TERMINATION AND WAIVER
AGREEMENT
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 (the “Bank”), and JAMES
A. STAPLETON, JR., a resident of the State of Georgia (the
“Director”).
Preamble :
WHEREAS, the 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 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.
