Document:

ex10-8.htm

Exhibit 10.8

 

Benefit Restoration Plan

 

Of

 

Charter Financial Corporation

 

 

Amended and Restated

 

Effective as of December 23, 2005

  

  

  

 

TABLE OF CONTENTS

	  	  	  	  
	  	  	  	
Page

	  	  	  	  
	
ARTICLE I

DEFINITIONS

	  	  	  	  
	
Section 1.1
	
Affiliated Employer
	  	
1

	
Section 1.2
	
Applicable Limitation
	  	
1

	
Section 1.3
	
Bank
	  	
1

	
Section 1.4
	
Beneficiary
	  	
1

	
Section 1.5
	
Board
	  	
2

	
Section 1.6
	
Change of Control
	  	
2

	
Section 1.7
	
Code
	  	
2

	
Section 1.8
	
Committee
	  	
2

	
Section 1.9
	
Company
	  	
2

	
Section 1.10            
	
Eligible Employee
	  	
2

	
Section 1.11
	
Employee
	  	
2

	
Section 1.12
	
Employer
	  	
2

	
Section 1.13
	
Employer Contributions
	  	
2

	
Section 1.14
	
ERISA
	  	
2

	
Section 1.15
	
ESOP
	  	
2

	
Section 1.16
	
Exchange Act
	  	
2

	
Section 1.17
	
Fair Market Value of a Share
	  	
2

	
Section 1.18
	
Former Participant
	  	
3

	
Section 1.19
	
Service Recipient
	  	
3

	
Section 1.20
	
Savings Plan
	  	
3

	
Section 1.21
	
Participant
	  	
3

	
Section 1.22
	
Plan
	  	
3

	
Section 1.23
	
Share
	  	
3

	
Section 1.24
	
Stock Unit
	  	
3

	
Section 1.25
	
Termination of Service
	  	
3

	  	  	  	  
	
ARTICLE II

PARTICIPATION

	  	  	  	  
	
Section 2.1
	
Eligibility for Participation
	  	
4

	
Section 2.2
	
Commencement of Participation
	  	
4

	
Section 2.3
	
Termination of Participation
	  	
4

	  	  	  	  
	
ARTICLE III

BENEFITS TO PARTICIPANTS

	  	  	  	  
	
Section 3.1
	
Supplemental Savings Benefit
	  	
4

	
Section 3.2
	
Supplemental ESOP Benefits
	  	
6

	
Section 3.3
	
Restored ESOP Benefits
	  	
7

  

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ARTICLE IV

DEATH BENEFITS

	  	  	  	  
	
Section 4.1
	
Supplemental Savings Plan Death Benefits
	  	
8

	
Section 4.2
	
Supplemental ESOP Death Benefits
	  	
8

	
Section 4.3
	
Restored ESOP Death Benefits
	  	
9

	
Section 4.4
	
Beneficiaries
	  	
9

	  	  	  	  
	
ARTICLE V

TRUST FUND

	  	  	  	  
	
Section 5.1
	
Establishment of Trust
	  	
9

	
Section 5.2
	
Contributions to Trust
	  	
9

	
Section 5.3
	
Unfunded Character of Plan
	  	
10

	  	  	  	  
	
ARTICLE VI

ADMINISTRATION

	  	  	  	  
	
Section 6.1
	
The Committee
	  	
10

	
Section 6.2
	
Liability of Committee Members and their Delegates
	  	
11

	
Section 6.3
	
Plan Expenses
	  	
11

	
Section 6.4
	
Facility of Payment
	  	
11

	  	  	  	  
	
ARTICLE VII

AMENDMENT AND TERMINATION

	  	  	  	  
	
Section 7.1
	
Amendment by the Company
	  	
12

	
Section 7.2
	
Termination
	  	
12

	
Section 7.3
	
Amendment or Termination by Other Employers
	  	
12

	  	  	  	  
	
ARTICLE VIII

MISCELLANEOUS PROVISIONS

	  	  	  	  
	
Section 8.1
	
Construction and Language
	  	
12

	
Section 8.2
	
Headings
	  	
13

	
Section 8.3
	
Non-Alienation of Benefits
	  	
13

	
Section 8.4
	
Indemnification
	  	
13

	
Section 8.5
	
Severability
	  	
13

	
Section 8.6
	
Waiver
	  	
13

	
Section 8.7
	
Governing Law
	  	
14

	
Section 8.8
	
Taxes
	  	
14

	
Section 8.9
	
No Deposit Account
	  	
14

	
Section 8.10            
	
No Right to Continued Employment
	  	
14

	
Section 8.11
	
Status of Plan Under ERISA
	  	
14

	
Section 8.12
	
Restrictions on Payments to Key Employees
	  	
14

	
Section 8.13
	
Compliance with Section 409A of the Code
	  	
15

  

ii

  

 

Benefit Restoration Plan

 

Of

 

Charter Financial Corporation

 

ARTICLE I

 

DEFINITIONS

 

Wherever appropriate to the purposes of the Plan, capitalized terms shall have the meanings assigned to them under the Savings Plan or ESOP, as applicable; provided, however, that the following special definitions shall apply for purposes of the Plan, unless a different meaning is clearly
indicated by the context:

 

 Section 1.1   Affiliated Employer means
any corporation which is a member of a controlled group of corporations (as defined in section 4l4(b) of the Code) that includes the Company; any trade or business (whether or not incorporated) that is under common control (as defined in section 4l4(c) of the Code) with the Company; any organization (whether or not incorporated) that is a member of an affiliated service group (as defined in section 414(m) of the Code) that includes the Company; any leasing organization (as defined in section 414(n) of the Code)
to the extent that any of its employees are required pursuant to section 414(n) of the Code to be treated as employees of the Company; and any other entity that is required to be aggregated with the Company pursuant to regulations under section 414(o) of the Code.

 

 Section 1.2   Applicable Limitation means
any of the following: (a) the limitation on annual compensation that may be recognized under a tax-qualified plan for benefit computation purposes pursuant to section 401(a)(17) of the Code; (b) the maximum limitation on annual additions to a tax-qualified defined contribution plan pursuant to section 415(c) of the Code; (c) the maximum limitation on aggregate annual benefits and annual additions under a combination of tax-qualified defined benefit and defined contribution plans maintained by a single employer
pursuant to section 415(e) of the Code; (d) the maximum limitation on annual elective deferrals to a qualified cash or deferred arrangement pursuant to section 402(g) of the Code; (e) the annual limitation on elective deferrals under a qualified cash or deferred arrangement by highly compensated employees pursuant to section 401(k) of the Code; and (f) the annual limitation on voluntary employee contributions by, and employer matching contributions for, highly compensated employees pursuant to section 401(m)
of the Code.

 

 Section 1.3   Bank means
CharterBank, a federally-chartered savings bank and its successors or assigns.

 

Section 1.4   Beneficiary means
any person, other than a Participant or Former Participant, who is determined to be entitled to benefits under the terms of the Plan.

  

  

  

 

Section 1.5       Board means
the Board of Directors of Company.

 

Section 1.6      Change of Control means
with respect to a Participant: (a) a change in ownership of the Participant’s Service Recipient; (b) a change in effective control of the Participant’s Service Recipient; or (c) a change in the ownership of a substantial portion of the assets of the Participant’s Service Recipient. The existence of a Change of Control shall be determined by the Committee in accordance with section 409A of the Code and the regulations thereunder.

 

Section 1.7       Code means
the Internal Revenue Code of 1986 (including the corresponding provisions of any prior law or succeeding law).

 

Section 1.8      Committee means
the Personnel & Compensation Committee of the Board of Directors of the Company, or such other person, committee or other entity as shall be designated by or on behalf of the Board to perform the duties set forth in Article VI.

 

Section 1.9       Company means
Charter Financial Corporation, a federal corporation, or any successor thereto.

 

Section 1.10             Eligible
Employee means an Employee who is eligible for participation in the Plan in accordance with the provisions of Article II.

 

 Section 1.11            Employee means
any person, including an officer, who is employed by the Employer.

 

 Section 1.12   Employer means
the Bank and any successor thereto and the Company and any successor thereto and any Affiliated Employer which, with the prior written approval of the Board of Directors of the Bank and subject to such terms and conditions as may be imposed by the Board, shall adopt this Plan.

 

 Section 1.13    Employer Contributions means
contributions by any Employer to the Savings Plan or the ESOP.

 

 Section 1.14   ERISA means
the Employee Retirement Income Security Act of 1974, as amended from time to time (including the corresponding provisions of any succeeding law).

 

 Section 1.15   ESOP means
the Employee Stock Ownership Plan of Charter Financial Corporation, as amended from time to time (including the corresponding provisions of any successor qualified employee stock ownership plan adopted by the Company).

 

 Section 1.16   Exchange Act means
the Securities Exchange Act of 1934, as amended from time to time (including the corresponding provisions of any succeeding law).

 

Section 1.17    Fair Market Value of a Share means,
with respect to a Share on a specified date:

  

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(a)           the final reported sales price on the date in question (or if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting system
with respect to securities listed or admitted to trading on the principal United States securities exchange on which the Shares are listed or admitted to trading; or

 

(b)           if the Shares are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a Share on such date on the National Association of Securities Dealers Automated Quotations System, or,
if no such quotation is provided, on another similar system, selected by the Committee, then in use; or

 

(c)           if sections 1.17(a) and (b) are not applicable, the fair market value of a Share as the Committee may determine.

 

 Section 1.18   Former Participant means
a person whose participation in the Plan has terminated as provided under section 2.3.

 

 Section 1.19   Service Recipient means
with respect to a Participant on any date: (a) the corporation for which the Participant is performing services on such date; (b) all corporations that are liable to the Participant for the benefits due to him under the Plan; (c) a corporation that is a majority shareholder of a corporation described in section 1.19(a) or (b); or (d) any corporation in a chain of corporations each of which is a majority shareholder of another corporation in the chain, ending in a corporation described in section 1.19(a) or (b).

 

 Section 1.20   Savings Plan means
the tax-qualified 401(k) plan maintained by the Company or the Bank from time to time.

 

 Section 1.21   Participant means
any person who is participating in the Plan in accordance with its terms.

 

 Section 1.22   Plan means
the Benefit Restoration Plan of Charter Financial Corporation as amended from time to time (including the corresponding provisions of any successor plan adopted by the Company).

 

 Section 1.23   Share means
a share of common stock, par value $.01 per share, of Charter Financial Corporation.

 

 Section 1.24   Stock Unit means
a right to receive a payment under the Plan in an amount equal, on the date as of which such payment is made, to the Fair Market Value of a Share.

 

 Section 1.25   Termination of Service means
an Employee’s separation from service with all Employers as an Employee, whether by resignation, discharge, death, disability, retirement or otherwise.

  

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ARTICLE II

 

PARTICIPATION

 

Section 2.1    Eligibility for Participation.

 

Only Eligible Employees may become Participants. An Employee shall become an Eligible Employee if:

 

(a)           he holds the office of Chief Executive Officer of the Bank or the Company, or he has been designated an Eligible Employee by resolution of the Board; and

 

(b)           he is a participant in the Savings Plan or the ESOP, or any combination thereof, and the benefits to which he is entitled thereunder are limited by one or more of the Applicable Limitations;

 

provided, however, that no person shall be named an Eligible Employee, nor shall any person who has been an Eligible Employee continue as an Eligible Employee, to the extent that such person’s participation, or continued participation, in the Plan would cause the Plan to fail
to be considered maintained for the primary purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of ERISA.

 

Section 2.2    Commencement of Participation.

 

An Employee shall become a Participant on the date when he first becomes an Eligible Employee, unless the Committee shall, by resolution, establish an earlier or later effective date of participation for a Participant.

 

Section 2.3    Termination of Participation.

 

Participation in the Plan shall cease on the earlier of (a) the date of the Participant’s Termination of Service or (b) the date on which he ceases to be an Eligible Employee.

 

ARTICLE III

 

BENEFITS TO PARTICIPANTS

 

Section 3.1    Supplemental Savings Benefit.

 

(a)           A Participant whose benefits under the Savings Plan are limited by one or more of the Applicable Limitations shall be eligible for a supplemental savings benefit under this Plan in an amount equal to:

 

    (i)           the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating
in the Savings Plan) that would have been credited to the Participant’s account under the Savings Plan in the absence of the Applicable Limitations if for all relevant periods he had made the maximum amount of elective deferrals, within the meaning of section 402(g)(3) of the Code, or voluntary employee contributions, within the meaning of section 401(a) of the Code, required to qualify for the maximum possible allocation of Employer Contributions (and without regard to the amount of elective deferrals
or voluntary employee contributions actually made); over

  

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    (ii)           the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating
in the Savings Plan) actually credited to the Participant’s account under the Savings Plan for such periods;

 

adjusted for earnings and losses as provided in section 3.1(b); provided, however, that if the Participant dies before the payment of such supplemental savings benefit begins, no benefit shall be payable under this section 3.1 and the survivor benefit, if any, which may be payable shall be determined under section 4.1.

 

         (b)          The Committee shall cause to be maintained a bookkeeping account to reflect all Employer Contributions (including
any reallocation of amounts forfeited upon the termination of employment of others participating in the Savings Plan) that cannot be made to a Participant’s account under the Savings Plan due to the Applicable Limitations and shall cause such bookkeeping account to be credited with all such Employer Contributions as of the date on which such Employer Contributions would have been credited to the Participant’s account in the Savings Plan in the absence of the Applicable Limitations. The balance credited
to such bookkeeping account shall be adjusted for earnings or losses as follows:

 

    (i)           except as provided in section 3.1(b)(ii), the balance credited to such bookkeeping account shall be credited with interest as of the last day of
each calendar month at a rate for such month equal to one-twelfth of the annual interest rate prescribed by the Commissioner of Internal Revenue for such month pursuant to section 417(e) of the Code; or

 

    (ii)           if and to the extent permitted by the Committee, as though such Employer Contributions had been contributed to a trust fund and invested, for
the benefit of the Participant, in such investments at such time or times as the Participant shall have designated in such form and manner as the Committee shall prescribe.

 

       (c)           The supplemental savings benefit payable to a Participant hereunder shall be paid in a single lump sum as soon as practicable
following the Participant’s Termination of Service and shall be equal to the balance credited to his bookkeeping account as of the last day of the last calendar month to end prior to the date of payment. Notwithstanding the foregoing, a Participant may specify that such supplemental savings benefit be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may prescribe; provided, however, that no such election or change made thereto
shall be given effect until twelve (12) months after it is received by the Committee and the first payment made under such election shall not occur until at least five (5) years later than such payment would otherwise have been made.

  

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Section 3.2    Supplemental ESOP Benefits.

 

(a)            A Participant whose benefits under the ESOP are limited by one or more of the Applicable Limitations shall be eligible for a supplemental ESOP benefit under this Plan in an amount equal to the sum of:

 

        (i)           a number of Stock Units equal to the excess (if any) of (A) the aggregate number of Shares (including any reallocation of Shares
forfeited upon the termination of employment of others participating in the ESOP) that would have been credited to the Participant’s account under the ESOP in the absence of the Applicable Limitations over (B) the number of Shares actually credited to his account under the ESOP; plus

 

        (ii)          if and to the extent that Employer Contributions to the ESOP result in allocations to the Participant’s account of assets other
than Shares, an amount equal to the excess (if any) of (A) the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating in the ESOP) that would have been credited to the Participant’s account under the ESOP in the absence of the Applicable Limitations over (B) the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating
in the ESOP) actually credited to the Participant’s account under the ESOP;

 

adjusted for earnings and losses as provided section 3.2(b); provided, however, that if the Participant dies before the payment of such supplemental ESOP benefit begins, no benefit shall be payable under this section 3.2 and the survivor benefit, if any, which may be payable shall be determined under section 4.2.

 

(b)           The Committee shall cause to be maintained a bookkeeping account to reflect all Shares and Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating
in the ESOP) that cannot be allocated to a Participant’s account under the ESOP due to the Applicable Limitations and shall cause such bookkeeping account to be credited with such Employer Contributions and Stock Units reflecting such Shares as of the date on which such Employer Contributions and Shares, respectively, would have been credited to the Participant’s account in the ESOP in the absence of the Applicable Limitations, The balance credited to such bookkeeping account shall be adjusted for
earnings or losses as follows:

 

                (i)           all Stock Units shall be adjusted from time to time so that the value of a Stock Unit on any date is equal to the Fair Market
Value of a Share on such date, and the number of Stock Units shall be adjusted as and when appropriate to reflect any stock dividend, stock split, reverse stock split, exchange, conversion, or other event generally affecting the number of Shares held by all holders of Shares; and

  

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                (ii)           (A)           except as provided in section 3.2(b)(ii)(B), the balance
credited to such bookkeeping account that does not consist of Stock Units shall be credited with interest as of the last day of each calendar month at a rate for such month equal to one-twelfth of the annual interest rate prescribed by the Commissioner of Internal Revenue for such month pursuant to section 417(e) of the Code; or

 

                (B)           if and to the extent permitted by the Committee, the balance credited to such bookkeeping account that does not consist of
Stock Units shall be adjusted as though such Employer Contributions had been contributed to a trust fund and invested, for the benefit of the Participant, in such investments at such time or times as the Participant shall have designated in such form and manner as the Committee shall prescribe;

 

provided, however, that to the extent that the Participant shall receive on a current basis any dividend paid with respect to Shares credited to his account under the ESOP, the bookkeeping account established for him under this Plan shall not
be adjusted to reflect such dividend and, instead, the Participant shall be paid an amount per Stock Unit equal to the dividend per Share received by the Participant under the ESOP, at substantially the same time as such dividend is paid under the ESOP.

 

(c)           The supplemental ESOP benefit payable to a Participant hereunder shall be paid in a single lump sum cash payment as soon as practicable following the Participant’s Termination of Service and shall be in an amount equal
to the balance credited to his bookkeeping account. Notwithstanding the foregoing, a Participant may specify that such supplemental ESOP benefit be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may prescribe; provided, however, that no such election or change made thereto shall be given effect until twelve (12) months after it is received by the Committee and the first payment made under such election shall not occur until at
least five (5) years later than such payment would otherwise have been made.

 

Section 3.3             Restored ESOP Benefits.

 

(a)           A Participant who satisfies section 2.1 shall be entitled to, upon his Termination of Service upon or after attaining age 55, an unfunded, unsecured promise from the Bank to receive an amount determined by:

 

      (i)           projecting the total number of Shares that would have been allocated to the Participant’s account under the terms of the ESOP (without
regard to the Applicable Limitations) had the Participant continued in the employ of the Bank until the ESOP loan was repaid in full and the final allocation of Shares acquired when the ESOP loan was made occurred; and then

  

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	        (ii)           multiplying the number of Shares determined in section 3.3(a)(i) above by the average of the closing prices of such Shares
at the end of each fiscal quarter during the preceding four fiscal quarters immediately preceding (or such fewer quarters as the Participant has been a Participant) to the Participant’s retirement.

 

(b)           The projection of Shares required by section 3.3(a)(i) above shall be performed by a public accountant based on assumptions which the Committee has approved as reasonable at the time the calculation of the benefit payable to
the Participant is performed.

 

(c)           The restored ESOP benefit payable to a Participant hereunder shall be paid in a single lump sum cash payment as soon as practicable following the Participant’s Termination of Service and shall be in an amount
determined pursuant to section 3.3(a) above. Notwithstanding the foregoing, a Participant may specify that such restored ESOP benefit be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may prescribe; provided, however, that no such election or change made thereto shall be given effect until twelve (12) months after it is received by the Committee and the first payment made under such election shall not occur until at least five
(5) years later than such payment would otherwise have been made.

 

ARTICLE IV

 

DEATH BENEFITS

 

Section 4.1    Supplemental Savings Plan Death Benefits.

 

If a Participant who is eligible for a supplemental savings benefit under section 3.1 dies before the payment of such benefit begins, a supplemental survivor’s savings benefit shall be payable to the Participant’s Beneficiary under this Plan in amount equal to the balance
credited to the bookkeeping account established for the Participant under section 3.1(b). Such benefit shall be paid in a single lump sum cash payment as soon as practicable following the death of the Participant and the bookkeeping account established for such Participant pursuant to section 3.1(b) shall continue to be adjusted as provided therein through the last day of the last calendar month to end prior to the date of payment.

 

Section 4.2    Supplemental ESOP Death Benefits.

 

If a Participant who is eligible for a supplemental ESOP benefit under section 3.2 dies before the payment of such benefit begins, a supplemental ESOP benefit shall be payable to the Participant’s Beneficiary under this Plan in amount equal to the balance credited to the bookkeeping
account established for the Participant under section 3.2(b). Such benefit shall be paid in a single lump sum cash payment as soon as practicable following the death of the Participant, and the bookkeeping account established for such Participant pursuant to section 3.2(b) shall continue to be adjusted as provided therein through the last day of the last calendar month to end prior to the date of payment.

  

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Section 4.3    Restored ESOP Death Benefits.

 

If a Participant who is eligible for a restored ESOP benefit under section 3.3 dies before the payment of such benefit begins, a restored ESOP benefit shall be payable to the Participant’s Beneficiary under this Plan in amount determined pursuant to section 3.3(b). Such benefit
shall be paid in a single lump sum cash payment as soon as practicable following the death of the Participant.

 

Section 4.4    Beneficiaries.

 

A Participant or Former Participant may designate a Beneficiary or Beneficiaries to receive any survivor benefits payable under the Plan upon his death. Any such designation, or change therein or revocation thereof, shall be made in writing in the form and manner prescribed by the Committee,
shall be revocable until the death of the Participant, and shall thereafter be irrevocable; provided, however, that any change or revocation shall be effective only if received by the Committee prior to the Participant’s or Former Participant’s death. If a Participant or Former Participant shall die without having effectively named a Beneficiary, he shall be deemed to have named his estate as his sole Beneficiary. If a Participant or Former Participant and his designated Beneficiary shall die in circumstances
which give rise to doubt as to which of them shall have been the first to die, the Participant or Former Participant shall be deemed to have survived the Beneficiary. If a Participant or Former Participant designates more than one Beneficiary, all shall be deemed to have equal shares unless the Participant or Former Participant shall expressly provide otherwise.

 

ARTICLE V

 

TRUST FUND

 

Section 5.1    Establishment of Trust.

 

The Company may establish a trust fund which may be used to accumulate funds to satisfy benefit liabilities to Participants, Former Participants and their Beneficiaries under the Plan; provided, however, that the assets of such trust shall be subject to the claims of the creditors of
the Company in the event that it is determined that the Company is insolvent; and provided, further, that the trust agreement shall contain such terms, conditions and provisions as shall be necessary to cause the Company to be considered the owner of the trust fund for federal, state or local income tax purposes with respect to all amounts contributed to the trust fund or any income attributable to the investments of the trust fund. The Company shall pay all costs and expenses incurred in establishing and maintaining
such trust. Any payments made to a Participant, Former Participant or Beneficiary from a trust established under this section 5.1 shall offset payments which would otherwise be payable by the Company in the absence of the establishment of such trust. Any such trust will conform to the terms of the model trust described in Revenue Procedure 92-64, as the same may be modified from time to time.

  

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Section 5.2    Contributions to Trust.

 

If a trust is established in accordance with section 5.1, the Company shall make contributions to such trust in such amounts and at such times as may be specified by the Committee or as may be required pursuant to the terms of the agreement governing the establishment and operation of
such trust. In the event of a Change of Control, the payments that would be owed to any Participant if the Participant had a Termination of Service on the date Change of Control shall be immediately paid into a rabbi trust contemplated by section 5.1 for the benefit of the affected Participant with such amount being then distributed under the terms and conditions of this Plan.

 

Section 5.3    Unfunded Character of Plan.

 

Notwithstanding the establishment of a trust pursuant to section, the Plan shall be unfunded for purposes of the Code and ERISA. Any liability of the Bank, the Company or another Employer to any person with respect to benefits payable under the Plan shall be based solely upon such contractual
obligations, if any, as shall be created by the Plan, and shall give rise only to a claim against the general assets of the Bank, the Company or such Employer. No such liability shall be deemed to be secured by any pledge or any other encumbrance on any specific property of the Bank, the Company or any other Employer.

 

ARTICLE VI

 

ADMINISTRATION

 

Section 6.1    The Committee.

 

Except for the functions reserved to the Bank or the Board, the administration of the Plan shall be the responsibility of the Committee. The Committee shall have the power and the duty to take all actions and to make all decisions necessary or proper to carry out the Plan. The determination
of the Committee as to any question involving the general administration and interpretation of the Plan shall be final, conclusive and binding. Any discretionary actions to be taken under the Plan by the Committee shall be uniform in their nature and applicable to all persons similarly situated. Without limiting the generality of the foregoing, the Committee shall have the following powers:

 

(a)           to furnish to all Participants, upon request, copies of the Plan and to require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving
any benefits under the Plan;

 

(b)           to make and enforce such rules and regulations and prescribe the use of such forms as it shall deem necessary for the efficient administration of the Plan;

 

(c)           to interpret the Plan, and to resolve ambiguities, inconsistencies and omissions, and the determinations of the Committee in respect thereof shall be binding, final and conclusive upon all interested parties;

 

(d)           to decide on questions concerning the Plan in accordance with the provisions of the Plan;

 

(e)           to determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan, to hear and decide claims for benefits, and to provide a full and fair review to any Participant
whose claim for benefits has been denied in whole or in part;

  

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(f)           to designate a person, who may or may not be a member of the Committee, as “plan administrator” for purposes of the ER1SA;

 

(g)           to allocate any such powers and duties to or among individual members of the Committee; and

 

(h)           the power to designate persons other than Committee members to carry out any duty or power which would otherwise be a responsibility of the Committee or Administrator, under the terms of the Plan.

 

Section 6.2    Liability of Committee Members and their Delegates

 

To the extent permitted by law, the Committee and any person to whom it may delegate any duty or power in connection with administering the Plan, the Bank, the Company, any Employer, and the officers and directors thereof, shall be entitled to rely conclusively upon, and shall be fully
protected in any action taken or suffered by them in good faith in the reliance upon, any actuary, counsel, accountant, other specialist, or other person selected by the Committee, or in reliance upon any tables, valuations,, certificates, opinions or reports which shall be furnished by any of them. Further, to the extent permitted by law, no member of the Committee, nor the Bank, the Company, any Employer, nor the officers or directors thereof, shall be liable for any neglect, omission or wrongdoing of any other
members of the Committee, agent, officer or employee of the Bank, the Company or any Employer. Any person claiming benefits under the Plan shall look solely to the Employer for redress.

 

Section 6.3    Plan Expenses

 

All expenses incurred prior to the termination of the Plan that shall arise in connection with the administration of the Plan (including, but not limited to administrative expenses, proper charges and disbursements, compensation and other expenses and charges of any actuary, counsel,
accountant, specialist, or other person who shall be employed by the Committee in connection with the administration of the Plan), shall be paid by the Company.

 

Section 6.4    Facility of Payment.

 

If the Company is unable to make payment to any Participant, Former Participant Beneficiary, or any other person to whom a payment is due under the Plan, because it cannot ascertain the identity or whereabouts of such Participant, Former Participant Beneficiary, or other person after
reasonable efforts have been made to identify or locate such person (including a notice of the payment so due mailed to the last known address of such Participant, Former Participant Beneficiary, or other person shown on the records of the Employer), such payment and all subsequent payments otherwise due to such Participant, Former Participant, Beneficiary or other person shall be forfeited 24 months after the date such payment first became due; provided, however, that such payment and any subsequent payments
shall be reinstated, retroactively, no later than 60 days after the date on which the Participant, Former Participant, Beneficiary, or other person is identified or located.

  

11

  

 

ARTICLE VII

 

AMENDMENT AND TERMINATION

 

Section 7.1     Amendment by the Company.

 

The Company reserves the right, in its sole and absolute discretion, at any time and from to time, by action of the Board, to amend the Plan in whole or in part. In no event, however, shall any such amendment adversely affect the right of any Participant, Former Participant or Beneficiary
to receive any benefits under the Plan in respect of participation for any period ending on or before the later of the date on which such amendment is adopted or the date on which it is made effective.

 

Section 7.2    Termination.

 

The Company also reserves the right, in its sole and absolute discretion, by action of the Board, to terminate the Plan. In such event, undistributed benefits attributable to participation prior to the date of termination shall be distributed as though each Participant terminated employment
with the Bank, the Company and all other Employers as of the effective date of termination of the Plan.

 

Section 7.3    Amendment or Termination by Other Employers.

 

In the event that a corporation or trade or business other than the Bank shall adopt this Plan, such corporation or trade or business shall, by adopting the Plan, empower the Bank to amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business,
upon the terms and conditions set forth in sections 7.1 and 7.2; provided, however, that any such corporation or trade or business may, by action of its board of directors or other governing body, amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business, at different times and in a different manner. In the event of any such amendment or termination by action of the board of directors or other governing body of such a corporation or trade or business, a separate
plan shall be deemed to have been established for the employees of such corporation or trade or business, and any amounts set aside to provide for the satisfaction of benefit liabilities with respect to Employees of such corporation or trade or business shall be segregated from the assets set aside for the purposes of this Plan at the earliest practicable date and shall be dealt with in accordance with the documents governing such separate plan.

 

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

Section 8.1    Construction and Language.

 

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

  

12

  

 

Section 8.2    Headings.

 

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

 

Section 8.3    Non-Alienation of Benefits.

 

Except as may otherwise be required by law, no distribution or payment under the Plan to any Participant, Former Participant or Beneficiary shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or involuntary,
and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; nor shall any such distribution or payment be in any way liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to such distribution or payment. If any Participant, Former Participant or Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge encumber or charge any such distribution or payment, voluntarily
or involuntarily, the Committee, in its sole discretion, may cancel such distribution or payment or may hold or cause to be held or applied such distribution or payment, or any part thereof, to or for the benefit of such Participant, Former Participant or Beneficiary, in such manner as the Committee shall direct; provided, however, that no such action by the Committee shall cause the acceleration or deferral of any benefit payments from the date on which such payments are scheduled to be made.

 

Section 8.4    Indemnification.

 

The Bank shall indemnify, hold harmless and defend each Participant, Former Participant and Beneficiary, against their reasonable costs, including legal fees, incurred by them or arising out of any action, suit or proceeding in which they may be involved, as a result of their efforts,
in good faith, to defend or enforce the obligation of the Bank, the Company and any other Employer under the terms of the Plan.

 

Section 8.5    Severability.

 

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

 

Section 8.6    Waiver.

 

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

  

13

  

 

Section 8.7    Governing Law.

 

The Plan shall be construed, administered Section and enforced according to the laws of the State of Georgia without giving effect to the conflict of laws principles thereof, except to the extent that such laws are preempted by the federal laws of the United States, Any payments made pursuant
to this Plan are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

 

Section 8.8    Taxes.

 

The Employer shall have the right to retain a sufficient portion of any payment made under the Plan to cover the amount required to be withheld pursuant to any applicable federal, state and local tax law.

 

Section 8.9    No Deposit Account.

 

Nothing in this Plan shall be held or construed to establish any deposit account for any Participant or any deposit liability on the part of the Bank. Participants’ rights hereunder shall be equivalent to those of a general unsecured creditor of each Employer.

 

Section 8.10    No Right to Continued Employment.

 

Neither the establishment of the Plan, nor any provisions of the Plan nor any action of the Plan Administrator, the Committee or any Employer shall be held or construed to confer upon any Employee any right to a continuation of employment by the Employer. The Employer reserves the right
to dismiss any Employee or otherwise deal with any Employee to the same extent as though the Plan had not been adopted.

 

Section 8.11    Status of Plan Under ERISA.

 

The Plan is intended to be (a) to the maximum extent permitted under applicable laws, an unfunded, non-qualified excess benefit plan as contemplated by section 3(36) of ERISA for the purpose of providing benefits in excess of the limitations imposed under section 415 of the Code, and
(b) to the extent not so permitted, an unfunded, non-qualified plan maintained primarily for the purpose of providing deferred compensation for highly compensated employees, as contemplated by sections 201(2), 301(a)(3) and 401(a)(l) of ERISA. The Plan is not intended to comply with the requirements of section 401 (a) of the Code or to be subject to Parts 2, 3 and 4 of Title I of ERISA. The Plan shall be administered and construed so as to effectuate this intent.

 

Section 8.12    Restrictions on Payments to Key Employees.

 

Notwithstanding anything in the Plan to the contrary, to the extent required under section 409A of the Code, no payment to be made to a key employee (within the meaning of section 409A of the Code) on or after the date of his termination of service shall be made sooner than six (6) after
such termination of service; provided, however, that to the extent such six (6) month delay is imposed by section 409A of the Code, the payments required under this Plan shall be paid into a rabbi trust contemplated by section 5.1 for the benefit of the affected Participant, Former Participant or Beneficiary as if the six (6) month delay was not imposed with such amounts then being distributed to the affected Participant, Former Participant or Beneficiary as soon as permissible under section 409A of the Code.

  

14

  

 

Section 8.13    Compliance with Section 409A of the Code.

 

The Plan is intended to be a non-qualified deferred compensation plan described in section 409A of the Code. The Plan shall be operated, administered and construed to give effect to such intent. In addition he Plan shall be subject to amendment, with or without advance notice to Participants
and other interested parties, and on a prospective or retroactive basis, including but not limited amendment in a manner that adversely affects the rights of participants and other interested parties, to the extent necessary to effect such compliance.

  

15

  

 

AMENDMENT TO

BENEFIT RESTORATION PLAN OF

CHARTER FINANCIAL CORPORATION

 

This Amendment (this “Amendment”) is made this 27th day of January, 2009 (the “Amendment Date”),
by Charter Financial Corporation (the “Company”), and consented to by Robert Johnson, an individual resident of Alabama (hereinafter referred to as the “Participant”).

 

INTRODUCTION

 

The Company maintains the Benefit Restoration Plan of Charter of Financial Corporation under a plan document dated December 23, 2005 (the “Plan”). The Participant is the sole participant in the Plan. The Company and the Participant now desire to amend the Plan to freeze all benefits under the Plan and to change the time and form
of payments under the Plan, subject to the provisions of this Amendment.

 

NOW, THEREFORE, the Company does hereby amend the Plan as follows:

 

1.           Notwithstanding any other provision of the Plan, the amount of all benefits under the Plan shall be determined as if the Participant incurred a Termination of Service as of the Amendment Date, but shall not be adjusted for earnings and losses thereafter. For the avoidance
of doubt “Termination of Service” refers to a “separation from service” within the meaning of Code Section 409A.

 

2.           Notwithstanding any other provision of the Plan, the benefits payable under the Plan shall be paid in one hundred twenty (120) equal monthly installments beginning on the first day of the month that is five years (five years and six months, in the event the Participant
is a “specified employee” (within the meaning of Code Section 409A) and payment is made pursuant to Subsection (a) or (b) below) after the earliest applicable date specified below:

 

(a)           the date the Participant reaches age sixty-five (65), if the Participant’s Termination of Service occurs before the Participant reaches age sixty-two (62), for reasons other than death, Disability, or termination of employment within two (2) years after a Change
in Control;

 

(b)           the date of the Participant’s Termination of Service, if the Participant’s Termination of Service occurs (i) upon or after the Participant’s reaching age sixty-two (62) or (ii) within two (2) years after a Change in Control;

 

(c)           upon the Participant’s Disability before reaching age 65; or

 

(d)           upon the Participant’s death.

 

Notwithstanding the foregoing, the changes in the form and timing of payment made by this Paragraph 2 shall not take effect until twelve (12) months after the Amendment Date, and if any payment would be paid under the provisions of the Plan without regard to this Amendment within
twelve (12) months following the Amendment Date, the change in payment schedule in this Paragraph 2 shall not take effect.

  

  

  

 

3.           For purposes of this Amendment, the following terms shall have the following definitions:

 

(a)           “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 Company 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 Company 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 Company; 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 Company, Charterbank 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 the Company or reorganization of First Charter MHC, in either case as part of a conversion or partial conversion of the direct or indirect ownership of Charterbank from a mutual holding company structure to a stock holding company structure shall not be deemed to be a Change in Control.

 

(b)           “Disability” means the Participant 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 Company’s or Charterbank’s
disability plan, or by a physician selected by the Participant and reasonably acceptable to the Company; provided that in each case the definition of “Disability” employed must be consistent with the foregoing regulations.

 

Except as specifically amended hereby, the Plan shall remain in full force and effect as prior to this Amendment.

 

IN WITNESS WHEREOF, the Company has executed this Amendment.

	  	  	  	  
	  	
CHARTER FINANCIAL CORPORATION
	  
	  	  	  	  
	  	
By:
	
/s/ Thomas M. Lane
	  
	  	  	  	  
	  	
Title:
	
Chairman, Personnel & Compensation Committee
	  
	  	  	
 
	  
	  	
Consented to by the Participant:
	  
	 	 	 
	 	/s/ Robert L. Johnson	 
	  	

Robert L. Johnson, the Participantex10-9.htm

Exhibit 10.9

 

Charter Financial Corporation

2001 Stock Option Plan

 

Effective as of April 24, 2002

 

  

  

  

 

TABLE OF CONTENTS

	  	  	  	
Page

	 	 	 
	
Article I Purpose
	  	
1

	 	 	 
	
Section 1.1.
	
General Purpose of the Plan
	  	
1

	 	 	 	 
	
Section 2.1
	
Bank
	  	
1

	 	 	 	 
	
Section 2.2
	
Board
	  	
1

	 	 	 	 
	
Section 2.3
	
Change in Control
	  	
1

	 	 	 	 
	
Section 2.4
	
Code
	  	
3

	 	 	 	 
	
Section 2.5
	
Committee
	  	
3

	 	 	 	 
	
Section 2.6
	
Company
	  	
3

	 	 	 	 
	
Section 2.7
	
Disability
	  	
3

	 	 	 	 
	
Section 2.8
	
Disinterested Board Member
	  	
3

	 	 	 	 
	
Section 2.10
	
Eligible Director
	  	
3

	 	 	 	 
	
Section 2.11
	
Eligible Employee
	  	
3

	 	 	 	 
	
Section 2.12
	
Employer
	  	
3

	 	 	 	 
	
Section 2.13
	
Exchange Act
	  	
4

	 	 	 	 
	
Section 2.14
	
Exercise Price
	  	
4

	 	 	 	 
	
Section 2.15
	
Fair Market Value
	  	
4

	 	 	 	 
	
Section 2.16
	
Family Member
	  	
4

	 	 	 	 
	
Section 2.17
	
FDIC Regulations
	  	
4

	 	 	 	 
	
Section 2.18
	
Incentive Stock Option
	  	
4

	 	 	 	 
	
Section 2.19
	
Non-Profit Organization
	  	
4

	 	 	 	 
	
Section 2.20
	
Non-Qualified Stock Option
	  	
4

	 	 	 	 
	
Section 2.21
	
Option
	  	
4

	 	 	 	 
	
Section 2.22
	
Option Period
	  	
5

	 	 	 	 
	
Section 2.23
	
Person
	  	
5

	 	 	 	 
	
Section 2.24
	
Plan
	  	
5

	 	 	 	 
	
Section 2.25
	
Retirement
	  	
5

	 	 	 	 
	
Section 2.26
	
Share
	  	
5

	 	 	 	 
	
Section 2.27
	
Termination for Cause
	  	
5

	 	 	 	 
	
Article III Available Shares
	
5

	 	 
	
Section 3.1
	
Available Shares
	  	
5

 

 

 

 

 

	
Article IV Administration
	  	
6

	 	 	 
	
Section 4.1
	
Committee
	  	
6

	 	 	 	 
	
Section 4.2
	
Committee Action
	  	
6

	 	 	 	 
	
Section 4.3
	
Committee Responsibilities
	  	
7

	 	 	 	 
	
Article V Stock Option Grants
	  	
7

	 	 	 
	
Section 5.1
	
Grant of Options
	  	
7

	 	 	 	 
	
Section 5.2
	
Size of Option
	  	
8

	 	 	 	 
	
Section 5.3
	
Exercise Price
	  	
8

	 	 	 	 
	
Section 5.4
	
Option Period
	  	
8

	 	 	 	 
	
Section 5.5
	
Required Regulatory Provisions
	  	
9

	 	 	 	 
	
Section 5.6
	
Additional Restrictions on Incentive Stock Options
	  	
10

	 	 	 	 
	
Article VI Options In General
	  	
11

	 	 	 
	
Section 6.1
	
Method of Exercise
	  	
11

	 	 	 	 
	
Section 6.2
	
Limitations on Options
	  	
12

	 	 	 	 
	
Article VII Amendment and Termination
	  	
13

	 	 	 
	
Section 7.1
	
Termination
	  	
13

	 	 	 	 
	
Section 7.2
	
Amendment
	  	
13

	 	 	 	 
	
Section 7.3
	
Adjustments in the Event of a Business Reorganization
	  	
13

	 	 	 	 
	
Article VIII Miscellaneous
	  	
14

	 	 	 
	
Section 8.1
	
Status as an Employee Benefit Plan
	  	
14

	 	 	 	 
	
Section 8.2
	
No Right to Continued Employment
	  	
14

	 	 	 	 
	
Section 8.3
	
Construction of Language
	  	
14

	 	 	 	 
	
Section 8.4
	
Governing Law
	  	
14

	 	 	 	 
	
Section 8.5
	
Headings
	  	
15

	 	 	 	 
	
Section 8.6
	
Non-Alienation of Benefits
	  	
15

	 	 	 	 
	
Section 8.7
	
Taxes
	  	
15

	 	 	 	 
	
Section 8.8
	
Notices
	  	
15

	 	 	 	 
	
Section 8.9
	
Required Regulatory Provisions
	  	
16

	 	 	 	 
	
Section 8.10
	
Approval of Shareholders
	  	
16

	 	 	 	 
	
Article IX Additional
Provisions Subject to Further Shareholder Approval
	  	
16

	 	 	 
	
Section 9.1
	
Accelerated Vesting Upon Retirement or Change in Control
	  	
16

	 	 	 	 
	
Section 9.2
	
Discretion to Establish Vesting Schedules
	  	
16

	 	 	 	 
	
Section 9.3
	
No Effect Prior to Shareholder Approval
	  	
16

 

  

ii

  

 

Charter Financial Corporation 2001 Stock Option Plan

 

Article I

 

Purpose

 

Section 1.1.                      General Purpose of the Plan.

 

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

 

Article II

 

Definitions

 

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

 

Section 2.1                      Bank means
CharterBank and any successor thereto.

 

Section 2.2                      Board means
the board of directors of the Company.

 

Section 2.3                      Change
in Control means any of the following events:

 

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

 

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

 

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

 

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

 

 

 

 

 

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

 

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

 

(i)           individuals who were members of the Board of Directors of the Company on the Effective Date; or

 

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

 

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

 

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

 

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of the Company; provided, however, that this section 2.3(d) shall only apply if the Company is not majority owned by First Charter, MHC; or

 

(e)           approval by the stockholders of the Company of any agreement, plan or arrangement for the consummation of a transaction which, if consummated, would result in the occurrence of an event described in section 2.3(a), (b), (c) or (d); or

 

(f)           any event which would be described in section 2.3(a), (b), (c), (d) or (e) if the term “Bank” were substituted for the terms
“Company“ therein.

 

In no event, however, shall a Change of Control be deemed to have occurred as a result of (i) any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them or (ii) the conversion
of First Charter, MHC to a stock form company and the issuance of additional Shares of the Company in connection therewith.  For purposes of this section 2.3, the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

 

 

2

 

 

Section 2.4                      Code means
the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

 

Section 2.5                      Committee means
the Committee described in section 4.1.

 

Section 2.6                      Company means
Charter Financial Corporation, a corporation organized and existing under the laws of the State of Georgia, and any successor thereto.

 

Section 2.7                      Disability means
a condition of total incapacity, mental or physical, for further performance of duty with the Company which the Committee shall have determined, on the basis of competent medical evidence, is likely to be permanent.

 

Section 2.8                      Disinterested
Board Member means a member of the Board who (a) is not a current employee of the Company or a subsidiary, (b) is not a former employee of the Company who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, (c) has not been an officer of the Company, (d) does not receive remuneration from the Company or a subsidiary, either directly or indirectly,
in any capacity other than as a director except in an amount for which disclosure would not be required pursuant to Item 404(a) of the proxy solicitation rules of the Securities and Exchange Commission and (e) does not possess an interest in any other transaction, and is not engaged in a business relationship, for which disclosure would be required pursuant to Item 404(a) or (b) of the proxy solicitation rules of the Securities and Exchange Commission.  The term Disinterested Board Member shall be interpreted
in such manner as shall be necessary to conform to the requirements of section 162(m) of the Code and Rule 16b-3 promulgated under the Exchange Act.

 

Section 2.9                      Effective
Date means the date on which the Bank converts from a mutual bank to a stock bank (the “Reorganization”) if permitted by OTS Regulations, otherwise on April 24, 2002.

 

Section 2.10                      Eligible
Director means a member of the board of directors of an Employer who is not also an employee or an officer of any Employer.

 

Section 2.11                      Eligible
Employee means any employee whom the Committee may determine to be a key officer or employee of an Employer and select to receive a grant of an Option pursuant to the Plan.

 

Section 2.12                      Employer means
the Company, the Bank and any successor thereto and, with the prior approval of the Board, and subject to such terms and conditions as may be imposed by the Board, any other savings bank, savings and loan association, bank, corporation, financial institution or other business organization or institution.  With respect to any Eligible Employer or Eligible Director, the Employer shall mean the entity which employs such person or upon whose board of directors such person serves.

 

 

3

 

 

Section 2.13                      Exchange
Act means the Securities Exchange Act of 1934, as amended.

 

Section 2.14                      Exercise
Price means the price per Share at which Shares subject to an Option may be purchased upon exercise of the Option, determined in accordance with section 5.3.

 

Section 2.15                      Fair
Market Value means, with respect to a Share on a specified date:

 

(a)           the final reported sales price on the date in question (or if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting system with respect to securities listed or admitted
to trading on the principal United States securities exchange on which the Shares are listed or admitted to trading; or

 

(b)           if the Shares are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a Share on such date on the National Association of Securities Dealers Automated Quotations System, or, if no such quotation is provided, on another similar
system, selected by the Committee, then in use; or

 

(c)           if sections 2.15(a) and (b) are not applicable, the fair market value of a Share as the Committee may determine.

 

Section 2.16                      Family
Member means the spouse, parent, child or sibling of an Eligible Director or Eligible Employee.

 

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

 

Section 2.18                      Incentive
Stock Option means a right to purchase Shares that is granted to Eligible Employees pursuant to section 5.1, that is designated by the Committee to be an Incentive Stock Option and that is intended to satisfy the requirements of section 422 of the Code.

 

Section 2.19                      Non-Profit
Organization means any organization which is exempt from federal income tax under section 501(c)(3), (4), (5), (6), (7), (8) or (10) of the Internal Revenue Code.

 

Section 2.20                      Non-Qualified
Stock Option means a right to purchase Shares that is either (a) granted to an Eligible Director or (b) granted to an Eligible Employee and either (i)  is not designated by the Committee to be an Incentive Stock Option, or (ii) does not satisfy the requirements of section 422 of the Code.

 

Section 2.21                      Option means
either an Incentive Stock Option or a Non-Qualified Stock Option.

 

 

4

 

 

Section 2.22                      Option
Period means the period during which an Option may be exercised, determined in accordance with section 5.4.

 

Section 2.23                      Person means
an individual, a corporation, a bank, a savings bank, a savings and loan association, a financial institution, a partnership, an association, a joint-stock company, a trust, an estate, an unincorporated organization and any other business organization or institution.

 

Section 2.24                      Plan means
the Charter Financial Corporation 2001 Stock Option Plan, as amended from time to time.

 

Section 2.25                      Retirement means
with respect to an Eligible Employee, termination of all service for all Employers as an employee at or after the normal or early retirement date set forth in any tax-qualified retirement plan of the Bank, whether or not the individual in question actually participates in any such tax-qualified plan of the Bank, and in the case of an Eligible Director, termination of all service for all Employers as a voting member of the Employer’s board of directors after the attainment of the latest age at which the
Eligible Director is eligible for election or appointment as a voting member of the Employer’s board of directors under the Employer’s charter.

 

Section 2.26                      Share means
a share of Common Stock, par value $.01 share, of Charter Financial Corporation.

 

Section 2.27                      Termination
for Cause means termination of service or removal from office with the Employer upon the occurrence of any of the following:  (a) the individual intentionally engages in dishonest conduct in connection with his performance of services for the Employer resulting in his conviction of a felony; (b) the individual is convicted of, or pleads guilty or nolo contendere to,
a felony or any crime involving moral turpitude; (c) the individual breaches his fiduciary duties to the Employer for personal profit; or (d) the individual willfully breaches or violates any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with his performance of services for the Employer.

 

Article III

 

Available Shares

 

Section 3.1                      Available
Shares.

 

(a)           The maximum aggregate number of Shares with respect to which Options may be granted at any time shall be equal to the excess of:

 

(i)           707,943 Shares; over

 

(ii)           the sum of:

 

(A)           the number of Shares with respect to which previously granted Options may then or may in the future be exercised; plus

 

 

5

 

 

(B)           the number of Shares with respect to which previously granted Options have been exercised;

 

subject to adjustment pursuant to section 7.3.

 

(b)           Options to purchase an aggregate maximum of 212,382 Shares (subject to adjustment pursuant to section 7.3) may be granted to Eligible Directors, and Options to purchase a maximum of 35,397 Shares (subject to adjustment pursuant to section 7.3) may be granted to any one
Eligible Director.

 

(c)           Options to purchase a maximum of 176,985 Shares (subject to adjustment pursuant to section 7.3) may be granted to any one Eligible Employee.

 

(d)           For purposes of this section 3.1, an Option shall not be considered as having been exercised to the extent that such Option terminates by reason other than the purchase of related Shares; provided, however, that for purposes of meeting the requirements of section 162(m)
of the Code, no Eligible Employee who is a covered employee (within the meaning of section 162(m) of the Code) shall receive grants of Options for an aggregate number of Shares that is in excess of the amount specified for him under this section 3.1, computed as if any Option which is canceled or forfeited reduced the maximum number of Shares.

 

Article IV

Administration

 

Section 4.1                      Committee.

 

The Plan shall be administered by the members of the Compensation Committee of Charter Financial Corporation who are Disinterested Board Members.  If the Committee consists of fewer than two Disinterested Board Members, then the Board shall appoint to the Committee such additional Disinterested Board Members as shall be necessary
to provide for a Committee consisting of at least two Disinterested Board Members.

 

Section 4.2                      Committee
Action.

 

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

  

6

  

Section 4.3                      Committee
Responsibilities.

 

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

 

(a)           to interpret and construe the Plan, and to determine all questions that may arise under the Plan as to eligibility for participation in the Plan, the number of Shares subject to the Options, if any, to be granted, and the terms and conditions thereof;

 

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

 

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

 

Article V

 

Stock Option Grants

 

Section 5.1                      Grant of Options.

 

(a)           Subject to the limitations of the Plan, the Committee may, in its discretion, grant to an Eligible Employee or an Eligible Director an Option to purchase Shares.  An Option for Eligible Employees must be designated as either an Incentive Stock Option or a Non-Qualified
Stock Option and, if not designated as either, shall be a Non-Qualified Stock Option.  An Option for an Eligible Director shall be a Non-Qualified Stock Option.

 

(b)           Any Option granted under this section 5.1 shall be evidenced by a written agreement which shall:

 

(i)           specify the number of Shares covered by the Option determined in accordance with section 5.2;

 

(ii)           specify the Exercise Price, determined in accordance with section 5.3, for the Shares subject to the Option;

 

(iii)           specify the Option Period determined in accordance with section 5.4;

 

(iv)           set forth specifically or incorporate by reference the applicable provisions of the Plan; and

 

(v)           contain such other terms and conditions not inconsistent with the Plan as the Committee may, in its discretion, prescribe with respect to an Option granted to an Eligible Employee or an Eligible Director.

 

 

7

 

 

Section 5.2                      Size of Option.

 

Subject to section 3.1 and such limitations as the Board may from time to time impose, the number of Shares as to which an Eligible Employee or Eligible Director may be granted Options shall be determined by the Committee, in its discretion.

 

Section 5.3                      Exercise
Price.

 

The price per Share at which an Option granted to an Eligible Employee or Eligible Director shall be determined by the Committee, in its discretion; provided, however, that the Exercise Price shall not be less than the Fair Market Value of a Share on the date on which the Option
is granted.

 

Section 5.4                      Option
Period.

 

Subject to section 5.5, the Option Period during which an Option granted to an Eligible Employee may be exercised shall commence on the date specified by the Committee in the Option agreement and shall expire on the date specified in the Option agreement or, if no date is specified, on the earliest of:

 

(a)           in the case of an Option granted to an Eligible Employee:

 

(i)           the close of business on the last day of the three-month period commencing on the date of the Eligible Employee's termination of employment with the Employer, other than on account of death or Disability, Retirement or a Termination for Cause;

 

(ii)           the close of business on the last day of the one-year period commencing on the date of the Eligible Employee's termination of employment due to death, Disability or Retirement;

 

(iii)           the date and time when the Eligible Employee ceases to be an employee of the Employer due to a Termination for Cause; and

 

(iv)           the last day of the ten-year period commencing on the date on which the Option was granted; and

 

(b)           in the case of an Option granted to an Eligible Director:

 

(i)           removal for cause in accordance with the Employer’s bylaws, or Termination for Cause; or

 

(ii)           the last day of the ten-year period commencing on the date on which the Option was granted.

 

 

8

 

 

Section 5.5                      Required
Regulatory Provisions.

 

Notwithstanding anything contained herein to the contrary:

 

(a)           no Option shall be granted to an Eligible Employee or Eligible Director under the Plan prior to the later of (i) six months after the date of the Reorganization or (ii) the approval of the Plan by shareholders in accordance with section 8.10;

 

(b)           each Option granted to an Eligible Employee or Eligible Director shall become exercisable no more rapidly than as follows:

 

(i)           prior to the first anniversary of the Effective Date, an Option shall not be exercisable;

 

(ii)           on and after the first anniversary, but prior to the second anniversary, of the Effective Date, an Option may be exercised as to a maximum of twenty percent (20%) of the Shares subject to the Option when granted;

 

(iii)           on and after the second anniversary, but prior to the third anniversary, of the Effective Date, an Option may be exercised as to a maximum of forty percent (40%) of the Shares subject to the Option when granted, including in such forty percent (40%) any optioned Shares
purchased prior to such second anniversary;

 

(iv)           on and after the third anniversary, but prior to the fourth anniversary, of the Effective Date, an Option may be exercised as to a maximum of sixty percent (60%) of the Shares subject to the Option when granted, including in such sixty percent (60%) any optioned Shares
purchased prior to such third anniversary;

 

(v)           on and after the fourth anniversary, but prior to the fifth anniversary, of the Effective Date, an Option may be exercised as to a maximum of eighty percent (80%) of the Shares subject to the Option when granted, including in such eighty percent (80%) any optioned Shares
purchased prior to such fourth anniversary; and

 

(vi)           on and after the fifth anniversary of the Effective Date and for the remainder of the Option Period, an Option may be exercised as to the entire number of optioned Shares not theretofore purchased;

 

provided, however, that such an Option shall become fully exercisable, and all optioned Shares not previously purchased shall become available for purchase, on the date of the Option holder's death or Disability while in the service of an Employer.

 

 

9

 

 

(c)           The Option Period of any Option granted hereunder, whether or not previously vested, shall be suspended as of the time and date at which the Option holder has received notice from the Board that his or her employment is subject to a possible Termination for Cause, or
in the case of an Eligible Director, removal for cause in accordance with the Employer’s by-laws.  Such suspension shall remain in effect until the Option holder receives official notice from the Board that he or she has been cleared of any possible Termination for Cause, or in the case of an Eligible Director, removal for cause, at which time, the original Exercise Period shall be reinstated without any adjustment for the intervening suspended period.  In the event that the Option Period
under section 5.4 expires during such suspension, the Company shall pay to the Eligible Employee, within 30 days after his reinstatement as an employee of the Company, damages equal to the value of the expired Options (based on the Fair Market Value of a Share as of the expiration of the Option Period less the Exercise Price of such Options).

 

(d)           No Option granted to an Eligible Employee or Eligible Director hereunder, whether or not previously vested, shall be exercised after the time and date at which the Option holder's services with the Employer are terminated in a Termination for Cause, or, in the case of
an Eligible Director, removal for cause in accordance with the Employer’s by-laws.

 

Section 5.6                      Additional
Restrictions on Incentive Stock Options.

 

An Option granted to an Eligible Employee designated by the Committee to be an Incentive Stock Option shall be subject to the following limitations:

 

(a)           If, for any calendar year, the sum of (i) plus (ii) exceeds $100,000, where (i) equals the Fair Market Value (determined as of the date of the grant) of Shares subject to an Option intended to be an Incentive Stock Option which first become available for purchase during
such calendar year, and (ii) equals the Fair Market Value (determined as of the date of grant) of Shares subject to any other options intended to be Incentive Stock Options and previously granted to the same Eligible Employee which first become exercisable in such calendar year, then that number of Shares optioned which causes the sum of (i) and (ii) to exceed $100,000 shall be deemed to be Shares optioned pursuant to a Non-Qualified Stock Option or Non-Qualified Stock Options, with the same terms as the Option
or Options intended to be an Incentive Stock Option;

 

(b)           The Exercise Price of an Incentive Stock Option granted to an Eligible Employee who, at the time the Option is granted, owns Shares comprising more than 10% of the total combined voting power of all classes of stock of the Company shall not be less than 110% of the Fair
Market Value of a Share, and if an Option designated as an Incentive Stock Option shall be granted at an Exercise Price that does not satisfy this requirement, the designated Exercise Price shall be observed and the Option shall be treated as a Non-Qualified Stock Option;

 

(c)           The Option Period of an Incentive Stock Option granted to an Eligible Employee who, at the time the Option is granted, owns Shares comprising more than 10% of the total combined voting power of all classes of stock of the Company, shall expire no later than the fifth
anniversary of the date on which the Option was granted, and if an Option designated as an Incentive Stock Option shall be granted for an Option Period that does not satisfy this requirement, the designated Option Period shall be observed and the Option shall be treated as a Non-Qualified Stock Option;

 

 

10

 

 

(d)           An Incentive Stock Option that is exercised during its designated Option Period but more than:

 

(i)           three (3) months after the termination of employment with the Company, a parent or a subsidiary (other than on account of disability within the meaning of section 22(e)(3) of the Code or death) of the Eligible Employee to whom it was granted; and

 

(ii)           one (1) year after such individual’s termination of employment with the Company, a parent or a subsidiary due to disability (within the meaning of section 22(e)(3) of the Code) or death;

 

may be exercised in accordance with the terms but shall at the time of exercise be treated as a Non-Qualified Stock Option; and

 

(e)           Except with the prior written approval of the Committee, no individual shall dispose of Shares acquired pursuant to the exercise of an Incentive Stock Option until after the later of (i) the second anniversary of the date on which the Incentive Stock Option was granted,
or (ii) the first anniversary of the date on which the Shares were acquired.

 

Article VI

 

Options In General

 

Section 6.1                      Method
of Exercise.

 

(a)           Subject to the limitations of the Plan and the Option agreement, an Option holder may, at any time during the Option Period, exercise his or her right to purchase all or any part of the Shares to which the Option relates; provided,
however, that the minimum number of Shares which may be purchased at any time shall be 100, or, if less, the total number of Shares relating to the Option which remain unpurchased.  An Option holder shall exercise an Option to purchase Shares by:

 

(i)           giving written notice to the Committee, in such form and manner as the Committee may prescribe, of his intent to exercise the Option;

 

(ii)           delivering to the Committee full payment, consistent with section 6.1(b), for the Shares as to which the Option is to be exercised; and

 

(iii)           satisfying such other conditions as may be prescribed in the Option agreement.

 

 

11

 

 

(b)           The Exercise Price of Shares to be purchased upon exercise of any Option shall be paid in full in cash (by certified or bank check or such other instrument as the Company may accept) or, if and to the extent permitted by the Committee, by one or more of the following:  (i)
in the form of Shares already owned by the Option holder having an aggregate Fair Market Value on the date the Option is exercised equal to the aggregate Exercise Price to be paid; (ii) by requesting the Company to cancel without payment Options outstanding to such Person for that number of Shares whose aggregate Fair Market Value on the date of exercise, when reduced by their aggregate Exercise Price, equals the aggregate Exercise Price of the Options being exercised; or (iii) by a combination thereof.  Payment
for any Shares to be purchased upon exercise of an Option may also be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price.  To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms.

 

(c)           When the requirements of section 6.1(a) and (b) have been satisfied, the Committee shall take such action as is necessary to cause the issuance of a stock certificate evidencing the Option holder's ownership of such Shares.  The Person exercising the Option
shall have no right to vote or to receive dividends, nor have any other rights with respect to the Shares, prior to the date as of which such Shares are transferred to such Person on the stock transfer records of the Company, and no adjustments shall be made for any dividends or other rights for which the record date is prior to the date as of which such transfer is effected, except as may be required under section 7.3.

 

Section 6.2                      Limitations
on Options.

 

(a)           An Option by its terms shall not be transferable by the Option holder other than to Family Members or Non-Profit Organizations or by will or by the laws of descent and distribution and shall be exercisable, during the lifetime of the Option holder, only by the Option
holder, a Family Member or a Non-Profit Organization.  Any such transfer shall be effected by written notice to the Company given in such form and manner as the Committee may prescribe and shall be recognized only if such notice is received by the Company prior to the death of the person giving it.  Thereafter, the transferee shall have, with respect to such Option, all of the rights, privileges and obligations which would attach thereunder to the transferor if the Option were issued to such
transferor.  If a privilege of the Option depends on the life, employment or other status of the transferor, such privilege of the Option for the transferee shall continue to depend on the life, employment or other status of the transferor.  The Committee shall have full and exclusive authority to interpret and apply the provisions of this Plan to transferees to the extent not specifically described herein.  Notwithstanding the foregoing, an Incentive Stock Option is not transferable
by an Eligible Employee other than by will or the laws of descent and distribution, and is exercisable, during his lifetime, solely by him.

 

 

12

 

 

(b)           The Company’s obligation to deliver Shares with respect to an Option shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Option holder to whom such Shares are to be delivered, in such form
as the Committee shall determine to be necessary or advisable to comply with the provisions of applicable federal, state or local law.  It may be provided that any such representation shall become inoperative upon a registration of the Shares or upon the occurrence of any other event eliminating the necessity of such representation.  The Company shall not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange on which Shares
may then be listed, or (ii) the completion of such registration or other qualification under any state or federal law, rule or regulation as the Committee shall determine to be necessary or advisable.

 

Article VII

 

Amendment and Termination

 

Section 7.1                      Termination.

 

The Board may suspend or terminate the Plan in whole or in part at any time prior to the tenth anniversary of the Effective Date by giving written notice of such suspension or termination to the Committee.  Unless sooner terminated, the Plan shall terminate automatically on the day preceding the tenth anniversary of the Effective
Date.  In the event of any suspension or termination of the Plan, all Options theretofore granted under the Plan that are outstanding on the date of such suspension or termination of the Plan shall remain outstanding and exercisable for the period and on the terms and conditions set forth in the Option agreements evidencing such Options.

 

Section 7.2                      Amendment.

 

The Board may amend or revise the Plan in whole or in part at any time; provided, however, that, to the extent required to comply with section 162(m) of the Code, no such amendment or revision shall be effective if it amends a material term of the Plan unless approved by the holders
of a majority of the votes cast on a proposal to approve such amendment or revision.

 

Section 7.3                      Adjustments
in the Event of a Business Reorganization.

 

(a)           In the event of any merger, consolidation, or other business reorganization in which the Company is the surviving entity, and in the event of any stock split, stock dividend or other event generally affecting the number of Shares held by each Person who is then a holder
of record of Shares, the number of Shares covered by each outstanding Option and the number of Shares available to any individual or group of individuals pursuant to section 3.1 shall be adjusted to account for such event.  Such adjustment shall be effected by multiplying such number of Shares by an amount equal to the number of Shares that would be owned after such event by a Person who, immediately prior to such event, was the holder of record of one Share, and the Exercise Price of the Options shall
be adjusted by dividing the Exercise Price by such number of Shares; provided, however, that the Committee may, in its discretion, establish another appropriate method of adjustment.

 

 

13

 

 

(b)           In the event of any merger, consolidation, or other business reorganization in which the Company is not the surviving entity, any Options granted under the Plan which remain outstanding shall be converted into options to purchase voting common equity securities of the
business entity which survives such merger, consolidation or other business reorganization having substantially the same terms and conditions as the outstanding Options under this Plan and reflecting the same economic benefit (as measured by the difference between the aggregate exercise price and the value exchanged for outstanding Shares in such merger, consolidation or other business reorganization), all as determined by the Committee prior to the consummation of such merger; provided,
however, that the Committee may, at any time prior to the consummation of such merger, consolidation or other business reorganization, direct that all, but not less than all, outstanding Options be canceled as of the effective date of such merger, consolidation or other business reorganization in exchange for a cash payment per optioned Share equal to the excess (if any) of the value exchanged for an outstanding Share in such merger, consolidation or other business reorganization over the Exercise Price
of the Option being canceled.

 

Article VIII

 

Miscellaneous

 

Section 8.1                      Status
as an Employee Benefit Plan.

 

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

 

Section 8.2                      No Right
to Continued Employment.

 

Neither the establishment of the Plan nor any provisions of the Plan nor any action of the Board or the Committee with respect to the Plan shall be held or construed to confer upon any Eligible Director or Eligible Employee any right to a continuation of his or her position as a director or employee of the Company.  The Employers
reserve the right to remove any Eligible Director or dismiss any Eligible Employee or otherwise deal with any Eligible Director or Eligible Employee to the same extent as though the Plan had not been adopted.

 

Section 8.3                      Construction
of Language.

 

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

 

Section 8.4                      Governing
Law.

 

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

 

 

14

 

 

Section 8.5                      Headings.

 

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

 

Section 8.6                      Non-Alienation
of Benefits.

 

The right to receive a benefit under the Plan shall not be subject in any manner to anticipation, alienation or assignment, nor shall such right be liable for or subject to debts, contracts, liabilities, engagements or torts.

 

Section 8.7                      Taxes.

 

The Company shall have the right to deduct from all amounts paid by the Company in cash with respect to an Option under the Plan any taxes required by law to be withheld with respect to such Option.  Where any Person is entitled to receive Shares pursuant to the exercise of an Option, the Company shall have the right to require
such Person to pay the Company the amount of any tax which the Company is required to withhold with respect to such Shares, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of Shares to cover the minimum amount required to be withheld under applicable law.

 

Section 8.8                      Notices.

 

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

 

(a)           If to the Committee:

 

Charter Financial Corporation

600 Third Avenue

West Point, GA  31833

 

Attention:            Corporate Secretary

 

(b)           If to an Option holder, to the Option holder’s address as shown in the Employer’s records.

 

 

15

 

 

Section 8.9                      Required Regulatory Provisions.

 

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

 

Section 8.10                      Approval of Shareholders.

 

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

 

Article IX

 

Additional Provisions Subject to Further Shareholder Approval

 

Section 9.1                      Accelerated Vesting Upon Retirement or Change in Control.

 

Notwithstanding anything in the Plan to the contrary, but subject to section 9.3(a) in the event that any Eligible Employee terminates service as an Employee of all Employers, or in the event that an Eligible Director terminates service as a voting member of all Employers' boards of directors, and such termination constitutes a Retirement,
all Options outstanding to such holder on the date of his Retirement shall, to the extent not already exercisable, become exercisable upon Retirement; and (b) in the event of a Change in Control, all Options outstanding under the Plan on the date of the Change in Control shall, to the extent not already exercisable, become exercisable on the date of the Change in Control.

 

Section 9.2                      Discretion to Establish Vesting Schedules.

 

Notwithstanding anything in the Plan to the contrary, but subject to section 9.3, section 5.5(b) shall apply in determining the exercisability of Options granted to Eligible Employees only if no different vesting schedule is established by the Committee and specified in the agreement evidencing an outstanding Option.

 

Section 9.3                      No Effect Prior to Shareholder Approval.

 

Notwithstanding anything contained in this Article IX to the contrary, the provisions of this Article IX shall not be applied, and shall be of no force or effect, unless and until the shareholders of the Company shall have approved such provisions by affirmative vote of the holders of a majority of the Shares represented in person or by
proxy and entitled to vote at a meeting of shareholders duly called and held after October 16, 2002.

 

 

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