Exhibit 10.4
DEFERRED COMPENSATION PLAN FOR
DIRECTORS
Second Amendment and Complete
Restatement
This Second
Amendment and Complete Restatement of the Deferred Compensation
Plan for Directors is adopted this 21 st
day of
December, 2006, by Greer State Bank, a bank organized and existing
under the laws of the State of South Carolina, having a principal
place of business in Greer, South Carolina.
The parties intend for this Second
Amendment and Complete Restatement to be a material modification of
the Deferred Compensation Plan for Directors such that all amounts
earned and vested both prior to and after December 31, 2004
shall be subject to the provisions of Section 409A of the Code
and the regulations promulgated thereunder.
WITNESSETH
WHEREAS, Greer State Bank wishes to
amend its Deferred Compensation Plan for Directors
(“Plan”);
WHEREAS, the Plan was established
October 19, 1995 and was amended by a First Amendment dated
July 25, 1996; and
WHEREAS, pursuant to Section 17
the Plan, the Plan may be amended at any time upon a majority vote
of the Board of Directors then serving;
NOW, THEREFORE, Greer State Bank
does hereby amend and restate the Plan in its entirety, effective
as of January 1, 2005, to read as follows:
1. Definitions . When used in
this Plan, the following terms shall have the indicated
meanings:
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(a)
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“Change
in Control” means a change in the ownership or effective
control of the Corporation or the Company, or in the ownership of a
substantial portion of the assets of the Corporation or the
Company, as such change is defined in Section 409A of the Code
and regulations thereunder.
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(b)
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“Code” means the Internal Revenue
Code of 1986, as amended, and any successor provisions
thereto.
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(c)
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“Committee” means those persons
appointed by the Board of Directors of the Company.
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(d)
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“Company” means Greer State Bank and
any affiliated company authorized by Greer State Bank to
participate in this Plan.
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(e)
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“Compensation” means the fees paid
to a Participant for serving as a member of the Company’s
Board of Directors.
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(f)
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“Corporation” means Greer Bancshares
Incorporated.
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(g)
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“Deferred
Compensation Account” means the account established by
Company to record the Participant’s deferral of Compensation
and any earnings thereon.
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(h)
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“Director” means a natural person
that is a member of the Board of Directors of the
Company.
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(i)
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“Participant” means a Director who
elects to participate in this Plan.
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(j)
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“Plan” means this Deferred
Compensation Plan for Directors, as from time to time
amended.
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(k)
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“Plan
Year” means the twelve (12) consecutive month period
beginning on January 1 and ending on
December 31.
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(l)
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“Specified Employee” means a key
employee (as defined in Section 416(i) of the Code without
regard to paragraph 5 thereof) of the Company if any stock of the
Company is publicly traded on an established securities market or
otherwise.
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(m)
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“Termination of Service” means the
good-faith and complete termination of a Participant’s
service as a Director. A Termination of Service does not occur if
the Company anticipates that the Participant will again serve as a
Director or that the Participant will become an employee of the
Company.
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(n)
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“Unforeseeable Emergency” means a
severe financial hardship to the Participant, his Designated
Beneficiary, or the spouse or a dependant of either the Participant
or his Designated Beneficiary as such hardship is defined in
Section 409A of the Code and regulations
thereunder.
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2. Deferral of Compensation .
A Director may voluntarily elect to participate in this Plan and
effective January 1, 1996 defer receipt of all or a part of
his Compensation due from the Company under the terms and
conditions of this Plan. The election to defer such Compensation
and the amount or portion of Compensation to be deferred shall be
made for each calendar year. A new Director may elect to
participate in this Plan within thirty (30) days after
becoming a member of the Company’s Board of Directors and
defer all or part of his Compensation for the remainder of the
calendar year in which he becomes a Director. A Director that does
not initially elect to participate in this Plan may do so for any
succeeding calendar year by electing in writing to participate
before January 1 of such succeeding calendar year. The
Committee may establish a minimum and/or maximum deferral amount at
any time and from time to time to be applicable to a subsequent
Plan Year. An election shall be irrevocable for any calendar year
or remainder thereof for a new Director specified in such election.
Further, an election shall remain in effect for each succeeding
calendar year unless the Participant amends or terminates his
election by written notice to the Company before January 1 of
such succeeding calendar year.
3. Deferred Compensation Account
and Earnings . The Company shall establish the Deferred
Compensation Account on its books. The Company shall credit the
Deferred Compensation Account by the amount of Compensation the
Participant elects to reduce his Compensation and defers into this
Plan. Each December 31 of a Plan Year, Company shall credit
the Deferred Compensation Account with earnings resulting in the
Deferred Compensation Account as follows. Company shall increase
the amount of each Participant’s
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Deferred Compensation Account each Plan Year by
the same percentage return (rounded to the nearest hundredth) on
average equity for the Company’s fiscal year ending within
such Plan Year; provided however, that the percentage increase
shall not be less than seven (7%) percent nor more than twelve
(12%) percent in any Plan Year. The percentage return on
average equity shall be determined by the independent accounting
firm serving the Company at the end of each Plan Year and such
determination shall be conclusive and binding upon Company,
Participant and Designated Beneficiary.
4. Participation and
Elections . The application for participation and election to
defer receipt of Compensation shall be made in writing by the
Participant to the Committee on a form provided by the Committee
and shall be signed by the Participant and acknowledged by the
Committee or its designated representative. The Participant shall
irrevocably elect in writing the method of payment of the Deferred
Compensation Account during life and upon death on a form provided
by the Committee at the time the Participant first elects to
participate in this Plan, and such form shall be properly delivered
to the Committee in accordance with the Committee’s
requirements. If a Participant dies after payment has commenced to
the Participant, the method of payment upon the Participant’s
death shall in no event extend longer than the period of payment
over which the Participant would have received payment had the
Participant not died.
5. Commencement of Payment of the
Deferred Compensation Account .
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(a)
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Commencement
of Payments . Except for
earlier payments made pursuant to the provisions of paragraphs
(b) or (c) of this Section 5, the Company shall
commence payment of the Deferred Compensation Account in accordance
with the method of payment elected by the Participant pursuant to
Section 6 below within thirty (30) days after the first
to occur of one of the following events:
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(i)
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The Participant
attaining the age of sixty-five (65) years.
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(ii)
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The death of
the Participant.
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(iii)
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The Termination
of Service of the Participant.
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Even though a Participant attains
the age of sixty-five (65) years and payment commences to such
Participant pursuant to subparagraph (i) above, such
Participant shall not be prohibited from deferring Compensation
under this Plan as long as an event described in subparagraph
(ii) and (iii) above has not occurred.
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(b)
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Unforeseeable Emergency . Upon application of any Participant (or
Designated Beneficiary of a Participant who is deceased) who has
incurred an Unforeseeable Emergency, the Committee, in its sole and
absolute discretion, may pay to the Participant (or Designated
Beneficiary) a lump sum from his Deferred Compensation Account. Any
such distribution approved by the Committee shall be limited to the
amount reasonably necessary to meet the emergency. The
circumstances that will constitute an Unforeseeable Emergency will
depend upon the facts of each case, but, in any case, payment may
not be made to the extent that such hardship is or may be
relieved:
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(i)
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through
reimbursement or compensation by insurance or otherwise;
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(ii)
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by liquidation
of the Participant’s assets, to the extent the liquidation of
such assets would not itself cause severe financial hardship;
or
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(iii)
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by cessation of
deferrals under this Plan.
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If the Participant or the Designated
Beneficiary requesting a distribution for an Unforeseeable
Emergency is a member of the Committee, such individual shall
abstain from voting upon the approval of his application for such
distribution.
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(c)
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Inclusion
Under Section 409A .
Upon the inclusion of any portion of the Deferred Compensation
Account into a Participant’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
Deferred Compensation Account, a distribution shall be made as soon
as is administratively practicable following the discovery of the
plan failure.
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(d)
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Restriction on Timing of
Distribution .
Notwithstanding any provision of this Agreement to the contrary, if
the Participant is considered a Specified Employee at Termination
of Service under such procedures as established by the Company in
accordance with Section 409A of the Code, benefit
distributions that are made upon Termination of Service may not
commence earlier than six (6) months after the date of such
Termination of Service. Therefore, in the event this paragraph
(d) is applicable to the Participant, any distribution which
would otherwise be paid to the Participant within the first
six
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months following the Termination
of Service shall be accumulated and paid to the Participant in a
lump sum on the first day of the seventh month following the
Termination of Service. All subsequent distributions shall be paid
in the manner specified.
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(e)
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Removal . Notwithstanding any provision of this Plan to
the contrary, the Company shall not distribute any benefit under
this Plan if the Participant 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.
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6. Method of Payment . Except
to the extent payment has previously been made as provided in
Section 5 above, the Deferred Compensation Account shall be
paid to the Participant, or his Designated Beneficiary, following
the time for commencement of payment specified in paragraph
(a) of Section 5 above pursuant to one of the following
methods:
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(b)
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Over a period
of Five (5) calendar years as follows:
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(i)
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Twenty
(20%) percent of the Deferred Compensation Account value
(which value is determined on the first day of the calendar year of
payment) in the first year;
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(ii)
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Twenty-Five
(25%) percent of the remainder in the second year;
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(iii)
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Thirty-Three
and Thirty-Three One-Hundredths (33.33%) percent of the
remainder in the third year;
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(iv)
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Fifty
(50%) percent of the remainder in the fourth year;
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(v)
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The remaining
balance in the fifth year.
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(c)
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Over a period
of Ten (10) calendar years as follows:
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(i)
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Ten
(10%) percent of the Deferred Compensation Account value
(which value is determined on the first day of the calendar year of
payment) in the first year;
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(ii)
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Eleven and
Eleven One-Hundredths (11.11%) percent of the remainder in the
second year;
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(iii)
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Twelve and
One-Half (12.50%) percent of the remainder in the third
year;
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(iv)
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Fourteen and
Twenty-Eight One-Hundredths (14.28%) percent of the remainder
in the fourth year;
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(v)
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Sixteen and
Sixty-Six One-Hundredths (16.66%) percent of the remainder in
the
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