Exhibit 10.4
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
EXECUTIVE AGREEMENT
THIS AGREEMENT is made and entered into this 11th day of September,
2001, by and between GrandSouth Bank, a bank organized and existing under the
laws of the State of South Carolina (hereinafter referred to as the "Bank"), and
Xxxxxx X. Xxxxxxx, an Executive of the Bank (hereinafter referred to as the
"Executive").
WHEREAS, the Executive is now in the employ of the Bank and has for
many years faithfully served the Bank. It is the consensus of the Board of
Directors (hereinafter referred to as the "Board") that the Executive's services
have been of exceptional merit, in excess of the compensation paid and an
invaluable contribution to the profits and position of the Bank in its field of
activity. The Board further believes that the Executive's experience, knowledge
of corporate affairs, reputation and industry contacts are of such value, and
the Executive's continued services so essential to the Bank's future growth and
profits, that it would suffer severe financial loss should the Executive
terminate their services;
ACCORDINGLY, the Board has adopted the GrandSouth Bank Executive
Supplemental Retirement Plan (hereinafter referred to as the "Executive Plan")
and it is the desire of the Bank and the Executive to enter into this Agreement
under which the Bank will agree to make certain payments to the Executive upon
the Executive's retirement or to the Executive's beneficiary(ies) in the event
of the Executive's death pursuant to the Executive Plan;
FURTHERMORE, it is the intent of the parties hereto that this Executive
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Executive, and be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Executive is fully advised of the Bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed in the future, and based upon the mutual
promises and covenants herein contained, the Bank and the Executive agree as
follows:
THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH
CAROLINA UNIFORM ARBITRATION ACT.
I. DEFINITIONS
A. Effective Date:
The Effective Date of the Executive Plan shall be September 11, 2001.
B. Plan Year:
Any reference to the "Plan Year" shall mean a calendar year from
January 1st to December 31st. In the year of implementation, the term
"Plan Year" shall mean the period from the Effective Date to December
31st of the year of the Effective Date.
C. Retirement Date:
Retirement Date shall mean retirement from service with the Bank that
becomes effective on the first day of the calendar month following the
month in which the Executive reaches age sixty-five (65) or such later
date as the Executive may actually retire.
D. Termination of Service:
Termination of Service shall mean the Executive's voluntary
resignation of service by the Executive or the Bank's discharge of the
Executive without cause, prior to the Normal Retirement Age
(Subparagraph I [J]).
E. Pre-Retirement Account:
A Pre-Retirement Account shall be established as a liability reserve
account on the books of the Bank for the benefit of the Executive.
Prior to the Executive's Retirement Date (Subparagraph I [C]), such
liability reserve account shall be increased or decreased each Plan
Year, until the aforestated event occurs, by the Index Retirement
Benefit (Subparagraph I [F]).
F. Index Retirement Benefit:
The Index Retirement Benefit for each Executive in the Executive Plan
for each Plan Year shall be equal to the excess (if any) of the Index
(Subparagraph I [G]) for that Plan Year over the Opportunity Cost
(Subparagraph I [H]) for that Plan Year.
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G. Index:
The Index for any Plan Year shall be the aggregate annual after-tax
income from the life insurance contract(s) described hereinafter as
defined by FASB Technical Bulletin 85-4. This Index shall be applied
as if such insurance contract(s) were purchased on the Effective Date
of the Executive Plan.
Insurance Company:
Policy Form:
Policy Name:
Insured's Age and Sex:
Riders:
Ratings:
Option:
Face Amount:
Premiums Paid:
Number of Premium Payments:
Assumed Purchase Date:
If such contracts of life insurance are actually purchased by the
Bank, then the actual policies as of the dates they were actually
purchased shall be used in calculations under this Executive Plan. If
such contracts of life insurance are not purchased or are subsequently
surrendered or lapsed, then the Bank shall receive annual policy
illustrations that assume the above-described policies were purchased
or had not subsequently surrendered or lapsed. Said illustration shall
be received from the respective insurance companies and will indicate
the increase in policy values for purposes of calculating the amount
of the Index.
In either case, references to the life insurance contracts are merely
for purposes of calculating a benefit. The Bank has no obligation to
purchase such life insurance and, if purchased, the Executive and the
Executive's beneficiary(ies) shall have no ownership interest in such
policy and shall always have no greater interest in the benefits under
this Executive Plan than that of an unsecured creditor of the Bank.
H. Opportunity Cost:
The Opportunity Cost for any Plan Year shall be calculated by taking
the sum of the amount of premiums for the life insurance policies
described in the definition of "Index" plus the amount of any
after-tax benefits paid to the Executive pursuant to the Executive
Plan (Paragraph II hereinafter) plus the amount of all previous years'
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after-tax Opportunity Cost, and multiplying that sum by the Average
Federal Funds Rate.
I. Change of Control:
A "Change of Control" of the Bank shall be deemed to have been
effected for purposes of this Agreement if either:
A. voting control of the Bank's holding company (the "Holding
company") is acquired, directly or indirectly, by any person or
group acting in concert,
B. the Holding Company is merged with or into any other entity and
the Holding company is not the surviving entity of the merger,
C. voting control of the Bank is acquired, directly or indirectly,
by any person or group acting in concert, or
D. the Bank is merged with or into another entity which is not also
a subsidiary of the Holding Company and such subsidiary is not
the surviving entity of the merger.
J. Normal Retirement Age:
Normal Retirement Age shall mean the date on which the Executive
attains age sixty-five (65).
II. INDEX BENEFITS
A. Retirement Benefits:
Subject to Subparagraph II (D) hereinafter, an Executive who remains
in the employ of the Bank until the Normal Retirement Age
(Subparagraph I [J]) shall be entitled to receive the balance in the
Pre-Retirement Account in fifteen (15) equal annual installments
commencing thirty (30) days following the Executive's retirement. In
addition to these payments and commencing in conjunction therewith,
the Index Retirement Benefit (Subparagraph I [F]) for each Plan Year
subsequent to the Executive's retirement, and including the remaining
portion of the Plan Year following said retirement, shall be paid to
the Executive until the Executive's death.
B. Termination of Service:
Subject to Subparagraph II (D), should an Executive suffer a
Termination of Service the Executive shall be entitled to receive
twenty-five percent (25%) times the number of full years of employment
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with the Bank from the date of first employment with the Bank (to a
maximum of 100%), times the balance in the Pre-Retirement Account
payable to the Executive in fifteen (15) equal annual installments
commencing thirty (30) days following the Executive's Normal
Retirement Age (Subparagraph I [J]). In addition to these payments and
commencing in conjunction therewith, twenty-five percent (25%) times
the number of full years of employment with the Bank from the date of
first employment with the Bank (to a maximum of 100%), times the Index
Retirement Benefit for each Plan Year subsequent to the year in which
the Executive attains Normal Retirement Age, and including the
remaining portion of the Plan Year in which the Executive attains
Normal Retirement Age, shall be paid to the Executive until the
Executive's death.
C. Death:
Should the Executive die while there is a balance in the Executive's
Pre-Retirement Account (Subparagraph I [E]), said unpaid balance of
the Executive's Pre-Retirement Account shall be paid in a lump sum to
the individual or individuals the Executive may have designated in
writing and filed with the Bank. In the absence of any effective
beneficiary designation, the unpaid balance shall be paid as set forth
herein to the duly qualified executor or administrator of the
Executive's estate. Said payment due hereunder shall be made the first
day of the second month following the decease of the Executive.
Provided, however, that anything hereinabove to the contrary
notwithstanding, no death benefit shall be payable hereunder if the
Executive dies on or before the 11th day of September, 2003.
D. Discharge for Cause:
Should the Executive be Discharged for Cause at any time, all benefits
under this Executive Plan shall be forfeited. The term "for cause"
shall mean:
(i) the willful and continued failure by the Executive to
substantially perform his duties (other than the Executive's
inability to perform, with or without reasonable accommodation,
resulting from his incapacity due to physical or mental illness
or impairment), after a demand for substantial performance is
delivered to him by the Bank, which demand specifically
identifies the manner in which the Executive is alleged to have
not substantially performed his duties;
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(ii) the willful engaging by the Executive in misconduct (criminal,
immoral, or otherwise) which is materially injurious to the Bank,
its holding company, or either of their officers, directors,
shareholders, employees, or customers, monetarily or otherwise;
(iii) the Executive's conviction of a felony; or
(iv) the commission in the course of the Executive's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not resulting in criminal prosecution or conviction),
or any act or practice which the Bank shall, in good faith, deem
to have resulted in the Executive's becoming unbondable under the
Bank's or its holding company's "banker's blanket bond".
If a dispute arises as to discharge "for cause," such dispute shall be
resolved by arbitration as set forth in this Executive Plan.
E. Death Benefit:
Except as set forth above, there is no death benefit provided
under this Agreement.
F. Disability Benefit:
In the event the Executive becomes disabled prior to any
Termination of Service, and the Executive's employment is
terminated because of such disability, he shall immediately begin
receiving the benefits in Subparagraph II (A) above. Such benefit
shall begin without regard to the Executive's Normal Retirement
Age and the Executive shall be one hundred percent (100%) vested
in the entire benefit amount. If there is a dispute regarding
whether the Executive is disabled, such dispute shall be resolved
by a physician selected by the Bank and such resolution shall be
binding upon all parties to this Agreement.
III. RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its obligations under this Executive Plan. The
Executive, their beneficiary(ies), or any successor in interest shall be
and remain simply a general creditor of the Bank in the same manner as any
other creditor having a general claim for matured and unpaid compensation.
The Bank reserves the absolute right, at its sole discretion, to either
fund the obligations undertaken by this Executive Plan or to refrain from
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funding the same and to determine the extent, nature and method of such
funding. Should the Bank elect to fund this Executive Plan, in whole or in
part, through the purchase of life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At
no time shall any Executive be deemed to have any lien nor right, title or
interest in or to any specific funding investment or to any assets of the
Bank.
If the Bank elects to invest in a life insurance, disability or annuity
policy upon the life of the Executive, then the Executive shall assist the
Bank by freely submitting to a physical exam and supplying such additional
information necessary to obtain such insurance or annuities.
IV. CHANGE OF CONTROL
Upon a Change of Control (Subparagraph I [I]), if the Executive
subsequently suffers a Termination of Service (Subparagraph I [D]), then
the Executive shall receive the benefits promised in this Executive Plan
upon attaining Normal Retirement Age, as if the Executive had been
continuously employed by the Bank until the Executive's Normal Retirement
Age. The Executive will also remain eligible for all promised death
benefits in this Executive Plan.
V. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, nor the Executive's surviving spouse, nor any other
beneficiary(ies) under this Executive Plan shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable hereunder nor
shall any of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the Executive or
the Executive's beneficiary(ies), nor be transferable by operation of law
in the event of bankruptcy, insolvency or otherwise. In the event the
Executive or any beneficiary attempts assignment, commutation,
hypothecation, transfer or disposal of the benefits hereunder, the Bank's
liabilities shall forthwith cease and terminate.
B. Binding Obligation of the Bank and any Successor in Interest:
This Executive Plan shall be binding upon the parties hereto, their
successors, beneficiaries, heirs and personal representatives.
C. Amendment or Revocation:
It is agreed by and between the parties hereto that, during the
lifetime of the Executive, this Executive Plan may be amended or
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revoked at any time or times, in whole or in part, by the mutual
written consent of the Executive and the Bank.
D. Gender:
Whenever in this Executive Plan words are used in the masculine or
neuter gender, they shall be read and construed as in the masculine,
feminine or neuter gender, whenever they should so apply.
E. Effect on Other Bank Benefit Plans:
Nothing contained in this Executive Plan shall affect the right of the
Executive to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part
of the Bank's existing or future compensation structure.
F. Headings:
Headings and subheadings in this Executive Plan are inserted for
reference and convenience only and shall not be deemed a part of this
Executive Plan.
G. Applicable Law:
The validity and interpretation of this Agreement shall be governed by
the laws of the State of South Carolina.
H. 12 U.S.C.Section 1828(k):
Any payments made to the Executive pursuant to this Executive Plan, or
otherwise, are subject to and conditioned upon their compliance with
12 U.S.C. Section 1828(k) or any regulations promulgated thereunder.
I. Partial Invalidity:
If any term, provision, covenant, or condition of this Executive Plan
is determined by an arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render
any other term, provision, covenant, or condition invalid, void, or
unenforceable, and the Executive Plan shall remain in full force and
effect notwithstanding such partial invalidity.
J. Employment:
No provision of this Executive Plan shall be deemed to restrict or
limit any existing employment agreement by and between the Bank and
the Executive, nor shall any conditions herein create specific
employment rights to the Executive nor limit the right of the Employer
to discharge the Executive with or without cause. In a similar
fashion, no provision shall limit the Executive's rights to
voluntarily sever the Executive's employment at any time.
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VI. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Executive Plan
shall be GrandSouth Bank until its resignation or removal by the
Board. As Named Fiduciary and Plan Administrator, the Bank shall be
responsible for the management, control and administration of the
Executive Plan. The Named Fiduciary may delegate to others certain
aspects of the management and operation responsibilities of the
Executive Plan including the employment of advisors and the delegation
of ministerial duties to qualified individuals.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this Executive Plan
and benefits are not paid to the Executive (or to the Executive's
beneficiary(ies) in the case of the Executive's death) and such
claimants feel they are entitled to receive such benefits, then a
written claim must be made to the Named Fiduciary and Plan
Administrator named above within sixty (60) days from the date
payments are refused. The Named Fiduciary and Plan Administrator shall
review the written claim and if the claim is denied, in whole or in
part, they shall provide in writing within sixty (60) days of receipt
of such claim the specific reasons for such denial, reference to the
provisions of this Executive Plan upon which the denial is based and
any additional material or information necessary to perfect the claim.
Such written notice shall further indicate the additional steps to be
taken by claimants if a further review of the claim denial is desired.
A claim shall be deemed denied if the Named Fiduciary and Plan
Administrator fail to take any action within the aforesaid sixty-day
period.
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If claimants desire a second review they shall notify the Named
Fiduciary and Plan Administrator in writing within sixty (60) days of
the first claim denial. Claimants may review this Executive Plan or
any documents relating thereto and submit any written issues and
comments it may feel appropriate. In their sole discretion, the Named
Fiduciary and Plan Administrator shall then review the second claim
and provide a written decision within sixty (60) days of receipt of
such claim. This decision shall likewise state the specific reasons
for the decision and shall include reference to specific provisions of
the Plan Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Executive Plan or the meaning and effect
of the terms and conditions thereof, then claimants may submit the
dispute to an arbitrator for final arbitration pursuant to the South
Carolina Uniform Arbitration Act. The parties hereto agree that they
and their heirs, personal representatives, successors and assigns
shall be bound by the decision of such arbitrator with respect to any
controversy properly submitted to it for determination.
Where a dispute arises as to the Bank's discharge of the Executive
"for cause," such dispute shall likewise be submitted to arbitration
as above described and the parties hereto agree to be bound by the
decision thereunder.
IN witness whereof, the parties hereto acknowledge that each has
carefully read this Agreement and executed the original thereof on the first day
set forth hereinabove, and that, upon execution, each has received a conforming
copy.
GRANDSOUTH BANK
Fountain Inn, South Carolina
By:
-------------------------- ------------------------------------------
Witness Title
-------------------------- ------------------------------------------
Witness Xxxxxx X. Xxxxxxx
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BENEFICIARY DESIGNATION FORM
FOR THE EXECUTIVE SUPPLEMENTAL
RETIREMENT PLAN AGREEMENT
PRIMARY DESIGNATION:
Name Address Relationship
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SECONDARY (CONTINGENT) DESIGNATION:
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All sums payable under the Executive Supplemental Retirement Plan Executive
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.
--------------------------------- ---------------------
Xxxxxx X. Xxxxxxx Date
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LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer:
Policy Number:
Bank: GrandSouth Bank
Insured: Xxxxxx X. Xxxxxxx
Relationship of Insured to Bank: Executive
THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH
CAROLINA UNIFORM ARBITRATION ACT.
The respective rights and duties of the Bank and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Agreement.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Bank for its use and for the use of
the Insured all in accordance with this Agreement. The Bank alone may, to
the extent of its interest, exercise the right to borrow or withdraw on the
policy cash values. Where the Bank and the Insured (or assignee, with the
consent of the Insured) mutually agree to exercise the right to increase
the coverage under the subject Split Dollar policy, then, in such event,
the rights, duties and benefits of the parties to such increased coverage
shall continue to be subject to the terms of this Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured's share of the proceeds
payable upon the death of the Insured, and to elect and change a payment
option for such beneficiary, subject to any right or interest the Bank may
have in such proceeds, as provided in this Agreement.
IV. PREMIUM PAYMENT METHOD
The Bank shall pay an amount equal to the planned premiums and any other
premium payments that might become necessary to keep the policy in force.
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V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the assumed
cost of insurance as required by the Internal Revenue Service. The Bank (or
its administrator) will report to the Insured the amount of imputed income
each year on Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VII and IX herein, the division of the death proceeds
of the policy is as follows:
A. Should the Insured be employed by the Bank and die on or before the
11th day of September, 2003, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled to an
amount equal to one hundred percent (100%) of the net-at-risk
insurance portion of the proceeds. The net-at-risk insurance portion
is the total proceeds less the cash value of the policy.
B. Should the Insured be employed by the Bank and die subsequent to the
11th day of September, 2003, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled to an
amount equal to eighty percent (80%) of the net-at-risk insurance
portion of the proceeds. The net-at-risk insurance portion is the
total proceeds less the cash value of the policy.
C. Should the Insured not be employed by the Bank at the time of his or
her death and die on or before the 11th day of September, 2003, the
Insured's beneficiary(ies), designated in accordance with Paragraph
III, shall be entitled to the percentage as set forth hereinbelow of
the proceeds described in Subparagraph VI (A) above that corresponds
to the number of full years the Insured has been employed by the Bank
since the date of first employment with the Bank. Should the Insured
not be employed by the Bank at the time of his or her death and die
subsequent to the 11th day of September, 2003, the Insured's
beneficiary(ies) shall be entitled to the following percentage of the
proceeds described in Subparagraph VI (B) hereinabove:
Total Years
of Employment
with the Bank Vested (to a maximum of 100%)
----------------- -----------------------------
1-4 25% per year
D. The Bank shall be entitled to the remainder of such proceeds.
E. The Bank and the Insured (or assignees) shall share in any interest
due on the death proceeds on a pro rata basis as the proceeds due each
respectively bears to the total proceeds, excluding any such interest.
VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY
The Bank shall at all times be entitled to an amount equal to the policy's
cash value, as that term is defined in the policy contract, less any policy
loans and unpaid interest or cash withdrawals previously incurred by the
Bank and any applicable surrender charges. Such cash value shall be
determined as of the date of surrender or death as the case may be.
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VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS
In the event the policy involves an endowment or annuity element, the
Bank's right and interest in any endowment proceeds or annuity benefits, on
expiration of the deferment period, shall be determined under the
provisions of this Agreement by regarding such endowment proceeds or the
commuted value of such annuity benefits as the policy's cash value. Such
endowment proceeds or annuity benefits shall be considered to be like death
proceeds for the purposes of division under this Agreement.
IX. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
A. The Insured shall be discharged from employment with the Bank for
cause. The term "for cause" shall mean:
(v) the willful and continued failure by the Insured to substantially
perform his duties (other than the Insured's inability to
perform, with or without reasonable accommodation, resulting from
his incapacity due to physical or mental illness or impairment),
after a demand for substantial performance is delivered to him by
the Bank, which demand specifically identifies the manner in
which the Insured is alleged to have not substantially performed
his duties;
(vi) the willful engaging by the Insured in misconduct (criminal,
immoral, or otherwise) which is materially injurious to the Bank,
its holding company, or either of their officers, directors,
shareholders, employees, or customers, monetarily or otherwise;
(vii) the Insured's conviction of a felony; or
(viii) the commission in the course of the Insured's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not resulting in criminal prosecution or conviction),
or any act or practice which the Bank shall, in good faith, deem
to have resulted in the Insured's becoming unbondable under the
Bank's or its holding company's "banker's blanket bond".
B. Surrender, lapse, or other termination of the Policy by the Bank.
Upon receipt of notice from the Insurer of such termination, the
Insured (or assignee) shall have a fifteen (15) day option to receive
from the Bank an absolute assignment of the policy in consideration of
a cash payment to the Bank, whereupon this Agreement shall terminate.
Such cash payment referred to hereinabove shall be the greater of:
A. The Bank's share of the cash value of the policy on the date of such
assignment, as defined in this Agreement; or
B. The amount of the premiums that have been paid by the Bank prior to
the date of such assignment.
If, within said fifteen (15) day period, the Insured fails to exercise
said option, fails to procure the entire aforestated cash payment, or
dies, then the option shall terminate and the Insured (or assignee)
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agrees that all of the Insured's rights, interest and claims in the
policy shall terminate as of the date of the termination of this
Agreement.
The Insured expressly agrees that this Agreement shall constitute
sufficient written notice to the Insured of the Insured's option to
receive an absolute assignment of the policy as set forth herein.
Except as provided above, this Agreement shall terminate upon
distribution of the death benefit proceeds in accordance with
Paragraph VI above.
X. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Bank, assign to any
individual, trust or other organization, any right, title or interest in
the subject policy nor any rights, options, privileges or duties created
under this Agreement.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representatives and assigns.
XII. ERISA PROVISIONS
The following provisions are part of this Agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"):
A. Named Fiduciary and Plan Administrator.
The "Named Fiduciary and Plan Administrator" of this Endorsement
Method Split Dollar Agreement shall be GrandSouth Bank until its
resignation or removal by the Board of Directors. As Named Fiduciary
and Plan Administrator, the Bank shall be responsible for the
management, control, and administration of this Split Dollar Plan as
established herein. The Named Fiduciary may delegate to others certain
aspects of the management and operation responsibilities of the Plan,
including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this Split Dollar
Plan and benefits are not paid to the Insured (or to the Insured's
beneficiary(ies) in the case of the Insured's death) and such
claimants feel they are entitled to receive such benefits, then a
written claim must be made to the Named Fiduciary and Plan
Administrator named above within sixty (60) days from the date
payments are refused. The Named Fiduciary and Plan Administrator shall
review the written claim and if the claim is denied, in whole or in
part, they shall provide in writing within sixty (60) days of receipt
of such claim the specific reasons for such denial, reference to the
provisions of this Split Dollar Plan upon which the denial is based
and any additional material or information necessary to perfect the
claim. Such written notice shall further indicate the additional steps
to be taken by claimants if a further review of the claim denial is
desired. A claim shall be deemed denied if the Named Fiduciary and
Plan Administrator fail to take any action within the aforesaid
sixty-day period.
If claimants desire a second review they shall notify the Named
Fiduciary and Plan Administrator in writing within sixty (60) days of
the first claim denial. Claimants may review this Split Dollar Plan or
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any documents relating thereto and submit any written issues and
comments it may feel appropriate. In their sole discretion, the Named
Fiduciary and Plan Administrator shall then review the second claim
and provide a written decision within sixty (60) days of receipt of
such claim. This decision shall likewise state the specific reasons
for the decision and shall include reference to specific provisions of
the Plan Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Split Dollar Plan or the meaning and
effect of the terms and conditions thereof, then claimants may submit
the dispute to an arbitrator for final arbitration. The parties hereto
agree that they and their heirs, personal representatives, successors
and assigns shall be bound by the decision of such arbitrator with
respect to any controversy properly submitted to it for determination.
Where a dispute arises as to the Bank's discharge of the Insured "for
cause," such dispute shall likewise be submitted to arbitration as
above described and the parties hereto agree to be bound by the
decision thereunder.
C. Funding Policy.
The funding policy for this Split Dollar Plan shall be to maintain the
subject policy in force by paying, when due, all premiums required.
D. Basis of Payment of Benefits.
Direct payment by the Insurer is the basis of payment of benefits
under this Agreement, with those benefits in turn being based on the
payment of premiums as provided in this Agreement.
E. Claim Procedures.
Claim forms or claim information as to the subject policy can be
obtained by contacting Benmark, Inc. (800-544-6079). When the Named
Fiduciary has a claim which may be covered under the provisions
described in the insurance policy, they should contact the office
named above, and they will either complete a claim form and forward it
to an authorized representative of the Insurer or advise the named
Fiduciary what further requirements are necessary. The Insurer will
evaluate and make a decision as to payment. If the claim is payable, a
benefit check will be issued in accordance with the terms of this
Agreement.
In the event that a claim is not eligible under the policy, the
Insurer will notify the Named Fiduciary of the denial pursuant to the
requirements under the terms of the policy. If the Named Fiduciary is
dissatisfied with the denial of the claim and wishes to contest such
claim denial, they should contact the office named above and they will
assist in making an inquiry to the Insurer. All objections to the
Insurer's actions should be in writing and submitted to the office
named above for transmittal to the Insurer.
XIII. GENDER
Whenever in this Agreement words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine or
neuter gender, whenever they should so apply.
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XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
The Insurer shall not be deemed a party to this Agreement, but will respect
the rights of the parties as herein developed upon receiving an executed
copy of this Agreement. Payment or other performance in accordance with the
policy provisions shall fully discharge the Insurer from any and all
liability.
XV. CHANGE OF CONTROL
A "Change of Control" of the Bank shall be deemed to have been effected for
purposes of this Agreement if either:
a. voting control of the Bank's holding company (the "Holding
Company") is acquired, directly or indirectly, by any person or
group acting in concert,
b. The Holding Company is merged with or into any other entity and
the Holding Company is not the surviving entity of the merger,
c. voting control of the Bank is acquired, directly or indirectly,
by any person or group acting in concert, or
D. The Bank is merged with or into another entity which is not also a
subsidiary of the Holding Company and such subsidiary is not the
surviving entiry of the merger.
Upon a Change of Control, if the Insured's employment is subsequently
terminated, except for cause, then the Insured shall be one hundred
percent (100%) vested in the benefits promised in this Agreement and,
therefore, upon the death of the Insured, the Insured's
beneficiary(ies) (designated in accordance with Paragraph III) shall
receive the death benefit provided herein as if the Insured had died
while employed by the Bank (see Subparagraphs VI [A] & [B]).
XVI. AMENDMENT OR REVOCATION
It is agreed by and between the parties hereto that, during the lifetime of
the Insured, this Agreement may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent of the Insured and the
Bank.
XVII. EFFECTIVE DATE
The Effective Date of this Agreement shall be September 11, 2003.
XVIII. SEVERABILITY AND INTERPRETATION
If a provision of this Agreement is held to be invalid or unenforceable,
the remaining provisions shall nonetheless be enforceable according to
their terms. Further, in the event that any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable
according to law and enforced as amended.
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XIX. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by the
laws of the State of South Carolina.
Executed at Fountain Inn, South Carolina this 11th day of September, 2003.
GRAND SOUTH BANK
Fountain Inn, South Carolina
By:
----------------------------------- ---------------------------------
Witness Title
----------------------------------- --------------------------------
Witness Xxxxxx X. Xxxxxxx
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BENEFICIARY DESIGNATION FORM
FOR LIFE INSURANCE ENDORSEMENT METHOD
SPLIT DOLLAR PLAN AGREEMENT
PRIMARY DESIGNATION:
Name Address Relationship
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SECONDARY (CONTINGENT) DESIGNATION:
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All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.
-------------------------------- ---------------------
Xxxxxx X. Xxxxxxx Date
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AMENDMENT
TO THE EXECUTIVE SUPPLEMENTAL
RETIREMENT PLAN AGREEMENT AND THE
LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT
This Amendment, made and entered into this ______ day of _____________, 2001, by
and between GrandSouth Bank, a Bank organized and existing under the laws of the
State of South Carolina, hereinafter referred to as the, "Bank", and Xxxxxx X.
Xxxxxxx, a Key Employee and Executive of the Bank, hereinafter referred to as
the, "Executive", shall effectively amend the Executive Supplemental Retirement
Plan Agreement and the Life Insurance Endorsement Method Split Dollar Plan
Agreement as specifically set forth herein pursuant to said Agreements.
I. EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT
1. The date of September 11, 2001 in Subparagraph I (A) shall be changed
to September 13, 2001.
2. The following language shall be added to the end of Subparagraph I (F)
of said Agreement, "... divided by a factor equal to 1.05 minus the
marginal tax rate."
3. The following life insurance policy information shall be added to
Subparagraph I (G):
Insurance Company: Massachusetts Mutual Life
Insurance Company
Policy Form: Flexible Premium Adjustable Life
Policy Name: Strategic Life Executive
Insured's Age and Sex: 47, Male
Riders: None
Ratings: None
Option: Level
Face Amount: $1,081,920
Premiums Paid: $368,000
Number of Premium Payments: Single
Assumed Purchase Date: September 13,2001
Insurance Company: Union Central Life
Insurance Company
Policy Form: Universal Life Insurance
Policy Name: COLI UL
Insured's Age and Sex: 47, Male
Riders: None
Ratings: None
Option: Level
Face Amount: $1,060,447
Premiums Paid: $368,000
Number of Premium Payments: Single
Assumed Purchase Date: September 13,2001
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4. The date of September 11, 2003 in Subparagraph II (C) shall be changed
to September 13, 2003.
II. Life Insurance Endorsement Method Split Dollar Plan Agreement
1. The following life insurance policy information shall be added to page one
(1):
Insurer: Massachusetts Mutual Life Insurance Company
Union Central Life Insurance Company
Policy Number: 0044375
U200001333
2. The date of September 11, 2003 in Subparagraphs VI (A), (B) and (C) shall
be changed to September 13, 2003.
3. The date of September 11, 2003 in Paragraph XVII shall be changed to
September 13, 2001.
4. The date of September 11, 2003 in the final execution sentence shall be
changed to September 13, 2001.
This Amendment shall be effective the 13th day of September, 2001. To the
extent that any paragraph, term, or provision of said agreement is not
specifically amended herein, or in any other amendment thereto, said
paragraph, term, or provision shall remain in full force and effect as set
forth in said September 11, 2001 Agreements.
(SIGNATURES ON THE FOLLOWING PAGE)
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Amendment and executed the original thereof on the first day set forth
herein, and that, upon execution, each has received a conforming copy.
GRANDSOUTH BANK
Fountain Inn, South Carolina
By:
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Witness Title
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Witness Xxxxxx X. Xxxxxxx
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