1
EXHIBIT 10.9
2
SUPPLEMENTAL AGREEMENT
FOR XXXXXX X. XXXXXXX
THIS AGREEMENT MADE THIS 30th day of June, 1999, by and between FIRST
CHARTER CORPORATION., a corporation organized under the State of North
Carolina (hereinafter referred to as First Charter"), and XXXXXX X.
XXXXXXX, an individual whose address is 000 Xxxxxxx Xxxx, and who resides
in the City of Concord, County of Cabarrus, and State of North Carolina
(hereinafter referred to as "the Executive").
WITNESSETH
WHEREAS, First Charter currently employs the Executive, and the Executive
serves First Charter in such capacity as the Board of Directors of First
Charter may designate from time to time; and
WHEREAS, the Executive currently devotes all of his time, attention, skill
and efforts to the performance of duties on behalf of First Charter; and
WHEREAS, in consideration of services rendered on behalf of First Charter
and as an inducement for ongoing valuable services until retirement, First
Charter has agreed to provide a deferred compensation benefit to the
Executive; and
WHEREAS, the intent of this deferred compensation agreement (hereinafter
referred to as "Agreement") is to provide, in the form of a special payment
to the Executive in the amount of Five Hundred Sixty Thousand Dollars
($560,000) when he reaches his Target Distribution Date.
NOW THEREFORE, in consideration of the Agreement and mutual promises
hereinafter contained, the parties hereto agree to the following:
Article I
DEFINITIONS. The following definitions shall govern this Agreement:
. BENEFIT means the benefit that will be available to the Executive as
described in Article III.
. BENEFICIARY means the person designated in writing by the Executive to
receive any benefits due the Executive upon his death. If no such
designation is made or if the designated person is not living at the
death of the Executive, the Beneficiary shall be the Executive's
spouse, if living; otherwise, the Beneficiary shall be his estate.
. BOARD OF DIRECTORS means the board of directors of First Charter.
. DISABLED means the inability of the Executive to engage in his
profession by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which is to
last or can be expected to last for a continuous period of not less
than twelve months, as determined by the Board of Directors in its
sole discretion upon certification thereof by a qualified physician
selected by the Board of directors after such physician examines the
Executive.
. DISTRIBUTABLE EVENT means an event upon which the Executive may become
entitled to receive his Benefit as described in Article VI.
. EFFECTIVE DATE means June 30, 1999.
3
. FIRST CHARTER means First Charter Corporation. In the case of a group
of employers that constitute a controlled group of corporations (as
defined in Section 414(b) of the Internal Revenue Code of 1986, as
amended) or that constitutes trades or businesses that are under
common control (as defined in Section 414(c) of the Internal Revenue
Code of 1986, as amended), all such employers shall be considered a
single employer.
. TARGET DISTRIBUTION DATE means the first day of the first month
beginning on or after the date the Executive both has attained age 65
and terminated employment with First Charter, or any earlier date
mutually agreed to by the Executive and the Board of Directors.
Article II
VESTING. The Executive shall be 50% vested in his Benefit, as determined
under Article III, on the Effective Date of this Agreement, and shall
become fully vested in his Benefit on June 30, 2004 if he remains an
employee of First Charter, subject at all times to the forfeiture
provisions of Article VI and VII.
Notwithstanding the forgoing, the Executive shall become fully vested in
his Benefit if he dies or becomes Disabled before June 30, 2004.
Article III
AMOUNT OF THE BENEFIT. The Executive shall be entitled on his Target
Distribution Date to payment of his vested Benefit in an amount equal to
Five Hundred Sixty Thousand Dollars ($560,000), payable at the times and in
the form described in Article VI.
Article IV
ACCRUAL OF BENEFIT. First Charter may use any reasonable accounting policy
in accruing the Benefit. The amount accrued shall be segregated from other
accounts on the books and records of First Charter as a contingent
liability of First Charter to the Executive.
Article V
GENERAL CREDITOR. The Executive shall be regarded as a general creditor of
First Charter with respect to any rights derived by the Executive from the
existence of this Agreement or the existence or amount of the liability.
ASSETS. Title to and beneficial ownership of any assets, whether cash,
investments, life insurance policies, or other assets that First Charter
may intend to use as a source of payment, shall at all times remain with
First Charter. The Executive and his Beneficiary shall not have any
property interest whatsoever in any specific assets of First Charter.
Article VI
DISTRIBUTABLE EVENTS. The Benefit shall be paid to the Executive or the
Executive's estate (unless forfeited by the occurrence of any of the events
of forfeiture specified in Article VII) upon the following events:
o Upon termination of the Executive's employment on or after the
Executive's Target Distribution Date, First Charter shall begin
payments of the Executive's Benefit to the Executive in equivalent
monthly installments over a period of ten (10) years, unless another
form of distribution is selected by the Board of Directors in its sole
discretion. Payment will be begin as soon as practicable following the
Executive's termination of employment.
o In the event that the Executive's employment with First Charter is
terminated by reason of his death [with a vested benefit] or if the
Executive's death occurs after a Distributable Event but before full
payment of the Benefit has been made to the Executive, First Charter
shall pay
4
(or continue to pay) the Executive's Benefit to the Executive's
Beneficiary in equivalent monthly installments such that the
Executive's Benefit is paid to the Executive's Beneficiary over a
period of ten (10) years unless another form of distribution is
selected by the Board of Directors in its sole discretion. Payment to
the Beneficiary will be begin as soon as practicable following the
Executive's death.
o In the event that the Executive becomes Disabled before reaching his
Target Distribution Date and while in the employ of First Charter,
First Charter shall pay the Executive's Benefit to the Executive in
equivalent monthly installments over a period of ten (10) years unless
another form of distribution is selected by the Board of Directors in
its sole discretion. Payment will be begin as soon as practicable
following the date the Executive attains his Target Distribution Date.
o In the event that the Executive's employment with First Charter is
terminated before the Executive attains his Target Distribution date
for any reason other than the Executive's death or if the Executive
becomes Disabled, First Charter shall begin payments to the Executive
of the Executive's vested Benefit as soon as practicable following the
date the Executive attains his Target Distribution Date.
FORM OF PAYMENT. Payment of the Benefit will be made in the form of
equivalent monthly installments over a period of ten (10) years, or in such
other form as the Board of Directors, in its sole discretion, may
determine.
FACILITY OF PAYMENTS. If any person entitled to payment under this
Agreement shall, in the sole opinion of First Charter, be too physically or
mentally incapacitated to properly receive such payments, First Charter may
make such payments to any member of the family of such person then entitled
to payment, or for the use and benefit of such person, or to any person or
institution providing care for such person then entitled to such payments.
All payments so made by First Charter shall fully discharge and acquit
First Charter to the amounts thereof.
INCOME TAX OR OTHER WITHHOLDING. First Charter may withhold from any
benefits payable under this Agreement all federal, state, city, or other
taxes, or qualified domestic relations order or divorce decree as shall be
required pursuant to any law, government regulation or ruling, or court
order.
Article VII
FORFEITURE PROVISIONS. All rights to any vested and unvested deferred
compensation payments, pursuant to this Agreement, shall be immediately
forfeited if the Executive engages in any act that, in the opinion of the
Board of Directors, is inimical to the best interests of First Charter,
including, but not limited to fraud, embezzlement, non-productivity,
disloyalty or similar acts. The judgment of the Board of Directors, as
expressed by a majority vote, shall be final as to the determination of the
nature of any acts performed by the Executive that are subject to this
Article. The Board of Directors, in its sole discretion, may interpret and
decide upon the nature of such acts.
Article VIII
LIABILITY OF FIRST CHARTER. Nothing in this Agreement shall constitute the
creation of a trust or other fiduciary relationship between First Charter
and the Executive or between First Charter and the Beneficiary or any other
person. First Charter shall not be considered a trustee by reason of this
Agreement.
Article IX
5
ASSIGNMENT. No rights under this Agreement may be assigned, transferred,
pledged or encumbered by the Executive or the Beneficiary except by will or
by North Carolina intestate laws or other laws of descent and distribution.
This Agreement may be assigned by First Charter only upon the following
events:
. First Charter or its assets are purchased by another entity or are
merged into the assets of another entity.
. Prior written consent of the Executive.
Article X
AGREEMENT BINDING. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective next of kin, successors,
assigns, heirs, personal representatives, executors, administrators, and
legatees. First Charter shall not merge or consolidate with any other
entity or reorganize unless and until such succeeding and continuing entity
agrees to assume and discharge the obligations of First Charter under this
Agreement. Upon such assumption, the term First Charter as used in this
Agreement shall be deemed to refer to such successor to First Charter. The
Board of Directors, at its sole discretion, reserves the right to amend,
revise, or terminate this Agreement with respect to future benefits.
Article XI
ENTIRE AGREEMENT. This document constitutes the entire Agreement between
the parties as to the provision of supplemental retirement benefits by
First Charter to the Executive. This Agreement may only be modified,
altered, or amended by prior written approval and consent of the parties
with respect to Benefits, except those provisions that may be amended
solely by a Board of Directors resolution as described in this Agreement.
Article XII
NO GUARANTEE OF EMPLOYMENT. Nothing in this Agreement shall be construed as
guaranteeing future employment to the Executive. The Executive continues to
be an employee of First Charter either subject to an employment agreement
or, if there is no such employment agreement, solely at the will of First
Charter, notwithstanding this Agreement.
Article XIII
NOT "COMPENSATION" FOR OTHER PURPOSES. Any deferred compensation payable
under this Agreement (or actuarial or the net present value of any such
payments) shall not be deemed salary or other compensation to the Executive
for purposes of any qualified retirement plans maintained by First Charter,
any incentive bonus plans, or for purposes of any other fringe benefit
obligations of First Charter.
Article XIV
CLAIMS SUBMISSION AND REVIEW PROCEDURE. In the event that any claim for
benefits, that must initially be submitted in writing to the Board of
Directors, is denied (in whole or in part) hereunder, the claimant shall
receive from First Charter notice in writing, written in a manner
calculated to be understood by the claimant, setting forth the specific
reasons for denial, with specific reference to pertinent provisions of this
Agreement. The interpretations and construction hereof by the Board of
Directors shall be binding and conclusive on all persons and for all
purposes. Any disagreements about such interpretations and construction
shall be submitted to an arbitrator subject to the rules and procedures
established by the American Arbitration Association. The arbitrator shall
be acceptable to both First Charter and the Executive; if the parties
cannot agree the disagreement shall be heard by a panel of three
arbitrators, with each party to appoint one arbitrator and the third to be
chosen by the other two. No member of the Board of Directors shall
6
be liable to any person for any action taken hereunder except those actions
undertaken with lack of good faith.
GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of North Carolina, except to the extent
such laws are preempted by federal laws and regulations.
CONSTRUCTION. The masculine gender shall include the feminine, and the
singular the plural, unless the context clearly requires otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
Attest: FIRST CHARTER CORPORATION
/s/ Xxxx X. Xxxxxxx /s/ J. Xxx Xxxxx Xx.
---------------------------------- -------------------------------
Xxxx X. Xxxxxxx J. Xxx Xxxxx, Xx.
Assistant Corporate Secretary Chairman of the Board
Witnesses: ACKNOWLEDGED:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxx
---------------------------------- -------------------------------
Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
