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EXHIBIT 10.26
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FIRST CHARTER CORPORATION
1994 DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1. PURPOSE; DEFINITIONS
The Plan is intended to afford any or all non-employee directors of the
Company and of any Subsidiary the option to defer the receipt of all or part of
their Director's Fees until such future date as they may elect pursuant to the
terms and conditions of the Plan.
For purposes of the Plan, the following terms are defined as set forth
below:
a. "Allocation Date" means any date on which an amount
representing all or a part of a Participant's
Director's Fees is to be credited to his or her Cash
Account or Stock Account pursuant to an effective
deferral election. The Allocation Date for
Director's Fees shall be the last day of the month
in which the meeting to which such Director's Fees
relate is held.
b. "Beneficiary" means any person or entity designated
as such in a current Election Form. If there is no
valid designation or if no designated Beneficiary
survives the Participant, the Beneficiary is the
Participant's estate.
c. "Board" means the Board of Directors of the Company
and the Board of Directors of each Subsidiary.
d. "Cash Account" means an unfunded deferred
compensation account established by the Company for a
Participant in accordance with Section 3.2.1.
e. "Common Stock" means the common stock, $5.00 par
value, of the Company.
f. "Company" means First Charter Corporation, a
corporation organized under the laws of the State of
North Carolina, or any successor corporation.
g. "Deferred Amount" means the amount (determined as a
percentage of the Director's Fees) subject to a
current deferral election, as evidenced by an
Election Form.
h. "Director's Fees" means any retainer paid to a
Participant for serving as a member of the Board and
any fees paid to a Participant for attending meetings
of the Board or any committee thereof.
i. "Disability" means permanent and total disability as
determined under procedures established by the Board
for purposes of the Plan.
j. "Distribution Date" means the date designated by a
Participant in accordance with Sections 3.3.1 and
3.3.2 for the commencement of payment of amounts
credited to his or her Cash Account or Stock Account,
as the case may be.
k. "Election Date" means the date an Election Form is
received by the Secretary of the Company.
l. "Election Form" means a valid Deferred Fee Election
Form in the form attached hereto as Exhibit A
properly completed and signed.
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m. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
rules and regulations thereunder.
n. "Exchange Act" means the Securities Exchange Act of
1934, as amended.
o. "Fair Market Value" means, as of any given date, the
average of the highest and lowest reported sales
prices of the Common Stock as reported on a national
securities exchange or quoted on the NASDAQ National
Market System; or if the Common Stock is not listed
on a national securities exchange or quoted on the
NASDAQ National Market System, the average of the
closing bid and asked prices for the Common Stock as
reported by the NASDAQ Stock Market; or if the Common
Stock is not listed on a national securities exchange
or quoted on the NASDAQ National Market System or
reported in the NASDAQ Stock Market, the fair value
thereof determined in good faith by the Board of
Directors of the Company.
p. "Participant" means a member of the Board who
satisfies the requirements of Section 2. A
Participant shall also include a person who ceases to
be a member of the Board after the effective date of
the Plan as long as a Cash Account or a Stock Account
is being maintained for his or her benefit.
q. "Plan" means the First Charter Corporation 1994
Deferred Compensation Plan for Non-Employee
Directors.
r. "Stock Account" means an unfunded deferred
compensation account established by the Company for a
Participant in accordance with Section 3.2.2.
s. "Subsidiary" or "Subsidiaries" means First Charter
National Bank and any other wholly-owned subsidiary
of the Company.
SECTION 2. ELIGIBILITY
Each member of the Board who is not a full-time employee of the Company
or a Subsidiary shall be eligible to participate in the Plan.
SECTION 3. DEFERRED FEE PROGRAM
3.1 Participation
3.1.1 Deferral Elections
A Participant may make a deferral election with
respect to all or a part of his or her Director's Fees to be
earned and payable thereafter by completing and executing an
Election Form and submitting it to the Secretary of the
Company. Any deferral election shall be in integral multiples
of twenty-five percent (25%) of the Director's Fees. Each
Participant shall indicate on his or her Election Form
(whether the initial Election Form or a modified Election Form
pursuant to Section 3.1.2 hereof) whether such Participant's
Deferred Amount is to be allocated to the Participant's Cash
Account or Stock Account. A Participant's Deferred Amount may
not be apportioned among the Cash Account and the Stock
Account; however, a Participant may change his or her
investment election in accordance with Section 3.1.2 hereof.
In addition to indicating the investment election,
the Participant shall indicate on his or her Election Form:
a. the percentage of the Director's Fees that
he or she wishes to defer;
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b. the Distribution Date;
c. whether distributions are to be in a lump
sum, in installments or a combination
thereof; and
d. the Participant's Beneficiaries.
A deferral election (including the investment
election) shall become effective with respect to a
Participant's Director's Fees accruing on and after the first
day of the calendar month following the Election Date. A
deferral election (including the investment election) shall be
irrevocable and shall remain in effect with respect to all
future Director's Fees until a new irrevocable deferral
election (including the investment election) made by the
Participant in accordance with Section 3.1.2 or Section 3.1.3
becomes effective.
A Participant (or a Beneficiary (after the death of
the Participant)) may not make transfers between his or her
Cash Account and Stock Account.
3.1.2 Deferral Election Modifications
A Participant may modify his or her deferral election with
respect to Director's Fees to be earned and payable thereafter by completing and
executing an additional Election Form (which shall replace the prior Election
Form) and submitting it to the Secretary of the Company. An election to increase
or decrease the amount of future Director's Fees to be deferred shall become
effective with respect to a Participant's Director's Fees accruing on and after
the first day of the calendar month following the new Election Date. Any amount
credited to a Participant's Cash Account or Stock Account, as the case may be,
prior to such effective date will continue to be subject to the provisions of
the Participant's previously valid Election Form.
3.1.3 Cessation of Deferrals
A Participant may cease to defer future Director's
Fees by completing and executing an additional Election Form
(which shall replace the prior Election Form) and submitting
it to the Secretary of the Company. An election by a
Participant to cease deferrals of his or her Director's Fees
shall become effective with respect to Director's Fees
accruing on or after the first day of the calendar month
following the new Election Date. Any amounts credited to a
Participant's Cash Account or Stock Account, as the case may
be, prior to such effective date will continue to be subject
to the provisions of the Participant's previously valid
Election Form.
3.1.4 Beneficiary Election Modification
A Participant shall be permitted at any time to modify his or
her Beneficiary election by completing and executing an additional Election Form
(which shall replace the prior Election Form) and submitting it to the Secretary
of the Company. Such Beneficiary modification shall be effective as of the new
Election Date.
3.2 Accounts
The Company shall establish a Cash Account and a Stock
Account, as applicable, for each Participant and for each Beneficiary to whom
installment distributions are being made.
3.2.1 Cash Accounts
The Cash Account shall be a bookkeeping account whose value is
based on the dollar amount of any Deferred Amounts allocated to such Cash
Account. On each Allocation Date, for each
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Participant who has elected to have Deferred Amounts invested in his or her Cash
Account, the Company shall credit such Cash Account with an amount equal to such
Deferred Amount. Interest shall be credited to such Cash Account as of the end
of each calendar month, at an annual rate equal to First Charter National Bank
Prime Rate in effect from time to time, based on the bookkeeping balance of the
Cash Account throughout the month.
3.2.2 Stock Accounts
The Stock Account shall be a bookkeeping account whose value
shall be based on the value of shares of Common Stock. On each Allocation Date,
for each Participant who has elected to have Deferred Amounts invested in his or
her Stock Account, the Company shall credit such Stock Account with units
equivalent to shares of Common Stock in an amount equal to the quotient of (1)
the Deferred Amount so allocated divided by (2) the Fair Market Value of the
Common Stock on the Allocation Date. Additional units equivalent to shares of
Common Stock shall be credited to such Stock Account as of each payment date for
dividends on the Common Stock in an amount equal to the quotient of (1) the
product of the number of units credited to the Stock Account on the record date
for such dividends and the dividend rate per share divided by (2) the Fair
Market Value of the Common Stock on the dividend payment date.
3.3 Distributions
3.3.1 Distribution Elections
Each Participant shall designate on his or her
Election Form (whether an initial Election Form or a modified
Election Form) one of the following dates as a Distribution
Date with respect to amounts credited to his or her Cash
Account or Stock Account, as the case may be, thereafter:
a. the first day of the calendar month
following the date of the Participant's
death;
b. the first day of the calendar month
following the date of the Participant's
Disability;
c. the first day of the calendar month
following the date of termination of the
Participant's service as a member of the
Board;
d. the first day of a calendar month specified
by the Participant which is at least six
months after the Election Date;
e. the earliest to occur of a, b, c or d;
f. the earliest to occur of a, b or c; or
g. the earliest to occur of a, b or d.
A Distribution Date election shall become effective
on the Election Date. A Participant may request on his or her
Election Form that distributions from his or her Cash Account
or Stock Account, as the case may be (referred to in this
Section 3.3.1 as the "Account"), be made in (i) a lump sum,
(ii) no more than one-hundred eighty (180) monthly or sixty
(60) quarterly installments or (iii) a combination of (i) and
(ii). Each installment shall be determined by dividing the
Account balance by the number of remaining installments. If a
Participant receives a distribution from his or her Account on
an installment basis, amounts remaining in such Account before
payment shall continue to be credited with earnings in
accordance with the terms of Section 3.2. Except as
hereinafter described, all distributions shall be made to the
Participant.
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If the Distribution Date is the first day of the
month following the Participant's death or a fixed date which
in fact occurs after the Participant's death or if at the time
of death the Participant was receiving distributions in
installments, the balance remaining in the Participant's
Account shall be payable to his or her Beneficiaries as set
forth on the Participant's current Election Form. All
distributions to Beneficiaries shall be in a lump sum, without
interest, except when the Distribution Date is the first day
of the month following the Participant's death and the
Participant's current Election Form specifies installment
payments. Upon the death of a Beneficiary who is receiving
distributions in installments, the balance remaining in the
Account of the Beneficiary shall be payable to his or her
estate without interest.
All distributions shall be paid in cash. Units
credited to a Participant's Stock Account shall be paid in
cash equal to the aggregate Fair Market Value of the shares of
Common Stock represented by such Units as of three (3)
business days prior to the Distribution Date.
3.3.2 Modified Distribution Elections
A Participant may not modify his or her election as
to Distribution Date or distribution form with respect to
Director's Fees previously earned and deferred hereunder. In
the event a Participant modifies his or her deferral election
in accordance with Section 3.1.2 hereof with respect to
Director's Fees to be earned and payable thereafter, such
Participant may modify the Distribution Date and distribution
form on such new Election Form.
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SECTION 4. GENERAL PROVISIONS
4.1 Unfunded Plan
It is intended that the Plan constitute an "unfunded" plan for
deferred compensation. The Company may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan,
provided that, unless the Company otherwise determines, the existence
of such trusts or other arrangements is consistent with the "unfunded"
status of the Plan. Any assets set aside shall remain in the name of
the Company. Any liability of the Company to any person with respect to
any grant under the Plan shall be based solely upon any contractual
obligations that may be created pursuant to the Plan, and any payments
under the Plan shall be made from the general assets of the Company. No
such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.
4.2 Changes in Capitalization
In the event of any merger, share exchange, reorganization,
consolidation, recapitalization, stock dividend, stock split or other
change in corporate structure affecting the Common Stock, appropriate
substitutions or adjustments shall be made to each Participant's Stock
Account, such that such Participant's Stock Account immediately
subsequent to such event shall have an aggregate balance of units equal
to such number of shares of Common Stock (or other property for which
the Common Stock of the Company shall have been exchanged) as such
Participant would have owned after such event if such Participant had
owned directly, immediately prior to such event, that number of shares
of Common Stock for which units were credited to his or her Stock
Account at that time.
4.3 Administration
The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Company. Such Administrator shall have
the authority and responsibility to administer and interpret this Plan.
Benefits due and owing to a Participant or Beneficiary under the Plan
shall be paid when due without any requirement that a claim for
benefits be filed. However, any Participant or Beneficiary who has not
received the benefits to which he or she believes himself or herself
entitled may file a written claim with the Administrator, who shall act
on the claim within thirty days. Any action on any such claims shall be
conclusive.
4.4 Rules of Construction
Headings are given to the sections of the Plan solely as a
convenience to facilitate reference. The reference to any statute,
regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
4.5 Withholding
No later than the date as of which an amount first becomes
includible in the gross income of the Participant for Federal income
tax purposes with respect to any participation under the Plan, the
Participant shall pay to the Company, or make arrangements satisfactory
to the Company regarding the payment of, any Federal, state, local or
foreign taxes of any kind required by law to be withheld with respect
to such amount.
4.6 Amendment
The Plan may be amended by the Board, but no amendment shall
be made that would impair the rights of a Participant to his or her
Cash Account and/or Stock Account without his or her consent.
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4.7 Duration of Plan
The Board may terminate the Plan at any time, by appropriate
action. Upon termination of the Plan, amounts then credited to each
Cash Account and each Stock Account shall be paid in accordance with
the Distribution Election then governing such Account or as otherwise
provided in Section 3.3.1.
4.8 Effective Date of Plan
The Plan will become effective on July 20, 1994, the date of
approval by the Board of Directors of the Company.
4.9 Assignability
No Participant or Beneficiary shall have the right to assign,
pledge or otherwise transfer any payments to which such Participant or
Beneficiary may be entitled under the Plan other than by will or by the
laws of descent and distribution or pursuant to a "qualified domestic
relations order" (as defined by Title I or ERISA.
4.10 Binding Effect
The provisions of this Plan shall be binding upon the
successors and assigns of the Company.
4.11 Governing Law
The Plan shall be construed and interpreted in accordance with
North Carolina law.
FIRST CHARTER CORPORATION
By:_______________________________
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EXHIBIT A
DEFERRED FEE ELECTION FORM
This Agreement between First Charter Corporation (the "Company") and
____________________ (the "Participant") is made this _____ day of
_______________, 19__ (the "Election Date"), under the First Charter Corporation
1994 Deferred Compensation Plan for Non-Employee Directors.
NOTE: Please indicate here whether this Election Form reflects an
initial deferral election, a modification of a prior deferral
election or the cessation of a deferral election
( ) Initial ( ) Modification of ( ) Cessation of
Deferral Deferral Deferral
Election Election Election
1. DEFERRED FEE PLAN. The Participant agrees to the terms and conditions of the
First Charter Corporation 1994 Deferred Compensation Plan for Non-Employee
Directors, a copy of which has been delivered to the Participant and constitutes
a part of this Agreement. Capitalized words and phrases in this Agreement shall
have the meaning given to them in the Plan, unless the context clearly indicates
otherwise.
2. ELECTION TO DEFER FEES. The Participant authorizes and directs the Company to
defer $_______, or ______% (in integral multiples of 25%), of the Director's
Fees earned on and after ________, 19__ and in each subsequent year. The
Participant may modify or revoke this election on a prospective basis for future
calendar years in accordance with the provisions of the Plan by delivering to
the Secretary of the Company a written revocation of the election.
3. ACCOUNT. The Participant elects to have his or her Director's Fees deferred
hereunder allocated to either the Cash Account or the Stock Account, as follows:
( ) Cash Account
( ) Stock Account
NOTE: All Director's Fees deferred hereunder must be allocated to only one
account.
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4. DISTRIBUTION DATE. The Participant elects to receive, or commence
receipt of, payment of his or her deferred Director's Fees as follows (check
one):
( ) 1. The first day of the calendar month following the
date of the Participant's death.
( ) 2. The first day of the calendar month following the
date of the Participant's Disability.
( ) 3. The first day of the calendar month following the
date of termination of the Participant's service as a
member of the Board.
( ) 4. The first day of the following calendar month (which
must be at least six months after the date hereof):
( ) 5. The earliest to occur of the events specified in 1,
2, 3 or 4 above (if choosing this option, please fill
in calendar month in 4 above).
( ) 6. The earliest to occur of the events specified in 1, 2
or 3 above.
( ) 7. The earliest to occur of the events specified in 1, 2
or 4 above (if choosing this option, please fill in
calendar month in 4 above).
5. FORM OF PAYMENT.
The Participant elects to receive the amount of Deferred Fees credited
to his or her Cash Account or Stock Account, as the case may be, in (check one):
( ) a lump sum; or
( ) substantially equal installments as follows:
_____ 180 monthly installments
_____ 60 quarterly installments
( ) combination ______________________________________
6. BENEFICIARY DESIGNATION. The Participant requests that, upon his or
her death, any amounts remaining in his or her Cash Account or Stock Account, as
the case may be, be paid to the Beneficiary or Beneficiaries he or she has
designated below:
___________________________________
___________________________________
Name(s) of Beneficiary(ies)
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IN WITNESS WHEREOF, the Participant has executed this Agreement on the
day and year written above.
____________________________(SEAL)
Participant