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EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into this 20th day of April, 1993, by
and between THE BANK OF EAST RIDGE, a corporation organized and existing under
the laws of the State of Tennessee (hereinafter called the "Corporation"), and
XXXXX XXXXXXX (hereinafter called the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is in the employ of the Corporation serving as
its President; and
WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Corporation, his reputation and contacts in the industry are so valuable
that assurance of his continued service is essential for the future growth and
profits of the Corporation and it is in the best interests of the Corporation to
arrange terms of continued employment for the Executive so as to reasonably
assure his remaining in the Corporation's employment during his lifetime or
until the age of retirement; and
WHEREAS, it is the desire of the Corporation that his services be
retained as herein provided; and
WHEREAS, the Executive is willing to continue in the employ of the
Corporation provided the Corporation agrees to pay him or his beneficiaries
certain benefits in accordance with the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the services to be performed in the
future as well as the mutual promises and covenants herein contained, it is
agreed as follows:
ARTICLE 1.
1.1 Beneficiary. The term "Beneficiary" shall mean the person or
persons whom the Executive shall designate in writing to receive the benefits
provided hereunder.
1.2 Disability. The term "Disability" shall mean an inability to
substantially perform the usual and regular duties performed by the Executive as
an employee of the Corporation. Such disability may be caused by either illness
or injury and includes mental disabilities. For purposes of this Agreement, the
determination of the Executive's disability shall be made solely by the Board of
Directors of the Corporation without participation by the alleged disabled
Executive. Such a determination by the Board of Directors shall be final and
conclusive on all parties hereto.
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1.3 Named Fiduciary and Plan Administrator. The "Named Fiduciary and
Plan Administrator" of this plan shall be the Corporation.
ARTICLE 2.
2.1 Employment. The Corporation agrees to employ the Executive in such
capacity as the Corporation may from time to time determine. The Executive will
continue in the employ of the Corporation in such capacity and with such duties
and responsibilities as may be assigned to him, and with such compensation as
may be determined from time to time by the Board of Directors of the
Corporation.
2.2 Full Efforts. The Executive agrees to devote his full time and
attention exclusively to the business and affairs of the Corporation, except
during vacation periods, and to use his best efforts to furnish faithful and
satisfactory services to the Corporation.
2.3 Fringe Benefits. The salary continuation benefits provided by this
Agreement are granted by the Corporation as a fringe benefit to the Executive
and are not part of any salary reduction plan or any arrangement deferring a
bonus or a salary increase. The Executive has no option to take any current
payment or bonus in lieu of these salary continuation benefits.
ARTICLE 3.
3.1 Retirement. If the Executive shall continue in the employment of
the Corporation until he attains the age of seventy (70), he may retire from
active daily employment as of the first day of the month next following
attainment of age seventy (70) or upon such later date as may be mutually agreed
upon by the Executive and the Corporation.
3.2 Payment. The Corporation agrees that upon such retirement it will
pay to the Executive the annual sum of Eighteen Thousand Dollars ($18,000.00),
payable monthly on the first day of each month following such retirement for a
period of one hundred twenty (120) months; subject to the conditions and
limitations hereinafter set forth. The Eighteen Thousand Dollars ($18,000.00)
annual payment amount may be adjusted as of the first year in which it is to be
paid to reflect changes in the federally determined cost-of-living index and may
be adjusted annually for each payment year thereafter to reflect changes in said
federally determined cost-of-living index. However, the Corporation is not
obligated hereunder to make any such adjudgment.
3.3 Death After Retirement. The Corporation agrees that if the
Executive shall so retire, but shall die before receiving the full amount of
monthly payments to which he is entitled hereunder, it will continue to make
such monthly payments to the Executive's designated Beneficiary for the
remaining period. If a valid Beneficiary Designation is not in effect, the
payments shall be made to
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the Executive's surviving spouse or, if none, said payments shall be made to the
duly qualified personal representative, executor or administrator of his estate.
ARTICLE 4.
4.1 Death Prior to Retirement. In the event the Executive should die
while actively employed by the Corporation at any time after the date of this
Agreement but prior to his attaining the age of seventy (70) years, the
Corporation will pay the annual sum of Eighteen Thousand Dollars ($18,000.00)
per year, to the Executive's designated Beneficiary in equal monthly
installments for a period of one hundred twenty (120) months. If a valid
Beneficiary Designation is not in effect, the payments shall be made to the
Executive's surviving spouse or, if none, said payments shall be made to the
duly qualified personal representative, executor or administrator of his estate.
The said monthly payments shall begin the first day of the month following the
month of the decease of the Executive. Provided, however, that anything
hereinabove to the contrary notwithstanding, no death benefit shall be payable
hereunder if it is determined that the Executive's death was caused by suicide
on or before April 20, 1995.
4.2 Disability Prior to Retirement. In the event the Executive should
become disabled while actively employed by the Corporation at any time after the
date of this Agreement but prior to his attaining the age of seventy (70) years,
the Executive will be considered to be one hundred percent (100%) vested in the
amount set forth in Schedule A attached hereto and made a part hereof. Said
amount shall be paid to the Executive in a lump sum within three (3) months of
the determination of disability. Said payment shall be in lieu of any other
retirement or death benefit under this Agreement.
ARTICLE 5.
5.1 Termination of Employment. The Corporation reserves the right to
terminate the employment of the Executive at any time prior to retirement. In
the event that the employment of the Executive shall terminate prior to his
attaining age seventy (70), other than by reason of his disability or his death,
then this Agreement shall terminate upon the date of such termination of
employment. Provided, however, that the Executive shall be entitled to the
following benefits under the following circumstances:
(a) If the Executive has been employed by the Corporation for
a period of at least three (3) continuous years, the Executive will be
considered to be vested in forty percent (40%) of the amount set out in
Schedule A attached hereto and made a part hereof and shall become
vested in an additional twelve percent (12%) of said amount for each
succeeding year thereafter until he becomes one hundred percent (100%)
vested. If the Executive has been employed by the Corporation for a
period of less than three (3) continuous years, the Executive will not
be considered to be vested in any benefit hereunder and shall be
entitled
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to no benefits under this Agreement. If the Executive's employment is
terminated under the provisions of this Section 5.1, the Corporation
will pay the Executive's vested amount upon such terms and conditions
and commencing at such time as the Corporation shall determine, but in
no event commencing no later than age seventy (70).
(b) Anything hereinabove to the contrary notwithstanding, if
the Executive is not fully vested in the amount set forth in Schedule
A, he will become fully vested in said amount in the event of a
transfer in the controlling ownership or sale of the Corporation or its
parent corporation and shall be entitled to the full amount set forth
in Schedule A, upon the terms and conditions hereof, if termination of
employment thereafter occurs under this Section 5.1.
ARTICLE 6.
6.1 Termination of Agreement by Reason of Changes in Law. The
Corporation is entering into this Agreement upon the assumption that certain
existing tax laws will continue in effect in substantially their current form.
In the event of any changes in such federal laws, the Corporation shall have an
option to terminate or modify this Agreement. Provided, however, that the
Executive shall be entitled to at least the same amount as he would have been
entitled to under Section 4.2 relating to disability. The payment of said amount
shall be made upon such terms and conditions and at such time as the Corporation
shall determine, but in no event commencing later than age seventy (70).
ARTICLE 7.
7.1 Unassignability. Neither the Executive, his 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, owned by the Executive or his beneficiary or any of
them, or be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise.
ARTICLE 8.
8.1 Claims Procedure. The Corporation shall make all determinations as
to rights to benefits under this Agreement. Any decision by the Corporation
denying a claim by the Executive or his beneficiary for benefits under this
Agreement shall be stated in writing and delivered or mailed to the Executive or
such beneficiary. Such decision shall set forth the specific reasons for the
denial, written to the best of the Corporation's ability in a manner calculated
to be understood without legal or actuarial counsel. In addition, the
Corporation shall provide a reasonable opportunity to the Executive or such
beneficiary for full and fair review of the decision denying such claim.
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ARTICLE 9.
9.1 Unsecured General Creditor. The Executive and his beneficiary shall
have no legal right or equitable rights, interests, or claims in or to any
property or assets of the Corporation. No assets of the Corporation shall be
held under any trust for the benefit of the Executive or his beneficiaries or
held in any way as security for the fulfilling of the obligations of the
Corporation under this plan. All of the Corporation's assets shall be and remain
the general, unpledged, unrestricted assets of the Corporation. The
Corporation's obligation under this plan shall be that of an unfunded and
unsecured promise by the Corporation to pay money in the future. Executives and
their beneficiaries shall be unsecured general creditors with respect to any
benefits hereunder.
ARTICLE 10.
10.1 Reorganization. The Corporation shall not merge or consolidate
into or with another corporation, or reorganize, or sell substantially all of
its assets to another corporation, firm, or person unless and until such
succeeding or continuing corporation, firm, or person agrees to assume and
discharge the obligations of the Corporation under this Agreement. Upon the
occurrence of such event, the term "Corporation" as used in this Agreement shall
be deemed to refer to such successor or survivor corporation.
ARTICLE 11.
11.1 Benefits and Burdens. This Agreement shall be binding upon and
inure to the benefit of the Executive and his personal representatives, and the
Corporation and any successor organization which shall succeed to substantially
all of its assets and business.
ARTICLE 12.
12.1 Not a Contract of Employment. This Agreement shall not be deemed
to constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Corporation to discharge the
Executive or restrict the right of the Executive to terminate his employment.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
duly executed by its proper officer and the Executive has hereunto set his hand
at Chattanooga, Tennessee, the day and year first above written.
By:/s/ Xxxxx X. Xxxxx
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Title: Chairman/CEO
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EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
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SCHEDULE A
AMOUNT IN WHICH
PLAN YEAR VESTING OCCURS
1 3,920
2 8,251
3 13,036
4 18,321
5 24,160
6 30,610
7 37,736
8 45,608
9 54,304
10 63,911
11 74,524
12 86,247
13 99,199
14 113,501
Schedule A - 1
