EXHIBIT 10.5
EXECUTIVE SALARY CONTINUATION AGREEMENT
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THE AGREEMENT, made and entered into this ___ day of January, 1994 by and
between The Park Avenue Bank, a Bank organized under the laws of the State of
Georgia (hereinafter called "Bank"), and [_____________] (hereinafter called the
"Executive").
W I T N E S S E T H :
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WHEREAS, the Executive has been and continues to be a valued Executive of
the Bank, and is now serving the Bank as its Chief Executive Officer; and,
WHEREAS, it is the consensus of the Board of Directors that the Executive's
services to the Bank in the past have been of exceptional merit and have
constituted an invaluable contribution to the general welfare of the Bank and in
bringing it to its present status of operating efficiency, and its present
position in its field of activity; and,
WHEREAS, the experience of the Executive, his knowledge of the affairs of
the Bank, his reputation and contacts in the industry are so valuable that
assurance of his continued services is essential for the future growth and
profits of the Bank and it is in the best interests of the Bank to arrange terms
of continued employment for the Executive so as to reasonably assure his
remaining in the Bank's employment during his lifetime or until the age of
retirement; and,
WHEREAS, it is the desire of the Bank that his services be retained as
herein provided:
ACCORDINGLY, it is the desire of the Bank and the Executive to enter into
this agreement under which the Bank will agree to make certain payments to the
Executive at retirement or his beneficiary in the event of his premature death
while employed by the Bank, and,
FURTHERMORE, it is the intent of the parties hereto that this agreement be
considered an unfunded arrangement maintained primarily to provide supplemental
benefits for the Executive, as a member of a select group of management or
highly compensated employees of the Bank for the purposes of the Employee
Retirement Security Act of 1974, (E.R.I.S.A.):
NOW, THEREFORE, in consideration of services performed in the past and to
be performed in the future as well as of the mutual promises and covenants
herein contained it is agreed as follows:
EMPLOYMENT
1. The Bank agrees to employ the Executive in such full-time capacity as the
Bank may from time to time determine. The Executive will continue in the
employ of the Bank 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 Bank.
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FRINGE BENEFITS
2. The salary continuation benefits provided by this agreement are granted by
the Bank as a fringe benefit to the Executive in addition to its other
fringe benefits afforded the Executive by the Bank and are not part of any
salary reduction plan or an 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 except as set forth
hereinafter.
RETIREMENT DATE
3. If Executive remains in the continuous employ of the Bank, he shall retire
from active employment with the Bank on [___________] (the "Retirement
Date").
RETIREMENT BENEFIT AND POST-RETIREMENT DEATH BENEFIT
4. Upon said retirement by Executive and commencing with the first day of the
month following the Retirement Date, the Bank shall pay Executive an annual
benefit equal to 40% of Executive's average annual salary for the 3 years
immediately prior to his retirement in equal monthly installments (of 1/12
of the annual benefit) for a period of one hundred eighty (180) months,
provided that if less than one hundred eighty (180) of such monthly
payments have been made prior to the death of the Executive, the Bank shall
continue such monthly payments to whomever the Executive shall designate in
writing and filed with the Bank, until the full number of one hundred
eighty (180) monthly payments have been made. In the absence of any
effective designation of beneficiary, any such amount becoming due and
payable upon the death of the Executive shall be payable to the duly
qualified executor or administrator of his estate. Notwithstanding the
foregoing, the Bank shall not be obligated to pay the Executive any amounts
under this Paragraph 4 or the following Paragraph 5 if the Executive
engages in the business of banking as either the owner of an interest in a
bank (except as a passive investor owning less than 10% of the equity
securities of a publicly held company) or as a director, officer or
employee of, or consultant to a bank having a place of business in Lowndes
County of the State of Georgia at any time during the three year period
commencing with the Retirement Date. The term "salary" as used in this
agreement shall mean the annual compensation of the Executive established
from time to time by the Board of Directors, exclusive of directors fees,
bonuses, profit sharing or retirement plan contributions and the value of
fringe benefits and acccouterments granted the Executive by Bank.
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. If after the
retirement of Executive, the capital of the Bank should fall below the
minimum required by the Bank's regulatory authority and/or the Bank fails
to make a profit in any two (2) successive years, Executive may, at his
option, demand that the Bank pay him the balance of his Account in a lump
sum payable on or before thirty (30) days from the date of the delivery by
Executive of his written demand for payment to the Bank.
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DEATH ABND DISABILITY BENEFITS PRIOR TO RETIREMENT
5. In the event the Executive should die or become permanently disabled (as
that term is hereinafter defined) while actively employed by the Bank at
any time after the date of this Agreement but prior to the Retirement Date,
the Bank will pay an annual benefit equal to 40% of Executive's annual
average salary for the 3 years immediately prior to his death or permanent
disability in equal monthly installments (each equal to 1/12 of the annual
benefit) for a period of one hundred eighty (180) months to such individual
or individuals as the Executive may have designated in writing and filed
with the Bank. In the event of death prior to retirement, the said monthly
payments shall begin the first day of the third month following the month
in which the Executive dies. In the event the Executive's employment is
terminated due to permanent disability, the said monthly payments shall
begin the earlier of the first day of the month following the Retirement
Date of the first day of the month following the receipt by Bank of written
notice from the permanently disabled Executive to commence the payment of
the annual benefit computed in this paragraph 5. In the absence of any
effective designation of beneficiary, any such amounts becoming due and
payable upon the death of the Executive shall be payable to the duly
qualified executor or administrator of his estate. For purposes of this
agreement, permanent disability is defined as the continuous loss of one-
half (1/2) or more of the time spent by the Executive in the usual daily
performance of his duties as result of a physical or mental illness for a
continuous period in excess of ninety (90) days.
BENEFIT ACCOUNTING
6. The Bank shall account for this benefit using the regulatory accounting
principles of the Bank's primary federal regulator. The Bank shall
establish an accrued liability retirement account for the Executive (the
"Account") into which appropriate reserves shall be accrued in the amount
determined by the Bank's certified public accounting firm.
VESTED PERCENTAGE AMOUNT
7. As used in this Agreement, the term "Vested Percentage Amount" shall mean
the percentage amount resulting when (i) the number resulting from the sum
of the number of each year the first of which commences with the December
31 first falling after the Effective Date and the number of each successive
year thereafter until the December 31 preceding the date this Agreement
terminates by virtue of either subparagraph (a) or (b) of Paragraph 8 is
divided by (ii) the number resulting from the sum of the number of each
year the first of which commences with the December 31 first falling after
the Effective Date and the number of each successive year thereafter until
the December 31 immediately preceding the Retirement Date. For
illustrative purposes only, assume that the Effective Date is June 30, 1995
and the Retirement Date is September 30, 2005 and the Executive voluntarily
terminates his employment on March 31, 2000. Under this illustration, the
Vested Percentage Amount at the termination date would be 27.3% computed
where the numerator is 15 and the denominator is 55 computed as follows:
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Numerator Denominator
(To Termination Date) (To Retirement Date)
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Year Year
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12/31/95 1 12/31/95 1
12/31/96 2 12/31/96 2
12/31/97 3 12/31/97 3
12/31/98 4 12/31/98 4
12/31/99 5 12/31/99 5
12/31/00 6
12/31/01 7
12/31/02 8
12/31/03 9
12/31/04 10
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SUM OF YEARS 15 SUM OF YEARS 55
OTHER TERMINATION OF EMPLOYMENT
8. (a) In the event that the Executive's employment terminates prior
to the Retirement Date because of his discharge by the Bank without cause,
this agreement shall terminate. The Bank shall pay to the Executive an
amount of money equal to either (1) the amount resulting when the
Executive's Account as of the December 31 preceding the termination date is
multiplied by the Vested Percentage Amount or (2) the amount of the
Executive's Account as of the December 31 preceding the termination date in
the event the Executive is terminated within twenty four (24) months after
there has been a change of control of the Bank or PAB Bankshares, Inc.
which resulting amount shall be payable in one hundred eighty (180) equal
monthly installments commencing with the first day of the month following
the date of termination and each first day of the month thereafter until
paid in full. For purposes of this agreement the term "change in control"
shall mean transfer of 50% or more of the common stock ownership of either
the Bank or PAB Bankshares, Inc. during any twelve month period by either
sale or merger in which either the Bank or PAB Bankshares, Inc. is not the
surviving entity.
(b) In the event that the employment of the Executive shall terminate
prior to Retirement Date by his voluntary action, this agreement shall
terminate and the Bank shall pay to the Executive an amount of money equal
to the amount resulting when the Executive's Account as of the December 31
preceding the termination date is multiplied by the Vested Percentage
Amount which resulting amount shall be payable in one hundred eighty (180)
equal monthly installments commencing with the first day of the month
following the Retirement Date and each first day of the month thereafter
until paid in full. Notwithstanding the foregoing, the Bank shall not be
obligated to pay the Executive any amounts under this subparagraph (b) of
this Paragraph 8 if the Executive engages in the business of banking as
either the owner of an interest in a bank (except as a passive investor
owning less than 10% of the equity securities of a publicly held company),
or as a director, officer or employee of, or consultant to a bank having a
place of business in Lowndes County of the State of Georgia at any time
during the three years
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period commencing with the date the Executive voluntarily terminates his
employment with the Bank.
(c) In the event that the Executive's employment terminates prior to the
Retirement Date because of his discharge by the Bank for cause, then this
agreement shall terminate and the Bank shall have no further obligation to
make any payment of any amount of money to the Executive under this
agreement or otherwise. For purposes of this agreement, the Bank shall have
"cause" to terminate the Executive's employment and this agreement if he
(1) is convicted of one or more acts constituting a felony' (2) engages in
one or more acts involving fraud or serious moral turpitude; or (3)
misappropriates Bank assets or engages in conduct materially injurious to
the Bank.
(d) In the event the Executive should die after termination of
employment but prior to the completion of any monthly to the completion of
any monthly payments payable under either subparagraphs (a) or (b) of this
Paragraph 8, the remaining installments shall be paid to such individual or
individuals as the Executive may have designated in writing, and filed with
the Bank. In the absence of any effective designation of beneficiary, any
such amounts shall be payable to the duly qualified executor or
administrator of his estate.
PARTICIPATION IN OTHER PLANS
9. The benefits provided hereunder shall be in addition to Executive's annual
salary as determined by the Board of Directors, and shall not affect the
right of Executive to participate in any current or future Bank retirement
plan, group insurance, bonus, or in any such compensation arrangement which
constitutes a part of the Bank's regular compensation structure.
ALIENABILITY
10. It is agreed that neither Executive, nor his spouse, nor any other
designee, shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder, which
payments and the right thereto are expressly declared to be non-assignable
and non-transferable; and, in the event of any attempted assignment or
transfer, the Bank shall have no further liability hereunder.
RESTRICTIONS ON FUNDING
11. The Bank shall have no obligations to set aside, earmark, or entrust any
fund or money with which to pay its obligations under this Agreement. The
Bank reserves the absolute right at its sole discretion to either fund the
obligations undertaken by this Agreement or to refrain from funding the
same and determine the extent, nature and method of such funding.
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GENERAL ASSETS OF THE BANK
12. The rights of the Executive under this Agreement and of any beneficiary of
the Executive shall be solely those of an unsecured creditor of the Bank.
If the Bank 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 Executive nor any beneficiary of
Executive shall have any right with respect to, or claim against, such
policy or other asset. Such policy or asset shall not be deemed to be held
under any trust for the benefit of Executive or his beneficiaries or to be
held in any way as collateral security for the fulfilling of the
obligations of the Bank under this Agreement. It shall be, and remain, a
general, unpledged, unrestricted asset of the Bank and Executive or any of
his beneficiaries shall not have a greater claim to the insurance policy or
other assets, or any interest in either of them, than any other general
creditor of the Bank.
AMENDMENT AND TERMINATION
13. This Agreement may be amended in whole or in part from time to time by the
Bank, but only in writing. The Bank may terminate this agreement at any
time or for any reason. If terminated prior to the Executive's leaving the
employ of the Bank, the amount of the Executive's Account at the date the
agreement is terminated by the Bank shall be payable to the Executive or
his designated beneficiary upon retirement, permanent disability, death, or
germination of employment in the manner and at the times provided herein,
as the case may be.
NOT A CONTRACT OF EMPLOYMENT
14. 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 Bank to discharge the Executive, or restrict the right of the
Executive to terminate his employment.
HEADINGS
15. Headings and subheadings of this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.
APPLICABLE LAW
16. The validly and interpretation of this Agreement shall be governed by the
laws of the State of Georgia.
EFFECTIVE DATE
17. The effective date of this Agreement (the "Effective Date") shall be
December 31, 1993.
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be signed in
its corporate name by its duly authorized officer and Executive hereunto has set
his hand and seal, all on the day and year first above written.
THE PARK AVENUE BANK
"Bank"
By:
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Chairman of the Board
"Executive"
------------------------- (SEAL)
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DESIGNATION OF BENEFICIARY
Pursuant to the terms of that Executive Salary Continuation Agreement,
dated ________________, 19___ between myself and The Park Avenue Bank, I hereby
designate the following beneficiary(ies) to receive payments which may be due
under such Agreement after my death:
Primary Beneficiary
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Name Address Relationship
Secondary Beneficiary(ies)
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Name Address Relationship
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Name Address Relationship
The Primary Beneficiary named above shall be the designated beneficiary
referred to in Paragraph Four and Five of said Agreement if he or she is living
at the time a death benefit payment thereunder becomes due and payable, and the
Secondary Beneficiary named above shall be the designated beneficiary referred
to in Paragraphs Four, Five and Eight of said Agreement only if he or she is
living at the time a death benefit payment becomes payable and the Primary
Beneficiary is not then living.
This designation hereby revokes any prior designation which may have
been in effect.
Date
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Witness Executive
Acknowledged by:
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Title:
The Park Avenue Bank
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Schedule of Terms for Executive Salary Continuation Agreements
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Name Normal Retirement Date
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R. Xxxxxxxx Xxxxxxxx November 7, 0000
Xxxxxxx X. Xxxxxx December 22, 2018
C. Xxxxx Xxxxxxxxx, Xx. July 26, 2001
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