SECOND AMENDMENT
OF
DIRECTOR’S COMPENSATION AGREEMENT
THIS
AGREEMENT is entered into as of the 18th day of June, 2003, by
and between Athens Federal Community Bank, a
federally chartered savings institution organized under the laws of
the United States of America (sometimes hereinafter referred to as
“Bank”) and James L. Carter, Jr. of
Athens, Tennessee, (sometimes hereinafter referred to as
“Director”);
WHEREAS,
the parties hereto entered into an original Director’s
Compensation Agreement dated March 31, 1991, and amended the
referenced Agreement on February 23, 1998; and
WHEREAS,
the parties hereto desire to further amend the original Agreement
and First Amendment thereto as set forth herein; and
WHEREAS,
this restated contract and Second Amendment shall supersede and
shall replace any conflicting terms in the original Agreement and
First Amendment thereto.
NOW,
THEREFORE, for and in consideration of the premises set forth
herein, and other valuable considerations, the receipt and
sufficiency of which are herby acknowledged, the parties hereto
restate and amend the Original Agreement and First Amendment
thereto as follows:
(1) The
Director may elect on or before March 31, 1991, to defer
receipt of all or a specific portion of any annual fees to be
earned after March 31, 1991, for the remaining calendar year
of 1991. Pursuant to the action of the Board of Directors, the Bank
has placed all proceeds credited to each Director as a result of
the dismantling of Plan No. 2 of the Director’s Deferred
Compensation at Athens Federal into a general ledger account at the
Bank for the purpose of ensuring that the dismantling of the
Director’s Deferred Compensation Plan No. 2 is a
nontaxable event pursuant to the Internal Revenue Code. The sum
credited to each Director’s general ledger account shall be
equal to the sum of all monthly fees deferred and accumulated
interest thereon at the same rates of interest paid to those
Directors who were deferring all Director’s fees and having
the same paid into an account nominated as “the general
ledger deferred account for Directors” at the Bank. The total
amount of deferred Director’s fees and accumulated interest
as of April 30, 2003, is $238,918.47 .
(2) Thereafter,
the Director may elect on or before December 31
st of any year to defer receipt of all or a
specific part of his annual fees for the succeeding calendar years.
Any person elected to fill a vacancy on the Board and who was not a
Director on the preceding December 31 may elect, before his term
begins, to defer all or a specific part of his annual fees for the
balance of the calendar year following such election and for
succeeding calendar years. Such election shall remain in full force
and effect until rescinded in writing by the Director.
(3) The Bank
will maintain a separate memorandum account of the fees deferred by
each Director and will credit the account with interest at a rate,
which rate shall be the highest interest allowed to be credited on
savings or certificate accounts as of December 31 of the
succeeding calendar year after such election. The interest rates
for each year thereafter shall be the highest interest allowed to
be credited on savings or certificate accounts as of
December 31 of each year.
(4) On or
before the ninetieth (90 th )
day following the date on which the Director’s service on the
Board terminates for any reason, the Director shall in writing
elect one of the following forms of distribution:
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Amounts deferred under the plan,
together with accumulated interest thereon shall be paid in a
single lump sum.
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Amounts deferred under the plan,
together with accumulated interest thereon shall be paid in equal
monthly installments. Director may select the number of monthly
installments but in no case may the number of monthly installments
be less than 60 nor more than 180.
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Should the
Director elect to receive distributions in monthly installments,
the Director’s account will continue to be credited
interested as provided in Paragraph 3 above. The amount of the
equal monthly installments shall be estimated based on the interest
rate in effect number Paragraph 3 for the year preceding the
year in which payments begin. The final payment shall be increased
for any underestimate of future interest or payments will end when
the total balance is paid if future interest is overstated. Should
the Director fail to elect in writing a form of distribution,
amounts deferred under the plan, together with accumulated interest
thereon shall be paid in 180 equal monthly installments. Such
election shall become irrevocable on the ninetieth (90
th ) day following the date on which the
Director’s service on the Board terminates for any reason.
However, in the event of financial hardship of the Director, as
hereinafter defined, the Director may apply to the Bank for the
distribution of all or any part of said Director’s account.
The Bank shall consider the circumstances of the Director and his
or her family and shall have the right in its sole discretion to
make such hardship distribution or to refuse to make such hardship
distribution. Financial hardship means
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A
severe financial hardship to the Director resulting from a sudden
or unexpected illness or accident of the Director or of a dependent
of the Director,
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Loss of Director’s property
due to casualty, or
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Other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the control of the Director, each as determined to exist by the
Bank.
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A hardship
distribution may be made only with the consent of the Bank’s
Board of Directors.
(5) Should
the Director die while serving on the Board or within the ninety
(90) day period described in Paragraph 4, the designated
Beneficiary of the Director may elect in writing one of the
following forms of distribution during the ninety (90) day
period following the death of the Director:
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Amounts deferred under the plan,
together with accumulated interest thereon shall be paid in a
single lump sum within ninety (90) days following the death of
the Director.
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Amounts deferred under the plan,
together with accumulated interest thereon shall be paid in equal
monthly installments. Beneficiary may select the number of monthly
installments but in no case may the number of monthly installments
be less than 60 nor more than 180.
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Should said
Beneficiary elect to receive distributions in monthly installments,
the Director’s account will continue to be credited interest
as provided in Paragraph 3. The amount of the equal monthly
installments shall be estimated based on the interest rate in
effect under Paragraph 3 for the year preceding the year in
which payments begin. The final payment shall be increased for any
underestimate of future interest or payments will end when the
total balance is paid if future interest is overstated. Should the
beneficiary fail to elect in writing a form of distribution,
amounts deferred under the plan, together with accumulated interest
thereon shall be paid in 180 equal monthly installments. Should the
Director die following the date that is ninety (90) days after
the date on which the Director’s service to the Board
terminates, payments to the beneficiary will be made in the same
amount and in the same manner as if the Director were still living.
Should the Director fail to designate a beneficiary in writing, the
balance in the Director’s account shall be paid to the Estate
of the Director within ninety (90) days following his or her
death.
(6) The
Director will forfeit all rights to such deferred compensation if
he engages in competition with the Bank, without the prior written
consent of the Bank, within a radius of 50 miles of the main office
of the Bank for a period of 10 years, subsequent to the
Director’s service on the Board.
(7) This
Agreement shall be binding upon the parties hereto and upon the
successors and assigns of the Bank, and upon the heirs and legal
representatives of the Director.
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