Document:

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                                                                    EXHIBIT 10.5

                      Two-Year Change of Control Agreement

          This Change of Control Agreement (the "Agreement") is made and entered
into as of [______________], 2001 by and among CharterBank, a federally-
chartered savings bank having an office at 600 Third Avenue, West Point, GA
31833 (the "Bank"), Charter Financial Corp., a federally-chartered corporation
having an office at 600 Third Avenue, West Point, GA 31833 (the "Company")
and[__________________________] (the "Officer").

                             Introductory Statement

          The Bank has reorganized from a federally-chartered mutual savings
bank to a federally-chartered stock savings bank and has become a wholly-owned
subsidiary of the Company, a mid-tier stock holding company, which is majority
owned by First Charter MHC, a mutual holding company (the "Reorganization").  In
connection with the Reorganization, certain shares of the Company's common stock
were sold in an initial public stock offering.  The Officer has served the Bank
in an executive capacity for many years and is familiar with the Bank's
operations.

          The Board of Directors of the Bank has concluded that it is in the
best interests of the Bank, the Company and their prospective shareholders to
establish a working environment for the Officer which minimizes the personal
distractions that might result from possible business combinations in which the
Company or the Bank might be involved following the Reorganization. To this end,
the Bank has decided to provide the Officer with assurance that his compensation
will be continued for a minimum period of two (2) years following termination of
employment (the "Assurance Period") if his employment terminates under specified
circumstances related to a business combination. The Board of Directors of the
Bank has decided to formalize this assurance by entering into this Change of
Control Agreement with the Officer. The Board of Directors of the Company has
authorized the Company to guarantee the Banks obligations under this Agreement.

          The terms and conditions which the Bank, the Company and the Officer
have agreed to are as follows.

                                   Agreement

          Section 1.  Effective Date; Term; Change of Control and Pending Change
                      of Control Defined.
                      ----------------------------------------------------------

          (a) This Agreement shall take effect on the effective date of the
Reorganization (the "Effective Date") and shall be in effect during the period
(the "Term") beginning on the Effective Date of the Reorganization and ending on
the first anniversary of the date on which the Bank notifies the Executive of
its intent to discontinue the Agreement (the "Initial Expiration Date") or, if
later, the first anniversary of the latest Change of Control or Pending Change
of Control, as defined below, that occurs after the Effective Date and before
the Initial Expiration Date.
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                                      -2-

          (b)   For all purposes of this Agreement, a "Change of Control" shall
be deemed to have occurred upon the happening of any of the following events:

          (i)   the consummation of a reorganization, merger or consolidation of
     the Company with one or more other persons, other than a transaction
     following which:

                (A) at least 51% of the equity ownership interests of the entity
          resulting from such transaction are beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
          1934, as amended ("Exchange Act")) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the outstanding equity ownership
          interests in the Company; and

                (B) at least 51% of the securities entitled to vote generally in
          the election of directors of the entity resulting from such
          transaction are beneficially owned (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the securities entitled to vote
          generally in the election of directors of the Company;

          (ii)  the acquisition of all or substantially all of the assets of the
     Company or beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 25% or more of the outstanding
     securities of the Company entitled to vote generally in the election of
     directors by any person or by any persons acting in concert;

          (iii) a complete liquidation or dissolution of the Company;

          (iv)  the occurrence of any event if, immediately following such
     event, at least 50% of the members of the Board of Directors of the Company
     do not belong to any of the following groups:

                (A)  individuals who were members of the Board of Directors of
          the Company on the date of this Agreement; or

                (B)  individuals who first became members of the Board of
          Directors of the Company after the date of this Agreement either:

                     (1)  upon election to serve as a member of the Board of
               Directors of the Company by affirmative vote of three-quarters of
               the members of such board, or of a nominating committee thereof,
               in office at the time of such first election; or
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                                      -3-

                    (2) upon election by the shareholders of the Board of
               Directors of the Company to serve as a member of such board, but
               only if nominated for election by affirmative vote of three-
               quarters of the members of the Board of Directors of the Company,
               or of a nominating committee thereof, in office at the time of
               such first nomination;

          provided, however, that such individual's election or nomination did
          not result from an actual or threatened election contest (within the
          meaning of Rule 14a-11 of Regulation 14A promulgated under the
          Exchange Act) or other actual or threatened solicitation of proxies or
          consents (within the meaning of Rule 14a-11 of Regulation 14A
          promulgated under the Exchange Act) other than by or on behalf of the
          Board of Directors of the Company; provided, however, that this
          section 1(b)(iv) shall only apply if the Company is not majority owned
          by First Charter, MHC; or

          (v) any event which would be described in section 1(b)(i), (ii), (iii)
     or (iv) if the term "Bank" were substituted for the term "Company" therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of (i) any acquisition of securities or assets of the Company, the Bank,
or a subsidiary of either of them, by the Company, the Bank, or any subsidiary
of either of them, or by any employee benefit plan maintained by any of them or
(ii) the conversion of First Charter, MHC to a stock form company and the
issuance of additional shares of the Company in connection therewith.  For
purposes of this section 1(b), the term "person" shall have the meaning assigned
to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (c) For purposes of this Agreement, a "Pending Change of Control"
shall mean: (i) the signing of a definitive agreement for a transaction which,
if consummated, would result in a Change of Control; (ii) the commencement of a
tender offer which, if successful, would result in a Change of Control; or (iii)
the circulation of a proxy statement seeking proxies in opposition to management
in an election contest which, if successful, would result in a Change of
Control; provided, however, that the change of control contemplated does, in
fact, occur.

          Section 2.  Discharge Prior to a Pending Change of Control.
                      ----------------------------------------------

          The Bank may discharge the Officer at any time prior to the occurrence
of a Pending Change of Control for any reason or for no reason.  In such event:

          (a) The Bank shall pay to the Officer (or, in the event of his death,
his estate) his earned but unpaid compensation (including, without limitation,
salary and all other items which constitute wages under applicable law) as of
the date of his termination of employment.  This payment shall be made at the
time and in the manner prescribed by law applicable to the payment of wages but
in no event later than 30 days after the date of the Officer's termination of
employment.

          (b) The Bank shall provide the benefits, if any, due to the Officer
(or, in the event of his death, his estate, surviving dependents or his
designated beneficiaries) under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
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                                      -4-

officers and employees of the Bank. The time and manner of payment or other
delivery of these benefits and the recipients of such benefits shall be
determined according to the terms and conditions of the applicable plans and
programs.

The payments and benefits described in sections 2(a) and (b) shall be referred
to in this Agreement as the "Standard Termination Entitlements."

          Section 3.  Termination of Employment Due to Death.
                      --------------------------------------

          The Officer's employment with the Bank shall terminate, automatically
and without any further action on the part of any party to this Agreement, on
the date of the Officer's death.  In such event, the Bank shall pay and deliver
to his estate and surviving dependents and beneficiaries, as applicable, the
Standard Termination Entitlements.

          Section 4.  Termination Due to Disability after Change of Control or
                      Pending Change of Control.
                      --------------------------------------------------------

          The Bank may terminate the Officer's employment during the Term and
after the occurrence of a Change of Control or a Pending Change of Control upon
a determination, by a majority vote of the members of the Board of Directors of
the Bank, acting in reliance on the written advice of a medical professional
acceptable to it, that the Officer is suffering from a physical or mental
impairment which, at the date of the determination, has prevented the Officer
from performing his assigned duties on a substantially full-time basis for a
period of at least one hundred and eighty (180) days during the period of one
(1) year ending with the date of the determination or is likely to result in
death or prevent the Officer from performing his assigned duties on a
substantially full-time basis for a period of at least one hundred and eighty
(180) days during the period of one (1) year beginning with the date of the
determination.  In such event:

          (a) The Bank shall pay and deliver to the Officer (or in the event of
his death before payment, to his estate and surviving dependents and
beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements, the Bank
shall continue to pay the Officer his base salary, at the annual rate in effect
for him immediately prior to the termination of his employment, during a period
ending on the earliest of: (i) the expiration of one hundred and eighty (180)
days after the date of termination of his employment; (ii) the date on which
long-term disability insurance benefits are first payable to him under any long-
term disability insurance plan covering employees of the Bank (the "LTD
Eligibility Date"); (iii) the date of his death; and (iv) the expiration of the
Assurance Period (the "Initial Continuation Period").  If the end of the Initial
Continuation Period is neither the LTD Eligibility Date nor the date of his
death, the Bank shall continue to pay the Officer his base salary, at an annual
rate equal to sixty percent (60%) of the annual rate in effect for him
immediately prior to the termination of his employment, during an additional
period ending on the earliest of the LTD Eligibility Date, the date of his death
and the expiration of the Assurance Period.
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                                      -5-

A termination of employment due to disability under this section 4 shall be
effected by a notice of termination given to the Officer by the Bank and shall
take effect on the later of the effective date of termination specified in such
notice or the date on which the notice of termination is deemed given to the
Officer.

          Section 5.   Discharge with Cause after Change of Control or Pending
                       Change of Control.
                       -------------------------------------------------------

          (a) The Bank may terminate the Officer's employment with "Cause"
during the Term and after the occurrence of a Change of Control or Pending
Change of Control, but a termination shall be deemed to have occurred with
"Cause" only if:

               (i)   the Board of Directors of the Bank and the Board of
          Directors of the Company, by separate majority votes of their entire
          membership, determine that the Executive should be discharged because
          of personal dishonesty, incompetence, willful misconduct, breach of
          fiduciary duty involving personal profit, intentional failure to
          perform stated duties, willful violation of any law, rule or
          regulation (other than traffic violations or similar offenses) or
          final cease and desist order, or any material breach of this
          Agreement; and

               (ii)  at least forty-five (45) days prior to the vote
          contemplated by section 1(b)(i), the Bank has provided the Officer
          with notice of its intent to discharge the Officer for Cause,
          detailing with particularity the facts and circumstances which are
          alleged to constitute Cause (the "Notice of Intent to Discharge"); and

               (iii) after the giving of the Notice of Intent to Discharge and
          before the taking of the vote contemplated by section 5(a)(i), the
          Officer (together with his legal counsel, if he so desires) is
          afforded a reasonable opportunity to make both written and oral
          presentations before the Board of Directors of the Bank for the
          purpose of refuting the alleged grounds for Cause for his discharge;
          and

               (iv)  after the vote contemplated by section 5(a)(i), the Bank
          has furnished to the Officer a notice of termination which shall
          specify the effective date of his termination of employment (which
          shall in no event be earlier than the date on which such notice is
          deemed given) and include a copy of a resolution or resolutions
          adopted by the Board of Directors of the Bank, certified by its
          corporate secretary and signed by each member of the Board of
          Directors voting in favor of adoption of the resolution(s),
          authorizing the termination of the Officer's employment with Cause and
          stating with particularity the facts and circumstances found to
          constitute Cause for his discharge (the "Final Discharge Notice").
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                                      -6-

          (b) If the Officer is discharged with Cause during the Term and after
a Change of Control or Pending Change of Control, the Bank shall pay and provide
to him (or, in the event of his death, to his estate, his surviving
beneficiaries and his dependents) the Standard Termination Entitlements only.
Following the giving of a Notice of Intent to Discharge, the Bank may
temporarily suspend the Officer's duties and authority and, in such event, may
also suspend the payment of salary and other cash compensation, but not the
Officer's participation in retirement, insurance and other employee benefit
plans.  If the Officer is not discharged, or is discharged without Cause, within
forty-five (45) days after the giving of a Notice of Intent to Discharge,
payments of salary and cash compensation shall resume, and all payments withheld
during the period of suspension shall be promptly restored.  If the Officer is
discharged with Cause not later than forty-five (45) days after the giving of
the Notice of Intent to Discharge, all payments withheld during the period of
suspension shall be deemed forfeited and shall not be included in the Standard
Termination Entitlements. If a Final Discharge Notice is given later than forty-
five (45) days, but sooner than ninety (90) days, after the giving of the Notice
of Intent to Discharge, all payments made to the Officer during the period
beginning with the giving of the Notice of Intent to Discharge and ending with
the Officer's discharge with Cause shall be retained by the Officer and shall
not be applied to offset the Standard Termination Entitlements.  If the Bank
does not give a Final Discharge Notice to the Officer within ninety (90) days
after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge
shall be deemed withdrawn and any future action to discharge the Officer with
Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 6.  Discharge without Cause.
                      -----------------------

          The Bank may discharge the Officer without Cause at any time after the
occurrence of a Change of Control or Pending Change of Control, and in such
event:

          (a) The Bank shall pay and deliver to the Officer (or in the event of
his death before payment, to his estate and surviving dependents and
beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements:

              (i) During the Assurance Period, the Bank shall provide for the
          Officer and his dependents continued group life, health (including
          hospital  ization, medical and major medical), dental, accident and
          long-term disability insurance benefits on substantially the same
          terms and conditions (including any required premium-sharing
          arrangements, co-payments and deductibles) in effect for them
          immediately prior to the Officer's resignation.  The
<PAGE>

                                      -7-

          coverage provided under this section 6(b)(i) may, at the election of
          the Bank, be secondary to the coverage provided as part of the
          Standard Termination Entitlements and to any employer-paid coverage
          provided by a subsequent employer or through Medicare, with the result
          that benefits under the other coverages will offset the coverage
          required by this section 6(b)(i).

               (ii)   The Bank shall make a lump sum payment to the Executive
          (or, in the event of his death before payment, to his estate), in an
          amount equal to the estimated present value of the salary that
          Executive would have earned if he had continued working for the Bank
          during the Assurance Period at the highest annual rate of salary
          achieved during that portion of the employment period which is prior
          to Executive's termination of employment with the Bank, where such
          present value is to be determined using a discount rate equal to the
          applicable short-term federal rate prescribed under section 1274(d) of
          the Internal Revenue Code of 1986 ("Code"), com pounded using the
          compounding period corresponding to the Bank's regular payroll periods
          for its officers. Such lump sum shall be paid in lieu of all other
          payments of salary provided for under this Agreement in respect of the
          period following any such termination.

               (iii)  The Bank shall make a lump sum payment to the Executive
          (or, in the event of his death before payment, to his estate), in an
          amount equal to the payments that would have been made to Executive
          under any cash bonus or long-term or short-term cash incentive
          compensation plan maintained by, or covering employees of, the Bank if
          he had continued working for the Bank during the Assurance Period and
          had earned the maximum bonus or incentive award in each calendar year
          that ends during the Assurance Period, such payment to be equal to the
          product of:

               (iv)   the maximum percentage rate at which an award was ever
          available to Executive under such incentive compensation plan;
          multiplied by

                      (A)  the salary that would have been paid to Executive
          during each such calendar year at the highest annual rate of salary
          achieved during that portion of the employment period which is prior
          to Executive's termination of employment with the Bank.

     Such payment shall be made (without discounting for early payment) within
     thirty (30) days following the Executive's termination of employment.

The payments and benefits described in section 6(b) are referred to in this
Agreement as the "Additional Change of Control Entitlements".
<PAGE>

                                      -8-

          Section 7.     Resignation.
                         -----------

          (a) The Officer may resign from his employment with the Bank at any
time.  A resignation under this section 7 shall be effected by notice of
resignation given by the Officer to the Bank and shall take effect on the later
of the effective date of termination specified in such notice or the date on
which the notice of termination is deemed given to the Officer.  The Officer's
resignation of any of the positions within the Bank or the Company to which he
has been assigned shall be deemed a resignation from all such positions.

          (b)   The Officer's resignation shall be deemed to be for "Good
Reason" if the effective date of resignation occurs during the Term, but on or
after the effective date of a Change of Control, and is on account of:

          (i)   the failure of the Bank (whether by act or omission of the Board
     of Directors, or otherwise) to appoint or re-appoint or elect or re-elect
     the Officer to the position with Bank that he held immediately prior to the
     Change of Control (the "Assigned Office") or to a more senior office;

          (ii) a material failure by the Bank, whether by amendment of the
     certificate of incorporation or organization, by-laws, action of the Board
     of Directors of the Bank or otherwise, to vest in the Officer the
     functions, duties, or responsibilities customarily associated with the
     Assigned Office; provided that the Officer shall have given notice of such
     failure to the Bank, and the Bank has not fully cured such failure within
     thirty (30) days after such notice is deemed given;

          (iii)  any reduction of the Officer's rate of base salary in effect
     from time to time, whether or not material, or any failure (other than due
     to reasonable administrative error that is cured promptly upon notice) to
     pay any portion of the Officer's compensation as and when due;

          (iv)   any change in the terms and conditions of any compensation or
     benefit program in which the Officer participates which, either
     individually or together with other changes, has a material adverse effect
     on the aggregate value of his total compensation package; provided that the
     Officer shall have given notice of such material adverse effect to the
     Bank, and the Bank has not fully cured such material adverse effect within
     thirty (30) days after such notice is deemed given;
<PAGE>

                                      -9-

          (v)  any material breach by the Bank of any material term, condition
     or covenant contained in this Agreement; provided that the Officer shall
     have given notice of such material adverse effect to the Bank, and the Bank
     has not fully cured such material adverse effect within thirty (30) days
     after such notice is deemed given; or

          (vi) a change in the Officer's principal place of employment to a
     place that is not the principal executive office of the Bank, or a
     relocation of the Bank's principal executive office to a location that is
     both more than thirty-five (35) miles away from the Officer's principal
     residence and more than thirty-five (35) miles away from the location of
     the Bank's principal executive office on the day before the occurrence of
     the Change of Control.

In all other cases, a resignation by the Officer shall be deemed to be without
Good Reason. In the event of resignation, the Officer shall state in his notice
of resignation whether he considers his resignation to be a resignation with
Good Reason, and if he does, he shall state in such notice the grounds which
constitute Good Reason.  The Officer's determination of the existence of Good
Reason shall be conclusive in the absence of fraud, bad faith or manifest error.

          (c)   In the event of the Officer's resignation for any reason, the
Bank shall pay and deliver the Standard Termination Entitlements. In the event
of the Officer's resignation with Good Reason, the Bank shall also pay and
deliver the Additional Termination Entitlements.

          Section 8.  Terms and Conditions of the Additional Termination
                      Entitlements.
                      --------------------------------------------------

          The Bank and the Officer hereby stipulate that the damages which may
be incurred by the Officer following any termination of employment are not
capable of accurate measurement as of the date first above written and that the
Additional Termination Entitlements constitute reason  able damages under the
circumstances and shall be payable without any requirement of proof of actual
damage and without regard to the Officer's efforts, if any, to mitigate damages.
The Bank and the Officer further agree that the Bank may condition the payment
and delivery of the Additional Termination Entitlements on the receipt of:  (a)
the Officer's resignation from any and all positions which he holds as an
officer, director or committee member with respect to the Bank or the Company or
any subsidiary or affiliate of either of them; and (b) a release of the Bank and
its officers, directors, shareholders, subsidiaries and affiliates, in form and
substance satisfactory to the Bank, of any liability to the Officer, whether for
compensation or damages, in connection with his employment with the Bank and the
termination of such employment except for the Standard Termination Entitlements
and the Additional Termination Entitlements.

          Section 9.     No Effect on Employee Benefit Plans or Programs.
                         -----------------------------------------------

          The termination of the Officer's employment during the Assurance
Period or thereafter, whether by the Bank or by the Officer, shall have no
effect on the rights and obligations of the parties hereto under the Bank's
qualified or non-qualified retirement, pension, savings, thrift,
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                                      -10-

profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Bank from time to time; provided, however, that nothing in this Agreement
shall be deemed to duplicate any compensation or benefits provided under any
agreement, plan or program covering the Officer to which the Bank or Company is
a party and any duplicative amount payable under any such agreement, plan or
program shall be applied as an offset to reduce the amounts otherwise payable
hereunder.

          Section 10.    Successors and Assigns.
                         ----------------------

          This Agreement will inure to the benefit of and be binding upon the
Officer, his legal representatives and testate or intestate distributees, and
the Company and the Bank and their respective successors and assigns, including
any successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets
and business of the Company or the Bank may be sold or otherwise transferred.
Failure of the Bank to obtain from any successor its express written assumption
of the Company's or Bank's obligations hereunder at least 60 days in advance of
the scheduled effective date of any such succession shall, if such succession
constitutes a Change of Control, constitute Good Reason for the Officer's
resignation on or at any time during the Term following the occurrence of such
succession.

          Section 11.    Notices.
                         -------

          Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:

          If to the Officer:

               [Officer name]
               [Officer address]
               [Officer address]

          If to the Company or the Bank:

               Charter Financial Corp.
               600 Third Avenue
               West Point, GA 31833

               Attention: Chairman, Personnel & Compensation Committee
                          of the Board of Directors
<PAGE>

                                      -11-

          Section 12.    Indemnification for Attorneys' Fees.
                         -----------------------------------

          The Bank shall indemnify, hold harmless and defend the
Officer against reasonable costs, including legal fees, incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement; provided, however, that the Officer shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding.  The determination whether the Officer shall have substantially
prevailed on the merits and is therefore entitled to such indemnification, shall
be made by the court or arbitrator, as applicable.  In the event of a settlement
pursuant to a settlement agreement, any indemnification payment under this
section 12 shall be made only after a determination by the members of the Board
(other than the Officer and any other member of the Board to which the Officer
is related by blood or marriage) that the Officer has acted in good faith and
that such indemnification payment is in the best interests of the Bank.

          Section 13.    Severability.
                         ------------

          A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.

          Section 14.    Waiver.
                         ------

          Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition.  A waiver of any provision of this Agreement must be
made in writing, designated as a waiver, and signed by the party against whom
its enforcement is sought.  Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

          Section 15.    Counterparts.
                         ------------

          This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.

          Section 16.    Governing Law.
                         -------------

          This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of Georgia
applicable to contracts entered into and to be performed entirely within the
State of Georgia.

          Section 17.    Headings and Construction.
                         -------------------------

          The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section.  Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.
<PAGE>

                                      -12-

          Section 18.    Entire Agreement; Modifications.
                         -------------------------------

          This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof.  No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.

          Section 19.    Required Regulatory Provisions.
                         ------------------------------

          The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Bank:

          (a)  Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to the Officer
hereunder exceed three times the Officer's average annual compensation (within
the meaning of OTS Regulatory Bulletin 27a or any successor thereto) for the
last five consecutive calendar years to end prior to his termination of
employment with the Bank (or for his entire period of employment with the Bank
if less than five calendar years).  The compensation payable to the Officer
hereunder shall be further reduced (but not below zero) if such reduction would
avoid the assessment of excise taxes on excess parachute payments (within the
meaning of section 280G of the Code).

          (b)  Notwithstanding anything herein contained to the contrary, any
payments to the Officer by the Bank, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. (S)1828(k),
and any regulations promulgated thereunder.

          (c)  Notwithstanding anything herein contained to the contrary, if the
Officer is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Bank pursuant to a notice
served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. (S)1818(e)(3)
or 1818(g)(1), the Bank's obligations under this Agreement shall be suspended as
of the date of service of such notice, unless stayed by appropriate proceedings.
If the charges in such notice are dismissed, the Bank, in its discretion, may
(i) pay to the Officer all or part of the compensation withheld while the Bank's
obligations hereunder were suspended and (ii) reinstate, in whole or in part,
any of the obligations which were suspended.

          (d)  Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently  prohibited from participating in the
conduct of the Bank's affairs by an order issued under section 8(e)(4) or
8(g)(1) of the FDI Act, 12 U.S.C. (S)1818(e)(4) or (g)(1), all prospective
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights and obligations of the Bank and the
Executive shall not be affected.

          (e)  Notwithstanding anything herein contained to the contrary, if the
Bank is in default (within the meaning of section 3(x)(1) of the FDI Act, 12
U.S.C. (S)1813(x)(1), all prospective obligations of the Bank under this
Agreement shall terminate as of the date of default, but vested rights and
obligations of the Bank and the Officer shall not be affected.
<PAGE>

                                      -13-

          (f)  Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Bank hereunder shall be terminated, except to the
extent that a continuation of this Agreement is necessary for the continued
operation of the Bank:  (i) by the Director of the OTS or his designee or the
Federal Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act, 12 U.S.C. (S)1823(c); (ii)
by the Director of the OTS or his designee at the time such Director or designee
approves a supervisory merger to resolve problems related to the operation of
the Bank or when the Bank is determined by such Director to be in an unsafe or
unsound condition.  The vested rights and obligations of the parties shall not
be affected.

          If and to the extent that any of the foregoing provisions shall cease
to be required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.

          Section 20.    Guaranty.
                         --------

          The Company hereby irrevocably and unconditionally guarantees to the
Officer the payment of all amounts, and the performance of all other
obligations, due from the Bank in accordance with the terms of this Agreement as
and when due without any requirement of presentment, demand of payment, protest
or notice of dishonor or nonpayment.

          Section 21.    Effective Date.
                         --------------

          This Agreement shall become effective (the "Effective Date") upon the
later of the following two dates: (a) the effective date of the Bank's
conversion from a federally chartered mutual savings bank to a stock form
savings bank pursuant to the Reorganization or (b) the date the OTS advises the
Bank in writing that it either approves or has no objection to the terms and
conditions of this Agreement.  The Bank, the Company and the Officer each hereby
acknowledge and agree that the terms of this Agreement shall have no force or
effect prior to such Effective Date.
<PAGE>

                                      -14-

          In Witness Whereof, the Bank and the Company have caused this
Agreement to be executed and the Officer has hereunto set his hand, all as of
the day and year first above written.

                                    _______________________________________
                                    [___________]

                                    CharterBank

Attest:

By ______________________________   By ____________________________________
   Name:                               Name:
   Title:                              Title:

[Seal]

                                    Charter Financial Corp.

Attest:

By ______________________________   By ____________________________________
   Name:                               Name:
   Title:                              Title:

[Seal]<PAGE>

                                                                    EXHIBIT 10.6

                            Charter Financial Corp.

                      2001 Recognition and Retention Plan

                        ______________________________

                Effective as of the Date of the Reorganization
<PAGE>

<TABLE>
<CAPTION>
                                Table of Contents                             Page
<S>                                                                           <C>

                                   Article I

                                    Purpose

Section 1.1   General Purpose of the Plan....................................    1

                                   Article II

                                   Definitions

Section 2.1   Award..........................................................    1
Section 2.2   Award Notice...................................................    1
Section 2.3   Bank...........................................................    1
Section 2.4   Beneficiary....................................................    1
Section 2.5   Board..........................................................    1
Section 2.6   Change of Control..............................................    1
Section 2.7   Code...........................................................    3
Section 2.8   Committee......................................................    3
Section 2.9   Company........................................................    3
Section 2.10  Disability.....................................................    3
Section 2.11  Disinterested Board Member.....................................    3
Section 2.12  Effective Date.................................................    4
Section 2.13  Eligible Director..............................................    4
Section 2.14  Eligible Employee..............................................    4
Section 2.15  Employer.......................................................    4
Section 2.16  Exchange Act...................................................    4
Section 2.17  FDIC Regulations...............................................    4
Section 2.18  Fund...........................................................    4
Section 2.19  Funding Agent..................................................    4
Section 2.20  Funding Agreement..............................................    4
Section 2.21  Person.........................................................    4
Section 2.22  Plan...........................................................    5
Section 2.23  Retirement.....................................................    5
Section 2.24  Share..........................................................    5

                                   Article III

                            Shares Available Under Plan

Section 3.1   Shares Available Under Plan....................................    5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                Table of Contents                                          Page
<S>                                                                                        <C>

                                   Article IV

                                 Administration

Section 4.1   Committee...............................................................        5
Section 4.2   Committee Action........................................................        6
Section 4.3   Committee Responsibilities..............................................        6

                                    Article V

                                    The Fund

Section 5.1   Contributions...........................................................        6
Section 5.2   The Fund................................................................        7
Section 5.3   Investments.............................................................        7

                                   Article VI

                                     Awards

Section 6.1   To Eligible Directors...................................................        7
Section 6.2   To Eligible Employees...................................................        7
Section 6.3   Awards in General.......................................................        8
Section 6.4   Share Allocations.......................................................        8
Section 6.5   Dividend Rights.........................................................        8
Section 6.6   Voting Rights...........................................................        9
Section 6.7   Tender Offers...........................................................        9
Section 6.8   Limitations on Awards...................................................       10

                                   Article VII

                                     Vesting

Section 7.1   Vesting of Awards.......................................................       11
Section 7.2   Designation of Beneficiary..............................................       11
Section 7.3   Manner of Distribution..................................................       11
Section 7.4   Taxes...................................................................       12
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                  Table of Contents
                                                                                           Page
<S>                                                                                        <C>

                                  Article VIII

                            Amendment and Termination

Section 8.1   Termination.............................................................       13
Section 8.2   Amendment...............................................................       13
Section 8.3   Adjustments in the Event of a Business Reorganization...................       13

                                   Article IX

                                  Miscellaneous

Section 9.1   Status as an Employee Benefit Plan......................................       14
Section 9.2   No Right to Continued Employment........................................       14
Section 9.3   Construction of Language................................................       14
Section 9.4   Governing Law...........................................................       14
Section 9.5   Headings................................................................       14
Section 9.6   Non-Alienation of Benefits..............................................       15
Section 9.7   Notices.................................................................       15
Section 9.8   Required Regulatory Provisions..........................................       15
Section 9.9   Approval of Shareholders................................................       15

                                    Article X

          Additional Provisions Subject to Further Shareholder Approval

Section 10.1  Accelerated Vesting Upon Retirement.....................................       16
Section 10.2  No Effect Prior to Stockholder Approval.................................       16
</TABLE>

<PAGE>

                            Charter Financial Corp.
                            -----------------------
                      2001 Recognition and Retention Plan
                      -----------------------------------

                                   Article I
                                   ---------

                                    Purpose
                                    -------

           Section 1.1   General Purpose of the Plan.
                         ---------------------------

          The purpose of the Plan is to promote the growth and profitability of
Charter Financial Corp. and its affiliated companies and to provide eligible
directors, certain key officers and employees of Charter Financial Corp. and its
affiliated companies with an incentive to achieve corporate objectives, to
attract and retain directors, key officers and employees of outstanding
competence and to provide such directors, officers and employees with an equity
interest in Charter Financial Corp. and its affiliated companies.

                                  Article II
                                  ----------

                                  Definitions
                                  -----------

          The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:

          Section 2.1   Award means a grant of Shares to an Eligible Director
                        -----
or Eligible Employee pursuant to section 6.1 or 6.2.

          Section 2.2    Award Notice means, with respect to a particular Award,
                         ------------
a written instrument signed by the Company and the Awards recipient evidencing
the granting of the Award and establishing the terms and conditions thereof.

          Section 2.3   Bank means CharterBank and any successor thereto.
                        ----

          Section 2.4    Beneficiary means the Person designated by an Eligible
                         -----------
Director or Eligible Employee pursuant to section 7.2 to receive distribution of
any Shares available for distribution to such Eligible Director or Eligible
Employee, in the event such Eligible Director or Eligible Employee dies prior to
receiving distribution of such Shares.

           Section 2.5   Board means the Board of Directors of the Company.
                         -----

<PAGE>

                                      -2-

           Section 2.6   Change of Control means any of the following events:
                         -----------------

          (a) the consummation of a reorganization, merger or consolidation of
     the Company with one or more other persons, other than a transaction
     following which:

               (i)  at least 51% of the equity ownership interests of the entity
          resulting from such transaction are beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
          1934, as amended ("Exchange Act")) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the outstanding equity ownership
          interests in the Company; and

               (ii) at least 51% of the securities entitled to vote generally in
          the election of directors of the entity resulting from such
          transaction are beneficially owned (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the securities entitled to vote
          generally in the election of directors of the Company;

          (b) the acquisition of all or substantially all of the assets of the
     Company or beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 25% or more of the outstanding
     securities of the Company entitled to vote generally in the election of
     directors by any person or by any persons acting in concert;

          (c) a complete liquidation or dissolution of the Company;

          (d) the occurrence of any event if, immediately following such event,
     at least 50% of the members of the board of directors of the Company do not
     belong to any of the following groups:

               (i)  individuals who were members of the board of directors of
          the Company on the Effective Date; or

               (ii) individuals who first became members of the board of
          directors of the Company after the Effective Date either:

                    (A) upon election to serve as a member of the board of
               Directors of the Company by affirmative vote of three-quarters of
               the members of such board, or of a nominating committee thereof,
               in office at the time of such first election; or

                    (B) upon election by the shareholders of the Company to
               serve as a member of such board, but only if nominated for
               election
<PAGE>

                                      -3-

               by affirmative vote of three-quarters of the members of the board
               of directors of the Company, or of a nominating committee
               thereof, in office at the time of such first nomination;

          provided, however, that such individual's election or nomination did
          not result from an actual or threatened election contest (within the
          meaning of Rule 14a-11 of Regulation 14A promulgated under the
          Exchange Act) or other actual or threatened solicitation of proxies or
          consents (within the meaning of Rule 14a-11 of Regulation 14A
          promulgated under the Exchange Act) other than by or on behalf of the
          board of directors of the Company; provided, however, that this
          section 2.6(d) shall only apply if the Company is not majority owned
          by First Charter, MHC;

          (e) approval by the stockholders of the Company of any agreement, plan
     or arrangement for the consummation of a transaction which, if consummated,
     would result in the occurrence of an event described in section 2.6(a),
     (b), (c) or (d); or

          (f) any event which would be described in section 2.6(a), (b), (c),
     (d) or (e) if the term "Bank" were substituted for the term "Company"
     therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of (i) any acquisition of securities or assets of the Company, the Bank,
or a subsidiary of either of them, by the Company, the Bank, or any subsidiary
of either of them, or by any employee benefit plan maintained by any of them or
(ii) the conversion of First Charter, MHC to a stock form company and the
issuance of additional Shares of the Company therewith.  For purposes of this
section 2.6, the term "person" shall have the meaning assigned to it under
sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          Section 2.7    Code means the Internal Revenue Code of 1986 (including
                         ----
the corresponding provisions of any succeeding law).

          Section 2.8    Committee means the Committee described in section 4.1.
                         ---------

          Section 2.9    Company means Charter Financial Corp., a corporation
                         -------
organized and existing under the laws of the State of Georgia, and any successor
thereto.

          Section 2.10   Disability means a condition of total incapacity,
                         ----------
mental or physical, for further performance of duty with the Company which the
Committee shall have determined, on the basis of competent medical evidence, is
likely to be permanent.

          Section 2.11   Disinterested Board Member means a member of the Board
                         --------------------------
who (a) is not a current employee of the Company or a subsidiary, (b) does not
receive remuneration from the Company or a subsidiary, either directly or
indirectly, in any capacity other than as a director, except in an amount for
which disclosure would not be required pursuant to Item 404(a) of the proxy
solicitation rules of the Securities and Exchange Commission and (c) does not
possess an interest in any other transaction, and is not engaged in a business
relationship, for which disclosure would be required pursuant to Item 404(a) or
(b) of the proxy solicitation rules of the Securities and Exchange Commission.
The term Disinterested Board Member shall be interpreted in such manner
<PAGE>

                                      -4-

as shall be necessary to conform to the requirements of Rule 16b-3 promulgated
under the Exchange Act.

          Section 2.12   Effective Date means the date on which the Bank
                         --------------
converts from a mutual bank to a stock bank (the "Reorganization").

          Section 2.13   Eligible Director means a member of the board of
                         -----------------
directors of an Employer who is not also an employee or an officer of any
Employer.

          Section 2.14   Eligible Employee means any employee whom the Committee
                         -----------------
may determine to be a key officer or employee of an Employer and selects to
receive an Award pursuant to the Plan.

          Section 2.15   Employer means the Company, the Bank and any successor
                         --------
thereto and, with the prior approval of the Board of Directors of the Company,
and subject to such terms and conditions as may be imposed by the Board, any
other savings bank, savings and loan association, bank, corporation, financial
institution or other business organization or institution.  With respect to any
Eligible Employee or Eligible Director, the Employer shall mean the entity which
employs such person or upon whose board of directors such person serves.

           Section 2.16  Exchange Act means the Securities and Exchange Act of
                         ------------
1934, as amended.

           Section 2.17  FDIC Regulations means the rules and regulations of the
                         ----------------
Federal Deposit Insurance Corporation.

          Section 2.18   Fund means the corpus (consisting of contributions paid
                         ----
over to the Funding Agent, and investments thereof), and all earnings,
appreciations or additions thereof and thereto, held by the Funding Agent under
the Funding Agreement in accordance with the Plan, less any depreciation thereof
and any payments made therefrom pursuant to the Plan.

          Section 2.19   Funding Agent means the trustee or custodian of the
                         -------------
Fund from time to time in office.  The Funding Agent shall serve as Funding
Agent until it is removed or resigns from office and is replaced by a successor
Funding Agent or Funding Agents appointed by Charter Financial Corp.

          Section 2.20   Funding Agreement means the agreement between Charter
                         -----------------
Financial Corp. and the Funding Agent therein named or its successor pursuant to
which the Fund shall be held in trust or custody.

          Section 2.21   Person means an individual, a corporation, a bank, a
                         ------
savings bank, a savings and loan association, a financial institution, a
partnership, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or institution.

          Section 2.22   Plan means the Charter Financial Corp. 2001 Recognition
                         ----
and Retention Plan, as amended from time to time.
<PAGE>

                                      -5-

          Section 2.23   Retirement means with respect to an Eligible Employee,
                         ----------
termination of all service for all Employers as an employee at or after the
normal or early retirement date set forth in any tax-qualified retirement plan
of the Bank, whether or not the individual in question actually participates in
any such tax-qualified plan of the Bank, and in the case of an Eligible
Director, termination of all service for all Employers as a voting member of the
Employer's board of directors after the attainment of the latest age at which
the Eligible Director is eligible for election or appointment as a voting member
of the Employer's board of directors under the Employer's charter.

           Section 2.2   Share means a share of common stock of Charter
                         -----
Financial Corp., par value $.01 per share.

                                  Article III
                                  -----------

                          Shares Available Under Plan
                          ---------------------------

          Section 3.1   Shares Available Under Plan.
                        ---------------------------

          (a) The maximum number of Shares available for Awards under the Plan
shall be 1.96% of the total number of Shares issued in the Reorganization,
subject to adjustment pursuant to section 8.3.

          (b) An aggregate maximum of 0.588% of the total number of Shares
issued in the Reorganization (subject to adjustment pursuant to section 8.3) may
be granted as Awards to Eligible Directors, and a maximum of 0.098% of the total
number of Shares issued in the Reorganization (subject to adjustment pursuant to
section 8.3) may be granted as Awards to any one Eligible Director.

          (c) A maximum of 0.49% of the total number of Shares issued in the
Reorganization (subject to adjustment pursuant to section 8.3) may be granted as
Awards to any one Eligible Employee.

                                  Article IV
                                  ----------

                                Administration
                                --------------

          Section 4.1   Committee.
                        ---------

          The Plan shall be administered by the members of the Compensation
Committee of Charter Financial Corp. who are Disinterested Board Members.  If
the Committee consists of fewer than two Disinterested Board Members, then the
Board shall appoint to the Committee such
<PAGE>

                                      -6-

additional Disinterested Board Members as shall be necessary to provide for a
Committee consisting of at least two Disinterested Board Members.

           Section 4.2   Committee Action.
                         ----------------

          The Committee shall hold such meetings, and may make such
administrative rules and regulations, as it may deem proper.  A majority of the
members of the Committee shall constitute a quorum, and the action of a majority
of the members of the Committee present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting, shall be deemed
to be actions of the Committee.  All actions of the Committee shall be final and
conclusive and shall be binding upon the Company and all other interested
parties.  Any Person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the Secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.

          Section 4.3   Committee Responsibilities.
                        --------------------------

          Subject to the terms and conditions of the Plan and such limitations
as may be imposed by the Board, the Committee shall be responsible for the
overall management and administration of the Plan and shall have such authority
as shall be necessary or appropriate in order to carry out its responsibilities,
including, without limitation, the authority:

          (a) to interpret and construe the Plan, and to determine all questions
     that may arise under the Plan as to eligibility for Awards under the Plan,
     the amount of Shares, if any, to be granted pursuant to an Award, and the
     terms and conditions of such Award;

          (b) to adopt rules and regulations and to prescribe forms for the
     operation and administration of the Plan; and

          (c) to take any other action not inconsistent with the provisions of
     the Plan that it may deem necessary or appropriate.
<PAGE>

                                      -7-

                                   Article V
                                   ---------

                                   The Fund
                                   --------

          Section 5.1   Contributions.
                        -------------

          Charter Financial Corp. shall contribute, or cause to be contributed,
to the Fund, from time to time, such amounts of money or property as shall be
determined by the Board, in its discretion.  No contributions by Eligible
Directors or Eligible Employees shall be permitted.

          Section 5.2   The Fund.
                        --------

          The Fund shall be held and invested under the Funding Agreement with
the Funding Agent.  The provisions of the Funding Agreement shall include
provisions conferring powers on the Funding Agent as to investment, control and
disbursement of the Trust Fund, and such other provisions not inconsistent
with the Plan as may be prescribed by or under the authority of the Board.  No
bond or security shall be required of any Funding Agent at any time in office.

          Section 5.3   Investments.
                        -----------

          The Funding Agent shall invest the Trust Fund in Shares and in such
other investments as may be permitted under the Funding Agreement, including
savings accounts, time or other interest bearing deposits in or other interest
bearing obligations of the Company, in such proportions as shall be determined
by the Committee; provided, however, that in no event shall the Fund be used to
purchase more than 1.96% of the total number of Shares issued in the
Reorganization (subject to adjustment pursuant to section 8.3).  Notwithstanding
the immediately preceding sentence, the Funding Agent may temporarily invest the
Fund in short-term obligations of, or guaranteed by, the U.S. Government or an
agency thereof, or the Funding Agent may retain the Trust Fund uninvested or may
sell assets of the Fund to provide amounts required for purposes of the Plan.
<PAGE>

                                      -8-

                                  Article VI
                                  ----------

                                    Awards
                                    ------

          Section 6.1   To Eligible Directors.
                        ---------------------

          Subject to the limitations of the Plan and such limitations as the
Board may from time to time impose, the number of Shares as to which an Eligible
Director may be granted an Award shall be determined by the Committee in its
discretion; provided, however, that in no event shall the number of Shares
allocated to an Eligible Director in an Award exceed the number of Shares then
held in the Fund and not allocated in connection with other Awards.

          Section 6.2   To Eligible Employees.
                        ---------------------

          Subject to the limitations of the Plan and such limitations as the
Board may from time to time impose, the number of Shares as to which an Eligible
Employee may be granted an Award shall be determined by the Committee in its
discretion; provided, however, that in no event shall the number of Shares
allocated to an Eligible Employee in an Award exceed the number of Shares then
held in the Trust and not allocated in connection with other Awards.

          Section 6.3   Awards in General.
                        -----------------

          Any Award shall be evidenced by an Award Notice issued by the
Committee to the Eligible Director or Eligible Employee, which notice shall:

          (a) specify the number of Shares covered by the Award;

          (b) specify the date of grant of the Award;

          (c) specify the dates on which such Shares shall become vested; and

          (d) contain such other terms and conditions not inconsistent with the
     Plan as the Board or Committee may, in its discretion, prescribe.

          Section 6.4   Share Allocations.
                        -----------------

          Upon the grant of an Award to an Eligible Director or Eligible
Employee, the Committee shall notify the Funding Agent of the Award and of the
number of Shares subject to the Award.  Thereafter, until such time as the
Shares subject to such Award become vested or are forfeited, the books and
records of the Funding Agent shall reflect that such number of Shares have been
awarded to such Award recipient.
<PAGE>

                                      -9-

          Section 6.5   Dividend Rights.
                        ---------------

          (a) Unless the Committee determines otherwise with respect to any
Award and specifies such determination in the relevant Award Notice, any cash
dividends or distributions declared and paid with respect to Shares subject to
the Award that are, as of the record date for such dividend, allocated to an
Eligible Director or Eligible Employee in connection with such Award shall be
promptly paid to and retained by such Eligible Director or Eligible Employee.
Any cash dividends declared and paid with respect to Shares that are not, as of
the record date for such dividend, allocated to any Eligible Director or
Eligible Employee in connection with any Award shall, at the direction of the
Committee, be held in the Trust or used to pay the administrative expenses of
the Plan, including any compensation due to the Funding Agent.

          (b) Unless the Committee determines otherwise with respect to any
Award and specifies such determination in the relevant Award Notice, any
dividends or distributions declared and paid in property other than cash with
respect to Shares shall be subject to the same vesting and other restrictions as
the Shares to which the Award relates.  Any such dividends declared and paid
with respect to Shares that are not, as of the record date for such dividend,
allocated to any Eligible Director or Eligible Employee in connection with any
Award shall, at the direction of the Committee, be held in the Trust or used to
pay the administrative expenses of the Plan, including any compensation due to
the Funding Agent or, in the case of a stock dividend, used for future Awards.

          Section 6.6   Voting Rights.
                        -------------

          (a) Each Eligible Director or Eligible Employee to whom an Award has
been made that is not fully vested shall have the right to exercise, or direct
the exercise of, all voting rights appurtenant to unvested Shares related to
such Award.  Such a direction for any Shares as to which the Eligible Director
or Eligible Employee is not the record owner shall be given by completing and
filing, with the inspector of elections, the Funding Agent or such other person
who shall be independent of the Company as the Committee shall designate in
the direction, a written direction in the form and manner prescribed by the
Committee.  If no such direction is given by an Eligible Director or Eligible
Employee, then the voting rights appurtenant to the Shares allocated to him
shall not be exercised.

          (b) To the extent that the Fund contains Shares that are not allocated
in connection with an Award, all voting rights appurtenant to such Shares shall
be exercised by the Funding Agent in such manner as the Committee shall direct
to reflect the voting directions given by Eligible Directors or Eligible
Employees with respect to Shares allocated in connection with their Awards.

          (c) The Committee shall furnish, or cause to be furnished, to each
Eligible Director or Eligible Employee who is not the record holder of the
Shares relating to his or her Award all annual reports, proxy materials and
other information furnished by Charter Financial Corp., or by any proxy
solicitor, to the holders of Shares.
<PAGE>

                                      -10-

          Section 6.7   Tender Offers.
                        -------------

          (a)   Each Eligible Director or Eligible Employee to whom an Award has
been made that is not fully vested shall have the right to respond, or  to
direct the response, with respect to the Shares related to such Award, to any
tender offer, exchange offer or other offer made to the holders of Shares.  Such
a direction for any Shares as to which the Eligible Director or Eligible
Employee is not the record owner shall be given by completing and filing, with
the inspector of elections, the Funding Agent or such other person who shall be
independent of the Company as the Committee shall designate in the direction, a
written direction in the form and manner prescribed by the Committee.  If no
such direction is given by an Eligible Director or Eligible Employee, then the
Shares shall not be tendered or exchanged.

          (b)   To the extent that the Fund contains Shares that are not
allocated in connection with an Award, all responses to tender, exchange and
other offers appurtenant to such Shares shall be given by the Funding Agent in
such manner as the Committee shall direct to reflect the responses given by
Eligible Directors or Eligible Employees with respect to Shares allocated in
connection with their Awards.

          (c)   The Committee shall furnish, or cause to be furnished, to each
Eligible Director or Eligible Employee, all information furnished by the offeror
to the holders of Shares.

          Section 6.8   Limitations on Awards.
                        ---------------------

          (a)   No Award shall be granted under the Plan prior to the later of
(i) the date on which the Plan is approved by shareholders pursuant to section
9.9 or (ii) six months after the date of the Reorganization;

          (b)   No Award granted under the Plan shall become vested more rapidly
than under the following schedule:

          (i)   prior to the first anniversary of the Effective Date, no part of
     any Award shall be vested in the absence of the death or Disability of the
     Award recipient or the occurrence of a Change of Control;

          (ii)  on and after the first anniversary of the Effective Date and
     prior to the second anniversary of the Effective Date, an Award will be
     vested as to a maximum of twenty percent (20%) of the Shares subject to the
     Award when granted in the absence of the death or Disability of the Award
     recipient or the occurrence of a Change of Control;

          (iii) on and after the second anniversary of the Effective Date and
     prior to the third anniversary of the Effective Date, an Award may be
     vested as to a maximum of forty percent (40%) of the Shares subject to the
     Award when granted in the absence of the death or Disability of the Award
     recipient or the occurrence of a Change of Control;
<PAGE>

                                      -11-

          (iv)  on and after the third anniversary of the Effective Date and
     prior to the fourth anniversary of the Effective Date, an Award may be
     vested as to a maximum of  sixty percent (60%) of the Shares subject to the
     Award when granted in the absence of the death or Disability of the Award
     recipient or the occurrence of a Change of Control;

          (v)   on and after the fourth anniversary of the Effective Date and
     prior to the fifth anniversary of the Effective Date, an Award may be
     vested as to a maximum of eighty  percent (80%) of the Shares subject to
     the Award when granted in the absence of the death or Disability of the
     Award recipient or the occurrence of a Change of Control; and

          (vi)  on and after the fifth anniversary of the date on which the Plan
     is approved by shareholders pursuant to section 9.9, the Award may be
     vested as to one hundred percent (100%) of the Shares subject to the Award
     when granted; and

          (vii) an Award may become fully vested on the date of the Award
     holder's death or Disability or on the date of a Change of Control without
     regard to the time expired from and after the Effective Date.

          (c)   An Award by its terms shall not be transferable by the Eligible
Director or Eligible Employee other than by will or by the laws of descent and
distribution, and the Shares granted pursuant to such Award and held in the
Trust shall be distributable, during the lifetime of the Recipient, only to the
Recipient.

                                  Article VII
                                  -----------

                                    Vesting
                                    -------

          Section 7.1   Vesting of Awards.
                        -----------------

          Subject to the terms and conditions of the Plan, unless otherwise
determined by the Committee and specified in the Award Notice relating to an
Award, Shares subject to each Award granted to an Eligible Director or Eligible
Employee under the Plan shall become vested as follows: (i) twenty percent (20%)
of such Shares shall become vested twenty (20) calendar days after the end of
the calendar quarter that includes the first anniversary of the date of grant;
(ii) an additional twenty percent (20%) of such Shares shall become vested
twenty (20) calendar days after the end of the calendar quarter that includes
the second anniversary of the date of grant; (iii) an additional twenty percent
(20%) of such Shares shall become vested twenty (20) calendar days after the end
of the calendar quarter that includes the third anniversary of the date of
grant; (iv) an additional twenty percent (20%) of such Shares shall become
vested twenty (20) calendar days after the end of the calendar quarter that
includes the fourth anniversary of the date of grant; (v) an additional twenty
percent (20%) of such Shares shall become vested twenty (20) calendar days after
the end of the calendar quarter that includes the fifth anniversary of the date
of grant; and provided, further, an
<PAGE>

                                      -12-

Award shall become 100% vested upon the Award recipient's death or Disability or
on the date of a Change of Control.

          Section 7.2   Designation of Beneficiary.
                        --------------------------

          An Eligible Director or Eligible Employee who has received an Award
may designate a Beneficiary to receive any undistributed Shares that are, or
become, available for distribution on, or after, the date of his death.  Such
designation (and any change or revocation of such designation) shall be made in
writing in the form and manner prescribed by the Committee.  In the event that
the Beneficiary designated by an Eligible Director or Eligible Employee dies
prior to the Eligible Director or Eligible Employee, or in the event that no
Beneficiary has been designated, any undistributed Shares that are, or become,
available for distribution on, or after, the Eligible Director's or Eligible
Employee's death shall be paid to the executor or administrator of the Eligible
Director's or Eligible Employee's estate, or if no such executor or
administrator is appointed within such time as the Committee, in its sole
discretion, shall deem reasonable, to such one or more of the spouse and
descendants and blood relatives of such deceased person as the Committee may
select.

          Section 7.3   Manner of Distribution.
                        ----------------------

          (a) Except as provided in section 7.3(b), as  soon as practicable
following the date any Shares granted pursuant to an Award become vested
pursuant to sections 7.1, the Committee shall take such actions as are necessary
to cause the transfer of record ownership of the Shares that have become vested
from the Funding Agent to the Award holder and shall cause the Funding Agent to
distribute to the Award holder all property other than Shares then being held in
connection with the Shares being distributed.

          (b) The Committee may, in its discretion, cause the transfer to an
Award recipient of record ownership of the Shares subject to such Award that
have not yet vested.  Any such Shares shall be held in certificated form only,
and the certificate therefor shall bear the following or a substantially similar
legend:

          The securities evidenced hereby are subject to the
          terms of an Award Notice dated [date] between the
          issuer and [name of Award recipient] pursuant to
          the Charter Financial Corp. 2001 Recognition and
          Retention Plan, a copy of which is on file with
          the issuer and may be inspected at the issuer's
          executive offices at 600 Third Avenue, West Point,
          Georgia 31833. No sale, transfer, hypothecation or
          other disposition of these securities may be made
          except in compliance with the terms of such Award
          Notice and the terms of the Plan.

          (c)  The Company's obligation to deliver Shares with respect to an
Award shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Eligible Director or
Eligible Employee or Beneficiary to whom such Shares are to be delivered, in
such form as the Committee shall determine to be necessary or advisable to
comply with the provisions of applicable federal, state or local law.  It may be
provided that any such
<PAGE>

                                      -13-

representation shall become inoperative upon a registration of the Shares or
upon the occurrence of any other event eliminating the necessity of such
representation. The Company shall not be required to deliver any Shares under
the Plan prior to (i) the admission of such Shares to listing on any stock
exchange on which Shares may then be listed, or (ii) the completion of such
registration or other qualification under any state or federal law, rule or
regulation as the Committee shall determine to be necessary or advisable.

          Section 7.4   Taxes.
                        -----

          The Company, the Committee or the Funding Agent shall have the right
to require any person entitled to receive Shares pursuant to an Award to pay the
amount of any tax which is required to be withheld with respect to such Shares,
or, in lieu thereof, to retain, or to sell without notice, a sufficient number
of Shares to cover the amount required to be withheld.

                                 Article VIII
                                 ------------

                           Amendment and Termination
                           -------------------------

          Section 8.1   Termination.
                        -----------

          The Board may suspend or terminate the Plan in whole or in part at any
time by giving written notice of such suspension or termination to the
Committee; provided, however, that the Plan may not be terminated while there
are outstanding Awards that may thereafter become vested.  Upon the termination
of the Plan, the Funding Agent shall make distributions from the Fund in such
amounts and to such persons as the Committee may direct and shall return the
remaining assets of the Fund, if any, to Charter Financial Corp.

          Section 8.2   Amendment.
                        ---------

          The Board may amend or revise the Plan in whole or in part at any
time; provided, however, that no such amendment or revision shall alter the
stockholder approval standard set forth in Article X as a condition precedent to
the effectiveness of Article X or otherwise directly or indirectly give effect
to the substance of the provisions of Article X without compliance with the
stockholder approval requirement set forth therein.

          Section 8.3   Adjustments in the Event of a Business Reorganization.
                        -----------------------------------------------------

          (a) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in which
Charter Financial Corp. is the surviving entity, and in the event of any stock
split, stock dividend or other event generally affecting the number of Shares
held by each person who is then a holder of record of Shares, the number of
Shares
<PAGE>

                                      -14-

held or permitted to be held in the Fund, the number of Shares covered by
outstanding Awards, and the number of Shares available as Awards in total or to
particular individuals or groups shall be adjusted to account for such event.
Such adjustment shall be effected by multiplying such number of Shares by an
amount equal to the number of Shares that would be owned after such event by a
person who, immediately prior to such event, was the holder of record of one
Share, unless the Committee, in its discretion, establishes another appropriate
method of adjustment.

          (b) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in which
Charter Financial Corp. is not the surviving entity, the Funding Agent shall
hold in the Fund any money, stock, securities or other property received by
holders of record of Shares in connection with such merger, consolidation, or
other business reorganization.  Any Award with respect to which Shares had been
allocated to an Eligible Director or Eligible Employee shall be adjusted by
allocating to the Eligible Director or Eligible Employee receiving such Award
the amount of money, stock, securities or other property received by the Funding
Agent for the Shares allocated to such Eligible Director or Eligible Employee,
and such money, stock, securities or other property shall be subject to the same
terms and conditions of the Award that applied to the Shares for which it has
been exchanged.

                                  Article IX
                                  ----------

                                 Miscellaneous
                                 -------------

          Section 9.1   Status as an Employee Benefit Plan.
                        ----------------------------------

          This Plan is not intended to satisfy the requirements for
qualification under section 401(a) of the Code or to satisfy the definitional
requirements for an "employee benefit plan" under section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.  It is intended to be a non-
qualified incentive compensation program that is exempt from the regulatory
requirements of the Employee Retirement Income Security Act of 1974, as amended.
The Plan shall be construed and administered so as to effectuate this intent.

          Section 9.2   No Right to Continued Employment.
                        --------------------------------

          Neither the establishment of the Plan nor any provisions of the Plan
nor any action of the Board or the Committee with respect to the Plan shall be
held or construed to confer upon any Eligible Director or Eligible Employee any
right to continue in the service of any Employer.  The Employers reserve the
right to dismiss any Eligible Director or Eligible Employee or otherwise deal
with any Eligible Director or Eligible Employee to the same extent as though the
Plan had not been adopted.
<PAGE>

                                      -15-

           Section 9.3   Construction of Language.
                         ------------------------

          Whenever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine or the neuter.  Any reference to an Article or section number shall
refer to an Article or section of this Plan unless otherwise indicated.

           Section 9.4   Governing Law.
                         -------------

          The Plan shall be construed and enforced in accordance with the laws
of the State of Georgia without giving effect to the conflict of laws principles
thereof, except to the extent that such laws are preempted by the federal laws
of the United States of America.  The Plan shall be construed to comply with
applicable OTS Regulations.

           Section 9.5   Headings.
                         --------

          The headings of Articles and sections are included solely for
convenience of reference.  If there is any conflict between such headings and
the text of the Plan, the text shall control.

           Section 9.6   Non-Alienation of Benefits.
                         --------------------------

          The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation or assignment, nor shall such right be
liable for or subject to debts, contracts, liabilities, engagements or torts;
provided, however, that any recipient of an Award who makes an election pursuant
to section 83(b) of the Code to include the value of the Shares subject to such
Award in gross income for federal income purposes when granted rather than when
vested shall have the right to margin such Shares to finance the payment of
taxes.  Any Shares so margined shall nevertheless remain subject to the
forfeiture provisions and other terms and conditions of the Award.

           Section 9.7   Notices.
                         -------

          Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is personally delivered or 5 days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other:
<PAGE>

                                      -16-

          (a)  If to the Committee:

               Charter Financial Corp.
               600 Third Avenue
               West Point, Georgia  31833

               Attention:     Corporate Secretary
                              -------------------

          (b)  If to an Eligible Director or Eligible Employee, to the Eligible
     Director's or Eligible Employee's address as shown in the Employer's
     records.

           Section 9.8   Required Regulatory Provisions.
                         ------------------------------

          The making and payment of Awards under this Plan shall be conditioned
upon and subject to compliance with section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated
thereunder.

           Section 9.9   Approval of Shareholders.
                         ------------------------

          The Plan shall not be effective prior to its approval by a majority of
the total votes cast by purchasers (other than First Charter, MHC) in the stock
offering conducted in conjunction with the Reorganization who become holders of
Shares.  If not effective due to the vote of purchasers in the Reorganization,
the Plan shall be effective upon the date of its approval by a majority of the
total votes eligible to be cast at any duly called annual or special meeting of
the Company.  If not effective prior to the one year anniversary of the date of
the Reorganization, the Plan shall be effective on such later date as is
specified by the Board.  No Award shall be made prior to the date on which the
Plan becomes effective nor shall any Award be granted within six months of the
date of the Reorganization.

                                   Article X
                                   ---------

         Additional Provisions Subject to Further Shareholder Approval
         -------------------------------------------------------------

          Section 10.1  Accelerated Vesting Upon Retirement.
                        -----------------------------------

          Notwithstanding anything in the Plan to the contrary, unless otherwise
determined by the Committee and specified in the Award Notice relating to an
Award in the event that any Eligible Employee terminates service as an Employee
of all Employers, or in the event that an Eligible Director terminates service
as  a voting member of all Employers' boards of directors, and such termination
constitutes a Retirement, all Awards outstanding to such holder on the date of
his Retirement shall, to the extent not already vested, become vested upon
Retirement.
<PAGE>

                                      -17-

          Section 10.2  No Effect Prior to Stockholder Approval.
                        ---------------------------------------

          Notwithstanding anything contained in this Article X to the contrary,
the provisions of this Article X shall not be applied, and shall be of no force
or effect, unless and until the shareholders of the Company shall have approved
such provisions by affirmative vote of the holders of a majority of the Shares
represented in person or by proxy and entitled to vote at a meeting of
shareholders duly called and held after the one year anniversary of the date of
the Reorganization.

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