APPALACHIAN COMMUNITY BANK SALARY CONTINUATION AGREEMENT [As Amended]
Exhibit
10.3
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Appalachian
Community Bank
Salary
Continuation Agreement
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APPALACHIAN
COMMUNITY BANK
SALARY
CONTINUATION AGREEMENT
[As
Amended]
THIS
SALARY CONTINUATION AGREEMENT, as amended (the “Agreement”) is adopted as of the
11th day of August, 2006, by and among APPALACHIAN COMMUNITY BANK, a
state-chartered commercial bank located in Ellijay, Georgia (the "Bank"),
APPALACHIAN BANCSHARES, INC., the parent company of the Bank (the “Holding
Company”), and XXXXX
X.
XXXXXX (the "Executive").
The
purpose of this Agreement is to provide to the Executive, as a member of a
select group which contributes materially to the continued growth, development
and future business success of the Bank and the Holding Company, the specified
benefits, as well as incentives for continued employment with the Bank and
Holding Company, as set forth herein. This Agreement shall be unfunded for
tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended from time to time. The Bank will pay the
benefits provided under this Agreement from its general assets.
The
Bank,
the Holding Company and the Executive, for and in consideration of the above
stated contributions of the Executive and other good and valuable consideration,
do hereby agree as follows:
Article
1
Definitions
Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified:
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1.1
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“Accrual
Balance”
means the liability that should be accrued by the Bank, under Generally
Accepted Accounting Principles (”GAAP”), for the Bank’s obligation to the
Executive under this Agreement, by applying the Discount Rate. Any
amortization method, if acceptable under GAAP, may be used to determine
the Accrual Balance. However, once chosen, the method must be consistently
applied. The Accrual Balance for each Plan Year shall be reported
annually
by the Bank to the Executive in the form of Schedule
A
of
this Agreement.
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1.2
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“Beneficiary”
means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive, and
as
otherwise determined pursuant to Article 3 and Article
4.
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1.3
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“Beneficiary
Designation Form”
means the form established from time to time by the Plan Administrator
that the Executive completes, signs and returns to the Plan Administrator
to designate one or more
Beneficiaries.
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1
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1.4
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“Change
of Control”
means the occurrence of any of the following
conditions:
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(i)
Any
“Person” [which term, for purposes of this Section 1.4, shall mean an individual
(other than the Executive), individuals acting in concert or as a “group” under
the Securities Exchange Act of 1934, or a corporation, partnership, trust or
other form of entity, (other than the Holding Company, the Bank, a securities
underwriter of the shares of the Holding Company or the Bank, a corporation
owned by stockholders of the Holding Company in the same proportions as their
ownership of stock in the Holding Company, or a fiduciary holding securities
under an employee benefit plan of the Holding Company or Bank)] becomes,
directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934) of securities of the Holding Company or
Bank which represent twenty-five percent (25%) or more of the voting power
of
the then outstanding securities of the Holding Company or Bank; or
(ii)
Any
Person acquires, directly or indirectly, the ability to control the election
of
a majority of the directors of either the Bank or the Holding Company;
or
(iii)
Any
Person acquires, directly or indirectly, the ability to exercise a controlling
influence over the management of policies of either the Holding Company or
the
Bank; or
(iv)
During
any period of two (2) consecutive years, the “Continuing Directors” (which term,
for purposes of this Section 1.4, means these individuals who, (a) at the
beginning of such two-year period, constitute the board of directors of either
the Holding Company or the Bank or (b) whose election or nomination as directors
of the Holding Company or the Bank were approved by a vote of least two-thirds
of these previously elected directors) cease for any reason to constitute at
least two-thirds of the board of directors of either the Holding Company or
the
Bank; or
(v)
The
consummation of a merger or statutory share exchange of the Holding Company
or
the Bank with any Person, other than a merger or statutory share exchange which
would (a) result in the voting securities of the Holding Company or Bank
outstanding immediately prior thereto, continuing to represent at least
seventy-five percent (75%) of the combined voting power of the voting securities
of the Holding Company, Bank or such other surviving entity, outstanding
immediately after such merger or statutory share exchange, in substantially
the
same proportions as their ownership immediately prior to such merger or
statutory share exchange, or (b) effect or implement a recapitalization of
the
Holding Company or Bank (or similar transaction), in which no Person acquires
more than fifty percent (50%) of the combined voting power of the
then-outstanding securities of the Holding Company or Bank; or
2
(vi)
The
shareholders of the Holding Company or Bank approve a plan of complete
liquidation of the Holding Company or the Bank, or an agreement for the sale
or
disposition by the Holding Company or the Bank of all or substantially all
of
the assets of the Holding Company or the Bank.
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1.5
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“Change
of Control Benefit”
means the benefit provided to the Executive under Section 2.4 of
this
Agreement, and as set forth in Schedule
A
of
this Agreement, pursuant to the terms of this Agreement. The amount
of the
Change of Control Benefit, as determined under Section 2.4 and as
set
forth in Schedule
A,
is an annual amount equal to the projected annual benefit to be paid
to
the Executive at the Executive’s Normal Retirement Age, as set forth in
Section 2.1.1, which annual amount shall be paid to the Executive
in equal
monthly payments for each of the fifteen (15) consecutive twelve
(12)
month periods next following the Executive’s Normal Retirement
Age.
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1.6
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“Code”
means the Internal Revenue Code of 1986, as
amended.
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1.7
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“Disability”
means the Executive’s suffering a sickness, accident or injury which has
been determined by the insurance carrier of any individual or group
disability insurance policy covering the Executive, or by the Social
Security Administration, or by the Board of Executives of the Bank
or the
Holding Company, to be a disability rendering the Executive totally
and
permanently disabled. The Executive, upon the request of the Plan
Administrator, must submit proof of Disability, satisfactory to the
Plan
Administrator, including, if required, the determination thereof
by the
insurance carrier or Social Security Administration.
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1.8
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“Disability
Benefit”
means the benefit provided to the Executive under Section 2.3 of
this
Agreement, and as set forth in Schedule
A
of
this Agreement, pursuant to the terms of this Agreement. The amount
of the
Disability Benefit, as determined under Section 2.3 and as set forth
in
Schedule
A,
is an annual amount equal to the projected annual benefit to be paid
to
the Executive at the Executive’s Normal Retirement Age, as set forth in
Section 2.1.1, which annual amount shall be paid to the Executive
in equal
monthly payments for each of the fifteen (15) consecutive twelve
(12)
month periods next following the Executive’s Normal Retirement Age.
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1.9
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“Discount
Rate”
means the rate used by the Plan Administrator for determining the
Accrual
Balance. The initial Discount Rate is seven percent (7%). However,
the
Plan Administrator, in its sole discretion, may adjust the Discount
Rate
to maintain the rate within reasonable standards according to
GAAP.
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1.10
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“Early
Termination”
means the Termination of Employment before Normal Retirement Age,
for
reasons other than death, Disability, Termination for Cause or following
a
Change of Control.
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3
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1.11
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“Early
Termination Benefit”
means the benefit provided to the Executive under Section 2.2 of
this
Agreement, and as set forth in Schedule
A
of
this Agreement, as updated annually pursuant to the terms of this
Agreement. The amount of the Early Termination Benefit, as determined
under Section 2.2 and as set forth in Schedule
A,
is a one-time, lump-sum amount to be paid to the Executive within
thirty
(30) days following the Executive’s Early Termination Date, or at such
later date as may be required by applicable
law.
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1.12
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“Early
Termination Date”
means the date on which Early Termination
occurs.
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1.13
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“Effective
Date”
means Junel 1, 2004.
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1.14
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“Normal
Retirement Age”
means the earlier of the Executive’s 62nd birthday
or the date upon which the Executive completes 20 years of employment
with
the Bank and/or Holding Company.
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1.15
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“Normal
Retirement Benefit”
means the benefit provided to the Executive pursuant to the provisions
of
Section 2.1 of this Agreement, and as set forth in Schedule
A
of
this Agreement, as updated annually pursuant to the terms of this
Agreement. The amount of the Normal Retirement Benefit, as determined
under Section 2.1 and as set forth in Schedule
A,
is an annual amount to be paid to the Executive in equal monthly
payments
for each of the fifteen (15) consecutive twelve (12) month periods
next
following the Executive’s Normal Retirement
Date.
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1.16
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“Normal
Retirement Date”
means the date of the Executive’s Termination of Employment (other than a
Termination for Cause) occurring on or after the Executive’s Normal
Retirement Age.
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1.17
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“Plan
Administrator”
means the plan administrator described in Article
8.
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1.18
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“Plan
Year”
means each twelve-month period commencing on the Effective
Date.
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1.19
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“Termination
for Cause”
has that meaning set forth in Article
5.
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1.20
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“Termination
of Employment”
means that the Executive ceases to be employed by the Bank or the
Holding
Company for any reason, voluntary or involuntary, other than by reason
of
a leave of absence approved by the Bank or the Holding
Company.
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Article
2
Benefits
During Lifetime
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2.1
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Normal
Retirement Benefit.
The benefit payable to the Executive under this Section 2.1 is the
Normal
Retirement Benefit, an annual benefit set forth in Schedule
A
of
this Agreement (as updated annually) for the Plan Year during which
the
Executive’s Normal Retirement Date occurs. Upon the Executive’s Normal
Retirement Date, the Bank shall pay to the Executive the Normal Retirement
Benefit, as described in this Section 2.1, in lieu of any other benefit
under this Article.
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4
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2.1.1
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Amount
of Benefit.
The annual benefit under this Section 2.1 for the first Plan Year
is One
Hundred Fifty Thousand Dollars ($150,000). Commencing
on the first day of the second Plan Year, and on the first day of
each
Plan Year thereafter, the annual benefit shall be increased three
percent
(3%) from the previous Plan Year, to a projected annual benefit of
Two
Hundred Twenty-Seven Thousand Dollars ($227,000) at the Executive’s Normal
Retirement Age.
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2.1.2
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Payment
of Benefit.
The Bank shall pay the Normal Retirement Benefit to the Executive
in equal
monthly installments, commencing on the first day of the month following
the Executive’s Normal Retirement Date. This annual benefit shall be paid
to the Executive for each of the fifteen (15) consecutive twelve
(12)
month periods next following the Executive’s Normal Retirement Date, for a
total of 180 consecutive equal monthly
payments.
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2.2
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Early
Termination Benefit.
Upon the Executive’s Early Termination, the Bank shall pay to the
Executive the Early Termination Benefit, as described in this Section
2.2,
in lieu of any other benefit under this
Article.
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2.2.1
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Amount
of Benefit.
The benefit payable to the Executive under this Section 2.2 is the
Early
Termination Benefit, a one-time, lump-sum amount set forth on Schedule
A
of
the Agreement (as updated annually) for the Plan Year during which
the
Executive’s Early Termination Date occurs. The amount of the Early
Termination Benefit payable to the Executive in any Plan year shall
be
equal to the Executive’s Accrual Balance accrued under this Agreement for
such Plan Year.
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2.2.2
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Payment
of Benefit.
The Bank shall pay the Early Termination Benefit to the Executive,
as a
one-time, lump-sum amount, within thirty (30) days following the
Executive’s Early Termination Date, or at such later date as may be
required by applicable law.
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2.3
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Disability
Benefit.
Upon the Executive’s Termination of Employment due to Disability prior to
Normal Retirement Age, the Bank shall pay to the Executive the benefit
described in this Section 2.3, in lieu of any other benefit under
this
Article.
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2.3.1
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Amount
of Benefit.
The benefit payable to the Executive under this Section 2.3 is the
Disability Benefit, an annual benefit set forth on Schedule
A
of
the Agreement (as updated annually) for the Plan Year during which
the
Termination of Employment occurs. The annual amount of the Disability
Benefit payable to the Executive hereunder shall be equal to the
annual
amount of Executive’s Normal Retirement Benefit determined under this
Agreement for the Plan Year in which the Executive’s Termination of
Employment occurs.
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5
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2.3.2
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Payment
of Benefit.
The Bank shall pay the Disability Benefit to the Executive in equal
monthly installments, commencing with the month following the Executive’s
Normal Retirement Age. This annual benefit shall be paid to the Executive
for each of the fifteen (15) consecutive twelve (12) month periods
next
following the Executive’s Normal Retirement Age, for a total of 180
consecutive equal monthly payments.
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2.4
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Change
of Control Benefit.
Upon a Change of Control followed by the Executive’s Termination of
Employment (other than a Termination for Cause), the Bank shall pay
to the
Executive the Change of Control Benefit, as described in this Section
2.4,
in lieu of any other benefit under this Article.
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2.4.1
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Amount
of Benefit.
The benefit under this Section 2.4 is the Change of Control Benefit,
an
annual benefit in the amount set forth on Schedule
A
of
this Agreement (as updated annually) for the Plan Year during which
Termination of Employment occurs.
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2.4.2
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Payment
of Benefit.
The Bank shall pay the Change of Control Benefit to the Executive
in equal
monthly installments commencing with the month following the Executive’s
Normal Retirement Age. This annual benefit shall be paid to the Executive
for each of the next fifteen (15) consecutive years next following
the
Executive’s Normal Retirement Age, for a total of 180 consecutive equal
monthly payments.
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2.5
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Failure
to be Nominated or Reelected.
Upon the failure of the Executive to be terminated or reelected as
a
director of either of the Bank or the Holding Company (for any reason
other than for a Termination for Cause), the Bank shall pay to the
Executive the benefit described in this Section
2.5.
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2.5.1
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Amount
of Benefit.
The benefit payable under this Section 2.5 is an annual benefit in
an
amount equal to the projected annual benefit to be paid to the Executive
at the Executive’s Normal Retirement Age, as set forth in Section 2.1.1 of
this Agreement.
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2.5.2.
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Payment
of Benefit.
The benefit payable under this Section 2.5 shall be paid to the Executive
in equal monthly installments commencing with the month following
the
Executive’s Normal Retirement Age. This annual benefit shall be paid to
the Executive for each of the fifteen (15) consecutive years next
following the Executive’s Normal Retirement Age, for a total of 180
consecutive equal monthly payments.
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6
Article
3
Death
Benefits
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3.1
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Death
During Active Employment.
If the Executive dies while in the active employment of the Bank
and the
Holding Company, the Bank shall pay to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be paid in lieu
of the
benefits under Article 2.
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3.1.1
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Amount
of Benefit.
The benefit under this Section 3.1 is the Pre-Retirement Death Benefit,
an
annual benefit set forth on Schedule
A
of
this Agreement for the Plan Year in which the Executive dies, in
an amount
equal to the projected annual benefit to be paid to the Executive
at the
Executive’s Normal Retirement Age, as set forth in Section 2.1.1 of this
Agreement.
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3.1.2
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Payment
of Benefit.
The Bank shall pay the Pre-Retirement Death Benefit, to the Beneficiary
in
equal monthly installments, commencing with the month following the
Executive’s death. The Pre-Retirement Death Benefit shall be paid to the
Beneficiary (as provided under this Article 3 and Article 4) for
a period
of fifteen (15) consecutive twelve (12) month periods next following
the
death of the Executive, for a total of 180 consecutive equal monthly
payments.
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3.2
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Death
During Payment of a Benefit.
If the Executive dies after any benefit payments have commenced under
Article 2 of this Agreement, but before receiving all such payments,
the
Bank shall pay the remaining benefits to the Beneficiary at the same
time
and in the same amounts that would have been paid to the Executive
had the
Executive survived.
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3.3
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Death
After Termination of Employment But Before Payment of a Benefit
Commences. If
the Executive is entitled to any benefit payments under Article 2
of this
Agreement, but dies prior to the commencement of said benefit payments,
the Bank shall pay the same benefit payments to the Beneficiary that
the
Executive was entitled to prior to death, except that the benefit
payments
shall commence on the first day of the month following the date of
the
Executive’s death.
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3.4
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Death
of a Beneficiary prior to Full Payment of Benefit.
If a Beneficiary dies prior to receipt of the full benefits to be
paid to
the Beneficiary under this Agreement, the remaining benefit payments,
otherwise payable to the Beneficiary under the terms of this Agreement,
shall be paid to the personal representative of the estate of the
Beneficiary. The personal representative of the estate of the Beneficiary,
and any beneficiary to whom such benefits are paid by or from the
Beneficiary’s estate, shall each be a “Beneficiary” for purposes of this
Agreement.
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7
Article
4
Beneficiaries
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4.1
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Beneficiary
Designation.
The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefits payable under this Agreement
upon
the death of the Executive. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designation
under any other benefit plan of the Bank in which the Executive
participates.
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4.2
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Beneficiary
Designation: Change.
The Executive shall designate a Beneficiary by completing and signing
the
Beneficiary Designation Form, and delivering it to the Plan Administrator
or its designated agent. The Executive's Beneficiary designation
shall be
deemed automatically revoked if the Beneficiary predeceases the Executive
or if the Executive names a spouse as Beneficiary and the marriage
is
subsequently dissolved. The Executive shall have the right to change
a
Beneficiary by completing, signing and otherwise complying with the
terms
of the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time. Upon the acceptance by
the
Plan Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator
shall be entitled to rely on the last Beneficiary Designation Form
filed
by the Executive and accepted by the Plan Administrator prior to
the
Executive’s death.
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4.3
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Acknowledgment.
Except as otherwise specifically provided in this Agreement, no
designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan
Administrator, or its designated
agent.
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4.4
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No
Beneficiary Designation.
If the Executive dies without a valid beneficiary designation, or
if all
designated Beneficiaries predecease the Executive, then the Executive’s
spouse, if married to Executive at the date of Executive’s death, shall be
the designated Beneficiary. If the Executive has no spouse at the
Executive’s date of death, the benefits shall be made to the personal
representative of the Executive's estate. The personal representative
of
the Executive’s estate and any beneficiary to whom such benefits are paid
by or from the Executive’s estate, shall each be a “Beneficiary” for
purposes of this Agreement.
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4.5
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Facility
of Payment.
If the Plan Administrator determines in its discretion that a benefit
is
to be paid to a minor, to a person declared incompetent, or to a
person
incapable of handling the disposition of that person’s property, the Plan
Administrator may direct payment of such benefit to the guardian,
legal
representative or person having the care or custody of such minor,
incompetent person or incapable person. The Plan Administrator may
require
proof of incompetence, minority or guardianship as it may deem appropriate
prior to distribution of the benefit. Any payment of a benefit shall
be a
payment for the account of the Executive and the Executive’s Beneficiary,
as the case may be, and shall be a complete discharge of any liability
under the Agreement for such payment
amount.
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8
Article
5
General
Limitations
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5.1
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Termination
for Cause.
Notwithstanding any provision of this Agreement to the contrary,
the Bank
shall not pay any benefit under this Agreement if the board of directors
or shareholders of either the Bank or the Holding company terminates
the
Executive's employment for:
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(a)
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Gross
negligence or gross neglect of duties to the
Bank;
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(b)
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Commission
of a felony or of a gross misdemeanor involving moral turpitude;
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(c)
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Fraud
or willful violation of any law or significant Bank policy committed
in
connection with the Executive's employment and resulting in a material
adverse effect on the Bank; or
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(d)
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Issuance
of an order for removal of the Executive by the banking regulators
of the
Bank or the Holding Company.
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5.2
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Suicide
or Misstatement.
The Bank shall not pay any benefit under this Agreement if the Executive
commits suicide within two years after the Effective Date. In addition,
the Bank shall not pay any benefit under this Agreement if the Executive
has made any material misstatement of fact on any application for
life
insurance owned by the Bank on the Executive’s
life.
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5.3
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Competition
After Termination of Employment.
The Bank shall not pay any benefit under this Agreement if the Executive,
without the prior written consent of the Bank or, if earlier, within
1
year from the Executive’s Termination of Employment, engages in, directly
or indirectly, as a sole proprietor, as a partner in a partnership,
or as
a holder of more than five percent (5%) of the voting shares in a
corporation, or becomes associated with, in the capacity of employee,
director, officer, principal, agent or trustee, any enterprise conducted
within a 25-mile radius of any office of the Bank existing at the
time of
the Executive’s Termination of Employment, which enterprise is, or may
deemed to be, competitive with the business of banking carried on
by the
Bank as of the date of the Executive’s Termination of Employment.
This section shall not apply to a Termination of Employment (other
than a
Termination for Cause) following a Change of Control or to an Early
Termination which was involuntary on the part of the
Executive.
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Article
6
Claims
And Review Procedures
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6.1
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Claims
Procedure.
An Executive or Beneficiary (“claimant”) who has not received benefits
under the Agreement that he or she believes should be paid shall
make a
claim for such benefits as follows:
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9
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Appalachian
Community Bank
Salary
Continuation Agreement
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6.1.1
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Initiation
- Written Claim.
The claimant initiates a claim by submitting to the Plan Administrator
a
written claim for the benefits.
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6.1.2
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Timing
of Plan Administrator Response.
The Plan Administrator shall respond to such claimant within 90 days
after
receiving the claim. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the
Plan
Administrator can extend the response period by an additional 90
days by
notifying the claimant in writing, prior to the end of the initial
90-day
period, that an additional period is required. The notice of extension
must set forth the special circumstances and the date by which the
Plan
Administrator expects to render its
decision.
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6.1.3
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Notice
of Decision.
If the Plan Administrator denies part or all of the claim, the Plan
Administrator shall notify the claimant in writing of such denial.
The
Plan Administrator shall write the notification in a manner calculated
to
be understood by the claimant. The notification shall
include:
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(a) The
specific reasons for the denial;
(b) A
reference to the specific provisions of the Agreement on which the denial is
based;
(c) A
description of any additional information or material necessary for the claimant
to perfect the claim and an explanation of why it is needed; and
(d) A
description of the applicable review procedures and the time limits applicable
to such procedures.
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6.2
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Review
Procedure.
If the Plan Administrator denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as
follows:
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6.2.1
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Initiation
- Written Request.
To initiate the review, the claimant, within 60 days after receiving
the
Plan Administrator’s notice of denial, must file with the Plan
Administrator a written request for
review.
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6.2.2
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Additional
Submissions - Information Access.
The claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Plan
Administrator shall also provide the claimant, upon request and free
of
charge, reasonable access to, and copies of, all documents, records
and
other information relevant to the claimant’s claim for
benefits.
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6.2.3
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Considerations
on Review.
In considering the review, the Plan Administrator shall take into
account
all materials and information the claimant submits relating to the
claim,
without regard to whether such information was submitted or considered
in
the initial benefit determination.
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10
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Appalachian
Community Bank
Salary
Continuation Agreement
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6.2.4
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Timing
of Plan Administrator Response.
The Plan Administrator shall respond in writing to such claimant
within 60
days after receiving the request for review. If the Plan Administrator
determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response
period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period, that an additional
period
is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects
to
render its decision.
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6.2.5
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Notice
of Decision.
The Plan Administrator shall notify the claimant in writing of its
decision on review. The Plan Administrator shall write the notification
in
a manner calculated to be understood by the claimant. The notification
shall include:
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(a) The
specific reasons for the denial;
(b) A
reference to the specific provisions of the Agreement on which the denial is
based; and
(c) A
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits.
Article
7
Amendments
and Termination
This
Agreement may be amended or terminated only by a written agreement signed by
the
Bank and the Executive. Provided, however, if the Bank’s Board of Directors
determines that the Executive is no longer a member of a select group of
management or highly compensated employees, as that phrase applies to ERISA,
for
reasons other than death, Disability or retirement, the Bank may amend or
terminate this Agreement. Upon such amendment or termination, the Bank shall
pay
benefits to the Executive as if Early Termination occurred on the date of such
amendment or termination, regardless of whether Early Termination actually
occurs. Additionally, the Bank may also amend this Agreement to conform with
written directives to the Bank from its banking regulators.
Article
8
Administration
of Agreement
|
8.1
|
Plan
Administrator Duties.
This Agreement shall be administered by a Plan Administrator which
shall
consist of the Board, or such committee or person(s) as the Board
shall
appoint. The Executive may be a member of the Plan Administrator.
The Plan
Administrator shall also have the discretion and authority to (i)
make,
amend, interpret and enforce all appropriate rules and regulations
for the
administra-tion of this Agreement and (ii) decide or resolve any
and all
ques-tions including interpretations of this Agreement, as may arise
in
connection with the Agreement.
|
11
|
Appalachian
Community Bank
Salary
Continuation Agreement
|
|
8.2
|
Agents.
In the administration of this Agreement, the Plan Administrator may
employ
agents and delegate to them such administrative duties as it sees
fit,
(including acting through a duly appointed representative), and may
from
time to time consult with counsel who may be counsel to the
Bank.
|
|
8.3
|
Binding
Effect of Decisions.
The decision or action of the Plan Administrator with respect to
any
question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement. No
Executive or Beneficiary shall be deemed to have any right, vested
or
nonvested, regarding the continued use of any previously adopted
assumptions, including but not limited to the Discount
Rate.
|
|
8.4
|
Indemnity
of Plan Administrator.
The Bank shall indemnify and hold harmless the members of the Plan
Administrator against any and all claims, losses, damages, expenses
or
liabilities arising from any action or failure to act with respect
to this
Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its
members.
|
|
8.5
|
Bank
Information.
To enable the Plan Administrator to perform its functions, the Bank
shall
supply full and timely information to the Plan Administrator on all
matters relating to the date and circum-stances of the retirement,
Disability, death, or Termination of Employment of the Executive,
and such
other pertinent information as the Plan Administrator may reasonably
require.
|
|
8.6
|
Annual
Statement.
The Plan Administrator shall provide to the Executive, within 120
days
after the end of each Plan Year, in the form of Schedule
A
of
this Agreement, a statement setting forth the benefits payable under
this
Agreement. It is hereby agreed that such annual statement, in the
form of
Schedule
A,
shall be incorporated into, and thereby shall be a part of, this
Agreement.
|
Article
9
Miscellaneous
|
9.1
|
Binding
Effect.
This Agreement shall bind the Executive, the Company and the Bank,
and
their beneficiaries, survivors, executors, successors, administrators
and
transferees.
|
|
9.2
|
No
Guarantee of Employment.
This Agreement is not a policy or contract regarding the continued
employment of the Executive, as a director of the Bank and/or the
Holding
Company. It does not give the Executive the right to remain as an
employee
or director of the Bank or the Holding Company, nor does it interfere
with
the right of the Bank or the Holding Company, or their respective
shareholders, to remove the Executive from office. It also does not
require the Executive to remain a director of the Bank or Holding
Company
nor interfere with the Executive's right to terminate employment
with the
Bank or Holding Company at any
time.
|
12
|
Appalachian
Community Bank
Salary
Continuation Agreement
|
|
9.3
|
Non-Transferability.
Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any
manner.
|
|
9.4
|
Tax
Withholding.
The Bank shall withhold any taxes that, in its reasonable judgment,
are
required to be withheld from the benefits provided under this Agreement.
The Executive acknowledges that the Bank’s sole liability regarding taxes
is to forward any amounts withheld to the appropriate taxing
authority(ies).
|
|
9.5
|
Applicable
Law.
The Agreement and all rights hereunder shall be governed by the laws
of
the State of Georgia, except to the extent preempted by the laws
of the
United States of America. Further, the parties intend for this Agreement,
including the payment of benefits hereunder, to comply with the provisions
of Section 409A of the Internal Revenue Code of 1986, as said Section
may
be amended from time to time, and, therefore, hereby agree that the
provisions of this Agreement and the benefits payable hereunder shall
be,
and hereby are, modified, but only to the extent necessary, to achieve
compliance therewith.
|
|
9.6
|
Unfunded
Arrangement.
The Executive and Beneficiary (and any other parties with rights
under
this Agreement) are general unsecured creditors of the Bank for the
payment of benefits under this Agreement. The benefits represent
the mere
promise by the Bank to pay such benefits. The rights to benefits
are not
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors.
Any insurance on the Executive's life is a general asset of the Bank
to
which the Executive and Beneficiary have no preferred or secured
claim.
|
|
9.7
|
Reorganization. Neither
the Bank nor the Holding Company shall merge or consolidate into
or with
another company or bank, or reorganize, or sell substantially all
of its
assets to another company or bank, firm, or person unless such succeeding
or continuing company, bank, firm, or person agrees to assume and
discharge the obligations of the Bank and Holding Company under this
Agreement. Upon the occurrence of such event, the terms “Bank” and
“Holding Company”, as used in this Agreement, shall also be deemed to
refer to the successor or survivor company or
bank.
|
|
9.8
|
Entire
Agreement. This
Agreement constitutes the entire agreement between and among the
Bank, the
Holding Company and the Executive as to the subject matter hereof.
No
rights are granted to the Executive by virtue of this Agreement other
than
those specifically set forth
herein.
|
|
9.9
|
Interpretation.
Wherever the fulfillment of the intent and purpose of this Agreement
requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the
plural.
|
|
9.10
|
Alternative
Action.
In the event it shall become impossible for the Bank, the Holding
Company
or the Plan Administrator to perform any act required by this Agreement,
the Bank, the Holding Company or Plan Administrator may in its discretion
perform such alternative act as most nearly carries out the intent
and
purpose of this Agreement and is in the best interests of the
Bank.
|
13
|
Appalachian
Community Bank
Salary
Continuation Agreement
|
|
9.11
|
Headings.
Article and section headings are for convenient reference only and
shall
not control or affect the meaning or construction of any of its
provisions.
|
|
9.12
|
Validity.
In case any provision of this Agreement shall be illegal or invalid
for
any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Agreement shall be construed and enforced
as if
such illegal and invalid provision has never been inserted
herein.
|
|
9.13
|
Notice.
Any notice or filing required or permitted to be given to the Bank
or Plan
Administrator under this Agreement shall be sufficient if in writing
and
hand-delivered, or sent by registered or certified mail, to the address
below:
|
|
Appalachian
Community Bank
|
|
000
Xxxxxxxxxx Xxxx.
|
|
Xxxxxxx,
Xxxxxxx 00000
|
Such
notice shall be deemed given as of the date of delivery or, if delivery is
made
by mail, as of the date shown on the postmark on the receipt for registration
or
certification.
Any
notice or filing required or permitted to be given to the Executive under this
Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail,
to the last known address of the Executive.
IN
WITNESS WHEREOF, the Executive and a duly authorized representative of each
of
the Bank and Holding Company have signed this Agreement on the 11th day of
August, 2006.
|
“EXECUTIVE:”
|
|
|
/s/
Xxxxx X. Xxxxxx
|
|
|
Xxxxx
X. Xxxxxx,
|
|
|
Chief
Executive Officer
|
|
|
“BANK:”
|
|
|
Appalachian
Community Bank
|
|
|
By: /s/
Xxxxxx X. Xxxx, Xx.
|
|
|
Title:
Chief Operating
Officer
|
14
|
Appalachian
Community Bank
Salary
Continuation Agreement
|
|
“HOLDING
COMPANY:”
|
|
|
Appalachian
Bancshares, Inc.
|
|
|
By:
Xxxxxx X. Xxxx, Xx.
|
|
|
Title:
Chief Operating Officer
|
15
|
Appalachian
Community Bank
Salary
Continuation Agreement
BENEFICIARY
DESIGNATION
FORM
|
I
designate the following as beneficiary of benefits under the Agreement payable
following my death:
Primary: _______________________________________________________________________
_____________________________________________________________________________
Contingent: ____________________________________________________________________
_____________________________________________________________________________
Note:
To name a trust as beneficiary, please provide the name of the trustee(s) and
the exact
name and date of the trust agreement.
I
understand that I may change these beneficiary designations by delivering a
new
written designation to the Plan Administrator. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.
|
Name:
_______________________________
|
|
|
Signature: _______________________________
|
Date: _______
|
|
SPOUSAL
CONSENT (Required if Spouse not named beneficiary):
I
consent to the beneficiary designation above, and acknowledge that
if I am
named beneficiary and our marriage is subsequently dissolved, the
designation will be automatically revoked.
Spouse
Name: _______________________________
Signature: __________________________________
Date: _______
|
Received
by the Plan Administrator this ________ day of ___________________,
20___.
By: _________________________________
Title: ________________________________
00
|
Xxxxxxxxxxx
Xxxxxxxxx Xxxx
Salary
Continuation Agreement
|
SCHEDULE
A
(For
the Plan year Ending May 30, 20__)
|
Executive
Name
|
Xxxxx
X. Xxxxxx
|
Plan
Anniversary Date
|
06/01
|
|
|
Normal
Retirement Age
|
*
|
Normal
Retirement Date (Estimated)
|
|
Discount
Rate
|
Accrual
Balance
|
Normal
Retirement
Benefit
(annual
benefit
Amount)
|
Early
Termination Benefit
(one-time,
lump-sum benefit amount)
|
**
Disability
Benefit
(annual
benefit amount)
|
**
Change
of Control Benefit
(annual
benefit amount)
|
**
Pre-retirement
Death Benefit
(annual
benefit amount)
|
|
|
7%
|
$
|
$
|
$
|
$
|
$
|
$
|
The
parties to this Salary Continuation Agreement hereby further agree that this
Schedule
A
shall be
updated annually to include any changes in the Accrual Balance and the various
benefit levels described hereon. Further, this Schedule
A,
as it
now exists and as it may be further updated, is and shall continue to be a
part
of this Salary Continuation Agreement.
*The
earlier of Age 62 or the Age at which a Executive completes 20 years of
employment as a director of the Bank and/or the Holding
Company.
**This
annual benefit amount to be entered here for the Executive should be the
projected annual benefit amount set forth in Section 2.1.1 of the
Agreement.
