Exhibit
10.1


 


SUPPLEMENTAL EXECUTIVE


RETIREMENT PLAN


 


CITIZENS TRUST BANK


 


 


Effective July 1, 2008


 

















 


SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 


This
Supplemental Executive Retirement Plan (the “Plan”) is effective as of July 1, 2008. 
This Plan formalizes the agreements by and between CITIZENS TRUST BANK
(the “Bank”), a bank organized and existing under the laws of the State of
Georgia, and certain key employees, hereinafter referred to as “Executive(s)”,
who have been selected and approved by the Bank to participate in this Plan and
who have evidenced their participation by execution of a Supplemental Executive
Retirement Joinder Agreement (“Joinder Agreement”) in a form provided by the
Bank. This Plan replaces the individual Executive Supplemental Retirement Plan
Agreements and Executive Indexed Salary Continuation Plan Agreements between
the Bank (or First Southern Bank, which merged into the Bank) and
Executives.  The Plan is intended to
comply with Internal Revenue Code (“Code”) Section 409A and any regulatory
or other guidance issued under such Section. 
Any reference herein to the “Company” shall mean CITIZENS BANCSHARES
CORPORATION.  The Company shall be a
signatory to this Plan for the purpose of guaranteeing the Bank’s performance
hereunder and for purposes of acknowledging its potential obligation under Section 3.4(c) hereof.


 


W I T N E S S E T H :


 


WHEREAS, Executives are employed by the Bank; and


 


WHEREAS, the Bank recognizes the valuable services
heretofore performed for it by such Executives and wishes to encourage their
continued employment and to provide them with additional incentive to achieve
corporate objectives; and


 


WHEREAS, the Bank (or First Southern Bank) and some
Executives who are eligible to participate in the Plan previously entered into
either an Executive Supplemental Retirement Plan Agreement or an Executive
Indexed Salary Continuation Plan Agreement pursuant to which the Bank (or First
Southern Bank) offered Executive an “indexed retirement benefit” (collectively,
such agreements are referred to as an “Indexed Retirement Plan”); and


 


WHEREAS, in addition to the Indexed Retirement Plan,
the Bank (or First Southern Bank) also entered into a Life Insurance
Endorsement Method Split Dollar Plan Agreement (a “Split Dollar Agreement”) with
certain of the Executives who are eligible to participate herein; and


 


WHEREAS, Executives have had to recognize and will
continue to recognize and pay taxes on annually increasing income every year
for as long as Executives live and while the Split Dollar Agreements are in
effect; and


 


WHEREAS, although the Bank is required to administer
the Split Dollar Agreements for as long as they are in effect, the accounting
treatment of endorsement split dollar policies changed, effective December 15,
2007, and as a result, the Bank desires to terminate the Split Dollar
Agreements; and


 


WHEREAS, the Bank finds the  Indexed Retirement Plan cumbersome and
difficult to administer and has determined that it generally fails to provide
the level of retirement benefit expected by Executives; and


 


 WHEREAS,
the Bank desires to replace the Indexed Retirement Plan and the Split Dollar
Agreements with a Supplemental Executive Retirement Plan for current Executives
in order to modify the plan design into a “defined benefit” arrangement that
provides greater certainty to Executive as to benefits available at retirement
and to bring it into compliance with Section 409A of the Internal Revenue
Code (“Code”) and the Treasury Regulations issued thereunder; and


 

















 


WHEREAS, those Executives in the Split Dollar
Agreements have agreed to termination of the Split Dollar Agreements and the
modification of the Indexed Retirement Plan to a defined benefit-type
retirement plan; and


 


WHEREAS, the Bank intends this Plan to be considered
an unfunded arrangement, maintained primarily to provide supplemental
retirement income for its Executives, members of a select group of management
or highly compensated employees of the Bank, for tax purposes and for purposes
of the Employee Retirement Income Security Act of 1974, as amended; and


 


WHEREAS, the Bank has adopted this Supplemental
Executive Retirement Plan which controls all issues relating to Supplemental
Retirement Benefits as described herein.


 


NOW, THEREFORE, in consideration of the
premises and of the mutual promises herein contained, the Bank and Executive
agree as follows:


 


SECTION I


DEFINITIONS


 


When
used herein, the following words and phrases shall have the meanings below
unless the context clearly indicates otherwise:


 


1.1                                 “Accrued Benefit” means that
portion of the Supplemental Retirement Benefit which is expensed and accrued
under generally accepted accounting principles (GAAP).


 


1.2                                 “Act” means the Employee
Retirement Income Security Act of 1974, as amended from time to time.


 


1.3                                 “Administrator”
means the Bank and/or its Board.


 


1.4                                 “Bank” means CITIZENS TRUST
BANK and any successor thereto.


 


1.5                                 “Beneficiary” means the
person or persons (and their heirs) designated by an Executive as the
Beneficiary to whom the deceased Executive’s benefits are payable. Such
beneficiary designation shall be made on the form attached hereto as Exhibit A
and filed with the Plan Administrator. 
If no Beneficiary is so designated, then Executive’s Spouse, if living,
will be deemed the Beneficiary. If Executive’s Spouse is not living, then the
Children of Executive will be deemed the Beneficiaries and will take on a per stirpes basis. If there are no living
Children, then the Estate of Executive will be deemed the Beneficiary.


 


1.6                                 “Benefit Age” shall be age 65,
unless another age is specified with respect to an Executive in the Executive’s
Joinder Agreement.


 


1.7                                 “Benefit Eligibility Date”
shall mean, with respect to the Supplemental Retirement Benefit, the later of (1) the
date on which the Participant attains the Participant’s Benefit Age, or (ii) the
date on which the Participant actually has a Separation from Service.  With respect to the Supplemental Early
Retirement Benefit, the “Benefit Eligibility Date” shall be the date on which
the Participant Separates from Service on or after age 62.  With respect to all other  payments, the Benefit Eligibility Date shall
be the date of the occurrence of the event triggering distribution.  Subject to Section 3.7 of this Plan,
payments shall commence within 90 days following the Benefit Eligibility Date.


 


2

















 


1.8                                 “Board” shall
mean the Board of Directors of the Bank, unless specifically noted otherwise.


 


1.9                                 “Cause” shall mean gross
negligence or gross neglect or commission of a felony or gross-misdemeanor
involving moral turpitude, fraud, dishonesty, or willful violation of any law
that results in any adverse effect on the Bank.


 


1.10                           A “Change in Control” of the
Bank or the Company shall mean (1) a change in ownership of the Bank or
the Company under paragraph (i) below, or (2) a change in effective
control of the Bank or the Company under paragraph (ii) below, or (3) a
change in the ownership of a substantial portion of the assets of the Bank or
the Company under paragraph (iii) below:


 


(i)                                     Change in the ownership of
the Bank or the Company.  A change in the ownership of the
Bank or the Company shall occur on the date that any one person, or more than
one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)),
acquires ownership of stock of the corporation that, together with stock held
by such person or group, constitutes more than 50% of the total fair market
value or total voting power of the stock of such corporation.


 


(ii)                                  Change in the
effective control of the Bank or the Company.  A change in the effective control
of the Bank or the Company shall occur on the date that either (A) any one
person, or more than one person acting as a group (as defined in Treasury
Regulation Section 1.409A-3(i)(5)(vi)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Bank or the Company
possessing 30% or more of the total voting power of the stock of the Bank or
the Company; or (B) a majority of members of the Bank or the Company’s
Board of Directors is replaced during any 12-month period by Directors whose
appointment or election is not endorsed by a majority of the members of the
corporation’s Board of Directors prior to the date of the appointment or
election, provided that this sub-section (B) is inapplicable where a
majority shareholder of the Bank or the Company is another corporation.


 


(iii)                               Change in the ownership of a
substantial portion of the Bank’s or the Company’s assets.  A change in the ownership of a substantial
portion of the Bank’s or the Company’s assets shall occur on the date that any
one person, or more than one person acting as a group (as defined in Treasury
Regulation Section 1.409A-3(i)(5)(vii)(C)), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Bank or the Company that have a total
gross fair market value equal to more than 40% of the total gross fair market
value of all of the assets of the Bank or the Company immediately prior to such
acquisition.  For this purpose, gross
fair market value means the value of the assets of the corporation, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.


 


(iv)                              For all purposes hereunder,
the definition of Change in Control shall be construed to be consistent with
the requirements of Treasury Regulation Section 1.409A-3(i)(5), except to
the extent that such regulations are superseded by subsequent guidance.


 


3

















 


1.11                           “Children” means Executive’s
children, or the issue of any deceased Children, then living at the time
payments are due the Children under this Plan. The term “Children” shall
include both natural and adopted Children.


 


1.12                           “Code” means
the Internal Revenue Code of 1986, as amended.


 


1.13                           “Disability
Benefit” means the monthly benefit payable to Executive in accordance with Section 3.7
hereof following a determination that Executive is disabled.


 


1.14                           “Effective Date” of this
Plan shall be July 1, 2008.  As of
the Effective Date, this Plan supersedes and replaces, with respect to current
Executives, the Indexed Retirement Plan.


 


1.15                           “Estate” means
the estate of Executive.


 


1.16                           “Executive” means an officer
who has been selected and approved by the Board to participate in the Plan.


 


1.17                           “Interest Factor,” unless
specifically designated otherwise in this Subsection or in another place in
this Plan, means monthly compounding or discounting, as applicable, at six
percent (6%). For purposes of determining the present value of the amount
necessary to contribute to a rabbi trust to fund Executive’s benefit in the
event of a Change in Control, the Interest Factor shall mean 120% of the
semiannual applicable federal rate (AFR) as determined under Code Section 1274(d).


 


1.18                           “Joinder Agreement” means
the Supplemental Executive Retirement Plan Joinder Agreement between Executive
and the Bank which sets forth the particulars of Executive’s Supplemental
Retirement Benefit and/or other benefits to which Executive or Executive’s
Beneficiary become entitled under the Plan.


 


1.19                           “Payout Period” means the
time frame during which benefits payable hereunder shall be distributed.
Payment of the Supplemental Retirement Benefit and Supplemental Early
Retirement Benefit shall be made in monthly installments for 180 months
commencing within ninety (90) days following the Benefit Eligibility Date.  For all other payments, the Payout Period
shall generally be a one-time lump sum payment commencing within 90 days of the
occurrence of the event which triggers distribution, unless another Payout
Period is set forth in the Plan or in a Participant’s Joinder Agreement.


 


1.20                           “Plan Year” shall mean the
calendar year.


 


1.21                           “Separation from Service”
(or “Separate from Service”) means Executive’s death, retirement or other
termination of employment with the Bank within the meaning of Code Section 409A.  No Separation from Service shall be deemed to
occur due to military leave, sick leave or other bona fide leave of absence if the period of such leave does
not exceed six months or, if longer, so long as Executive’s right to
reemployment is provided by law or contract. 
If the leave exceeds six months and Executive’s right to reemployment is
not provided by law or by contract, then Executive shall have a Separation from
Service on the first date immediately following such six-month period.


 


Whether
a Separation from Service has occurred is determined based on whether the facts
and circumstances indicate that the Bank and Executive reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services Executive would perform after such date (whether as
an employee or as an independent contractor) would 


 


4

















 


permanently
decrease to no more than 49% of the average level of bona fide services performed
over the immediately preceding 36 months (or such lesser period of time in
which the Participant performed services for the Association).  The determination of whether Executive has
had a Separation from Service shall be made by applying the presumptions set
forth in the Treasury Regulations under Code Section 409A.


 


1.22                           “Specified Employee”  means, in the event the Bank or any corporate
parent is or becomes publicly traded, a “Key Employee” as such term is defined
in Code Section 416(i) without regard to paragraph 5 thereof.


 


1.23                           “Spouse” means the
individual to whom Executive is legally married at the time of Executive’s
death, provided, however, that the term “Spouse” shall not refer to an
individual to whom Executive is legally married at the time of death if Executive
and such individual have entered into a formal separation agreement (provided
that such separation agreement does not provide otherwise or state that such
individual is entitled to a portion of the benefit hereunder) or initiated
divorce proceedings.


 


1.24                           “Supplemental Early
Retirement Benefit” means, if provided in a Participant’s Joinder Agreement, a
fixed amount set forth in such Joinder Agreement (before taking into account
federal and state income and employment taxes). 
The Supplemental Early Retirement Benefit shall be payable in monthly
installments throughout the Payout Period.


 


1.25                           “Supplemental Retirement
Benefit” means a fixed amount set forth in a Participant’s Joinder Agreement (before
taking into account federal and state income and employment taxes).  The Supplemental Retirement Benefit shall be
payable in monthly installments throughout the Payout Period.


 


1.26                           “Survivor’s
Benefit” means the benefit payable to a Participant’s Beneficiary if the
Participant dies prior to a Separation from Service.  The Survivor’s Benefit will be determined as
set forth in the Participant’s Joinder Agreement in accordance with one of the
following alternatives:


 


(a)          the Survivor’s Benefit shall
be equal to the amount that would have been payable to the Executive if the
Executive had lived until his or her Benefit Age and retired immediately prior
to death and shall be paid in equal monthly installments over the Payout
Period, or


 


(b)         the Survivor’s Benefit shall
equal the Executive’s Accrued Benefit         determined at the date of the Executive’s death,
payable in a lump sum within 90 days of the Executive’s death.


 


1.27                           Vested
Percentage” means the percentage of a Participant’s Accrued Benefit available
to pay a benefit to a Participant who has a Separation from Service (other than
due to death) prior to Benefit Age.


 


1.28                           “Vesting Rate”
means the rate set forth in certain Participants’ Joinder Agreements.  In the event of a Separation from Service
prior to Benefit Age, the Vesting Rate shall be multiplied by the Participant’s
Accrued Benefit to determine the Participant’s Vested Percentage of  the Accrued Benefit.


 


5

















 


SECTION II


ESTABLISHMENT OF RABBI TRUST


 


The
Bank intends to establish a rabbi trust into which the Bank intends to
contribute assets which shall be held therein, subject to the claims of the
Bank’s creditors in the event of the Bank’s “Insolvency” as defined in the
agreement which establishes such rabbi trust, until the contributed assets are
paid to  Executives and their
Beneficiaries in such manner and at such times as specified in this Plan. It is
the intention of the Bank to contribute cash or other property to the rabbi
trust to provide the Bank with a source of funds to assist it in meeting the
liabilities of this Plan. To the extent the language in this Plan is modified
by the language in the rabbi trust agreement, the rabbi trust agreement shall
supersede this Plan. In the event of a Change in Control, the Bank shall
transfer to the rabbi trust within thirty (30) days prior to such Change in
Control, the present value (applying the Interest Factor) of an amount
sufficient to fully fund the Supplemental Retirement Benefit for each Executive
covered by this Plan.


 


SECTION III


BENEFITS


 


3.1                                 Retirement
Benefit.


 


(a)          Supplemental Retirement
Benefit.  If a
Participant is in service with the Bank until reaching Benefit Age, the
Participant shall be entitled to the Supplemental Retirement Benefit. Such
benefit shall commence within ninety (90) days following the Participant’s
Benefit Eligibility Date and shall be payable in equal monthly installments
throughout the Payout Period.   In the
event a Participant dies at any time after attaining his Benefit Age, but prior
to completion of all such payments due and owing hereunder, the Bank shall pay
to the Participant’s Beneficiary a continuation of the monthly installments for
the remainder of the Payout Period.


 


(b)         Supplemental Early
Retirement Benefit.  If a
Participant has a voluntary or involuntary Separation from Service on or after
age 62 but before Benefit Age, and the Participant’s Joinder Agreement so
provides, the Participant will be entitled to a Supplemental Early Retirement
Benefit commencing within ninety (90) days following the Benefit Eligibility
Date, subject to the requirements for payments to Specified Employees, and
payable in equal monthly installments throughout the Payout Period.  In the event a Participant dies at any time
after attaining his Benefit Age, but prior to completion of all such payments
due and owing hereunder, the Bank shall pay to the Participant’s Beneficiary a
continuation of the monthly installments for the remainder of the Payout
Period.


 


3.2                                 Survivor’s or
Death Benefit.


 


(a)          If a Participant dies prior
to Separation from Service but while employed at the Bank, the Participant’s
Beneficiary shall be entitled to the Survivor’s Benefit. The Survivor’s Benefit
shall commence within ninety (90) days following the Participant’s date of
death and shall be payable in the manner set forth in the Joinder Agreement.


 


(b)         If the Participant dies
following Separation from Service, prior to the commencement of any benefit
payments to which the Participant is entitled, the Participant’s Beneficiary
shall be entitled to the payment of the benefit amount otherwise payable to the
Participant under the applicable Sub-section of this Section III (which
benefit shall be deemed the “Death Benefit”), commencing within ninety (90)
days following the Participant’s date of death and payable in the form, i.e.,
lump sum or installment, that the benefit otherwise would have been paid to the
Participant.


 


6
















 


(c)          In addition to the
above-described Survivor Benefit or Death Benefit, upon a Participant’s death,
the Participant’s Beneficiary shall be entitled to receive a one-time lump sum
death benefit in the amount of Ten Thousand ($10,000.00) Dollars. This benefit
shall be provided specifically for the purpose of providing payment for burial
and/or funeral expenses of the Participant. Such death benefit shall be payable
within ninety (90) days following the Participant’s death. A Participant’s
Beneficiary shall not be entitled to such benefit if the Participant is
terminated for Cause prior to death.


 


3.3                               Voluntary or
Involuntary Separation from Service Prior to Age 62.


 


(a)         Unless the Participant’s
Joinder Agreement states otherwise, if a Participant has a voluntary or
involuntary Separation from Service prior to the attainment of age 62, the
Participant shall be entitled to the Vested Percentage of the Participant’s
Accrued Benefit, determined as set forth herein.  The Vested Percentage of the Accrued Benefit,
determined at the date of the Participant’s Separation from Service, shall be
payable in a lump sum payment within ninety (90) days following Separation from
Service, subject to the payment timing rules for Specified Employees set
forth in Section 3.7.


 


(b)         If a Participant’s Joinder
Agreement so provides, a Participant who has a voluntary Separation from
Service prior to age 62 shall be entitled to the Participant’s Accrued Benefit,
increased annually by the Interest Factor until the Participant’s Benefit Age.  When the Participant attains Benefit Age, the
Accrued Benefit shall be annuitized (using the Interest Factor) and shall be
payable over the Payout Period.


 


(c)          If a Participant’s Joinder
Agreement so provides, a Participant who has an involuntary Separation from
Service prior to age 62 shall be entitled to the full Supplemental Retirement
Benefit.  The full Supplemental
Retirement Benefit shall commence at Benefit Age and shall be payable over the
Payout Period.


 


3.4                               Benefit Payable
Following a Change in Control.


 


(a)               If a Change in Control
occurs followed by a Participant’s Separation from Service, the Participant
shall be entitled to the amount set forth in the Participant’s Joinder
Agreement, payable in the form and at the time set forth therein.  Consistent with the requirements of Treasury
Regulation Section 1.409A-3(c), if set forth in a Participant’s Joinder
Agreement, a different time and form of benefit may be payable to a Participant
if the Participant’s Separation from Service occurs within two years following
a Change in Control than will be paid to the Participant if Separation from
Service occurs more than two years following the Change in Control.  The benefit payable under this Section 3.4(a) shall
be in lieu of any other benefit under this Plan, except the death benefit
provided by Section 3.2(c).  In the
event Participant dies prior to commencement or completion of the payments due
and owing hereunder, the Bank shall pay to the Participant’s Beneficiary the
amounts due to the Participant or a continuation of the payments for the Payout
Period or the remainder of the Payout Period.


 


(b)               If required by the Participant’s Joinder
Agreement, the benefit payable to the Participant under this Section 3.4,
either as a stand-alone benefit or when aggregated with other payments to or
for the benefit of the Participant that are contingent on a Change in Control
would cause Participant to have an “excess parachute payment” under Code Section 280G,
the Supplemental Benefit and/or such other payments shall be reduced to avoid
this result.  In the event a reduction is
necessary, the Participant shall be entitled to determine which 


 


7

















 


benefits
or payments shall be reduced or eliminated so the total parachute payments do
not result in an excess parachute payment. 
If the Participant does not make this determination within ten business
days after receiving a written request from the Bank, the Bank may make such
determination, and shall notify the Participant promptly thereof.  In the event it is determined that permitting
the Participant or the Bank to make the determination regarding the form or
manner of reduction would violate Code Section 409A, such reduction shall
be made pro rata among the benefits and/or payments.


 


(c)                Notwithstanding Section 3.4(b) of
this Plan, if the Participant would have an excess parachute payment under Code
Sections 280G and 4999 and the Participant’s Joinder Agreement requires, the
Bank or the Company shall make an additional payment to or on behalf of the
Participant (the “Gross Up Payment”) which shall be the minimum amount
necessary to ensure that the net amount of the Supplemental Retirement Benefit
received by the Participant (net of such excise tax and any federal, state and
local income and employment taxes on the Bank’s payment to the Participant
attributable to such excise tax) equals the net amount of the Supplemental
Retirement Benefit the Participant would receive without giving effect to Code
Sections 280G and 4999.  Payment of the
Gross-Up Payment to the Participant shall be made as soon as reasonably
practicable after the amount of such payment or payments is determined, but in
no event later than the end of the Participant’s taxable year next following
the Participant’s taxable year in which the Participant remits the excise tax
to the required taxing authority.


 


3.5                               Termination for
Cause.  If a Participant is terminated
for Cause, all benefits under this Plan shall be forfeited by the Participant
and the Participant’s participation in this Plan shall become null and
void.  Any purported termination for
Cause by the Bank shall be communicated by a Notice of Termination for Cause to
the Participant.  For purposes of this
Plan, a “Notice of Termination for Cause” shall mean a written notice that
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for the Participant’s termination for Cause.  If, within thirty (30) days after any Notice
of Termination for Cause is given, the Participant notifies the Bank that a
dispute exists concerning the termination for Cause, the parties shall promptly
proceed to arbitration in accordance with Section 6.3 of the Plan.


 


3.6                               Disability
Benefit.


 


(a)               Notwithstanding any other provision hereof,
if a Participant terminates employment due to Disability prior to age 62, the
Participant shall be entitled to receive the Disability Benefit hereunder.  Participant shall be deemed to be “Disabled”
or to have a “Disability” in any case in which it is determined:


 


(i)                   by a duly licensed physician
selected by the Bank, that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death, or last for a
continuous period of not less than twelve (12) months;


 


(ii)          by reason of any medically
determinable physical or mental impairment which can be expected to result in
death, or last for a continuous period of not less than twelve (12) months,
that the Participant is receiving income replacement benefits for a period of
not less than three months under an accident and health plan covering employees
of the Participant’s employer; or


 


(iii)       by the Social Security
Administration, that the Participant is totally disabled.


 


8

















 


(b)               The Disability Benefit generally shall be
equivalent to either: (i) a Participant’s Accrued Benefit (which will be
or become 100% vested) at the time of Disability, or (ii) the Vested
Percentage of the Accrued Benefit, determined at the time of Disability, as set
forth in the Joinder Agreement.  The
Disability Benefit generally shall be payable in a lump sum within ninety (90)
days following the date on which Participant has a Separation from Service due
to Disability.  Notwithstanding the
foregoing, if a Participant becomes Disabled after age 62, the Participant
shall be entitled to the Supplemental Early Retirement Benefit under Section 3.1(b) or
the Supplemental Retirement Benefit under Section 3.1(a), as applicable,
upon Separation from Service.


 


(c)                Alternatively, if set forth in the
Participants Joinder Agreement, a Participant who becomes Disabled shall be
entitled to the Supplemental Retirement Benefit regardless of the Participant’s
age at Disability, as provided in the Participant’s Joinder Agreement.


 


3.7                               Restriction on
Timing of Payment. Notwithstanding any provision of this Plan or a
Participant’s Joinder Agreement to the contrary, in the event a Participant is
a Specified Employee and the distribution is due to Separation from Service
(other than due to death or Disability), then, to the extent necessary to avoid
penalties under Code Section 409A, any payment to which the Participant is
entitled for the first six months following Participant’s Separation from
Service with the Bank shall be withheld and shall be paid to the Participant on
the first day of the seventh month following the Participant’s Separation from
Service with the Bank.  Interest (at the
rate of the Interest Factor) will accrue on any withheld payment and shall be
paid at the time that the withheld payments are paid.  With respect to installment payments, all
remaining payments shall be paid as originally scheduled.  Whether and the extent to which a Participant
is a Specified Employee shall be determined on the “Specified Employee
Determination Date” which shall be December 31 of each calendar year and
shall be applicable commencing on the following July 1, in accordance with
the rules set forth in the Treasury Regulations under Code Section 409A.


 


SECTION IV


BENEFICIARY DESIGNATION


 


A
Participant shall make an initial designation of primary and secondary
Beneficiaries upon execution of his or her Joinder Agreement and shall have the
right to change such designation, at any subsequent time, by submitting to the
Administrator, in substantially the form attached as Exhibit A, a written
designation of primary and secondary Beneficiaries. Any Beneficiary designation
made subsequent to execution of the Joinder Agreement shall become effective
only when receipt thereof is acknowledged in writing by the Administrator.


 


SECTION V


PARTICIPANT’S RIGHT TO ASSETS:


ALIENABILITY AND ASSIGNMENT PROHIBITION


 


At
no time shall a Participant be deemed to have any lien, right, title or
interest in or to any specific investment or asset of the Bank. The rights of a
Participant, any Beneficiary, or any other person claiming through a
Participant under this Plan, shall be solely those of an unsecured general
creditor of the Bank. The Participant, the Beneficiary, or any other person
claiming through the Participant, shall only have the right to receive from the
Bank those payments so specified under this Plan. Neither the Participant nor
any Beneficiary under this Plan shall have any power or right to transfer,
assign, anticipate, hypothecate, mortgage, commute, modify or otherwise
encumber in advance any of the benefits payable hereunder, nor shall any of
said benefits be subject to seizure for the payment of any 


 


9

















 


debts,
judgments, alimony or separate maintenance owed by the Participant or his
Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise.


 


SECTION VI


ACT
PROVISIONS


 


6.1                               Named Fiduciary
and Administrator.  The Bank
shall be the Named Fiduciary and Administrator of this Plan. As Administrator,
the Bank shall be responsible for the management, control and administration of
the Plan as established herein. The Administrator may delegate to others
certain aspects of the management and operational responsibilities of the Plan,
including the employment of advisors and the delegation of ministerial duties
to qualified individuals.


 


6.2                               Claims Procedure.  In the event that benefits under this Plan
are not paid to the Participant (or to his or her Beneficiary in the case of
the Participant’s death) and such claimants feel they are entitled to receive
such benefits, then a written claim must be made to the Administrator within
sixty (60) days from the date payments are refused. The Administrator shall
review the written claim and, if the claim is denied, in whole or in part, they
shall provide in writing, within thirty (30) days following receipt of such
claim, their specific reasons for such denial, reference to the provisions of
this Plan or the Joinder Agreement upon which the denial is based, and any
additional material or information necessary to perfect the claim. Such writing
by the Administrator shall further indicate the additional steps which must be
undertaken by claimants if an additional review of the claim denial is desired.


 


If
claimants desire a second review, they shall notify the Administrator in
writing within thirty (30) days of the first claim denial. Claimants may review
this Plan, the Joinder Agreement or any documents relating thereto and submit
any issues and comments, in writing, they may feel appropriate. In its sole
discretion, the Administrator shall then review the second claim and provide a
written decision within thirty (30) days of receipt of such claim. This
decision shall state the specific reasons for the decision and shall include
reference to specific provisions of this Plan or the Joinder Agreement upon
which the decision is based.


 


If
claimants continue to dispute the benefit denial based upon completed
performance under this Plan and the Joinder Agreement or the meaning and effect
of the terms and conditions thereof, it shall be settled by arbitration in
accordance Section 6.3 hereof.


 


6.3                               Arbitration.  Any dispute or controversy arising under or
in connection with Section 3.5, Section 6.2, or any other provision
of the Plan shall be settled exclusively by arbitration, conducted before a
panel or three arbitrators sitting in Atlanta, Georgia in accordance with the rules of
the American Arbitration Association (“AAA”) 
National Rules for the Resolution of Employment Disputes (“National
Rules”), then in effect, Judgment may be entered on the arbitrator’s award in
any court having jurisdiction.


 


SECTION VII


MISCELLANEOUS


 


7.1                               No Effect on Employment
Rights.  Nothing contained herein will
confer upon an Executive the right to be retained in the service of the Bank
nor limit the right of the Bank to discharge or otherwise deal with Executive
without regard to the existence of the Plan.


 


10

















 


7.2                               State Law.  The Plan is established under, and will be
construed according to, the laws of the State of Georgia, to the extent such
laws are not preempted by the Act and valid regulations published thereunder.


 


7.3                               Severability and
Interpretation of Provisions.  In the event that any of the provisions of
this Plan or portion hereof are held to be inoperative or invalid by any court
of competent jurisdiction, or in the event that any provision is found to
violate Code Section 409A and would subject Executive to additional taxes
and interest on the amounts deferred hereunder, or in the event that any
legislation adopted by any governmental body having jurisdiction over the Bank
would be retroactively applied to invalidate this Plan or any provision hereof
or cause the benefits hereunder to be taxable, then: (1) insofar as is
reasonable, effect will be given to the intent manifested in the provisions
held invalid or inoperative, and (2) the validity and enforceability of
the remaining provisions will not be affected thereby.  In the event that the intent of any provision
shall need to be construed in a manner to avoid taxability, such construction shall
be made by the Administrator in a manner that would manifest to the maximum
extent possible the original meaning of such provisions.


 


7.4                               Incapacity of Recipient.  In the event a Participant is declared
incompetent and a conservator or other person legally charged with the care of
his person or Estate is appointed, any benefits under the Plan to which such
Participant is entitled shall be paid to such conservator or other person
legally charged with the care of his person or Estate.


 


7.5                               Unclaimed Benefit.  A Participant shall keep the Bank informed of
his or her current address and the current address of his Beneficiaries. If the
location of a Participant is not made known to the Bank, the Bank shall delay
payment of the Participant’s benefit payment(s) until the location of the
Participant is made known to the Bank; however, the Bank shall only be
obligated to hold such benefit payment(s) for the Participant until the
expiration of five (5) years. Upon expiration of the five (5) year
period, the Bank may discharge its obligation by payment to the Participant’s
Beneficiary. If the location of the Participant’s Beneficiary is not known to
the Bank, the Participant and his or her Beneficiary(ies) shall thereupon
forfeit any rights to the balance, if any, of any benefits provided for such
Participant and/or Beneficiary under this Plan.


 


7.6                               Limitations on Liability.   Notwithstanding any of the preceding
provisions of the Plan, no individual acting as an employee or agent of the
Bank, or as a member of the Board of the Bank shall be personally liable to an
Executive or any other person for any claim, loss, liability or expense
incurred in connection with the Plan.


 


7.7                               Gender.  Whenever in this Plan words are used in the
masculine or neuter gender, they shall be read and construed as in the masculine,
feminine or neuter gender, whenever they should so apply.


 


7.8                               Effect on Other Corporate
Benefit Plans.  Nothing
contained in this Plan shall affect the right of Executive to participate in or
be covered by any qualified or nonqualified pension, profit sharing, group,
bonus or other supplemental compensation or fringe benefit agreement
constituting a part of the Bank’s existing or future compensation structure.


 


7.9                               Suicide.  Notwithstanding anything to the contrary in
this Plan, if a Participant’s death results from suicide, whether sane or
insane, within twenty-six (26) months after the execution of his Joinder
Agreement, the maximum benefit payable to the Participant’s Beneficiary will be
the Participant’s Accrued Benefit at the time of his or her death.


 


11

















 


7.10                        Inurement.  This Plan shall be binding upon and shall
inure to the benefit of the Bank, its successors and assigns, and the
Participant, his successors, heirs, executors, administrators, and Beneficiaries.


 


7.11                        Acceleration of Payments. 
Except as specifically permitted herein or in other sections of this
Plan, no acceleration of the time or schedule of any payment may be made
hereunder.  Notwithstanding the foregoing,
payments may be accelerated hereunder by the Bank, in accordance with the
provisions of Treasury Regulation Section 1.409A-3(j)(4) and any
subsequent guidance issued by the United States Treasury Department.  Accordingly, payments may be accelerated, in
accordance with requirements and conditions of the Treasury Regulations (or
subsequent guidance) in the following circumstances: (i) as a result of
certain domestic relations orders; (ii) in compliance with ethics
agreements with the Federal Government; (iii) in compliance with ethics
laws or conflicts of interest laws; (iv) in limited cash-outs (but not in
excess of the limit under Code Section 402(g)(1)(B)); (v) in the case
of certain distributions to avoid a non-allocation year under Code Section 409(p);
(vi) to apply certain offsets in satisfaction of a debt of Executive to
the Bank; (vii) in satisfaction of certain bona fide disputes between Executive and the Bank; or (viii) for
any other purpose set forth in the Treasury Regulations and subsequent
guidance.


 


7.12                        Headings.  Headings and sub-headings in this Plan are
inserted for reference and convenience only and shall not be deemed a part of
this Plan.


 


7.13                        12 U.S.C. §
1828(k).  Any payments made to a
Participant or Beneficiary pursuant to this Plan or otherwise are subject to and
conditioned upon compliance with 12 U.S.C. § 1828(k) or any regulations
promulgated thereunder.


 


7.14                        Payment of
Employment and Code Section 409A Taxes.  Any distribution under this Plan shall be
reduced by the amount of any taxes required to be withheld from such
distribution.  This Plan shall permit the
acceleration of the time or schedule of a payment to pay employment-related
taxes as permitted under Treasury Regulation Section 1.409A-3(j) or
to pay any taxes that may become due at any time that the arrangement fails to
meet the requirements of Code Section 409A and the regulations and other
guidance promulgated thereunder.  In the
latter case, such payments shall not exceed the amount required to be included
in income as the result of the failure to comply with the requirements of Code Section 409A.


 


SECTION VIII


AMENDMENT/TERMINATION


 


8.1                               Amendment to the Plan.  This Plan shall not be amended or modified at
any time, in whole or part, without the mutual written consent of each affected
Participant and the Bank, except to the extent necessary to comply with
applicable laws.


 


8.2                               Termination of
Plan.


 


(a)                                 Partial
Termination.  The Board
may partially terminate the Plan by freezing future accruals if, in its
judgment, the tax or accounting effects of the continuance of the Plan, or
potential payments thereunder, would not be in the best interests of the Bank,
provided, however, the Plan may not be terminated following a Change in Control
unless the Executives consent.


 


(b)                                 Complete
Termination.  Subject to
the requirements of Code Section 409A, in the event of complete
termination of the Plan, the Plan shall cease to operate and the Bank shall pay



 


12

















 


out
to Executive his benefit as if Executive had terminated employment as of the
effective date of the complete termination. 
Such complete termination of the Plan shall occur only under the
following circumstances and conditions:


 


(i)                                     The Board may terminate the
Plan within 12 months of a corporate dissolution taxed under Code Section 331,
or with approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A),
provided that the amounts deferred under the Plan (e.g., the Accrued Benefit)
are included in Executive’s gross income in the latest of (i) the calendar
year in which the Plan terminates; (ii) the calendar year in which the
amount is no longer subject to a substantial risk of forfeiture; or (iii) the
first calendar year in which the payment is administratively practicable.


 


(ii)                                  The Board may terminate the
Plan by Board action occurring within the 30 days preceding a Change in Control
(but not following a Change in Control), provided that the Plan shall only be
treated as terminated if all substantially similar arrangements sponsored by
the Bank are terminated so that participants under substantially similar
arrangements are required to receive all amounts of compensation deferred under
the terminated arrangements within 12 months of the date of the termination of
the arrangements.  Following the termination
of the Plan, the amount payable to each Participant shall be the amount to
which Executive is entitled upon a Change in Control, as set forth in
Participant’s Joinder Agreement.


 


(iii)                               The Board may
terminate the Plan provided that (i) the termination and liquidation does
not occur proximate to a downturn in the financial health of the Bank or
Company, (ii) all arrangements sponsored by the Bank that would be
aggregated with this Plan under Treasury Regulations Section 1.409A-1(c) if
the Executive covered by this Plan was also covered by any of those other
arrangements are also terminated; (iii) no payments other than payments
that would be payable under the terms of the arrangement if the termination had
not occurred are made within twelve (12) months of the termination of the
arrangement; (iv) all payments are made within twenty-four (24) months of
the termination of the arrangements; and (v) the Bank does not adopt a new
arrangement that would be aggregated with any terminated arrangement under
Treasury Regulations Section 1.409A-1(c) if the Executive
participated in both arrangements, at any time within three years following the
date of termination of the arrangement.


 


SECTION IX


EXECUTION


 


9.1                               This Plan sets
forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby, and any previous agreements or understandings
between the parties hereto regarding the subject matter hereof are merged into
and superseded by this Plan.


 


9.2                               This Plan may be executed in
duplicate, each copy of which, when so executed and delivered, shall be an
original, but both copies shall together constitute one and the same
instrument.


 


[Signature Page Follows]


 


13

















 


IN
WITNESS WHEREOF, the Bank has caused this Plan to be executed on this
       day of July, 2008.


 


	
  ATTEST:

  	
   

  	
  CITIZENS
  TRUST BANK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Cynthia N. Day

  	
   

  	
  By:

  	
  /s/
  James E. Young

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  CITIZENS
  BANCSHARES CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Cynthia N. Day

  	
   

  	
  By:

  	
  /s/
  James E. Young

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
						



 


14