Exhibit 10.5





Exhibit 10.5




ATHENS FEDERAL COMMUNITY BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT




THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT (the “Agreement”) is amended and
restated this 1st day of April, 2010, by and between Athens Federal Community Bank, a
savings association located in Athens, Tennessee (the “Bank”), and Jeffrey L. Cunningham (the
“Executive”).



The purpose of this Agreement is to provide specified benefits to the Executive, a member of a
select group of management or highly compensated employees who contribute materially to the
continued growth, development and future business success of the Bank. This Agreement shall be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended from time to time.



Article 1

Definitions




Whenever used in this Agreement, the following words and phrases shall have the meanings
specified:




	1.1	 	“Account Value” means the amount shown on Schedule A under the heading Account Value.
The parties expressly acknowledge that the Account Value may be different than the liability
that should be accrued by the Bank, under U.S. Generally Accepted Accounting Principles
(“GAAP”), for the Bank’s obligation to the Executive under this Agreement. The Account Value
on any date other than the end of a Plan Year shall be determined by adding the prorated
increase attributable for the current Plan Year to the Account Value for the previous Plan
Year.

	 
	1.2	 	“Beneficiary” means each designated person or entity, or the estate of the Executive,
entitled to any benefits upon the death of the Executive pursuant to Article 4.

	 
	1.3	 	“Beneficiary Designation Form” means the form established from time to time by the
Plan Administrator that the Executive completes, signs and returns to the Plan Administrator
to designate one or more Beneficiaries.

	 
	1.4	 	“Board” means the Board of Directors of the Bank as from time to time constituted.

	 
	1.5	 	“Change in Control” means a change in the ownership or effective control of the Bank,
or in the ownership of a substantial portion of the assets of the Bank, as such change is
defined in Code Section 409A and regulations thereunder.

	 
	1.6	 	“Code” means the Internal Revenue Code of 1986, as amended, and all regulations and
guidance thereunder, including such regulations and guidance as may be promulgated after the
Effective Date of this Agreement.

	 
	1.7	 	“Disability” means the Executive: (i) 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 can be expected to last for a continuous period of not less
than twelve (12) months; or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less





 


 









 











	 	 	than twelve (12) months, receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering employees or directors of the
Bank. Medical determination of Disability may be made by either the Social Security
Administration or by the provider of an accident or health plan covering employees or
director’s of the Bank provided that the definition of “disability” applied under such
insurance program complies with the requirements of the preceding sentence. Upon the request
of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the
Social Security Administration’s or the provider’s determination.

	 
	1.8	 	“Early Involuntary Termination” means that the Executive, prior to his Normal
Retirement Age, has experienced a Separation from Service, following receipt of a written
notification from the Bank that such Separation from Service has occurred for reasons other
than Termination for Cause, Disability, or Early Voluntary Termination.

	 
	1.9	 	“Early Voluntary Termination” means that the Executive, prior to his Normal
Retirement Age, experiences a Separation from Service for reasons other than Termination for
Cause, Disability, death of the Executive or Early Involuntary Termination.

	 
	1.10	 	“Effective Date” means January 1, 2007.

	 
	1.11	 	“Normal Retirement Age” means the Executive attaining age fifty-eight (58).

	 
	1.12	 	“Plan Administrator” means the Board or committee or person that the Board shall
appoint from time to time

	 
	1.13	 	“Plan Year” means each twelve (12) month period commencing on January 1 and ending on
December 31 of each year.

	 
	1.14	 	“Schedule A” means the schedule attached to this Agreement and made a part hereof.
Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3.

	 
	1.15	 	“Separation from Service” means the termination of the Executive’s employment with
the Bank. Whether a Separation from Service takes place is determined in accordance with the
requirements of Code Section 409A based on the facts and circumstances surrounding the
termination of the Executive’s employment and whether the Bank and the Executive intended for
the Executive to provide significant services for the Bank following such termination. A
Separation from Service will not have occurred if:







	 	(a)	 	the Executive continues to provide services as an employee of the Bank at an
annual rate that is twenty percent (20%) or more of the services rendered, on average,
during the immediately preceding three (3) full calendar years of employment (or, if
employed less than three (3) years, such lesser period) and the annual remuneration for
such services is twenty percent (20%) or more of the average annual remuneration earned
during the final three (3) full calendar years of employment (or, if less, such lesser
period), or

	 
	 	(b)	 	the Executive continues to provide services to the Bank in a capacity other
than as an employee of the Bank at an annual rate that is fifty percent (50%) or more
of the services rendered, on average, during the immediately preceding three (3) full
calendar years of employment (or if employed less than three (3) years, such lesser
period) and the annual remuneration for such services is fifty percent (50%) or more of
the average annual
remuneration earned during the final three (3) full calendar years of employment (or
if less, such lesser period).





 


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	 	 	The Executive’s employment relationship will be treated as continuing intact while the
Executive is on military leave, sick leave or other bona fide leave of absence if the period
of such leave of absence does not exceed six (6) months, or, if longer, so long as the
Executive’s right to reemployment with the Bank is provided either by statute or by
contract. If the period of leave exceeds six (6) months and there is no right to
reemployment, a Separation from Service will be deemed to have occurred as of the first date
immediately following such six (6) month period.

	 
	1.16	 	“Specified Employee” means a key employee (as defined in Section 416(i) of the Code
without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded
on an established securities market or otherwise, as determined by the Plan Administrator
based on the twelve (12) month period ending each December 31 (the “identification period”).
If the Executive is determined to be a Specified Employee for an identification period, the
Executive shall be treated as a Specified Employee for purposes of this Agreement during the
twelve (12) month period that begins on the first day of the fourth month following the close
of the identification period.

	 
	1.17	 	“Termination for Cause” means Separation from Service by action of the Board of
Directors or a banking regulatory agency resulting from the Executive’s:







	 	(a)	 	Gross negligence or gross neglect of duties to the Bank; or

	 
	 	(b)	 	Conviction of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Bank; or

	 
	 	(c)	 	Fraud, disloyalty, dishonesty or willful violation of any law or significant
Bank policy committed in connection with the Executive’s employment and resulting in a
material adverse effect on the Bank.






Article 2

Distributions During Lifetime





	2.1	 	Normal Retirement Benefit, Upon the Executive’s Separation from Service on or after
attaining his Normal Retirement Age for any reason other than death or a Termination for
Cause, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this Agreement.







	 	2.1.1	 	Amount of Benefit. The annual benefit under this Section 2.1 is One
Hundred Sixty Thousand Dollars ($160,000).

	 
	 	2.1.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on the first
business day of the month following the Executive’s Separation from Service. The annual
benefit shall be distributed to the Executive for twenty (20) years.







	2.2	 	Early Voluntary Termination Benefit. If Early Voluntary Termination occurs, the Bank
shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.





 


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	 	2.2.1	 	Amount of Benefit. The benefit under this Section 2.2 is the vested
Account Value determined as of the end of the Plan Year preceding Separation from
Service.

	 
	 	 	 	For the purpose of this provision, the Executive shall be vested in the Account
Value as follows:






	 	 	 	 	 
	As of Date	 	Vested Percentage	 
	December 31, 2008
	 	 	28.57	%
	December 31, 2009
	 	 	37.50	%
	December 31, 2010
	 	 	46.43	%
	December 31, 2011
	 	 	55.36	%
	December 31, 2012
	 	 	64.29	%
	December 31, 2013
	 	 	73.22	%
	December 31, 2014
	 	 	82.15	%
	December 31, 2015
	 	 	91.08	%
	December 31, 2016
	 	 	100.00	%







	 	2.2.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on the first
business day of the month following Normal Retirement Age. The annual benefit shall be
distributed to the Executive for twenty (20) years.







	2.3	 	Early Involuntary Termination Benefit. If an Early Involuntary Termination occurs,
the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu
of any other benefit under this Agreement.







	 	2.3.1	 	Amount of Benefit. The benefit under this Section 2.3 is one hundred
percent (100%) of the Account Value determined as of the end of the Plan Year preceding
Separation from Service.

	 
	 	2.3.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on the first
business day of the month following Normal Retirement Age. The annual benefit shall be
distributed to the Executive for twenty (20) years.







	2.4	 	Disability Benefit. If the Executive experiences a Disability which results in a
Separation from Service prior to Normal Retirement Age, the Bank shall distribute to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit under this
Article.







	 	2.4.1	 	Amount of Benefit. The benefit under this Section 2.4 is one hundred
percent (100%) of the Account Value determined as of the end of the Plan Year preceding
Separation from Service.

	 
	 	2.4.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on the first
business day of the month following the date of Separation of Service resulting from
such Disability determination. The annual benefit shall be distributed to the Executive
for twenty (20) years.





 


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	2.5	 	Change in Control Benefit. Notwithstanding anything herein to the contrary, if a
Change in Control occurs followed by a Separation from Service for any reason other than a
Termination for Cause, the Bank shall distribute to the Executive the benefit described in
this Section 2.5 in lieu of any other benefit under this Agreement.







	 	2.5.1	 	Amount of Benefit. The benefit under this Section 2.5 is one hundred
percent (100%) of the Normal Retirement Benefit amount described in Section 2.1.1.

	 
	 	2.5.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on the first
business day of the month following Normal Retirement Age. The annual benefit shall be
distributed to the Executive for twenty (20) years.







	2.6	 	Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee at Separation
from Service, the provisions of this Section 2.6 shall govern all distributions hereunder.
Benefit distributions that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six (6) months following
Separation from Service. Rather, any distribution which would otherwise be paid to the
Executive during such period shall be accumulated and paid to the Executive in a lump sum on
the first business day of the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner specified. Notwithstanding the forgoing,
no such delay or continued delay in payments shall be required following the death of the
Executive.

	 
	2.7	 	Distributions Upon Income Inclusion Under Code Section 409A. If any amount is
required to be included in income by the Executive prior to receipt due to a failure of this
Agreement to meet the requirements of Code Section 409A, the Executive may petition the Plan
Administrator for a distribution of that portion of the amount the Bank has accrued with
respect to the Bank’s obligations hereunder that is required to be included in the Executive’s
income. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the
Bank shall distribute to the Executive immediately available funds in an amount equal to the
portion of the amount the Bank has accrued with respect to the Bank’s obligations hereunder
required to be included in income as a result of the failure of this Agreement to meet the
requirements of Code Section 409A, within ninety (90) days of the date when the Executive’s
petition is granted. Such a distribution shall affect and reduce the Executive’s benefits to
be paid under this Agreement.

	 
	2.8	 	Change in Form or Timing of Distributions. For distribution of benefits under this
Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the
Agreement to delay the timing or change the form of distributions. Any such amendment:







	 	(a)	 	may not accelerate the time or schedule of any distribution, except as provided
in Code Section 409A and the regulations thereunder;

	 
	 	(b)	 	must be made at least twelve (12) months prior to the first scheduled
distribution;

	 
	 	(c)	 	must delay the commencement of distributions for a minimum of five (5) years
from the date the first distribution was originally scheduled to be made; and

	 
	 	(d)	 	must take effect not less than twelve (12) months after the amendment is made.





 


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Article 3

Distribution at Death





	3.1	 	Death During Active Service. If the Executive dies prior to Separation from Service,
the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1 This
benefit shall be distributed in lieu of any benefits under Article 2.







	 	3.1.1	 	Amount of Benefit. The benefit under this Section 3.1 is the Normal
Retirement Benefit amount described in Section 2.1.1.

	 
	 	3.1.2	 	Distribution of Benefit. The Bank shall distribute the annual benefit
to the Beneficiary in twelve (12) equal monthly installments for twenty (20) years
commencing the last day of the month following receipt by the Bank of the Executive’s
death certificate.







	3.2	 	Death During Distribution of a Benefit. If the Executive dies after any benefit
distributions have commenced under this Agreement but before receiving all such distributions,
the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in
the same amounts they would have been distributed to the Executive had the Executive survived.

	 
	3.3	 	Death After Separation from Service But Before Benefit Distributions Commence. If
the Executive is entitled to benefit distributions under this Agreement but dies prior to the
commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the
same benefits to which the Executive was entitled prior to death, except that the benefit
distributions shall commence within thirty (30) days following receipt by the Bank of the
Executive’s death certificate.






Article 4

Beneficiaries





	4.1	 	In General. The Executive shall have the right, at any time, to designate a
Beneficiary to receive any benefit distributions under this Agreement upon the death of the
Executive. The Beneficiary designated under this Agreement may be the same as or different
from the beneficiary designation under any other plan of the Bank in which the Executive
participates.

	 
	4.2	 	Designation. The Executive shall designate a Beneficiary by completing and signing
the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated
agent. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the
Plan Administrator may, in its sole discretion, determine that spousal consent is required to
be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse
and returned to the Plan Administrator. The Executive’s beneficiary designation shall be
deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive
names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall
have the right to change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.
Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be
entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted
by the Plan Administrator prior to the Executive’s death.

	 
	4.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Plan Administrator or
its designated agent.





 


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	4.4	 	No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s
spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, any
benefits shall be paid to the Executive’s estate.

	 
	4.5	 	Facility of Distribution. If the Plan Administrator determines in its discretion
that a benefit is to be distributed to a minor, to a person declared incompetent, or to a
person incapable of handling the disposition of that person’s property, the Plan Administrator
may direct distribution of such benefit to the guardian, legal representative or person having
the care or custody of such minor, incompetent person or incapable person. The Plan
Administrator may require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a
distribution for the account of the Executive and the Beneficiary, as the case may be, and
shall be completely discharge liability under the Agreement equal to such distribution amount.






Article 5

General Limitations





	5.1	 	Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s
employment with the Bank is terminated due to a Termination for Cause.

	 
	5.2	 	Suicide or Misstatement. No benefit shall be distributed if the Executive commits
suicide within two years after the Effective Date of this Agreement, or if an insurance
company which issued a life insurance policy covering the Executive and owned by the Bank
denies coverage for material misstatements of fact made by the Executive on an application for
such life insurance.

	 
	5.3	 	Regulatory Exclusions. Notwithstanding any provision of this Agreement to the
contrary:







	 	(a)	 	If the Executive is suspended and/or temporarily prohibited from participating
in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or (g)(1)
of the Federal Deposit Insurance Act, as amended (“FDIA”) (12 U.S.C 1818(e)(3) and
(g)(1)), the Bank’s obligations under the Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may at its discretion (i) pay the Executive all or part of the
compensation withheld while its contract obligations were suspended and (ii) reinstate
(in whole or in part) any of its obligations which were suspended.

	 
	 	(b)	 	If the Executive is removed and/or permanently prohibited from participating in
the conduct of the Banks affairs by an order issued under Sections 8(e)(4) or 8(g)(1)
of FDIA (12 U.S C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this
Agreement shall terminate, as of the effective date of the order, but the vested rights
of the contracting parties shall not be affected.

	 
	 	(c)	 	If the Bank is in default (as defined in Section 3(x)(1) of the FDIA) all
obligations under this Agreement shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting patties.

	 
	 	(d)	 	All obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued operation
of the Bank: (i) by the Director of the Office of Thrift Supervision (“Director of
OTS”), or his or her designee, at the time that the Federal Deposit Insurance
Corporation (“FDIC”) enters into





 


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	 	 	 	an agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, or (ii) by the Director of the OTS, or his
or her designee, at the time that the Director of the OTS, or his or her designee
approves a supervisory merger to resolve problems related to operation of the Bank
or when the Bank is determined by the Director of the OTS to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

	 
	 	5.3.2	 	Notwithstanding anything herein to the contrary, any payments made to the
Executive pursuant to the Agreement, or otherwise, shall be subject to and conditioned
upon compliance with 12 USC 1828(k) and FDIC Regulation 12 CFR Part 359, Golden
Parachute Indemnification Payments and any regulations promulgated thereunder.






Article 6

Administration of Agreement





	6.1	 	Plan Administrator Duties. The Plan Administrator shall administer this Agreement
according to its express terms and shall also have the discretion and authority to (i) make,
amend, interpret and enforce all appropriate rules and regulations for the administration of
this Agreement and (ii) decide or resolve any and all questions, including interpretations of
this Agreement, as may arise in connection with the Agreement to the extent the exercise of
such discretion and authority does not conflict with Code Section 409A.

	 
	6.2	 	Agents. In the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit, including acting
through a duly appointed representative, and may, from time to time, consult with counsel, who
may be counsel to the Bank.

	 
	6.3	 	Binding Effect of Decisions. Any decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons having any interest in
the Agreement.

	 
	6.4	 	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Agreement, except
in the case of willful misconduct by the Plan Administrator or any of its members.

	 
	6.5	 	Bank Information. To enable the Plan Administrator to perform its functions, the Bank
shall supply full and timely information to the Plan Administrator on all matters relating to
the date and circumstances of the death, Disability or Separation from Service of the
Executive and such other pertinent information as the Plan Administrator may reasonably
require.

	 
	6.6	 	Annual Statement. The Plan Administrator shall provide to the Executive, within one
hundred twenty (120) days after the end of each Plan Year, a statement setting forth the
benefits to be distributed under this Agreement.





 


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Article 7

Claims And Review Procedures





	7.1	 	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be distributed shall make a claim
for such benefits as follows:







	 	7.1.1	 	Initiation — Written Claim. The claimant initiates a claim by
submitting to the Plan Administrator a written claim for the benefits. If such a claim
relates to the contents of a notice received by the claimant, the claim must be made
within sixty (60) days after such notice was received by the claimant. All other claims
must be made within one hundred eighty (180) days of the date on which the event that
caused the claim to arise occurred. The claim must state with particularity the
determination desired by the claimant.

	 
	 	7.1.2	 	Timing of Plan Administrator Response. The Plan Administrator shall
respond to such claimant within ninety (90) days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by an
additional ninety (90) days by notifying the claimant in writing, prior to the end of
the initial ninety (90) day period that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the Plan
Administrator expects to render its decision.

	 
	 	7.1.3	 	Notice of Decision. If the Plan Administrator denies part or the
entire claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner calculated to
be understood by the claimant. The notification shall set forth:







	 	(a)	 	The specific reasons for the denial;

	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;

	 
	 	(c)	 	A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of why it is
needed;

	 
	 	(d)	 	An explanation of the Agreement’s review procedures and the
time limits applicable to such procedures; and

	 
	 	(e)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on
review.







	7.2	 	Review Procedure. If the Plan Administrator denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Plan Administrator of
the denial as follows:







	 	7.2.1	 	Initiation — Written Request. To initiate the review, the claimant,
within sixty (60) days after receiving the Plan Administrator’s notice of denial, must
file with the Plan Administrator a written request for review.

	 
	 	7.2.2	 	Additional Submissions — Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits.





 


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	 	7.2.3	 	Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

	 
	 	7.2.4	 	Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days after receiving the request
for review. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional sixty (60) days by notifying the claimant in writing,
prior to the end of the initial sixty (60) day period that an additional period is
required. The notice of extension must set forth the special circumstances and the date
by which the Plan Administrator expects to render its decision.

	 
	 	7.2.5	 	Notice of Decision. The Plan Administrator shall notify the claimant
in writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The notification
shall set forth:







	 	(a)	 	The specific reasons for the denial;

	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;

	 
	 	(c)	 	A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of all documents,
records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits; and

	 
	 	(d)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a).






Article 8

Amendments and Termination





	8.1	 	Amendments. This Agreement may be amended only by a written agreement signed by the
Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform
with written directives to the Bank from its banking regulators or to comply with legislative
or tax law provisions or changes thereto, including without limitation Code Section 409A and
any and all regulations and guidance promulgated thereunder.

	 
	8.2	 	Plan Termination Generally. Except as otherwise provided herein, this Agreement may
be terminated only by a written agreement signed by the Bank and the Executive. Upon such
termination of the Agreement in accordance with this Section 8.2, the benefit shall be 100% of
the Account Value determined as of the date the Agreement is terminated. Except as provided in
Section 8.3, the termination of this Agreement shall not cause a distribution of benefits
under this Agreement. Rather, upon such termination, benefit distributions will be made at the
earliest distribution event permitted under Article 2 or Article 3.





 


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	8.3	 	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary
in Section 8.2, the Bank may, in its sole discretion, terminate this Agreement by unilateral
action;
provided that, if the Bank terminates this Agreement in accordance with Section 8.3, it
shall do so in conformity with one of the following circumstances:







	 	(a)	 	Upon the Bank’s dissolution or with the approval of a bankruptcy court,
provided that all distributions are made no later than the end of the tax year in which
the Executive is required to include any portion of the amounts deferred under the
Agreement in his gross income; or

	 
	 	(b)	 	Upon the Bank’s termination of this and all other non-account balance plans (as
referenced in Code Section 409A or the regulations thereunder), provided that all
distributions are made no later than the end of the tax year in which the Executive, is
required to include any portion of the amounts deferred under the Agreement in his
gross income, and that the Bank does not adopt any new non-account balance plans for a
minimum of five (5) years following the date of such termination;







In which case, the Bank may distribute the Account Value, determined as of the date of the
termination of the Agreement, to the Executive in a lump sum subject to the above terms.



Article 9

Miscellaneous





	9.1	 	Binding Effect. This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, administrators and transferees.

	 
	9.2	 	No Guarantee of Employment. This Agreement is not a contract for employment. It does
not give the Executive the right to remain as an employee of the Bank, nor interfere with the
Bank’s right to discharge the Executive. It does not require the Executive to remain an
employee nor interfere with the Executive’s right to terminate employment at any time.

	 
	9.3	 	Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

	 
	9.4	 	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to
be withheld, including but not limited to taxes owed under Code Section 409A from the benefits
provided under this Agreement. The Executive acknowledges that the Bank’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing authorities. The
Bank shall satisfy all applicable reporting requirements, including those under Code Section
409A.

	 
	9.5	 	Applicable Law. The Agreement and all rights hereunder shall be governed by the laws
of the State of Tennessee, except to the extent preempted by the laws of the United States of
America.

	 
	9.6	 	Unfunded Arrangement. The Executive and the Beneficiary are general unsecured
creditors of the Bank for the distribution of benefits under this Agreement. The benefits
represent the mere promise by the Bank to distribute such benefits. The rights to benefits are
not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors. Any insurance on the Executive’s life or
other informal funding asset is a general asset of the Bank to which the Executive and
Beneficiary have no preferred or secured claim.





 


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	9.7	 	Reorganization. The Bank shall not merge or consolidate into or with another bank, or
reorganize, or sell substantially all of its assets to another bank, firm or person unless
such succeeding or continuing bank, firm or person agrees to assume and discharge the
obligations of the Bank under this Agreement. Upon the occurrence of such an event, the term
“Bank” as used in this Agreement shall be deemed to refer to the successor or.
survivor entity.

	 
	9.8	 	Entire Agreement. This Agreement constitutes the entire agreement between the Bank
and the Executive as to the subject matter hereof. No rights are granted to the Executive by
virtue of this Agreement other than those specifically set forth herein.

	 
	9.9	 	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement
requires and the context will permit, the use of the masculine gender includes the feminine
and use of the singular includes the plural.

	 
	9.10	 	Alternative Action. In the event it shall become impossible for the Bank or the Plan
Administrator to perform any act required by this Agreement due to regulatory or other
constraints, the Bank or Plan Administrator may perform such alternative act as most nearly
carries out the intent and purpose of this Agreement and is in the best interests of the Bank,
provided that such alternative acts do not violate Code Section 409A.

	 
	9.11	 	Headings. Article and section headings are for convenient reference only and shall
not control or affect the meaning or construction of any provision herein.

	 
	9.12	 	Validity. If any provision of this Agreement shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof; but this
Agreement shall be construed and enforced as if such illegal or invalid provision had never
been inserted herein.

	 
	9.13	 	Notice. Any notice or filing required or permitted to be given to the Bank or Plan
Administrator under this Agreement shall be sufficient if in writing and hand-delivered or
sent by registered or certified mail to the address below:





Athens Federal Community Bank

106 West Washington Aveune

Athens, TN 37303-3545





Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.




Any notice or filing required or permitted to be given to the Executive under this Agreement
shall be sufficient if in writing and hand-delivered or sent by mail to the last known
address of the Executive.




	9.14	 	Deduction Limitation on Benefit Payments. If the Bank reasonably anticipates that the
Bank’s deduction with respect to any distribution under this Agreement would be limited or
eliminated by application of Code Section 162(m), then to the extent deemed necessary by the
Bank to ensure that the entire amount of any distribution from this Agreement is deductible,
the Bank may delay payment of any amount that would otherwise be distributed under this
Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in
the event of the Executive’s death) at the earliest date the Bank reasonably anticipates that
the deduction of the payment of the amount will not be limited or eliminated by application of
Code Section 162(m).





 


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	9.15	 	Compliance with Code Section 409A. This Agreement shall be interpreted and
administered consistent with Code Section 409A; provided, however, the Bank shall be under no
obligation to indemnify the Executive for any tax liabilities incurred by the Executive with
respect to the Agreement, including but not limited to Code Section 409A.






[Signature Page to Follow]




 


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IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.




	 	 	 	 	 
	EXECUTIVE

	 	ATHENS FEDERAL COMMUNITY BANK

	 
	 	 	 	 
	/s/ Jeffrey L. Cunningham

	 	By
	 	/s/ Larry D. Wallace
	 

	 	 	 	 
	Jeffrey L. Cunningham

	 	 	 	Larry D. Wallace
	 

	 	 	 	Title Chairman of the Board of
Directors






	 	 	 	 	 
	 	ATHENS FEDERAL COUMMUNITY BANK

 	 
	 	By   	/s/ G. Scott Hannah
 
	 	 	G. Scott Hannah 	 
	 	 	Title:  	Compensation Committee Chairman 	 
	 




 


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Schedule A




	 	 	 	 	 
	ClarkConsulting

	 	 	 	Plan Year Reporting
	 
	 	 	 	 
	 

	 	Salary Continuation Plan	 	 
	 
	 	 	 	 
	 

	 	Hypothetical Termination Benefits Schedule

 







Jeffrey Cunningham




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Early Voluntary	 	 	Early Involuntary	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Pre-retire	 
	Birth Date: 3/20/1958	 	 	Termination  2	 	 	Termination 2	 	 	Disability 2	 	 	Change in Control  2	 	 	Death	 
	Plan Anniversary Date: 1/1/2008	 	 	Annual Benefit 	 	 	Annual Benefit	 	 	Annual Benefit 	 	 	Annual Benefit	 	 	Benefit 2	 
	Normal Retirement: 3/20/2016, Age 58	 	 	Amount Payable at	 	 	Amount Payable at	 	 	Amount Payable at	 	 	Amount Payable at	 	 	Annual 	 
	Normal Retirement Payment: Monthly for 20 years	 	 	Normal Retirement Age	 	 	Normal Retirement Age	 	 	Separation from Service	 	 	Normal Retirement Age	 	 	Benefit	 
	 	 	Discount	 	 	Benefit	 	 	Account	 	 	 	 	 	 	Based On	 	 	 	 	 	 	Based On	 	 	 	 	 	 	Based On	 	 	 	 	 	 	Benefit	 	 	Benefit	 
	Values	 	Rate	 	 	Level	 	 	Value	 	 	Vesting	 	 	Account Value	 	 	Vesting	 	 	Account Value	 	 	Vesting	 	 	Account Value	 	 	Vesting	 	 	Based On	 	 	Based On	 
	as of	 	(1)	 	 	(2)	 	 	(3)	 	 	(4)	 	 	(5)	 	 	(6)	 	 	(7)	 	 	(8)	 	 	(9)	 	 	(10)	 	 	(11)	 	 	(12)	 
	Dec
20081
	 	 	7.00	%	 	 	160,000	 	 	 	356,143	 	 	 	28.57	%	 	 	15,611	 	 	 	100	%	 	 	54,640	 	 	 	100	%	 	 	32,942	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2009
	 	 	7.00	%	 	 	160,000	 	 	 	506,901	 	 	 	37.50	%	 	 	27,198	 	 	 	100	%	 	 	72,527	 	 	 	100	%	 	 	46,886	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2010
	 	 	7.00	%	 	 	160,000	 	 	 	668,556	 	 	 	46.43	%	 	 	41,419	 	 	 	100	%	 	 	89,208	 	 	 	100	%	 	 	61,839	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2011
	 	 	7.00	%	 	 	160,000	 	 	 	841,898	 	 	 	55.36	%	 	 	57,997	 	 	 	100	%	 	 	104,764	 	 	 	100	%	 	 	77,872	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2012
	 	 	7.00	%	 	 	160,000	 	 	 	1,027,770	 	 	 	64.29	%	 	 	76,679	 	 	 	100	%	 	 	119,271	 	 	 	100	%	 	 	95,065	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2013
	 	 	7.00	%	 	 	160,000	 	 	 	1,227,080	 	 	 	73.22	%	 	 	97,237	 	 	 	100	%	 	 	132,801	 	 	 	100	%	 	 	113,500	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2014
	 	 	7.00	%	 	 	160,000	 	 	 	1,440,797	 	 	 	82.15	%	 	 	119,461	 	 	 	100	%	 	 	145,418	 	 	 	100	%	 	 	133,268	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Dec 2015
	 	 	7.00	%	 	 	160,000	 	 	 	1,669,964	 	 	 	91.08	%	 	 	143,164	 	 	 	100	%	 	 	157,184	 	 	 	100	%	 	 	154,465	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 
	Mar 2016
	 	 	7.00	%	 	 	160,000	 	 	 	1,729,799	 	 	 	100.00	%	 	 	160,000	 	 	 	100	%	 	 	160,000	 	 	 	100	%	 	 	160,000	 	 	 	100	%	 	 	160,000	 	 	 	160,000	 






March 20, 2016 Retirement; April 1, 2016 First Payment Date






	 	 	 
	1  	 	The first line reflects 7 months of data, June 2008 to December 2008.

	 
	2  	 	The annual benefit amount will be distributed in 12 equal monthly payments for a total
of 240 monthly payments.

	 
	*	 	The purpose of this hypothetical illustration is to show the participant’s annual
benefit based on various termination assumptions. Actual benefits are based on the terms and
provisions the plan agreement.
Consequently, actual benefits may differ from those shown on this Hypothetical Termination Benefits
Schedule.