Exhibit 10
HERITAGE COMMUNITY BANK SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is adopted this 17th
day of February, 2006, by and between HERITAGE COMMUNITY BANK, a South Carolina
corporation located in Hartsville, South Carolina (the "Bank") and XXXXXX X.
XXXXX (the "Executive").
The purpose of this Agreement is to provide specified benefits to
Executive, a member of a select group of management or highly compensated
employees who contribute materially to the continued growth, development, and
future business success of the Bank. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended from time to time.
Article 1 Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Accrual Balance" means the liability that should be accrued by the Bank,
under Generally Accepted Accounting Principles ("GAAP"), for the Bank's
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion Number 12 ("APB 12") as amended by Statement of
Financial Accounting Standards Number 106 ("FAS 106") and the Discount Rate. Any
one of a variety of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently applied. The
Accrual Balance shall be reported annually by the Bank to the Executive.
1.2 "Beneficiary" means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive
determined pursuant to Article 4.
1.3 "Beneficiary Designation Form" means the form established from time to time
by the Plan Administrator that the Executive completes, signs, and returns to
the Plan Administrator to designate one or more Beneficiaries.
1.4 "Board" means the Board of Directors of the Bank as from time to time
constituted.
1.5 "Change in Control" has the meaning set forth in the Employment Agreement.
(i) Upon the consummation of any transaction in which any person (or
persons acting in concert), partnership, financial institution,
corporation, or other organization shall own, control, or hold with the
power to vote more than fifty percent (50%) of any class of voting
securities of the Bank;
(ii) Upon the consummation of any transaction in which the Bank, or
substantially all of the assets of the Bank, shall be sold or transferred
to, or consolidated or merged with, another financial institution,
corporation or other organization; provided, however, if the Bank shall
become a subsidiary of a bank holding company, corporation, or other
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organization, or shall be merged or consolidated into another financial
institution, corporation, or other organization and a majority of the
outstanding voting shares of the parent or surviving corporation are owned
immediately after such acquisition, merger, or consolidation by the owners
of a majority of the outstanding shares of the Bank immediately before such
acquisition, merger, or consolidation, then no Change of Control shall be
deemed to have occurred.
1.6 "Code" means the Internal Revenue Code of 1986, as amended.
1.7 "Disability" means Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of the Bank. Medical determination of Disability may be made
by either the Social Security Administration or by the provider of an accident
or health plan covering employees of the Bank. Upon the request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator of
Social Security Administration's or the provider's determination.
1.8 "Discount Rate" means the rate used by the Plan Administrator for
determining the Accrual Balance. The initial Discount Rate is six percent (6%).
However, the Plan Administrator, in its discretion, may adjust the Discount Rate
to maintain the rate within reasonable standards according to GAAP and/or
applicable bank regulatory guidance.
1.9 "Early Termination" means Separation from Service before Normal Retirement
Age except when such Separation from Service occurs:
(i) following a Change in Control; or
(ii) due to death, Disability, or Termination for Cause.
1.10 "Effective Date" means February 17, 2006.
1.11 "Employment Agreement" means the Employment Agreement between the Executive
and the Bank dated September 27, 1999, and any subsequent amendments.
1.12 "Final Pay" means the Executive's highest annualized base salary (before
reduction for compensation deferred pursuant to all qualified, non-qualified,
and Code Section 125 plans) from the five (5) years prior to Separation from
Service, including the year such Separation from Service occurs.
1.13 "Normal Retirement Age" means the Executive attaining age sixty-five (65).
1.14 "Normal Retirement Date" means the later of Normal Retirement Age or
Separation from Service.
1.15 "Plan Administrator" means the plan administrator described in Article 6.
1.16 "Plan Year" means each twelve-month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall commence on the
Effective Date of this Plan and end on the following December 31.
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1.17 "Projected Benefit" means thirty-five percent (35%) of Projected Final Pay.
1.18 "Projected Final Pay" means Final Pay increased four percent (4%) annually,
until Normal Retirement Age.
1.19 "Separation from Service" means the termination of the Executive's
employment with the Bank for reasons other than death or Disability. Whether a
Separation from Service takes place is determined based on the facts and
circumstances surrounding the termination of the Executive's employment and
whether the Bank and the Executive intended for the Executive to provide
significant services for the Bank following such termination. A termination of
employment will not be considered a Separation from Service if:
(a) the Executive continues to provide services as an employee of the Bank
at an annual rate that is twenty percent (20%) or more of the services
rendered, on average, during the immediately preceding three full calendar
years of employment (or, if employed less than three years, such lesser
period) and the annual remuneration for such services is twenty percent
(20%) or more of the average annual remuneration earned during the final
three full calendar years of employment (or, if less, such lesser period),
or
(b) the Executive continues to provide services to the Bank in a capacity
other than as an employee of the Bank at an annual rate that is fifty
percent (50%) or more of the services rendered, on average, during the
immediately preceding three full calendar years of employment (or if
employed less than three years, such lesser period) and the annual
remuneration for such services is fifty percent (50%) or more of the
average annual remuneration earned during the final three full calendar
years of employment (or if less, such lesser period).
1.20 "Specified Employee" means a key employee (as defined in Section 416(i) of
the Code without regard to paragraph 5 thereof) of the Bank if any stock of the
Bank is publicly traded on an established securities market or otherwise.
1.21 "Termination for Cause" has the meaning set forth in the Employment
Agreement.
(a)Termination for Cause.
Executive shall have no right to compensation or other benefits for any
period after a Termination for Cause. Termination for Cause shall be
determined by the Board of Directors of the Bank in the reasonable exercise
of their discretion and acting in good faith, and shall include termination
because of Executive's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duties involving personal profit,
intentional failure to perform stated duties, willful violation of any law,
rule, or regulation (other than traffic violations or similar offenses), or
a final cease-and-desist order, the regulatory suspension or removal of
Executive as defined in paragraphs 8(a) and (b) hereof, the failure of
Executive to follow reasonable written instructions of the Board of
Directors of the Bank, or a material breach by Executive of any provision
of this Agreement. The termination of employment of Executive shall not be
deemed to be a Termination for Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of
the Board of Directors of the Bank at a meeting of the Board called and
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held for such purpose (after at least thirty (30) days' prior notice of
such meeting is provided to Executive and Executive is given an
opportunity, together with counsel, to be heard before the Board of
Directors), finding that, in the good faith opinion of the Board of
Directors, Executive is guilty of the conduct described herein and
specifying the particulars thereof in detail. Said Termination for Cause
shall not be effective until thirty (30) days after such resolution is
adopted, during which time Executive shall be afforded the opportunity to
petition the Board of Directors for reconsideration of such resolution. The
Board of Directors of the Bank, in its discretion, may suspend Executive,
with pay, for all or any portion of the period of time from the delivery of
the notice described herein until the effective time of the Termination for
Cause.
Article 2 Distributions During Lifetime
2.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in lieu of
any other benefit under this Article.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
thirty-five percent (35%) of Final Pay.
2.1.2 Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on
the first day of the month following the Normal Retirement Date. The annual
benefit shall be distributed to the Executive for fifteen (15) years.
2.2 Early Termination Benefit. Upon Early Termination, the Bank shall distribute
to the Executive the benefit described in this Section 2.2 in lieu of any other
benefit under this Article.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the end
of the Plan Year preceding Separation from Service. Interest will be
applied to the Accrual Balance at the Discount Rate, compounded monthly,
from Separation from Service to the Executive's Normal Retirement Age.
2.2.2 Distribution of Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) equal monthly installments commencing
on the first day of the month following Normal Retirement Age. During the
applicable installment period, interest will be applied to the Accrual
Balance at the Discount Rate, compounded monthly.
2.3 Disability Benefit. If Executive experiences a Disability which results in a
Separation from Service prior to Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.3 in lieu of
any other benefit under this Article.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the Plan
Year preceding Separation from Service. Interest will be applied to the
Accrual Balance at the Discount Rate, compounded monthly, from Separation
from Service to the Executive's Normal Retirement Age.
2.3.2 Distribution of Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) equal monthly installments commencing
on the first day of the month following Normal Retirement Age. During the
applicable installment period, interest will be applied to the Accrual
Balance at the Discount Rate, compounded monthly.
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2.4 Change in Control Benefit. Upon a Change in Control, followed by a
Separation from Service, the Bank shall distribute to the Executive the benefit
described in this Section 2.4 in lieu of any other benefit under this Article.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
Projected Benefit.
2.4.2 Distribution of Benefit. The Bank shall distribute the annual benefit
to the Executive in twelve (12) equal monthly installments commencing on
the first day of the month following Normal Retirement Age. The annual
benefit shall be distributed to the Executive for fifteen (15) years.
2.5 Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee
at Separation from Service under such procedures as established by the Bank in
accordance with Section 409A of the Code, benefit distributions that are made
upon Separation from Service may not commence earlier than six (6) months after
the date of such Separation from Service. Therefore, in the event this Section
2.6 is applicable to the Executive, any payment or series of payments to be made
due to a Separation from Service shall commence no earlier that the first day of
the seventh month following the Separation from Service.
2.6 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any portion of the Accrual Balance into the Executive`s income as a
result of the failure of this non-qualified deferred compensation plan to comply
with the requirements of Section 409A of the Code, to the extent such tax
liability can be covered by the participant's vested Accrual Balance, a
distribution shall be made as soon as is administratively practicable following
the discovery of the plan failure.
Article 3 Distribution at Death
3.1 Death During Active Service. If the Executive dies while in the active
service of the Bank, the Bank shall distribute to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be distributed in lieu of the
benefits under Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the
Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 Distribution of Benefit. The Bank shall distribute the annual benefit
to the Beneficiary in twelve (12) equal monthly installments for fifteen
(15) years commencing within thirty (30) days following receipt by the Bank
of the Executive's death certificate.
3.2 Death During Distribution of a Benefit. If the Executive dies after any
benefit distributions have commenced under this Agreement but before receiving
all such distributions, the Bank shall distribute to the Beneficiary the
remaining benefits at the same time and in the same amounts they would have been
distributed to the Executive had the Executive survived.
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3.3 Death After Separation from Service But Before Benefit Distributions
Commence. If the Executive is entitled to benefit distributions under this
Agreement, but dies prior to the commencement of said benefit distributions, the
Bank shall distribute to the Beneficiary the same benefits that the Executive
was entitled to prior to death except that the benefit distributions shall
commence within thirty (30) days following receipt by the Bank of the
Executive's death certificate.
Article 4 Beneficiaries
4.1 Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefit distributions under this Agreement upon
the death of the Executive. The Beneficiary designated under this Agreement may
be the same as or different from the beneficiary designation under any other
plan of the Bank in which the Executive participates.
4.2 Beneficiary Designation: Change. The Executive shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent. The Executive's beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator's rules and procedures,
as in effect from time to time. Upon the acceptance by the Plan Administrator of
a new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be entitled to rely on
the last Beneficiary Designation Form filed by the Executive and accepted by the
Plan Administrator prior to the Executive's death.
4.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by the
Plan Administrator or its designated agent.
4.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive's spouse shall be the designated Beneficiary. If
the Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executive's estate.
4.5 Facility of Distribution. If the Plan Administrator determines in its
discretion that a benefit is to be distributed to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person's property, the Plan Administrator may direct distribution of such
benefit to the guardian, legal representative or person having the care or
custody of such minor, incompetent person or incapable person. The Plan
Administrator may require proof of incompetence, minority or guardianship as it
may deem appropriate prior to distribution of the benefit. Any distribution of a
benefit shall be a distribution for the account of the Executive and the
Executive's Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.
Article 5 General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this Agreement to
the contrary, the Bank shall not distribute any benefit under this Agreement if
Executive's employment with the Bank is terminated due to a Termination for
Cause.
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5.2 Suicide or Misstatement. No benefits shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage: (i) for material misstatements
of fact made by the Executive on an application for such life insurance; or (ii)
for any other reason.
5.3 Removal. Notwithstanding any provision of this Agreement to the contrary,
the Bank shall not distribute any benefit under this Agreement if the Executive
is subject to a final removal or prohibition order issued by an appropriate
federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
Act.
5.4 Forfeiture Provision. The Executive shall forfeit any non-distributed
benefits under this Agreement if during the term of this Agreement and within
twelve (12) months following a Separation from Service, the Executive, directly
or indirectly, either as an individual or as a proprietor, stockholder, partner,
officer, director, employee, agent, consultant or independent contractor of any
individual, partnership, corporation or other entity (excluding an ownership
interest of three percent (3%) or less in the stock of a publicly-traded
company):
(i) becomes employed by, participates in, or becomes connected in any
manner with the ownership, management, operation or control of any bank,
savings and loan or other similar financial institution if the Executive's
responsibilities will include providing banking or other financial services
within the twenty-five (25) miles of any office maintained by the Bank as
of the date of the termination of the Executive's employment;
(ii) participates in any way in hiring or otherwise engaging, or assisting
any other person or entity in hiring or otherwise engaging, on a temporary,
part-time or permanent basis, any individual who was employed by the Bank
as of the date of termination of the Executive's employment;
(iii) assists, advises, or serves in any capacity, representative or
otherwise, any third party in any action against the Bank or transaction
involving the Bank;
(iv) sells, offers to sell, provides banking or other financial services,
assists any other person in selling or providing banking or other financial
services, or solicits or otherwise competes for, either directly or
indirectly, any orders, contract, or accounts for services of a kind or
nature like or substantially similar to the financial services performed or
financial products sold by the Bank (the preceding hereinafter referred to
as "Services"), to or from any person or entity from whom the Executive or
the Bank, to the knowledge of the Executive provided banking or other
financial services, sold, offered to sell or solicited orders, contracts or
accounts for Services during the three (3) year period immediately prior to
the termination of the Executive's employment;
(v) divulges, discloses, or communicates to others in any manner
whatsoever, any confidential information of the Bank, to the knowledge of
the Executive, including, but not limited to, the names and addresses of
customers or prospective customers, of the Bank, as they may have existed
from time to time, of work performed or services rendered for any customer,
any method and/or procedures relating to projects or other work developed
for the Bank, earnings or other information concerning the Bank. The
restrictions contained in this subparagraph (v) apply to all information
regarding the Bank, regardless of the source who provided or compiled such
information. Notwithstanding anything to the contrary, all information
referred to herein shall not be disclosed unless and until it becomes known
to the general public from sources other than the Executive.
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5.5 Change in Control. The forfeiture provision detailed in Section 5.4 hereof
shall not be enforceable following a Change in Control.
Article 6 Administration of Agreement
6.1 Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint. The Plan Administrator shall administer this
Agreement according to its express terms and shall also have the discretion and
authority to
(i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and
(ii) decide or resolve any and all questions including interpretations of
this Agreement, as may arise in connection with the Agreement to the extent
the exercise of such discretion and authority does not conflict with
Section 409A of the Code and regulations thereunder.
6.2 Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.
6.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.
6.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless
the members of the Plan Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.
6.5 Bank Information. To enable the Plan Administrator to perform its functions,
the Bank shall supply full and timely information to the Plan Administrator on
all matters relating to the date and circumstances of the retirement,
Disability, death, or Separation from Service of the Executive and such other
pertinent information as the Plan Administrator may reasonably require.
6.6 Annual Statement. The Plan Administrator shall provide to the Executive,
within one hundred twenty (120) days after the end of each Plan Year, a
statement setting forth the benefits to be distributed under this Agreement.
Article 7 Claims And Review Procedures
7.1 Claims Procedure. An Executive or Beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be
distributed shall make a claim for such benefits as follows:
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7.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Plan Administrator a written claim for the benefits. If
such a claim relates to the contents of a notice received by the claimant,
the claim must be made within sixty (60) days after such notice was
received by the claimant. All other claims must be made within one hundred
eighty (180) days of the date on which the event that caused the claim to
arise occurred. The claim must state with particularity the determination
desired by the claimant.
7.1.2 Timing of Plan Administrator Response. The Plan Administrator shall
respond to such claimant within 90 days after receiving the claim. If the
Plan Administrator determines that special circumstances require additional
time for processing the claim, the Plan Administrator can extend the
response period by an additional 90 days by notifying the claimant in
writing, prior to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to
render its decision.
7.1.3 Notice of Decision. If the Plan Administrator denies part or all of
the claim, the Plan Administrator shall notify the claimant in writing of
such denial. The Plan Administrator shall write the notification in a
manner calculated to be understood by the claimant. The notification shall
set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on which
the denial is based;
(c) A description of any additional information or material necessary
for the claimant to perfect the claim and an explanation of why it is
needed;
(d) An explanation of the Agreement's review procedures and the time
limits applicable to such procedures; and
(e) A statement of the claimant's right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on
review.
7.2 Review Procedure. If the Plan Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:
7.2.1 Initiation - Written Request. To initiate the review, the claimant,
within 60 days after receiving the Plan Administrator's notice of denial,
must file with the Plan Administrator a written request for review.
7.2.2 Additional Submissions - Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and
other information relating to the claim. The Plan Administrator shall also
provide the claimant, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the claimant's claim for
benefits.
7.2.3 Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
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7.2.4 Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within 60 days after receiving the
request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional 60 days by
notifying the claimant in writing, prior to the end of the initial 60- day
period, that an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the Plan
Administrator expects to render its decision.
7.2.5 Notice of Decision. The Plan Administrator shall notify the claimant
in writing of its decision on review. The Plan Administrator shall write
the notification in a manner calculated to be understood by the claimant.
The notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on which
the denial is based;
(c) A statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in
applicable ERISA regulations) to the claimant's claim for benefits;
and
(d) A statement of the claimant's right to bring a civil action under
ERISA Section 502(a).
Article 8 Amendments and Termination
8.1 Amendments. This Agreement may be amended only by a written agreement signed
by the Bank and the Executive. However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its auditors or
banking regulators or to comply with legislative or tax law, including without
limitation Section 409A of the Code and any and all regulations and guidance
promulgated thereunder.
8.2 Plan Termination Generally. The Bank may unilaterally terminate this
Agreement at any time. The benefit shall be the Accrual Balance as of the date
the Agreement is terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, upon such termination benefit distributions will be made at
the earliest distribution event permitted under Article 2 or Article 3
8.3 Plan Terminations Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, the Bank may make distributions in the following
circumstances, in accordance with Section 409A of the Code or the regulations
thereunder:
(a) Within thirty (30) days before, or twelve (12) months after a Change in
Control, provided that all distributions are made no later than twelve (12)
months following such termination of the Agreement and provided that all
the Bank's arrangements which are substantially similar to the Agreement
are terminated so the Executive and all participants in the similar
arrangements are required to receive all amounts of compensation deferred
under the terminated arrangements within twelve (12) months of the
termination of the arrangements;
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(b) Upon the Bank's dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of: (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the payment is administratively practical; or
(c) Upon the Bank's termination of this and all other non-account balance
plans (as referenced in Section 409A of the Code or the regulations
thereunder), provided that all distributions are made no earlier than
twelve (12) months and no later than twenty-four (24) months following such
termination, and the Bank does not adopt any new non- account balance plans
for a minimum of five (5) years following the date of such termination; the
Bank may distribute the Deferral Account balance, determined as of the date
of the termination of the Agreement to the Executive, in a lump sum subject
to the above terms.
Article 9 Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Executive and the Bank, and
their beneficiaries, survivors, executors, administrators and transferees.
9.2 No Guarantee of Employment. This Agreement is not a contract for employment.
It does not give the Executive the right to remain as an employee of the Bank,
nor does it interfere with the Bank's right to discharge the Executive. It also
does not require the Executive to remain an employee nor interfere with the
Executive's right to terminate employment at any time.
9.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.4 Tax Withholding and Reporting. The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under Section
409A of the Code and regulations thereunder, from the benefits provided under
this Agreement. Executive acknowledges that the Bank's sole liability regarding
taxes is to forward any amounts withheld to the appropriate taxing
authority(ies). Further, the Bank shall satisfy all applicable reporting
requirements, including those under Section 409A of the Code and regulations
thereunder.
9.5 Applicable Law. The Agreement and all rights hereunder shall be governed by
the laws of the State of South Carolina, except to the extent preempted by the
laws of the United States of America.
9.6 Unfunded Arrangement. The Executive and the Beneficiary are general
unsecured creditors of the Bank for the distribution of benefits under this
Agreement. The benefits represent the mere promise by the Bank to distribute
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
or other informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured claim.
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9.7 Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Bank under this Agreement.
Upon the occurrence of such event, the term "Bank" as used in this Agreement
shall be deemed to refer to the successor or survivor bank.
9.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
9.9 Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.
9.10 Alternative Action. In the event it shall become impossible for the Bank or
the Plan Administrator to perform any act required by this Agreement, the Bank
or Plan Administrator may in its discretion perform such alternative act as most
nearly carries out the intent and purpose of this Agreement and is in the best
interests of the Bank.
9.11 Headings. Article and section headings are for convenient reference only
and shall not control or affect the meaning or construction of any of its
provisions.
9.12 Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal and invalid provision has never been inserted herein.
9.13 Notice. Any notice or filing required or permitted to be given to the Bank
or Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to the Executive
under this Agreement shall be sufficient if in writing and hand-delivered,
or sent by mail, to the last known address of the Executive .
9.14 Compliance with Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and all
regulations thereunder, including such regulations as may be promulgated after
the Effective Date of this Agreement.
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9.15 Rescissions. Any modification to the terms of this Agreement that would
inadvertently result in an additional tax liability on the part of the
Executive, shall have no effect to the extent the change in the terms of the
plan is rescinded by the earlier of a date before the right is exercised (if the
change grants a discretionary right) and the last day of the calendar year
during which such change occurred.
IN WITNESS WHEREOF, the Executive and a duly authorized representative of
the Bank have signed this Agreement.
[SIGNATURES OMITTED]
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