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EXHIBIT 10.5
SAMPLE AGREEMENT
DIRECTOR'S COMPENSATION AGREEMENT
This Agreement is entered into effective as of the _____ day of
_____________, between CENTURY NATIONAL BANK ("Bank"), CENTURY BANCSHARES, INC.
("Company") and ________________ ("Director").
WITNESSETH
WHEREAS, the Bank and the Company recognize that the competent and
faithful efforts of the Director on behalf of the Bank and the Company have
contributed significantly to the success and growth of the Bank and the
Company; and
WHEREAS, the Bank and the Company value the efforts, abilities and
accomplishments of the Director and recognize that the Director's continued
service is expected to contribute to the Bank's and the Company's continued
growth and success in the future; and
WHEREAS, the Bank and the Company desire to compensate the Director,
as set forth below, if elected to serve on the Board of Directors of the Bank
and/or the Company ("Board"); and
WHEREAS, the Director wishes to defer current director's fees under a
deferred compensation arrangement with the Bank and the Company pursuant to
which (a) the Director would be entitled to receive a retirement benefit for a
specified period after the Director retires from the Board or the Director's
term of service on the Board ends, and/or (b) the Director's family would be
entitled to such benefits from and after the Director's death; and
WHEREAS, the parties hereto wish to provide the terms and conditions
upon which the Bank and the Company shall pay such retirement benefits to the
Director after retirement or to the Director's family after the Director's
death;
NOW, THEREFORE, it is mutually agreed as follows:
1. Deferral of Fees: Subject to the terms and conditions of the
Agreement, the Bank, the Company and the Director agree to defer payment of
fees of which the Director would otherwise be entitled to be paid ("Deferred
Fees"), for a period of up to five years from the date hereof.
2. Retirement Benefit: The Bank and the Company agree to pay the
Director the total sum of $_________ payable in monthly installments of $______
for 180 consecutive months, commencing on the first day of the month following
the Director's 65th birthday ("Retirement Date"). Payments to the Director
will terminate when all such payments have been made or at the time of the
Director's death, whichever occurs first.
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DIRECTOR'S COMPENSATION AGREEMENT
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3. Death of Director Before Retirement Date: In the event the
Director should die before the Retirement Date, the Bank and the Company agree
to pay the total sum of $_________ payable in monthly installments of $______
for ___ consecutive months, commencing on the first day of the month following
the date of the Director's death, to the Director's then living Beneficiary
designated in writing to the Bank, if any, for the life of said Beneficiary; if
none, then to the Director's then living spouse, if any, for the life of said
spouse; if none, or from and after the death of said spouse, then to the then
living descendants of the Director, if any, in equal shares, per stirpes, for
their joint and survivor lives; and if none, or after their respective joint
and survivor lives, any balance thereof in one lump sum to the estate of the
Director.
4. Death Of Director After Retirement Date: If the Director dies
after the Retirement Date but prior to receiving all of the monthly
installments set forth in paragraph "2", the remaining monthly installments
will be paid to the Director's designated Beneficiary. The Beneficiary shall
receive all remaining installments which the Director would have received
designated Beneficiary. The Beneficiary shall receive all remaining
installments which the Director would have received until the total sum set
forth in paragraph "2" (as reduced by the provisions of paragraph "6" if
applicable) has been paid. If the Director fails to designate a Beneficiary in
writing to the Bank, the remaining monthly installments after the time of the
Director's death shall be paid to the legal representative of the estate of the
Director.
5. Early Retirement: If the Director, for any reason other than
death of the Director or change of control of the Company or the Bank, fails to
serve on the Board of Directors of either the Company or the Bank for five
consecutive years, the Director will receive monthly compensation (or the
Director's Beneficiary will receive a monthly benefit) which is reduced
proportionately based on the number of full months served in relation to the
required service of 60 months. For example, if the Director served only 30
months on the Board, the Director would be entitled to 30/60 or 50% of the
monthly compensation stated in paragraph "2". Similarly, in the above example,
if the Director died after leaving the Board but before the Retirement Date,
the Director's Beneficiary would be entitled to 30/60 or 50% of the monthly
benefit stated in paragraph "3". In determining consecutive years of service,
beginning _______________, no year shall be counted in which the Director fails
to attend at least two-thirds of the regularly scheduled meetings of the Board
of Directors, except pursuant to the circumstances set forth in paragraph "6"
below. In the event that there is a change of control of the Bank or the
Company while the Director is serving on the Board, there shall be no reduction
in compensation or benefits on account of the provisions of this paragraph,
except for any reduction resulting from the Director's failure to fulfill the
attendance requirement prior to the time the change of control takes place.
6. Interruption of Service: The service of the Director shall
not be deemed to have been terminated or interrupted due to absence from active
service on account of illness, disability, during any authorized vacation or
during temporary leaves of absence granted by the Bank and/or the
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DIRECTOR'S COMPENSATION AGREEMENT
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Company for reasons of professional advancement, education, health, or
government service, or during military leave for any period if the Director is
elected to serve on the Board following such interruption.
7. Prohibited Payment: The obligation of the Bank and the
Company, and their successors and assigns, to make payments pursuant to this
Agreement shall be reduced or eliminated to the extent required (i) to comply
with regulations or orders issued pursuant to Section 18(k)(1) of the Federal
Deposit Insurance Act, (ii) by any other law, rule, or regulation which is
binding on the Company or the Bank or (iii) by direction or instruction from a
federal regulatory authority.
8. Suicide: No payments will be made to the Director's
Beneficiary or estate in the event of death by suicide during the first three
years of this Agreement.
9. Status of Agreement: This Agreement does not constitute a
contract of employment between the parties, nor shall any provision of this
Agreement constitute an agreement by the Bank, the Company, or shareholders of
the Bank and the Company, to nominate or elect the Director as a director in
the future or restrict the right of the shareholders of the Bank or the Company
to remove the Director in accordance with the Bank's and the Company's charter
and by-laws. The Director retains the right to resign from the Board of
Directors or to decline to stand for reelection.
10. Assignment of Rights: Except as provided in this Agreement,
none of the rights to benefits under this Agreement are assignable by the
Director or any Beneficiary or designee of the Director and any attempt to
sell, transfer, assign, pledge, encumber or change the Director's right to
receive compensation shall be void.
11. Status of Director's Rights: The rights granted to the
Director or any designee or Beneficiary under this Agreement shall be solely
those of an unsecured creditor of the Bank.
12. Funding Vehicles: If the Bank and the Company shall acquire
an insurance policy or any other asset in connection with the liabilities
assumed by it hereunder, it is expressly understood and agreed that neither the
Director nor any Beneficiary shall have any right with respect to, or claim
against, such policy or other asset. Such policy or asset shall be and remain
a general, unpledged, unrestricted asset of the Bank or the Company and shall
not be deemed to be held under any trust for the benefit of the Director or any
Beneficiary or to be held in any way as collateral security for the fulfilling
of the obligations of the Bank under this Agreement, except as expressly
provided by the terms of such policy or other asset.
13. Governing Law: This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the District of
Columbia (excluding the choice of law rules thereof).
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DIRECTOR'S COMPENSATION AGREEMENT
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14. Amendment; Modification; Waiver: No amendment, modification
or waiver of the terms of this Agreement shall be valid unless made in writing
and duly executed by the Director, the Bank and the Company. No delay or
failure at any time on the part of the Bank and the Company in exercising any
right, power or privilege under this Agreement, or in enforcing any provision
of this Agreement, shall impair any such right, power or privilege, or be
construed as a waiver of any default or as any acquiescence therein, or shall
affect the right of the Bank and the Company thereafter to enforce each and
every provision of this Agreement in accordance with its term.
15. Binding Effect: This Agreement shall be binding upon and
inure to the benefit of the parties hereto, the successors and assigns of the
Bank and the Company, and the heirs and legal representatives of the Director.
Any successor of the Bank and the Company shall be deemed substituted for the
Bank and the Company under the terms of this Agreement. As used herein, the
term "successor" shall include any person, corporation or other business entity
which at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the stock, assets or business of the Bank and/or the
Company.
IN WITNESS HEREOF, the parties have signed this Agreement effective as
of the day and year above written.
ATTEST CENTURY BANCSHARES, INC. ( "Company" )
By
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President
ATTEST CENTURY NATIONAL BANK ("Bank")
By
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Chairman of the Board
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Witness ________________ ("Director")
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BENEFICIARY DESIGNATION
Date
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Pursuant to Paragraph "3" and Paragraph "4" of the Director's
Compensation Agreement between CENTURY NATIONAL BANK, CENTURY BANCSHARES, INC.,
and _______________, dated as of ______________________, the undersigned hereby
requests that any death benefits payable under the provisions of said Agreement
be payable to (please provide full name and relationship):
Beneficiary Relationship
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1.
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2.
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3.
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4.
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WITNESS
