Exhibit 10.7
GREER STATE BANK
SALARY CONTINUATION
AGREEMENT
THIS SALARY CONTINUATION AGREEMENT
(the “Agreement”) is made and entered into this 24 day
of NOVEMBER, 1997 by and between Greer State Bank with a principal
office in Greer, South Carolina (the “Bank”), and R.
Dennis Hennett (the “Executive”).
Whereas, to encourage the Executive
to remain an employee of the Bank, the Bank is willing to provide
salary continuation benefits to the Executive.
Now, Therefore, in consideration of
the mutual covenants and agreements herein, the Executive and Bank
agree as follows:
Article 1
Definitions
|
1.1
|
Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
|
|
|
1.1.1
|
“Board” or “Board of
Directors” means
the Board of Directors of Bank.
|
|
|
1.1.2
|
“Change of Control”
means:
|
|
|
(i)
|
the
acquisition, directly or indirectly, (including beneficial
ownership) by any “person” as this term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended within any twelve (12) consecutive month period of the
Bank’s securities representing an aggregate of fifty
(50%) percent or more of the Bank’s combined voting
power then outstanding securities; or
|
|
|
(ii)
|
consummation of
merger, sale, acquisition, or liquidation of all, or substantially
all, of the Bank’s assets or outstanding stock; or
|
|
|
(iii)
|
the occurrence
of any other event or circumstance which is not covered by 1.1.2
(i) through 1.1.2 (ii) which the Board determines affects
the Bank’s control and, to implement the purposes of this
Agreement, adopts a resolution that the event or circumstances
constitutes a Change in Control for the purposes of this
Agreement.
|
|
|
(iv)
|
Notwithstanding any other
provision in this Agreement, “Change of Control” shall
not be construed to mean the formation of a
|
1
|
|
bank holding company or other
entity approved in advance by the Bank’s Board of Directors
or any changes in ownership of the Bank’s assets or stock as
the result of the formation of such an entity.
|
|
|
1.1.3
|
“Code” means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be to that
section as it now exists and to any successor provision.
|
|
|
1.1.4
|
“Date
of Employment” means October 19, 1987.
|
|
|
1.1.5
|
“Disability”
means sickness, accident or injury
which, in the judgment of a physician appointed and paid by the
Bank, prevents the Executive from performing all of the
Executive’s customary duties for the Bank. As a condition to
any benefits, the Bank may require the Executive to submit to such
physical or mental evaluations and tests as the Bank’s Board
of Directors deems appropriate.
|
|
|
1.1.6
|
“Early
Retirement Date “means the first day of the calendar month
after Executive has completed ten (10) Years of Service with
Bank.
|
|
|
1.1.7
|
“Effective Date”
means the 1st day of November,
1997.
|
|
|
1.1.8
|
“Month of Service”
means each completed full month in a
Year of Service.
|
|
|
1.1.9
|
“Normal Retirement Date”
means the date upon which the
Executive attains age sixty-five (65) years.
|
|
|
1.1.10
|
“Plan
Year” means the
twelve (12) consecutive month period beginning on each
November 1 and ending on October 31. The first Plan Year
shall commence on the Effective Date.
|
|
|
1.1.11
|
“Termination of
Employment” means
the Executive’s ceasing to be an employee of the Bank for any
reason whatsoever, voluntary or involuntary.
|
|
|
1.1.12
|
“Year
of Service” means a
twelve (12) consecutive month period beginning on
November 1 and ending on October 31 during which the
Executive is employed on a full-time basis by the Bank, inclusive
of any approved leaves of absence.
|
2
Article 2
Lifetime Benefits
|
2.1
|
Normal
Retirement Benefit. If
Executive’s employment terminates with Bank on or after
Executive’s Normal Retirement Date for any reason other than
Executive’s death, the Bank shall pay to Executive as a
Normal Retirement Benefit the sum of three thousand three hundred
thirty three dollars and thirty four cents ($3,333.34) each month
for one hundred eighty (180) consecutive calendar months. The
first such monthly payment shall commence on the first day of the
calendar month following Executive’s termination of
employment after Executive’s Normal Retirement Date and
thereafter on the first day of each subsequent calendar month until
paid in full.
|
|
2.2
|
Early
Retirement Benefit. If
the Executive’s employment terminates with Bank after
Executive’s Early Retirement Date but before
Executive’s Normal Retirement Date and before a Change of
Control, and for reasons other than death or Disability, Bank shall
pay to the Executive the Early Retirement Benefit described in this
Section 2.2.
|
|
|
2.2.1
|
Amount of
Benefit. The Early
Retirement Benefit under this Section 2.2 is the
Executive’s vested amount of the final benefit which is
listed on Schedule A for the Plan Year completed immediately prior
to the Executive’s Termination of Employment which shall be
increased by an amount determined using the following
formula:
|
|
|
2.2.1.2
|
The vested
amount set forth in Schedule A for the Plan Year in which the
Executive’s Termination of Employment occurred;
less
|
|
|
2.2.1.3
|
The amount set
forth in Schedule A in the Plan Year completed immediately prior to
the date of the Executive’s Termination of Employment;
multiplied times
|
|
|
2.2.1.4
|
A fraction
where the numerator is the number of Months of Service completed
since Plan Year completed immediately prior to the
Executive’s Termination of Employment and the denominator is
12.
|
|
|
2.2.2
|
Payment of
Benefit. The Bank shall
pay the Early Retirement Benefit to Executive in one hundred eighty
(180) consecutive monthly payments. The first such monthly
payment shall commence on the first day of each calendar month
following the Executive’s Normal Retirement Date and
thereafter on the first day of each subsequent calendar month until
paid in full.
|
3
|
2.3
|
Disability
Benefit. If
Executive’s employment terminates with Bank because of
Disability prior to Executive’s Normal Retirement Date, the
Bank shall pay to Executive the Disability Benefit described in
this Section 2.3.
|
|
|
2.3.1
|
Amount of
Disability Benefit. The
Disability Benefit under this Section 2.3 is the amount listed
in Schedule A determined as of the Plan Year completed immediately
prior to the Executive’s Termination of
Employment.
|
|
|
2.3.2
|
Payment of
Benefit. The Bank shall
pay the Disability Benefit to the Executive, at the Bank’s
discretion, in either a lump sum payment within sixty
(60) days following Executive’s Termination of
Employment, or in one hundred eighty (180) consecutive monthly
payments. The first such monthly payment shall commence on the
first day of the calendar month following the Executive’s
Termination of Employment and thereafter on the first day of each
calendar month until paid in full. If the Disability Benefit is
paid in monthly installments it shall be paid as an annuity in
substantially equal installments with interest credited over the
payment period at an annual rate of eight percent (8%), compounded
monthly.
|
|
2.4
|
Change of
Control Benefit. If
Executive’s employment terminates with Bank before
Executive’s Normal Retirement Date (other than by reason of
death or Disability) but after a Change of Control, the Bank shall
pay to Executive following Executive’s termination of
employment a Change of Control Benefit described in this
Section 2.4 in lieu of (and not in addition to) any other
benefit under this Agreement.
|
|
|
2.4.1
|
Amount of
Benefit. The Change of
Control Benefit shall be 100% vesting in the Normal Retirement
Benefit paid in Section 2.1.
|
|
|
2.4.2
|
Payment of
Benefit. Within sixty
(60) days following Executive’s termination of
employment after the Change of Control, the Bank shall pay the
Change of Control Benefit to the Executive, as described in
Section 2.1 in a lump sum present value payment based on an 8%
discount rate.
|
Article 3
Death Benefits
|
3.1
|
Death During
Active Service. If the
Executive dies while employed with Bank and Executive has completed
at least ten (10) Years of Service with Bank, then Bank shall
pay to the Executive’s beneficiary as a Death Benefit the sum
of three thousand three hundred thirty three dollars and thirty
four cents ($3,333.34) per month for one hundred eighty
(180) consecutive calendar months. The first such monthly
payment shall commence on the first day of the calendar month
following the Executive’s date of death and thereafter on the
first day of each subsequent calendar month until paid in
full.
|
4
|
3.2
|
Death During
Benefit Period. If the
Executive dies after benefit payments have commenced under
Section 2 of this Agreement but before receiving all such
payments, the Bank shall pay the remaining benefits to the
Executive’s beneficiary at the same time an
|
|
