Document:

ex10-7.htm

    
      
        

      

    

    Exhibit
10.7

     

    CHARTERBANK

    SALARY
CONTINUATION PLAN

     

    THIS
SALARY CONTINUATION PLAN AGREEMENT (this “Agreement”) is entered into as
of this first day January, 2009 by and between Charterbank, a federally
chartered thrift, supervised by the Office of Thrift Supervision (the
“Employer”), located in West Point, Georgia, and Curt Kollar, an individual
resident of Georgia (hereinafter referred to as the “Executive” or
“Participant”) .

     

    WHEREAS,
the Executive has contributed substantially to the success of the Employer and
the Employer desires that the Executive continue in its
employ;

     

    WHEREAS,
to encourage the Executive to remain an employee of the Employer, the Employer
is willing to provide salary continuation benefits to the Executive, payable out
of the Employer’s general assets; and

     

    WHEREAS,
the parties hereto intend that this Agreement shall be considered an unfunded
arrangement maintained primarily to provide supplemental retirement benefits for
the Executive, and shall be considered a plan described in Section 301(a)(3) of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).

     

    WHEREAS
this Plan is intended to comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).  Accordingly,
the intent of the parties hereto is that the Plan shall be operated and
interpreted consistent with the requirements of Code Section
409A.

     

    NOW
THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.

     

    ARTICLE
1

    DEFINITIONS

     

    Whenever
used in this Agreement, the following terms have the meanings specified
—

     

    1.1           “Accrual
Balance” means the
liability that should be accrued by the Employer under accounting principles
generally accepted in the United States (“GAAP”) for the Employer’s obligation
to the Executive under this Agreement, by applying Accounting Principles Board
Opinion No. 12, as amended by Statement of Financial Accounting Standards No.
106, and the calculation method and discount rate specified
hereinafter.  The initial Accrual Balance shall be equal to the
liability accrued by the Employer as of the Effective Date. The projected
Accrual Balance is detailed on Schedule
A including annual accruals. The
Accrual Balance shall be calculated assuming a level principal amount and
interest as the discount rate is accrued each period.  The principal
accrual is determined such that when it is credited with interest each month,
the Accrual Balance at Normal Retirement Age equals the present value of the
normal retirement benefits described in Section 2.1.1.  At the end of
each Plan Year, the Accrual Balance shall be adjusted to reflect the Employer’s
obligation under Sections 2.1.1 in terms of the Executive’s actual base salary
for that Plan Year.  The discount rate means the rate used by the Plan
Administrator for determining the Accrual Balance.  The rate is based
on the yield on a 20-year corporate bond rated Aa by Moody’s, rounded to the
nearest 1⁄4%, or as otherwise determined by a Regulatory Body applicable to the
Employer. The initial discount rate is 6.00%.  In its sole discretion,
the Plan Administrator may adjust the discount rate to maintain the rate within
reasonable standards according to GAAP and consistent with the
Interagency Advisory on Accounting for Deferred Compensation Agreements
which states that the “cost of those benefits shall be accrued over that period
of the employee’s service in a systematic and rational manner.” 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2           “Affiliate”
means an entity controlling, controlled by or under common control with
the Employer, with control meaning direct or indirect ownership of equity
securities with the ordinary voting power of more than fifty percent (50%) of
the equity securities of an entity.

     

    1.3           “Beneficiary”
means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive, determined
according to Article 4.

     

    1.4           
“Beneficiary Designation Form” means the form established from time to
time by the Plan Administrator that the Executive completes, signs, and returns
to the Plan Administrator to designate one or more Beneficiaries.

     

    1.5           “Board”
means the Board of Directors of the Employer.

     

    1.6           “Change
in Control” means a
change in the ownership or effective control of the relevant corporation, or in
the ownership of a substantial portion of the assets of the relevant
corporation, as such change is defined in Treasury Regulations Section
1.409A-3(i)(5).  The “relevant corporation” means the Employer or any
corporation that is a majority shareholder (i.e., owns
more than fifty percent (50%) of the total fair market value and the total
voting power of the equities securities) of the Employer or of any corporation
in a chain of corporations in which each corporation is a majority shareholder
of another corporation in the chain, ending in the Employer; provided, however,
that for purposes of determining whether a “change in the effective control of
the relevant corporation” has occurred, the sole relevant corporation shall be
the corporation for which no other corporation is a majority
shareholder.  As of the Effective Date, the relevant corporations are
the Employer, Charter Financial Corporation and First Charter, MHC; provided,
however, that for purposes of determining whether a “change in the effective
control of the relevant corporation” has occurred, the sole relevant corporation
is First Charter, MHC.  Notwithstanding anything herein to the
contrary, the sale of shares of Charter Financial Corporation or reorganization
of First Charter MHC, in either case as part of a conversion or partial
conversion of the direct or indirect ownership of the Employer from a mutual
holding company structure to a stock holding company structure shall not be
deemed to be a Change in Control.

     

    1.7           “Disability”
means the Executive suffers from a disability as defined in Treasury
Regulations Section 1.409A-3(i)(4).  The determination of Disability
will be made by the Social Security Administration, by the insurer under the
Employer’s disability plan, or by a physician selected by the Executive and
reasonably acceptable to the Employer; provided that in each case the definition
of “Disability” employed must be consistent with the foregoing
regulations.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.8           “Early
Retirement Date” means the date of the Executive’s Termination of
Employment upon or following the completion of ten (10) Years of Service with
the Employer and attaining age sixty-two (62), but before Normal Retirement Age,
for reasons other than death, Disability, Termination for Cause, termination
under Article 6 of
this Agreement, or Termination of Employment within two (2) years after a Change
in Control.

     

    1.9           “Early
Termination Date” means the date of the Executive’s Termination of
Employment upon or following completion of ten (10) Years of Service but before
reaching his Early Retirement Date or his Normal Retirement Date, for reasons
other than death, Disability, Termination for Cause, termination under
Article 6
of this Agreement, or Termination of Employment within two (2) years after a
Change in Control.

     

    1.10           “Effective
Date” means January 1, 2009.

     

    1.11           “Final
Base Salary” means the Executive’s average annual base salary for the
highest three (3) consecutive calendar year period ending at the earlier of the
Executive’s Normal Retirement Age or the date of the Executive’s Termination of
Employment within two (2) years after a Change in Control.

     

    1.12           “Normal
Retirement Age” means the later of the date the Executive reaches age
sixty-five (65) or completes ten (10) Years of Service.

     

    1.13           “Normal
Retirement Date” means the date of the Executive’s Termination of
Employment on or after the Executive’s Normal Retirement Age, for reasons other
than death, Termination for Cause, termination under Article 6 of this
Agreement, or Termination of Employment within two (2) years after a Change in
Control.

     

    1.14           “Person”
means an individual, corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated organization or
other entity.

     

    1.15           “Plan
Administrator” means the plan administrator described in
Article 9.

     

    1.16           “Plan
Year” means a twelve-month period commencing on January 1, and ending on
December 31 of each year.  The initial Plan Year shall commence on the
Effective Date of this Agreement and end on December 31 of the year in which
occurs the Effective Date.

     

    1.17           “Regulatory
Body” means The Office of the Comptroller of the Currency (OCC), the
Board of Governors of the Federal Reserve System (FRB), the Federal Deposit
Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS), also
known as “the agencies.”

     

    1.18           “Specified
Employee” means an employee who at the time of Termination of Employment
is a “specified employee” within the meaning of Treasury Regulations Section
1.409A-1(i) with respect to the Employer or any entity aggregated with the
Employer as the “service recipient” within the meaning of Treasury Regulations
Section 1.409A-1(g).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.19           “Termination
for Cause” and “Cause”
shall have the same definition specified in any effective severance or
employment agreement existing between the Executive and the Employer or an
Affiliate at the date of the Executive’s Termination of Employment. If the
Executive is not a party to a severance or employment agreement containing a
definition of termination for cause, Termination for Cause means the Employer or
an Affiliate terminates the Executive’s employment because of:

     

    (a)
fraud;

     

    (b)
embezzlement;

     

    (c)
commission by the Executive of a felony;

     

    (d) a
material breach of, or the willful failure or refusal by the Executive to
perform and discharge the Executive’s duties, responsibilities and obligations
to the Employer or an Affiliate;

     

    (e) any
act of moral turpitude or willful misconduct by the Executive intended to result
in personal enrichment of the Executive at the expense of the Employer or an
Affiliate, or which has a material adverse impact on the business or reputation
of the Employer or an Affiliate (such determination to be made by the Board in
its reasonable judgment);

     

    (f)
intentional material damage to the property or business of the Employer or an
Affiliate;

     

    (g) gross
negligence; or

     

    (h) the
ineligibility of the Executive to perform his duties because of a ruling,
directive or other action by any agency of the United States or any state of the
United States having regulatory authority over the Employer or an
Affiliate;

     

    but in
each case only if:

     

    (1) the
Executive has been provided with written notice of any assertion that there is a
basis for termination for Cause which notice shall specify in reasonable detail
specific facts regarding any such assertion,

     

    (2) such
written notice is provided to the Executive a reasonable time (and in any event
no less than three business days) before the Board meets to consider any
possible termination for Cause,

     

    (3) at or
prior to the meeting of the Board to consider the matters described in the
written notice, an opportunity is provided to the Executive and his counsel to
be heard before the Board with respect to the matters described in the written
notice,

     

    (4) any
resolution or other Board action held with respect to any deliberation regarding
or decision to terminate the Executive for Cause is duly adopted by a vote of at
least two-thirds of the entire Board (excluding the Executive) at a meeting of
the Board duly called and held, and

     

    (5) the
Executive is promptly provided with a copy of the resolution or other corporate
action taken with respect to such termination.

     

    No act or
failure to act by the Executive shall be considered willful unless done or
omitted to be done by him not in good faith and without reasonable belief that
his action or omission was in the best interests of the Employer.

     

    
      
        
        

      

      
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    1.20           “Termination
of Employment” with the Employer means the Executive’s termination of
employment from the Employer and all entities aggregated with the Employer as
the “service recipient” within the meaning of Treasury Regulations Section
1.409A-1(g) that constitutes a “separation from service” within the meaning of
Treasury Regulations Section 1.409A-1(h).

     

    1.21           “Year
of Service” means each year the Participant is employed by the Employer
measured on an elapsed time basis from the first day worked through Termination
of Employment.

     

    ARTICLE
2

    RETIREMENT
BENEFITS

     

    2.1           Normal
Retirement Benefit.  Upon the Executive’s Normal Retirement
Date, the Executive shall receive the benefit described in this Section 2.1 in
lieu of any other benefit under Article 2 of this Agreement.

     

    
      	
               
      

            	
              2.1.1.

            	
              Amount
      of Benefit.  The annual Normal Retirement Benefit under
      this Section 2.1 is an amount equal to ten percent (10%) of the
      Executive’s Final Base
Salary.

            

    

     

    
      	
               
      

            	
              2.1.2.

            	
              Payment
      of Benefit.  The Employer shall pay the annual benefit to
      the Executive in twelve (12) equal monthly installments for fifteen (15)
      years beginning on the first day of the month after the Executive’s Normal
      Retirement Date.

            

    

     

    2.2           Early
Retirement Benefit.  Upon the Executive’s Early Retirement
Date, the Executive shall receive the benefit described in this Section 2.2 in
lieu of any other benefit under Article 2 of this Agreement.

     

    
      	
               
      

            	
              2.2.1.

            	
              Amount
      of Benefit.  The benefit under this Section 2.2 is an
      amount equal to the Accrual Balance earned as of the last day of the month
      immediately preceding the Executive’s Early Retirement
      Date.

            

    

     

    
      	
               
      

            	
              2.2.2.

            	
              Payment
      of Benefit.  The Employer shall pay the benefit to the
      Executive in one hundred eighty (180) equal monthly installments beginning
      on the first day of the month after the Executive’s Early Retirement
      Date.

            

    

     

    2.3           Early
Termination Benefit.  Following the Executive’s Early
Termination Date, the Executive shall receive the benefit described in this
Section 2.3 in lieu of any other benefit under Article 2 of this
Agreement.

     

    
      	
               
      

            	
              2.3.1.

            	
              Amount
      of Benefit.  The benefit under this Section 2.3 is an
      amount equal to the Accrual Balance earned as of the last day of the Plan
      Year immediately preceding or coinciding with the Executive’s Early
      Termination Date.

            

    

     

    
      	
               
      

            	
              2.3.2.

            	
              The
      Employer shall pay the benefit to the Executive in one hundred eighty
      (180) equal monthly installments beginning on the first day of the month
      after the Executive’s Normal Retirement
Age.

            

    

     

    
      
        
        

      

      
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    2.4           Disability
Benefit.  Upon the Executive’s Disability before reaching
Normal Retirement Age, the Executive shall receive the benefit described in this
Section 2.4 in
lieu of any other benefit under this Agreement.

     

    
      	
               
      

            	
              2.4.1.

            	
              Amount
      of Benefit.  The annual benefit under this Section 2.4 is
      an amount equal to the Normal Retirement Benefit computed as though the
      Executive had continued to be employed by the Employer at his rate of
      annual base salary in effect at the date of his Disability until attaining
      his Normal Retirement Age.

            

    

     

    
      	
               
      

            	
              2.4.2.

            	
              Payment
      of Benefit.  The Employer shall pay the annual benefit to
      the Executive in twelve (12) equal monthly installments for fifteen (15)
      years beginning on the first day of the month after the Executive’s
      Disability.

            

    

     

    2.5           Change
in Control Benefit. Upon
a Termination of Employment within
two (2) years after a Change
of Control, the Executive shall receive the benefit described in this Section
2.5 in lieu of any other benefit under this
Agreement.

     

    
      	
               
      

            	
              2.5.1.

            	
              Amount
      of Benefit.  The benefit under this Section 2.5 is an
      amount equal to the Normal Retirement Benefit set forth in Section 2.1.1,
      or the Executive’s Accrual Balance as of the last day of the Plan Year
      preceding the effective date of the Change in Control, whichever is
      greater.

            

    

     

    
      	
               
      

            	
              2.5.2.

            	
              Payment
      of Benefit.  The Employer shall pay the benefit to the
      Executive in one hundred eighty (180) equal monthly installments beginning
      on the first day of the month after the month after the Executive’s
      Termination of Employment.

            

    

     

    2.6           Restriction
on Timing of Distributions. Notwithstanding
any provision of this Agreement to the contrary, benefit distributions that are
made to a Specified Employee
upon Termination of Employment may not commence earlier than six (6) months
after the date of such Termination of Employment.  Therefore, in
the event this Section 2.5 is
applicable to the Executive, any
distribution which would otherwise be paid to the Executive within the first six
months following the Termination of Employment shall be accumulated and paid to
the Executive in a
lump sum on the first day of the seventh month following the Termination of
Employment.  All subsequent distributions shall be paid in the manner
specified.

     

    ARTICLE
3

    DEATH
BENEFITS

     

    3.1           Death
During Active Service.  If the
Executive dies while employed by the Employer, instead of any benefits payable
under Article 2 of this Agreement the Employer shall pay to the Executive’s
Beneficiary an amount equal to the Accrual Balance earned as of the last day of
the Plan Year immediately preceding or coinciding the date of the Executive’s
death. The Employer shall pay the death benefit under this Section 3.1 in one
hundred eighty (180) equal monthly installments beginning on the first day of
the month after the Executive’s death.

     

    3.2           Death
During Benefit Period.  If the
Executive dies after benefit payments under Article 2 of this Agreement commence
but before receiving all such payments, or if the Executive is entitled to
benefit payments under Article 2 but dies before payments commence, the
remaining payments shall be payable to the Executive’s Beneficiary in accordance
with the applicable payment provisions of Article 2, until fully
disbursed.  Payments shall be made in the same amounts they would have
been made to the Executive had the Executive
survived.

     

    
      
        
        

      

      
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    ARTICLE
4

    CODE
SECTION 409A

    AND
ADDITIONAL DISTRIBUTION RULES

     

    4.1           Distributions
Upon Income Inclusion Under Code Section 409A.  Upon
the inclusion of any amount into the Executive’s or Beneficiary’s income as a
result of the failure of this Agreement to comply with the requirements of Code
Section 409A, a distribution shall be made in an amount equal to the lesser of
the amount required to be included in income as a result of such failure or the
Accrual Balance.

     

    4.2           Change
in Form or Timing of Distributions.   This
Agreement may be amended by the Employer and the Executive (or after the
Executive’s death, the Beneficiary) to change the form of timing of
distributions hereunder; provided, however, that all changes in the form or
timing of distributions hereunder must comply with the following
requirements.  The changes:

     

    
      	
               
      

            	
              (a)

            	
              shall
      not take effect until at least twelve (12) months after the amendment is
      made, and

            

    

     

    
      	
               
      

            	
              (b)

            	
              shall,
      except for payments described in Section 2.4 or Article 3, delay the
      distribution for a minimum of five (5) years from the date the
      distribution was originally scheduled to be
  made;

            

    

     

    4.3           One
Benefit Only. Notwithstanding
any provision of this Agreement, the Executive and the Executive’s Beneficiary
are entitled to one benefit derived from Article 2 of this Agreement, which
shall be determined by the first event to occur that is dealt with by Article 2
of this Agreement. Subsequent occurrence of events dealt with by Article 2 shall
not entitle the Executive or the Executive’s Beneficiary to other or additional
benefits derived from Article 2.

     

    4.4           Compliance
with Code Section 409A. This
Agreement shall be interpreted and administered consistent with Code Section
409A.

     

    ARTICLE
5

    BENEFICIARIES

     

    5.1           Beneficiary
Designations.  The
Executive shall have the right to designate at any time a Beneficiary to receive
any benefits payable under this Agreement upon the death of the
Executive.  The Beneficiary designated under this Agreement may be the
same as or different from the beneficiary designation under any other benefit
plan of the Employer in which the Executive
participates.

     

    
      
        
        

      

      
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    5.2           Beneficiary
Designation: Change.  The
Executive shall designate a Beneficiary by completing and signing the
Beneficiary Designation Form and delivering it to the Plan Administrator or its
designated agent.  The Executive’s Beneficiary designation shall be
deemed automatically revoked if the Beneficiary predeceases the Executive or if
the Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved.  The Executive shall have the right to change a Beneficiary
by completing, signing, and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator’s rules and procedures,
as in effect from time to time.  Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled.  The Plan
Administrator shall be entitled to rely on the last Beneficiary Designation Form
filed by the Executive and accepted by the Plan Administrator before the
Executive’s death.

     

    5.3           Acknowledgment.  No designation
or change in designation of a Beneficiary shall be effective until received in
writing by the Plan Administrator or its designated
agent.

     

    5.4           No
Beneficiary Designation.  If the
Executive dies without a valid beneficiary designation, or if all designated
Beneficiaries predecease the Executive, then the Executive’s spouse shall be the
designated Beneficiary.  If the Executive has no surviving spouse, the
benefits shall be distributed to the personal representative of the Executive’s
estate; provided, however, that the personal representative of the Executive’s
estate may assign the right to receive payment to the heirs under the
Executive’s estate, or in the absence of a will, the Executive’s heirs in
accordance with the applicable intestacy statute.

     

    5.5           Facility
of Payment.  If a
benefit is payable to a minor, to a person declared incapacitated, or to a
person incapable of handling the disposition of his or her property, the
Employer may pay such benefit to the guardian, legal representative, or person
having the care or custody of the minor, incapacitated person, or incapable
person.  The Employer may require proof of incapacity, minority, or
guardianship as it may deem appropriate before distribution of the
benefit.  Distribution shall completely discharge the Employer from
all liability for the benefit.

     

    ARTICLE
6

    GENERAL
LIMITATIONS

     

    6.1           Termination
for Cause.  If the
Executive experiences a Termination of Employment which is a Termination for
Cause, notwithstanding any provision of this Agreement to the contrary, this
Agreement and the Employer’s obligations under this Agreement shall terminate as
of the effective date of the Termination for Cause.

     

    6.2           Suicide
or Misstatement No
benefits shall be paid under this Agreement if the Executive commits suicide
within two years after the Effective Date of this Agreement or if the Executive
makes any material misstatement of fact on any application for life insurance
purchased by the Employer.

     

    6.3           Removal.
Despite
any contrary provision of this Agreement, if the Executive is removed from
office or permanently prohibited from participating in the Employer’s affairs by
an order issued under section 8(e) or 8(g) of the Federal Deposit Insurance Act,
12 U.S.C. 1818(e) or 1818(g), all obligations of the Employer under this
Agreement shall terminate as of the effective date of the
order.

     

    6.4           Default
Despite
any contrary provision of this Agreement, if the Employer is in “default” or “in
danger of default”, as those terms are defined in of section 3(x) of the Federal
Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement
shall terminate.

     

    
      
        
        

      

      
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    6.5           FDIC
Open-Employer Assistance. All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of the contract is necessary for the continued
operation of the Employer, at the time the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the Employer
under the authority contained in section 13(c) of the Federal Deposit Insurance
Act. 12 U.S.C. 1823(c).

     

    6.6           No
Golden Parachutes.  Notwithstanding
anything contained in this Agreement to the contrary, no payments shall be made
hereunder in contravention of the golden parachute payment and indemnification
payment restrictions contained in regulations adopted pursuant to Section 18(k)
of the Federal Deposit Insurance Act, 12 U.S.C.
1828(k).

     

    ARTICLE
7

    CLAIMS
AND REVIEW PROCEDURES

     

    7.1            Claims
Procedure.  A person or beneficiary (a “claimant”) who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows –

     

    
      	
               
      

            	
              7.1.1

            	
              Initiation
      - Written Claim.  The claimant initiates a claim by
      submitting to the Employer a written claim for the benefits. If the claim
      relates to the contents of a notice received by the claimant, the claim
      must be made within 60 days after the notice was received by the claimant.
      All other claims must be made within 180 days after the date of the event
      that caused the claim to arise. The claim must state with particularity
      the determination desired by the
  claimant.

            

    

     

    
      	
               
      

            	
              7.1.2

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

            

    

     

    
      	
               
      

            	
              7.1.3

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

            

    

     

    
      	
               
      

            	
              7.1.4

            	
              The
      specific reasons for the denial,

            

    

     

    
      	
               
      

            	
              7.1.5

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            

    

     

    
      	
               
      

            	
              7.1.6

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

            

    

     

    
      	
               
      

            	
              7.1.7

            	
              An
      explanation of the Agreement’s review procedures and the time limits
      applicable to such procedures, and

            

    

     

    
      
        
        

      

      
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              7.1.8

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

            

    

     

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

     

    
      	
               
      

            	
              7.2.1

            	
              Initiation
      - Written Request.  To initiate
      the review, the claimant, within 60 days after receiving the Employer’s
      notice of denial,
      must file with the Employer a written request for
      review.

            

    

     

    
      	
               
      

            	
              7.2.2

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

            

    

     

    
      	
               
      

            	
              7.2.3

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

            

    

     

    
      	
               
      

            	
              7.2.4

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

            

    

     

    
      	
               
      

            	
              7.2.5

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

            

    

     

    
      	
               
      

            	
              7.2.5.1

            	
              The
      specific reasons for the denial,

            

    

     

    
      	
               
      

            	
              7.2.5.2

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            

    

     

    
      	
               
      

            	
              7.2.5.3

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

            

    

     

    
      	
               
      

            	
              7.2.5.4

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

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    ARTICLE
8

    MISCELLANEOUS

     

    8.1            Amendments
and Termination.  Subject to Section 7.13 of this Agreement,
(a) this Agreement may be amended solely by a written agreement signed by the
Employer and by the Executive, and (b) except for termination occurring under
Article 5, this Agreement may be terminated solely by a written agreement signed
by the Employer and by the Executive.

     

    8.2            Binding
Effect.  This Agreement shall bind the Executive and the
Employer and their beneficiaries, survivors, executors, successors,
administrators, and transferees.

     

    8.3            No
Guarantee of Employment. This Agreement is
not an employment policy or contract.  It does not give the Executive
the right to remain an employee of the Employer, nor does it interfere with the
Employer’s right to discharge the Executive.  It also does not require
the Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time.

     

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

     

    8.5            Tax
Withholding.  The Employer shall withhold any taxes that are
required to be withheld from the benefits provided under this
Agreement.

     

    8.6            Applicable
Law.  Except to the extent preempted by the laws of the United
States of America, the validity, interpretation, construction, and performance
of this Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia, without giving effect to the principles of conflict of
laws of such state.

     

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

     

    8.8            Severability.  If
any provision of this Agreement is held invalid, such invalidity shall not
affect any other provision of this Agreement, and each such other provision
shall continue in full force and effect to the full extent consistent with
law.  If any provision of this Agreement is held invalid in part, such
invalidity shall not affect the remainder of the provision, and the remainder of
such provision together with all other provisions of this Agreement shall
continue in full force and effect to the full extent consistent with
law.

     

    8.9            Headings.  The
headings of sections herein are included solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    8.10            Notices.  All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid.  Unless otherwise changed by notice, notice shall be properly
addressed to the Executive if addressed to the address of the Executive on the
books and records of the Employer at the time of the delivery of such notice,
and properly addressed to the Employer if addressed to the Board of Directors,
at CharterBank, 1233 O.G. Skinner Drive, West Point, Georgia 31833.

     

    8.11            Entire
Agreement.  This Agreement constitutes the entire agreement
between the Employer and the Executive concerning the subject matter
hereof.  No rights are granted to the Executive under this Agreement
other than those specifically set forth herein.

     

    8.12            Payment
of Legal Fees.  In the event litigation ensues between the
parties concerning the enforcement of the obligations of the parties under this
Agreement, the Employer shall promptly pay (but not later than two (2) months
after such expenses are incurred) all costs and expenses in connection with such
litigation until such time as a final determination (excluding any appeals) is
made with respect to the litigation.  If the Employer prevails on the
substantive merits of each material claim in dispute in such litigation, the
Employer shall be entitled to receive from the Executive all reasonable costs
and expenses, including without limitation attorneys’ fees, incurred by the
Employer on behalf of the Executive in connection with such litigation, and the
Executive shall pay such costs and expenses to the Employer promptly upon demand
by the Employer.

     

    8.13            Termination
or Modification of Agreement Because of Changes in Law, Rules or
Regulations.  The Employer is entering into this Agreement on
the assumption that certain existing tax laws, rules, and regulations will
continue in effect in their current form.  If that assumption
materially changes and the change has a material detrimental effect on this
Agreement, then the Employer reserves the right to terminate or modify this
Agreement accordingly, subject to the written consent of the Executive, which
shall not be unreasonably withheld.  This Section 8.13 shall become
null and void effective immediately if a Change in Control occurs.

     

    ARTICLE
9

    ADMINISTRATION
OF AGREEMENT

     

    9.1            Plan
Administrator Duties.  This Agreement shall be administered by
a Plan Administrator consisting of the Board of Directors of the Employer or
such committee or person(s) as the Board of Directors of the Employer shall
appoint.  The Plan Administrator shall have the sole and absolute
discretion and authority to interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and the rights of the
Participant under this Agreement, to decide or resolve any and all questions or
disputes arising under this Agreement, including benefits payable under this
Agreement and all other interpretations of this Agreement, as may arise in
connection with the Agreement.

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    9.3            Binding
Effect of Decisions.  The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation, and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.  No
Executive or Beneficiary shall be deemed to have any right, vested or nonvested,
regarding the continued use of any previously adopted assumptions, including but
not limited to the discount rate and calculation method described in Section
1.1.

     

    9.4            Indemnity
of Plan Administrator.  The Plan Administrator shall not be
liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Agreement, unless such action or
omission is attributable to the willful misconduct of the Plan Administrator or
any of its members.  The Employer shall indemnify and hold harmless
the members of the Plan Administrator against any and all claims, losses,
damages, expenses, or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.

     

    9.5            Employer
Information.  To enable
the Plan Administrator to perform its functions, the Employer shall supply full
and timely information to the Plan Administrator on all matters relating to the
date and circumstances of the retirement, Disability, death, or Termination of
Employment of the Executive and such other pertinent information as the Plan
Administrator may reasonably require.

     

    IN
WITNESS WHEREOF, the Executive and a duly authorized Officer of the
Employer have signed this Agreement as of the date first written
above.

     

    
       

      
        	
                THE
      EXECUTIVE:

              	 	
                CHARTERBANK

              	 
	 
      	 	 
      	 	 
	/s/
      Curt
      Kollar	 	
                By:

              	/s/
      Thomas M. Lane	 
	
                

                  Curt
      Kollar

                

              	 	 
      	 	 
	 
      	 	
                Its:

              	Chairman,
      Personnel and Compensation Committee	 

      

       

       

      13ex10-8.htm

    
      
        

      

    

    Exhibit
10.8

     

    CHARTERBANK

    SALARY
CONTINUATION PLAN

    

    THIS SALARY CONTINUATION PLAN
AGREEMENT (this “Agreement”) is entered into as of this first day
January, 2009 by and between Charterbank, a federally chartered thrift,
supervised by the Office of Thrift Supervision (the “Employer”), located in West
Point, Georgia, and Lee Washam, an individual resident of Georgia (hereinafter
referred to as the “Executive” or “Participant”) .

    

    WHEREAS, the Executive has
contributed substantially to the success of the Employer and the Employer
desires that the Executive continue in its employ;

     

    WHEREAS, to encourage the
Executive to remain an employee of the Employer, the Employer is willing to
provide salary continuation benefits to the Executive, payable out of the
Employer’s general assets; and

     

    WHEREAS, the parties hereto
intend that this Agreement shall be considered an unfunded arrangement
maintained primarily to provide supplemental retirement benefits for the
Executive, and shall be considered a plan described in Section 301(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).

     

    WHEREAS this Plan is intended
to comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).  Accordingly, the intent of the parties
hereto is that the Plan shall be operated and interpreted consistent with the
requirements of Code Section 409A.

    

    NOW THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows.

     

    ARTICLE
1

    DEFINITIONS

     

    Whenever
used in this Agreement, the following terms have the meanings specified
—

     

    1.1           “Accrual Balance” means the
liability that should be accrued by the Employer under accounting principles
generally accepted in the United States (“GAAP”) for the Employer’s obligation
to the Executive under this Agreement, by applying Accounting Principles Board
Opinion No. 12, as amended by Statement of Financial Accounting Standards No.
106, and the calculation method and discount rate specified
hereinafter.  The initial Accrual Balance shall be equal to the
liability accrued by the Employer as of the Effective Date. The projected
Accrual Balance is detailed on Schedule A including
annual accruals. The Accrual Balance shall be calculated assuming a level
principal amount and interest as the discount rate is accrued each
period.  The principal accrual is determined such that when it is
credited with interest each month, the Accrual Balance at Normal Retirement Age
equals the present value of the normal retirement benefits described in Section
2.1.1.  At the end of each Plan Year, the Accrual Balance shall be
adjusted to reflect the Employer’s obligation under Sections 2.1.1 in terms of
the Executive’s actual base salary for that Plan Year.  The discount
rate means the rate used by the Plan Administrator for determining the Accrual
Balance.  The rate is based on the yield on a 20-year corporate bond
rated Aa by Moody’s, rounded to the nearest 1⁄4%, or as otherwise determined by a
Regulatory Body applicable to the Employer. The initial discount rate is
6.00%.  In its sole discretion, the Plan Administrator may adjust the
discount rate to maintain the rate within reasonable standards according to GAAP
and consistent with the Interagency Advisory on Accounting for Deferred
Compensation Agreements which states that the “cost of those benefits shall be
accrued over that period of the employee’s service in a systematic and rational
manner.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2           “Affiliate” means an entity
controlling, controlled by or under common control with the Employer, with
control meaning direct or indirect ownership of equity securities with the
ordinary voting power of more than fifty percent (50%) of the equity securities
of an entity.

     

    1.3           “Beneficiary” means each
designated person, or the estate of the deceased Executive, entitled to
benefits, if any, upon the death of the Executive, determined according to
Article 4.

     

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

     

    1.5           “Board” means the Board of
Directors of the Employer.

     

    1.6           “Change in Control” means a
change in the ownership or effective control of the relevant corporation, or in
the ownership of a substantial portion of the assets of the relevant
corporation, as such change is defined in Treasury Regulations Section
1.409A-3(i)(5).  The “relevant corporation” means the Employer or any
corporation that is a majority shareholder (i.e., owns more than fifty
percent (50%) of the total fair market value and the total voting power of the
equities securities) of the Employer or of any corporation in a chain of
corporations in which each corporation is a majority shareholder of another
corporation in the chain, ending in the Employer; provided, however, that for
purposes of determining whether a “change in the effective control of the
relevant corporation” has occurred, the sole relevant corporation shall be the
corporation for which no other corporation is a majority
shareholder.  As of the Effective Date, the relevant corporations are
the Employer, Charter Financial Corporation and First Charter, MHC; provided,
however, that for purposes of determining whether a “change in the effective
control of the relevant corporation” has occurred, the sole relevant corporation
is First Charter, MHC.  Notwithstanding anything herein to the
contrary, the sale of shares of Charter Financial Corporation or reorganization
of First Charter MHC, in either case as part of a conversion or partial
conversion of the direct or indirect ownership of the Employer from a mutual
holding company structure to a stock holding company structure shall not be
deemed to be a Change in Control.

     

    1.7           “Disability” means the
Executive suffers from a disability as defined in Treasury Regulations Section
1.409A-3(i)(4).  The determination of Disability will be made by the
Social Security Administration, by the insurer under the Employer’s disability
plan, or by a physician selected by the Executive and reasonably acceptable to
the Employer; provided that in each case the definition of “Disability” employed
must be consistent with the foregoing regulations.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.8           “Early Retirement Date” means
the date of the Executive’s Termination of Employment upon or following the
completion of ten (10) Years of Service with the Employer and attaining age
sixty-two (62), but before Normal Retirement Age, for reasons other than death,
Disability, Termination for Cause, termination under Article 6 of this Agreement, or
Termination of Employment within two (2) years after a Change in
Control.

     

    1.9           “Early Termination Date”
means the date of the Executive’s Termination of Employment upon or following
completion of ten (10) Years of Service but before reaching his Early Retirement
Date or his Normal Retirement Date, for reasons other than death, Disability,
Termination for Cause, termination under Article 6 of this Agreement, or
Termination of Employment within two (2) years after a Change in
Control.

     

    1.10         “Effective Date” means
January 1, 2009.

     

    1.11         “Final Base Salary” means the
Executive’s average annual base salary for the highest three (3) consecutive
calendar year period ending at the earlier of the Executive’s Normal Retirement
Age or the date of the Executive’s Termination of Employment within two (2)
years after a Change in Control.

     

    1.12         “Normal Retirement Age” means
the later of the date the Executive reaches age sixty-five (65) or completes ten
(10) Years of Service.

     

    1.13         “Normal Retirement Date”
means the date of the Executive’s Termination of Employment on or after
the Executive’s Normal Retirement Age, for reasons other than death, Termination
for Cause, termination under Article 6 of this Agreement, or Termination of
Employment within two (2) years after a Change in Control.

     

    1.14         “Person” means an individual,
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or other entity.

     

    1.15         “Plan Administrator” means
the plan administrator described in Article 9.

     

    1.16         “Plan Year” means a
twelve-month period commencing on January 1, and ending on December 31 of each
year.  The initial Plan Year shall commence on the Effective Date of
this Agreement and end on December 31 of the year in which occurs the Effective
Date.

     

    1.17         “Regulatory Body” means The
Office of the Comptroller of the Currency (OCC), the Board of Governors of the
Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC),
and the Office of Thrift Supervision (OTS), also known as “the
agencies.”

     

    1.18         “Specified Employee” means an
employee who at the time of Termination of Employment is a “specified employee”
within the meaning of Treasury Regulations Section 1.409A-1(i) with respect to
the Employer or any entity aggregated with the Employer as the “service
recipient” within the meaning of Treasury Regulations Section
1.409A-1(g).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.19         “Termination for Cause” and
“Cause” shall have the
same definition specified in any effective severance or employment agreement
existing between the Executive and the Employer or an Affiliate at the date of
the Executive’s Termination of Employment. If the Executive is not a party to a
severance or employment agreement containing a definition of termination for
cause, Termination for Cause means the Employer or an Affiliate terminates the
Executive’s employment because of:

     

    (a)
fraud;

     

    (b)
embezzlement;

     

    (c)
commission by the Executive of a felony;

     

    (d) a
material breach of, or the willful failure or refusal by the Executive to
perform and discharge the Executive’s duties, responsibilities and obligations
to the Employer or an Affiliate;

     

    (e) any
act of moral turpitude or willful misconduct by the Executive intended to result
in personal enrichment of the Executive at the expense of the Employer or an
Affiliate, or which has a material adverse impact on the business or reputation
of the Employer or an Affiliate (such determination to be made by the Board in
its reasonable judgment);

     

    (f)
intentional material damage to the property or business of the Employer or an
Affiliate;

     

    (g) gross
negligence; or

     

    (h) the
ineligibility of the Executive to perform his duties because of a ruling,
directive or other action by any agency of the United States or any state of the
United States having regulatory authority over the Employer or an
Affiliate;

     

    but in
each case only if:

     

    (1) the
Executive has been provided with written notice of any assertion that there is a
basis for termination for Cause which notice shall specify in reasonable detail
specific facts regarding any such assertion,

     

    (2) such
written notice is provided to the Executive a reasonable time (and in any event
no less than three business days) before the Board meets to consider any
possible termination for Cause,

     

    (3) at or
prior to the meeting of the Board to consider the matters described in the
written notice, an opportunity is provided to the Executive and his counsel to
be heard before the Board with respect to the matters described in the written
notice,

     

    (4) any
resolution or other Board action held with respect to any deliberation regarding
or decision to terminate the Executive for Cause is duly adopted by a vote of at
least two-thirds of the entire Board (excluding the Executive) at a meeting of
the Board duly called and held, and

     

    (5) the
Executive is promptly provided with a copy of the resolution or other corporate
action taken with respect to such termination.

     

    No act or
failure to act by the Executive shall be considered willful unless done or
omitted to be done by him not in good faith and without reasonable belief that
his action or omission was in the best interests of the Employer.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.20         “Termination of Employment”
with the Employer means the Executive’s termination of employment from
the Employer and all entities aggregated with the Employer as the “service
recipient” within the meaning of Treasury Regulations Section 1.409A-1(g) that
constitutes a “separation from service” within the meaning of Treasury
Regulations Section 1.409A-1(h).

     

    1.21         “Year of Service” means each
year the Participant is employed by the Employer measured on an elapsed time
basis from the first day worked through Termination of Employment.

     

    ARTICLE
2

    RETIREMENT
BENEFITS

     

    2.1           Normal Retirement
Benefit.  Upon the Executive’s Normal Retirement Date, the
Executive shall receive the benefit described in this Section 2.1 in lieu of any
other benefit under Article 2 of this Agreement.

     

    
      	
               
      

            	
              2.1.1.

            	
              Amount of
      Benefit.  The annual Normal Retirement Benefit under this
      Section
      2.1 is an amount equal to thirty percent (30%) of the Executive’s Final
      Base Salary.

            

    

    

    
      	
               
      

            	
              2.1.2.

            	
              Payment of
      Benefit.  The Employer shall pay the annual benefit to
      the Executive in twelve (12) equal monthly installments for fifteen (15)
      years beginning on the first day of the month after the Executive’s Normal
      Retirement Date.

            

    

     

    2.2           Early Retirement
Benefit.  Upon the Executive’s Early Retirement Date, the
Executive shall receive the benefit described in this Section 2.2 in lieu of any
other benefit under Article 2 of this Agreement.

     

    
      	
               
      

            	
              2.2.1.

            	
              Amount of
      Benefit.  The benefit under this Section 2.2 is an amount
      equal to the Accrual Balance earned as of the last day of the month
      immediately preceding the Executive’s Early Retirement
    Date.

            

    

     

    
      	
               
      

            	
              2.2.2.

            	
              Payment of
      Benefit.  The Employer shall pay the benefit to the
      Executive in one hundred eighty (180) equal monthly installments beginning
      on the first day of the month after the Executive’s Early Retirement
      Date.

            

    

     

    2.3           Early Termination
Benefit.  Following the Executive’s Early Termination Date, the
Executive shall receive the benefit described in this Section 2.3 in lieu of any
other benefit under Article 2 of this Agreement.

     

    
      	
               
      

            	
              2.3.1.

            	
              Amount of
      Benefit.  The benefit under this Section 2.3 is an amount
      equal to the Accrual Balance earned as of the last day of the Plan Year
      immediately preceding or coinciding with the Executive’s Early Termination
      Date.

            

    

     

    
      	
               
      

            	
              2.3.2.

            	
              The
      Employer shall pay the benefit to the Executive in one hundred eighty
      (180) equal monthly installments beginning on the first day of the month
      after the Executive’s Normal Retirement
Age.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    2.4           Disability
Benefit.  Upon the Executive’s Disability before reaching
Normal Retirement Age, the Executive shall receive the benefit described in this
Section 2.4 in
lieu of any other benefit under this Agreement.

     

    
      	
               
      

            	
              2.4.1.

            	
              Amount of
      Benefit.  The annual benefit under this Section 2.4 is an
      amount equal to the Normal Retirement Benefit computed as though the
      Executive had continued to be employed by the Employer at his rate of
      annual base salary in effect at the date of his Disability until attaining
      his Normal Retirement Age.

            

    

     

    
      	
               
      

            	
              2.4.2.

            	
              Payment of
      Benefit.  The Employer shall pay the annual benefit to
      the Executive in twelve (12) equal monthly installments for fifteen (15)
      years beginning on the first day of the month after the Executive’s
      Disability.

            

    

     

    2.5           Change in Control Benefit.
Upon a Termination of Employment within two (2) years after a Change of Control,
the Executive shall receive the benefit described in this Section 2.5 in lieu of
any other benefit under this Agreement.

     

    
      	
               
      

            	
              2.5.1.

            	
              Amount of
      Benefit.  The benefit under this Section 2.5 is an amount
      equal to the Normal Retirement Benefit set forth in Section 2.1.1, or the
      Executive’s Accrual Balance as of the last day of the Plan Year preceding
      the effective date of the Change in Control, whichever is
      greater.

            

    

     

    
      	
               
      

            	
              2.5.2.

            	
              Payment of
      Benefit.  The Employer shall pay the benefit to the
      Executive in one hundred eighty (180) equal monthly installments beginning
      on the first day of the month after the month after the Executive’s
      Termination of Employment.

            

    

     

    2.6           Restriction on Timing of
Distributions. Notwithstanding any provision
of this Agreement to the contrary, benefit distributions that are made to a
Specified Employee
upon Termination of Employment may not commence earlier than six (6) months
after the date of such Termination of Employment.  Therefore, in
the event this Section 2.5 is applicable to the Executive, any
distribution which would otherwise be paid to the Executive within the first six
months following the Termination of Employment shall be accumulated and paid to
the Executive in
a lump sum on the first day of the seventh month following the Termination of
Employment.  All subsequent distributions shall be paid in the manner
specified.

     

    

    ARTICLE
3

    DEATH
BENEFITS

     

    3.1           Death During Active
Service.  If the Executive dies
while employed by the Employer, instead of any benefits payable under Article 2
of this Agreement the Employer shall pay to the Executive’s Beneficiary an
amount equal to the Accrual Balance earned as of the last day of the Plan Year
immediately preceding or coinciding the date of the Executive’s death. The
Employer shall pay the death benefit under this Section 3.1 in one hundred
eighty (180) equal monthly installments beginning on the first day of the month
after the Executive’s death.

     

    3.2           Death During Benefit
Period.  If the Executive dies after benefit payments under
Article 2 of this Agreement commence but before receiving all such payments, or
if the Executive is entitled to benefit payments under Article 2 but dies before
payments commence, the remaining payments shall be payable to the Executive’s
Beneficiary in accordance with the applicable payment provisions of Article 2,
until fully disbursed.  Payments shall be made in the same amounts
they would have been made to the Executive had the Executive
survived.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    ARTICLE
4

    CODE
SECTION 409A

    AND
ADDITIONAL DISTRIBUTION RULES

    

    4.1           Distributions Upon Income Inclusion
Under Code Section 409A.  Upon the inclusion of any amount into
the Executive’s or Beneficiary’s income as a result of the failure of this
Agreement to comply with the requirements of Code Section 409A, a distribution
shall be made in an amount equal to the lesser of the amount required to be
included in income as a result of such failure or the Accrual
Balance.

     

    4.2           Change in Form or Timing of
Distributions.   This Agreement may be amended by the Employer
and the Executive (or after the Executive’s death, the Beneficiary) to change
the form of timing of distributions hereunder; provided, however, that all
changes in the form or timing of distributions hereunder must comply with the
following requirements.  The changes:

     

    
      	
               
      

            	
              (a)

            	
              shall
      not take effect until at least twelve (12) months after the amendment is
      made, and

            

    

     

    
      	
               
      

            	
              (b)

            	
              shall,
      except for payments described in Section 2.4 or Article 3, delay the
      distribution for a minimum of five (5) years from the date the
      distribution was originally scheduled to be
  made;

            

    

    

    4.3           One Benefit Only.
Notwithstanding any provision of this Agreement, the Executive and the
Executive’s Beneficiary are entitled to one benefit derived from Article 2 of
this Agreement, which shall be determined by the first event to occur that is
dealt with by Article 2 of this Agreement. Subsequent occurrence of events dealt
with by Article 2 shall not entitle the Executive or the Executive’s Beneficiary
to other or additional benefits derived from Article 2.

     

    4.4           Compliance with Code Section 409A.
This Agreement shall be interpreted and administered consistent with Code
Section 409A.

     

    

    ARTICLE
5

    BENEFICIARIES

     

    5.1           Beneficiary
Designations.  The Executive shall have the right to designate
at any time a Beneficiary to receive any benefits payable under this Agreement
upon the death of the Executive.  The Beneficiary designated under
this Agreement may be the same as or different from the beneficiary designation
under any other benefit plan of the Employer in which the Executive
participates.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.2           Beneficiary Designation:
Change.  The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form and delivering it to the
Plan Administrator or its designated agent.  The Executive’s
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Executive or if the Executive names a spouse as Beneficiary and
the marriage is subsequently dissolved.  The Executive shall have the
right to change a Beneficiary by completing, signing, and otherwise complying
with the terms of the Beneficiary Designation Form and the Plan Administrator’s
rules and procedures, as in effect from time to time.  Upon the
acceptance by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled.  The
Plan Administrator shall be entitled to rely on the last Beneficiary Designation
Form filed by the Executive and accepted by the Plan Administrator before the
Executive’s death.

     

    5.3           Acknowledgment.  No designation or change
in designation of a Beneficiary shall be effective until received in writing by
the Plan Administrator or its designated agent.

     

    5.4           No Beneficiary
Designation.  If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary.  If the
Executive has no surviving spouse, the benefits shall be distributed to the
personal representative of the Executive’s estate; provided, however, that the
personal representative of the Executive’s estate may assign the right to
receive payment to the heirs under the Executive’s estate, or in the absence of
a will, the Executive’s heirs in accordance with the applicable intestacy
statute.

     

    5.5           Facility of
Payment.  If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Employer may pay such benefit to the guardian, legal
representative, or person having the care or custody of the minor, incapacitated
person, or incapable person.  The Employer may require proof of
incapacity, minority, or guardianship as it may deem appropriate before
distribution of the benefit.  Distribution shall completely discharge
the Employer from all liability for the benefit.

     

    ARTICLE
6

    GENERAL
LIMITATIONS

     

    6.1           Termination for
Cause.  If the Executive experiences a Termination of
Employment which is a Termination for Cause, notwithstanding any provision of
this Agreement to the contrary, this Agreement and the Employer’s obligations
under this Agreement shall terminate as of the effective date of the Termination
for Cause.

     

    6.2           Suicide or Misstatement No
benefits shall be paid under this Agreement if the Executive commits suicide
within two years after the Effective Date of this Agreement or if the Executive
makes any material misstatement of fact on any application for life insurance
purchased by the Employer.

     

    6.3           Removal. Despite any contrary
provision of this Agreement, if the Executive is removed from office or
permanently prohibited from participating in the Employer’s affairs by an order
issued under section 8(e) or 8(g) of the Federal Deposit Insurance Act, 12
U.S.C. 1818(e) or 1818(g), all obligations of the Employer under this Agreement
shall terminate as of the effective date of the order.

     

    6.4           Default Despite any contrary
provision of this Agreement, if the Employer is in “default” or “in danger of
default”, as those terms are defined in of section 3(x) of the Federal Deposit
Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall
terminate.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    6.5           FDIC Open-Employer Assistance.
All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of the contract is necessary for the
continued operation of the Employer, at the time the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to or on behalf of
the Employer under the authority contained in section 13(c) of the Federal
Deposit Insurance Act. 12 U.S.C. 1823(c).

     

    6.6           No Golden
Parachutes.  Notwithstanding anything contained in this
Agreement to the contrary, no payments shall be made hereunder in contravention
of the golden parachute payment and indemnification payment restrictions
contained in regulations adopted pursuant to Section 18(k) of the Federal
Deposit Insurance Act, 12 U.S.C. 1828(k).

     

    ARTICLE
7

    CLAIMS
AND REVIEW PROCEDURES

     

    7.1           Claims
Procedure.  A person or beneficiary (a “claimant”) who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows –

     

    
      	
               
      

            	
              7.1.1

            	
              Initiation - Written
      Claim.  The claimant initiates a claim by submitting to
      the Employer a written claim for the benefits. If the claim relates to the
      contents of a notice received by the claimant, the claim must be made
      within 60 days after the notice was received by the claimant. All other
      claims must be made within 180 days after the date of the event that
      caused the claim to arise. The claim must state with particularity the
      determination desired by the
claimant.

            

    

     

    
      	
               
      

            	
              7.1.2

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

            

    

     

    
      	
               
      

            	
              7.1.3

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

            

    

     

    
      	
               
      

            	
              7.1.4

            	
              The
      specific reasons for the denial,

            

    

     

    
      	
               
      

            	
              7.1.5

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            

    

     

    
      	
               
      

            	
              7.1.6

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

            

    

     

    
      	
               
      

            	
              7.1.7

            	
              An
      explanation of the Agreement’s review procedures and the time limits
      applicable to such procedures, and

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              7.1.8

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

            

    

     

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

    

    
      	
               
      

            	
              7.2.1

            	
              Initiation - Written
      Request.  To initiate the
      review, the claimant, within 60 days after receiving the Employer’s notice
      of denial,
      must file with the Employer a written request for
  review.

            

    

     

    
      	
               
      

            	
              7.2.2

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

            

    

     

    
      	
               
      

            	
              7.2.3

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

            

    

     

    
      	
               
      

            	
              7.2.4

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

            

    

     

    
      	
               
      

            	
              7.2.5

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

            

    

     

    
      	
               
      

            	
              7.2.5.1

            	
              The
      specific reasons for the denial,

            

    

     

    
      	
               
      

            	
              7.2.5.2

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            

    

     

    
      	
               
      

            	
              7.2.5.3

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

            

    

     

    
      	
               
      

            	
              7.2.5.4

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

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    ARTICLE
8

    MISCELLANEOUS

     

    8.1            Amendments and
Termination.  Subject to Section 7.13 of this Agreement, (a)
this Agreement may be amended solely by a written agreement signed by the
Employer and by the Executive, and (b) except for termination occurring under
Article 5, this Agreement may be terminated solely by a written agreement signed
by the Employer and by the Executive.

    

    8.2            Binding
Effect.  This Agreement shall bind the Executive and the
Employer and their beneficiaries, survivors, executors, successors,
administrators, and transferees.

    

    8.3            No Guarantee of Employment.
This Agreement is not an employment
policy or contract.  It does not give the Executive the right to
remain an employee of the Employer, nor does it interfere with the Employer’s
right to discharge the Executive.  It also does not require the
Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time.

    

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

    

    8.5            Tax
Withholding.  The Employer shall withhold any taxes that are
required to be withheld from the benefits provided under this
Agreement.

    

    8.6            Applicable
Law.  Except to the extent preempted by the laws of the United
States of America, the validity, interpretation, construction, and performance
of this Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia, without giving effect to the principles of conflict of
laws of such state.

    

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

    

    8.8            Severability.  If
any provision of this Agreement is held invalid, such invalidity shall not
affect any other provision of this Agreement, and each such other provision
shall continue in full force and effect to the full extent consistent with
law.  If any provision of this Agreement is held invalid in part, such
invalidity shall not affect the remainder of the provision, and the remainder of
such provision together with all other provisions of this Agreement shall
continue in full force and effect to the full extent consistent with
law.

    

    8.9            Headings.  The
headings of sections herein are included solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    8.10          Notices.  All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid.  Unless otherwise changed by notice, notice shall be properly
addressed to the Executive if addressed to the address of the Executive on the
books and records of the Employer at the time of the delivery of such notice,
and properly addressed to the Employer if addressed to the Board of Directors,
at CharterBank, 1233 O.G. Skinner Drive, West Point, Georgia 31833.

    

    8.11          Entire
Agreement.  This Agreement constitutes the entire agreement
between the Employer and the Executive concerning the subject matter
hereof.  No rights are granted to the Executive under this Agreement
other than those specifically set forth herein.

    

    8.12          Payment of Legal
Fees.  In the event litigation ensues between the parties
concerning the enforcement of the obligations of the parties under this
Agreement, the Employer shall promptly pay (but not later than two (2) months
after such expenses are incurred) all costs and expenses in connection with such
litigation until such time as a final determination (excluding any appeals) is
made with respect to the litigation.  If the Employer prevails on the
substantive merits of each material claim in dispute in such litigation, the
Employer shall be entitled to receive from the Executive all reasonable costs
and expenses, including without limitation attorneys’ fees, incurred by the
Employer on behalf of the Executive in connection with such litigation, and the
Executive shall pay such costs and expenses to the Employer promptly upon demand
by the Employer.

    

    8.13          Termination or Modification of
Agreement Because of Changes in Law, Rules or Regulations.  The
Employer is entering into this Agreement on the assumption that certain existing
tax laws, rules, and regulations will continue in effect in their current
form.  If that assumption materially changes and the change has a
material detrimental effect on this Agreement, then the Employer reserves the
right to terminate or modify this Agreement accordingly, subject to the written
consent of the Executive, which shall not be unreasonably
withheld.  This Section 8.13 shall become null and void effective
immediately if a Change in Control occurs.

    

    ARTICLE
9

    ADMINISTRATION
OF AGREEMENT

     

    9.1            Plan Administrator
Duties.  This Agreement shall be administered by a Plan
Administrator consisting of the Board of Directors of the Employer or such
committee or person(s) as the Board of Directors of the Employer shall
appoint.  The Plan Administrator shall have the sole and absolute
discretion and authority to interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and the rights of the
Participant under this Agreement, to decide or resolve any and all questions or
disputes arising under this Agreement, including benefits payable under this
Agreement and all other interpretations of this Agreement, as may arise in
connection with the Agreement.

    

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    9.3            Binding Effect of
Decisions.  The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation, and application of the Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.  No Executive
or Beneficiary shall be deemed to have any right, vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not
limited to the discount rate and calculation method described in Section
1.1.

    

    9.4            Indemnity of Plan
Administrator.  The Plan Administrator shall not be liable to
any person for any action taken or omitted in connection with the interpretation
and administration of this Agreement, unless such action or omission is
attributable to the willful misconduct of the Plan Administrator or any of its
members.  The Employer shall indemnify and hold harmless the members
of the Plan Administrator against any and all claims, losses, damages, expenses,
or liabilities arising from any action or failure to act with respect to this
Agreement, except in the case of willful misconduct by the Plan Administrator or
any of its members.

    

    9.5            Employer
Information.  To enable the Plan
Administrator to perform its functions, the Employer shall supply full and
timely information to the Plan Administrator on all matters relating to the date
and circumstances of the retirement, Disability, death, or Termination of
Employment of the Executive and such other pertinent information as the Plan
Administrator may reasonably require.

    

    IN WITNESS WHEREOF, the
Executive and a duly authorized Officer of the Employer have signed this
Agreement as of the date first written above.

    
       

      
        	
                THE
      EXECUTIVE:

              	 	
                CHARTERBANK

              	 
	 
      	 	 
      	 	 
	 	 	
                By:

              	 	 
	
                
                  Lee
      Washam

                

              	 	 
      	 	 
	 
      	 	
                Its:

              	 	 

      

      

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

    

    

    BENEFICIARY
DESIGNATION

    SALARY
CONTINUATION AGREEMENT

    

    I, Lee
Washam, designate the following as beneficiary of any death benefits under this
Salary Continuation Agreement –

     

    
      Primary:
________________________________________________________________________________________________________________

      ___________________________________________________________________________________________________________________.

      

      Contingent:
_____________________________________________________________________________________________________________

      _____________________________________________________________________________________________________________________________.

      

    

    Note:  To
name a trust as beneficiary, please provide the name of the trustee(s) and the
exact name and date of the trust agreement.

    

    I
understand that I may change these beneficiary designations by filing a new
written designation with the Employer.  I further understand that the
designations will be automatically revoked if the beneficiary predeceases me, or
if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

    
      

      
        	
                Signature:

              	______________________________
	 
      	
                
                  Lee
      Washam

                

              	 
      
	 
      	 
      	 
      
	
                Date:

              	
                ______________________________,
      2009

              
	 
      	 
      	 
      
	
                Accepted
      by the Employer this _________ day of ____________________,
      2009.

              
	 
      	 
      	 
      
	
                By:

              	______________________________
	 
      	 
      	 
      
	
                Print
      Name:

              	______________________________
	 
      	 
      	 
      
	
                Title:

              	______________________________

      

       

      
         

        14

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