Trust.
(c) The general corporate funds of the Bank shall be the sole
source of payment of benefits under this Agreement.
(d) For claims procedure purposes, the "Claims Administrator"
shall be the Compensation Committee of the Board of Directors of the Bank
approving the adoption of this Agreement or such other person named from time to
time by notice to Executive.
(i) If for any reason a claim for benefits under this
Agreement is denied by the Bank, the Claims Administrator shall
deliver to the claimant a written explanation setting forth the
specific reasons for the denial, pertinent references to the
provisions of this Agreement on which the denial is based, such other
data as may be pertinent and information on the procedures to be
followed by the claimant in obtaining a review of the claim, all
written in a manner calculated to be understood by the claimant for
this purpose:
(1) The claimant's claim shall be deemed filed when
presented orally or in writing to the Claims Administrator.
(2) The Claims Administrator's explanation shall be in
writing delivered to the claimant within 90 days of the date the
claim is filed.
(ii) The claimant shall have 60 days following receipt
of the denial of the claim to file with the Claims Administrator a
written request for review of the denial. For such review, the
claimant or the claimant's representative may submit pertinent
documents and written issues and comments.
(iii) The Claims Administrator shall decide the issue on
review and furnish the claimant with a copy within 60 days of receipt
of the claimant's request for review of the claim. The decision on
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review shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent Agreement
provisions on which the decision is based. If a copy of the decision
is not so furnished to the claimant within such 60 days, the claim
shall be deemed denied on review.
(iv) If the appeal is denied, the Claims Administrator
shall advise the claimant of the claimant's right to bring a civil
suit under ERISA.
(e) The Claims Administrator has the discretionary authority
to determine all interpretative issues arising under this Agreement and the
interpretations of the Claims Administrator shall be final and binding upon the
Executive or any other party claiming benefits under this Agreement.
5. Funding by Bank.
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(a) The Bank shall be under no obligation to set aside,
earmark or otherwise segregate any funds with which to pay its obligations under
this Agreement. Executive and Executive's beneficiary or any successor in
interest shall be and remain unsecured general creditors of the Bank with
respect to the Bank's obligations hereunder. Executive shall have no interest
in any property of the Bank or any other rights with respect thereto except to
the extent of the contractual right to the payments provided for in Section 2 of
this Agreement.
(b) Notwithstanding anything herein to the contrary, the Bank
has no obligation whatsoever to purchase or maintain an actual life insurance
policy with respect to Executive or otherwise. If the Bank determines in its
sole discretion to purchase an actual life insurance policy on the life of
Executive, neither Executive nor Executive's beneficiary shall have any legal or
equitable ownership interest in, or lien on, such policy or to any asset of the
Bank. The Bank, in its sole discretion, may determine the exact nature and
method of informal funding (if any) of the obligations under this Agreement. If
the Bank elects to fund, informally, its obligations under this Agreement, in
whole or in part, through the purchase of a life insurgence policy, mutual
funds, disability policy, annuity, or other security, the Bank reserves the
right, in its sole discretion, to terminate such method of funding at any time,
in whole or in part.
(c) If the Bank, in its sole discretion, elects to invest in
a life insurance, disability or annuity policy on the life of Executive to
assist it with the informal funding of its obligations under this Agreement,
Executive shall assist the Bank, from time to time, promptly upon the request of
the Bank, in obtaining such insurance policy by supplying any information
necessary to obtain such policy as well as submitting to any physical
examinations required therefor. The Bank shall be responsible for the payment
of all premiums with respect to any whole life, variable, or universal life
insurance policy purchased in connection with this Agreement unless otherwise
expressly agreed.
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6. Effect of Change in Control.
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(a) Upon the occurrence of a Change in Control (as
hereinafter defined) (except (i) in an internal reorganization which does not
affect the ultimate beneficial ownership of Gateway Bancshares, Inc./the Bank or
(ii) if consented to by Executive in writing) prior to the date any benefits
under this Agreement are scheduled to commence, Executive shall be entitled to
the Normal Retirement Benefit payable annually for ten years in quarterly
installments beginning on the first business day of the first calendar quarter
falling on or after the date the Executive's employment with the Bank terminates
for any reason on or after the Change in Control and on the first business day
of each calendar quarter thereafter.
(b) For purposes of this Agreement, the occurrence of a
"Change in Control" shall mean the occurrence of any of the following:
(i) the acquisition by any individual, entity or
"group", within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended, (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) of voting securities of
Gateway Bancshares, Inc. (the "Company") where such acquisition causes
any such Person to own twenty-five percent (25%) or more of the
combined voting power of the then outstanding voting securities then
entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that for purposes
of this Subsection (b)(i), the following shall not be deemed to result
in a Change in Control, (1) any acquisition directly from the Company,
unless such a Person subsequently acquires additional shares of
Outstanding Voting Securities other than from the Company, in which
case any such subsequent acquisition shall be deemed to be a Change in
Control; or, (2) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
affiliate;
(ii) a merger, consolidation, share exchange, combination
reorganization or like transaction involving the Company in which the
stockholders of the Company immediately prior to such transaction do
not own at least fifty percent (50%) of the value or voting power of
the issued and outstanding capital stock of the Company or its
successor immediately after such transaction; or
(iii) the sale or transfer (other than as Company security
for the Company's obligations) of more than fifty percent (50%) of the
assets of the Company in any one transaction or a series of related
transactions occurring within a one (1) year period in which the
Company, any corporation controlled by the Company or the stockholders
of the Company immediately prior to the transaction do not own at
least fifty percent (50%) of the value or voting power of
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the issued and outstanding equity securities of the acquiror
immediately after the transaction.
7. Employment of Executive; Other Agreements. The benefits
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provided for herein for Executive are supplemental retirement benefits and shall
not be deemed to modify, affect or limit any salary or salary increases,
bonuses, profit sharing or any other type of compensation of Executive in any
manner whatsoever. No provision contained in this Agreement shall in any way
affect, restrict or limit any existing employment agreement between the Bank and
Executive, nor shall any provision or condition contained in this Agreement
create specific employment rights of Executive or limit the right of the Bank to
discharge Executive with or without cause. Nothing contained in this Agreement
shall affect the right of Executive to participate in or be covered by or under
any qualified or non-qualified pension, profit sharing, group, bonus or other
supplemental compensation, retirement or fringe benefit plan constituting any
part of the Bank's compensation structure whether now or hereinafter existing.
8. Confidentiality. In further consideration of the mutual
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promises contained herein, the parties hereto each agree that the terms and
conditions of this Agreement, except as such may be disclosed in financial
statements and tax returns, or in connection with estate planning, are and shall
forever remain confidential until the death of Executive and the parties agree
that they shall not reveal the terms and conditions contained in this Agreement
at any time to any person or entity, other than their respective financial and
professional advisors unless required to do so by a court of competent
jurisdiction or as otherwise may be required by law.
9. Leave of Absence. The Bank may, in its sole discretion, permit
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Executive to take a leave of absence for a period not to exceed one year. Any
such leave of absence must be approved by the Board of Directors of Bank and
reflected in its minutes. During this time, Executive will still be considered
to be in the employ of the Bank for purposes of this Agreement.
10. Withholding. Executive is responsible for payment of all
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taxes applicable to compensation and benefits paid or provided Executive under
this Agreement, including federal and state income tax withholding, except the
Bank shall be responsible for payment of all employment (FICA) taxes due to be
paid by the Bank pursuant to Internal Revenue Code Sec. 3121(v) and regulations
promulgated thereunder (i.e., FICA taxes on the present value of payments
hereunder which are no longer subject to vesting). Executive agrees that
appropriate amounts for any such withholdings, including FICA taxes, may be
deducted from the cash salary, bonus or other payments due to Executive by the
Bank. If insufficient cash wages are available or if Executive so desires,
Executive may remit payment in cash for the withholding amounts.
11. Arbitration; Jury Trial Waiver.
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(a) Except as otherwise expressly provided herein or in any
other subsequent written agreement between Executive and the Bank, any
controversy or claim between Executive and the Bank, or between the respective
successors or assigns of either, or between Executive and any of the Bank's
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officers, employees, agents or affiliated entities, arising out of or relating
to this Agreement or any representations, negotiations, or discussions leading
up to this Agreement or any relationship that results from any of the foregoing,
whether based on contract, an alleged tort, breach of warranty, or other legal
theory (including claims of fraud, misrepresentation, suppression of material
fact, fraud in the inducement, and breach of fiduciary obligation), and whether
based on acts or omissions occurring or existing prior to, at the time of, or
after the execution of this Agreement and whether asserted as an original or
amended claim, counterclaim, cross-claim, or otherwise, shall be settled by
binding arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C.
Section 1, et seq.; provided, however, that resort to arbitration as provided in
this Section 11 may only be had after exhaustion of the claims procedure
described in Subsection 4(d). The arbitration shall be administered by the
American Arbitration Association ("AAA") under its Commercial Arbitration Rules
(the "Rules"), and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Any dispute regarding whether
a particular claim is subject to arbitration will be decided by the arbitrator.
Any court of competent jurisdiction may compel arbitration of claims pursuant to
this Agreement.
(b) The arbitrator may award to the prevailing party pre-and
post-award expenses of the arbitration, including the arbitrator's fees and
travel expenses, administrative fees, out-of-pocket expenses such as copying and
telephone, court costs, witness fees, stenographer's fees, and (if allowed by
applicable law) attorneys' fees. Otherwise, the parties will share equally the
arbitrator's fee and travel expenses and administrative fees, and each party
will bear its own expenses.
(c) This agreement to arbitrate disputes will survive the
payment of all obligations under this Agreement and termination or performance
of any transactions contemplated hereby between Executive and the Bank, and will
continue in full force and effect unless Executive and the Bank otherwise
expressly agrees in writing. Executive and the Bank acknowledge that the
transaction contemplated by this Agreement involves "commerce," as that term is
defined in the FAA.
(d) By entering into this Agreement, Executive and the Bank
agree and acknowledge that:
(i) by agreeing to arbitrate disputes, Executive and the
Bank are giving up the right to trial in a court and THE RIGHT TO
TRIAL BY JURY of all claims that are subject to arbitration under this
Agreement;
(ii) grounds for appeal of the arbitrator's decision are
very limited; and
(iii) in some cases the arbitrator may be employed by,
or may have worked closely with, a business in the same or a related
type of business as the business engaged in by Executive or the Bank.
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(e) EXECUTIVE AND THE BANK HEREBY WAIVE THE RIGHT TO TRIAL BY
JURY OF ALL DISPUTES, CONTROVERSIES AND CLAIMS BY, BETWEEN OR AGAINST EXECUTIVE
OR THE BANK, WHETHER THE DISPUTE, CONTROVERSY OR CLAIM IS SUBMITTED TO
ARBITRATION OR IS DECIDED BY A COURT.
EXECUTIVE MUST INITIAL HERE: .
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12. Miscellaneous Provisions.
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(a) Counterparts. This Agreement may be executed
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simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument. This Agreement may be executed and delivered by facsimile
transmission of an executed counterpart.
(b) Construction. As used in this Agreement, the neuter
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gender shall include the masculine and the feminine, the masculine and feminine
genders shall be interchangeable among themselves and each with the neuter, the
singular numbers shall include the plural, and the plural the singular. The
term "person" shall include all persons and entities of every nature whatsoever,
including, but not limited to, individuals, corporations, partnerships,
governmental entities and associations. The terms "including," "included,"
"such as" and terms of similar import shall not imply the exclusion of other
items not specifically enumerated.
(c) Severability. If any provision of this Agreement or the
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application thereof to any person or circumstance shall be held to be invalid,
illegal, unenforceable or inconsistent with any present or future law, ruling,
rule or regulation of any court, governmental or regulatory authority having
jurisdiction over the subject matter of this Agreement, such provision shall be
rescinded or modified in accordance with such law, ruling, rule or regulation
and the remainder of this Agreement or the application of such provision to the
person or circumstances other than those as to which it is held inconsistent
shall not be affected thereby and shall be enforced to the greatest extent
permitted by law.
(d) Governing Law. This Agreement is made in the State of
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Georgia and shall be governed in all respects and construed in accordance with
the laws of the State of Georgia, without regard to its conflicts of law
principles, except to the extent superseded by the Federal laws of the United
States.
(e) Binding Effect. This Agreement is binding upon the
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parties, their respective successors, assigns, heirs and legal representatives.
Without limiting the foregoing this Agreement shall be binding upon any
successor of the Bank whether by merger or acquisition of all or substantially
all of the assets or liabilities of the Bank. This Agreement may not be
assigned by any party without the prior written consent of each other party
hereto. This Agreement has been approved by the Board of Directors of Bank and
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the Bank agrees to maintain an executed counterpart of this Agreement in a safe
place as an official record of the Bank.
(f) No Trust. Nothing contained in this Agreement and no
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action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and Executive, Executive's designated beneficiary or any other person.
(g) Assignment of Rights. None of the payments provided for
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by this Agreement shall be subject to seizure for payment of any debts or
judgments against Executive or any beneficiary; nor shall Executive or any
beneficiary have any right to transfer, modify, anticipate or encumber any
rights or benefits hereunder; provided, however, that the undistributed portion
of any benefit payable hereunder shall at all times be subject to set-off for
debts owed by Executive to the Bank.
(h) Entire Agreement. This Agreement constitutes the entire
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agreement of the parties with respect to the subject matter hereof and all prior
or contemporaneous negotiations, agreements and understandings, whether oral or
written, are hereby superseded, merged and integrated into this Agreement.
(i) Notice. Any notice to be delivered under this Agreement
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shall be given in writing and delivered by hand, or by first class, certified or
registered mail, postage prepaid, addressed to the Bank or the Executive, as
applicable, at the address for such party set forth below or such other address
designated by notice.
Bank:
Gateway Bank & Trust
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
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Executive:
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(j) Non-waiver. No delay or failure by either party to
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exercise any right under this Agreement, and no partial or single exercise of
that right, shall constitute a waiver of that or any other right.
(k) Headings. Headings in this Agreement are for convenience
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only and shall not be used to interpret or construe its provisions.
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(l) Amendment. No amendments or additions to this Agreement
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shall be binding unless in writing and signed by both parties. No waiver of any
provision contained in this Agreement shall be effective unless it is in writing
and signed by the party against whom such waiver is asserted.
(m) Seal. The parties hereto intend this Agreement to have
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the effect of an agreement executed under the seal of each.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
GATEWAY BANK & TRUST:
By: /s/ Xxxxx X. Xxxxx
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Title: Chairman & CFO
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EXECUTIVE:
/s/
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