TERMINATION AND WAIVER AGREEMENT
Exhibit
10.8
THIS
TERMINATION AND WAIVER AGREEMENT (this “Termination Agreement”) is made and
entered into as of this 19th day of September, 2009 (the “Effective Date”) by
and between HABERSHAM BANK, as successor to Security State Bank (the “Bank”),
and XXXXX X. XXXXXXX, a resident of the State of Georgia (the
“Director”).
Preamble:
WHEREAS,
the Bank, as successor to Security State Bank, and Director are parties to that
certain Director Supplemental Retirement Plan Agreement originally effective as
of December 2, 1998, as amended by that certain 409A Amendment thereto (the
“SERP Agreement”).
WHEREAS,
the Bank, as successor to Security State Bank, and the Director are also parties
to that certain Life Insurance Endorsement Method Split Dollar Plan Agreement
dated as of December 2, 1998 (the “Split Dollar Agreement”) (collectively, the
SERP Agreement and the Split Dollar Agreement are referred to herein as the
“Agreements”).
WHEREAS,
the original purpose of the Agreements was to provide the Director with an
incentive to remain in the service of the Bank by providing the Director with
the opportunity to receive supplemental retirement payments and death benefits
in connection with certain qualifying events.
WHEREAS,
the Bank is negatively affected by the current downturn in the financial
services sector of the United States economy.
WHEREAS,
the Bank is under regulatory scrutiny and is in the process of seeking
alternatives to increase capital and reduce expenses for the purpose of
enhancing its financial position and performance.
WHEREAS,
the obligations represented by the Agreements are impairing the Bank’s ability
to address its financial issues.
WHEREAS,
pursuant to Subparagraph VII[C] of the SERP Agreement, with the Director’s
consent, the Bank desires to terminate the SERP Agreement to cease the accrual
of any new benefit obligations under the SERP Agreement and, in connection with
the SERP Agreement’s termination, the Bank also desires to obtain the Director’s
consent to waive completely the Director’s contractual rights to all of the
benefit obligations accrued under the SERP Agreement prior to the effective date
of the SERP Agreement’s termination so as to improve further the capital
position of the Bank and to enhance the prospects of the Bank in the face of its
current financial challenges.
WHEREAS,
contrary to the termination provisions under Paragraph IX of the Split Dollar
Agreement, the Bank desires to terminate the Split Dollar Agreement immediately,
with the consent of the Director, and to obtain a waiver by the Director of the
Director’s right to require an assignment of the policy or policies subject to
the Split Dollar Agreement.
WHEREAS,
the Director understands and acknowledges that the prospective termination of
the Agreements and the waiver of accrued obligations and rights thereunder
require the Director’s consent.
WHEREAS,
the Director also understands and acknowledges that the Director’s agreement to
waive completely the Director’s contractual rights to all of the benefit
obligations and rights accrued under the Agreements prior to the effective date
of the Agreements’ termination will enhance the Director’s prospects for
continuing in the service of the Board of Directors of the Bank; will help
preserve the value of any existing capital investment in the Bank that the
Director may have; and will mitigate the potential for involving the Director in
litigation should the Bank be unsuccessful in addressing its financial
challenges.
NOW,
THEREFORE, in consideration of the recitals set forth above and the mutual
agreements set forth below, the parties hereto agree as follows:
Statement of
Agreement:
1.
Termination. The
Director, on the Director’s own behalf and on behalf of the Director’s heirs and
beneficiaries, hereby irrevocably consents to the Bank’s termination of the
Agreements effective as of the Effective Date so that no new or additional
benefits or rights shall accrue under the Agreements from and after the
Effective Date.
2.
Waiver. The
Director, on the Director’s own behalf and on behalf of the Director’s heirs and
beneficiaries, hereby irrevocably waives and renounces any and all of the
Director’s rights, title, benefits, and interests in the Agreements to which the
Director may be entitled by operation of law, private contract or otherwise and
unconditionally and without qualification refuses to accept any such rights,
title, benefits, and interests in the Agreement.
3.
Acknowledgements. By
entering into this Termination Agreement, the Director acknowledges and agrees
that:
(a) the
prospective termination of the Agreements and the waiver of accrued obligations
and rights thereunder require the consent of the Director;
(b) in
terminating the SERP Agreement pursuant to Subparagraph VII[C] thereof, by
virtue of the waiver provided in Paragraph 2 above, the Bank has no obligation
to distribute now, or at any time hereafter, to the Director or any other party
any benefit obligations accrued under the Agreement from its inception through
and including the effective date of such termination (or at any time
thereafter);
(c) in
terminating the Split Dollar Agreement, by virtue of the waiver provided in
Paragraph 2 above, the Bank has no obligation now, or at any time hereafter, to
the Director or any other party to make an assignment of the policy or policies
subject to the Split Dollar Agreement; and
(d) the
Bank shall have no obligations of any kind to the Director or any other party
under the terms of the Agreements which survive its termination.
4.
Further
Acknowledgements. By entering into this Termination Agreement,
the Director further acknowledges and agrees that:
(a) the
Director has entered into this Termination Agreement of the Director’s own free
will without fear or coercion;
(b) the
Director has had an opportunity to review documents, consult with counsel and
make inquiries of Bank representatives prior to entering into this Termination
Agreement and that the Director understands the implications, economic and
otherwise, of the decision to waive the Director’s rights to existing benefits
and rights accrued under the Agreements; and
(c) the
consideration to be received by the Director as a result of entering into this
Termination Agreement, as recited above in the Preamble to this Termination
Agreement, is good and valuable consideration sufficient in kind and amount to
support the waiver and release provided herein.
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5.
Release. The
Director, on the Director’s own behalf and on behalf of the Director’s heirs and
beneficiaries, hereby unconditionally and forever releases, acquits, and
discharges the Bank, and the past, present and future subsidiaries and related
companies, as well as the successors, assigns, officers, owners, directors,
agents, representatives, attorneys and employees of any of the foregoing, from
any and all liabilities, actions, causes of action, claims, demands, damages,
costs and expenses (including, without limitation, attorneys’ fees and costs
actually incurred) which may have arisen or which may hereafter arise from, on
account of or in any way connected with the waiver provided herein.
6.
No
Guarantee of Continued Services. No portion of this
Termination Agreement shall be construed as an obligation on the part of the
Bank to continue the services of the Director by the Bank or any of its
affiliates.
7. Governing
Laws. This Termination Agreement shall be construed,
administered and enforced according to the laws of the State of Georgia, to the
extent not preempted by federal law.
8.
Successors. This
Termination Agreement shall be binding upon and inure to the benefit of the
heirs, legal representatives, successors and permitted assigns of the
parties.
9.
Entire
Agreement. This Termination Agreement expresses the entire
understanding and agreement of the parties with respect to the subject
matter.
10. Specific
Performance. In the event of any actual or threatened default
in, or breach of, any of the terms, conditions and provisions of this
Termination Agreement, the party or parties who are thereby aggrieved shall have
the right to specific performance and injunction in addition to any and all
other rights and remedies at law or in equity, and all such rights and remedies
shall be cumulative.
THE
DIRECTOR ACKNOWLEDGES THAT THE DIRECTOR HAS BEEN ADVISED TO DISCUSS ALL ASPECTS
OF THIS TERMINATION AGREEMENT WITH AN ATTORNEY OR ADVISOR OF THE DIRECTOR’S
CHOICE. THE DIRECTOR HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL THE
PROVISIONS OF THIS TERMINATION AGREEMENT AND HAS KNOWINGLY AND VOLUNTARILY
ENTERED INTO THIS TERMINATION AGREEMENT.
IN
WITNESS WHEREOF, the parties have caused this Termination Agreement to be
executed as of the date first indicated above.
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HABERSHAM
BANK
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By:
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/s/ Xxxxxx X. Xxxxxxxxx,
III
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Title:
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Chairman
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DIRECTOR:
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/s/ Xxxxx X.
Xxxxxxx
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Xxxxx
X. Xxxxxxx
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