Greenville First Bank,
N.A.
Salary Continuation
Agreement
This Salary Continuation Agreement (this "Agreement") is
made and entered into as of this
day of
, 2
, by and between Greenville First Bank, N.A., a South
Carolina-chartered bank (the "Bank"), and
, its
(the "Executive").
Whereas , the Executive has contributed substantially to the
success of the Bank and the Bank desires that the Executive
continue in its employ,
Whereas , to encourage the Executive to remain an employee
of the Bank, the Bank is willing to provide salary continuation
benefits to the Executive, payable from the Bank's general
assets,
Whereas , none of the conditions or events included in the
definition of the term "golden parachute payment" that is set forth
in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12
U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance
Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists
or, to the best knowledge of the Bank, is contemplated insofar as
the Bank is concerned, and
Whereas , the parties hereto intend that this Agreement
shall be considered an unfunded arrangement maintained primarily to
provide supplemental retirement benefits for the Executive, and to
be considered a non-qualified benefit plan for purposes of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Executive is fully advised of the Bank's
financial status.
Now Therefore , in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Executive and the Bank hereby
agree as follows.
Article 1
Definitions
The following words and phrases used in this Agreement have the
meanings specified.
1.1 " Accrual
Balance " means the liability that should be accrued by the
Bank under generally accepted accounting principles ("GAAP"), as
consistently applied in accordance with past practices at the Bank,
for the Bank's obligation to the Executive under this
Agreement.
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 according 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 " Change in
Control " shall mean any one of the following events occurs,
provided the event constitutes a change in control within the
meaning of Internal Revenue Code section 409A and rules,
regulations, and guidance of general application thereunder issued
by the Department of the Treasury, and provided the occurrence of
the event is objectively determinable and does not require the
exercise of judgment or discretion on the part of the Plan
Administrator or any other person -
(a) the individuals who,
as of the date of this Agreement, are members of the Board of
Directors of Greenville First Bancshares, Inc., of which the Bank
is a wholly owned subsidiary (the "Incumbent Board") cease for any
reason during any twelve (12) -month period to constitute more than
fifty percent (50%) of the Board of Directors of Greenville First
Bancshares, Inc.; provided, however, that if the election, or
nomination for election by Greenville First Bancshares, Inc.'s
shareholders, of any new director was approved in advance by a vote
of more than fifty percent (50%) of the then existing Board of
Directors of Greenville First Bancshares, Inc., such new director
shall, for purposes of this Agreement, be considered as a member of
the Incumbent Board;
(b) acquisitions during a
twelve (12) - month period ending on the date of the most recent
acquisition by such Person (as the term "person" is used for
purposes of Section 13(d) or 14(d) of the Exchange Act,
specifically excluding a transfer to a subsidiary of Greenville
First Bancshares, Inc.) of any voting securities of Greenville
First Bancshares, Inc. (the "Voting Securities") by any Person
immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of thirty-five percent (35%) or more of the combined voting
power of Greenville First Bancshares, Inc.'s then outstanding
Voting Securities; or
(c) acquisitions of the
assets of Greenville First Bancshares, Inc. that have a total gross
fair market value equal to or more than forty percent (40%) of the
total gross fair market value (as the term "gross fair market
value" is used for purposes of Section 1.409A-3(g)(5)(vi) of the
Code) of all of the assets of Greenville First Bancshares, Inc.
immediately prior to such acquisitions by any Person during a
twelve (12) - month period ending on the date of the most recent
acquisition.
1.5 " Code "
means the Internal Revenue Code of 1986, as amended, and rules,
regulations, and guidance of general application issued thereunder
by the Department of the Treasury.
1.6 " Disability
" means because of a medically determinable physical or mental
impairment that can be expected to result in death or that can be
expected to last for a continuous period of at least twelve (12)
months, ( x ) the Executive is unable to engage in any
substantial gainful activity, or ( y ) the Executive is
receiving income replacement benefits for a period of at least
three (3) months under an accident and health plan of the
employer. Medical determination of disability may be made
either by the Social Security Administration or by the provider of
an accident or health plan covering employees of the Bank.
Upon request of the Plan Administrator, the Executive must submit
proof to the Plan Administrator of the Social Security
Administration's or provider's determination.
1.7 " Early
Termination " means Separation from Service before Normal
Retirement Age for reasons other than death, Disability,
Termination for Cause, or after a Change in Control.
1.8 " Effective
Date " means July 1, 200 6.
1.9 "
Intentional " does not mean an act or failure to act on the
part of the Executive if it was due primarily to an error in
judgment or negligence. An act or failure to act on the
Executive's part shall be considered intentional if it is not in
good faith and if it is without a reasonable belief that the action
or failure to act is in the best interests of the Bank.
1.10 " Normal Retirement Age
" means the Executive's
birthday.
1.11 " Plan Administrator "
or " Administrator " means the plan administrator described
in Article 8.
1.12 " Plan Year " means a
twelve (12) - 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 Agreement.
1.13 " Separation from
Service " means the Executive's service as an executive or
independent contractor to the Bank and any member of a controlled
group, as defined in Code section 414, terminates for any reason,
other than because of a leave of absence approved by the Bank or
the Executive's death. For purposes of this Agreement, if
there is a dispute about the employment status of the Executive or
the date of the Executive's Separation from Service, such status
will be determined in compliance with Section 409A of the Code,
specifically Prop. Reg. § 1.409A-1(h).
1.14 " Termination for Cause
" and " Cause " shall have the meaning specified in any
effective severance or employment agreement existing on the date
hereof or hereafter entered into between the Executive and the Bank
and/or Greenville First Bancshares, Inc. If the Executive is
not a party to a severance or employment agreement containing a
definition for termination for cause, Termination for Cause, for
purposes of this Agreement, means the Bank and/or Greenville First
Bancshares, Inc. terminates the Executive's employment for any of
the following reasons -
(a) the Executive's gross
negligence or gross neglect of duties or intentional and material
failure to perform stated duties after written notice thereof,
or
(b) disloyalty or
dishonesty by the Executive in the performance of the Executive's
duties, or a breach of the Executive's fiduciary duties for
personal profit, in any case whether in the Executive's capacity as
a director or officer, or
(c) intentional wrongful
damage by the Executive to the business or property of the Bank or
Greenville First Bancshares, Inc. or any of its affiliates,
including without limitation the reputation of the Bank or
Greenville First Bancshares, Inc., which in the judgment of the
Bank or Greenville First Bancshares, Inc. causes material harm to
the Bank or Greenville First Bancshares, Inc. or any of its
affiliates, or
(d) a willful violation
by the Executive of any applicable law or significant policy of the
Bank or Greenville First Bancshares, Inc. or any of its affiliates
that, in the Bank's or Greenville First Bancshares, Inc.'s
judgment, results in an adverse effect on the Bank or Greenville
First Bancshares, Inc. or any of its affiliates, regardless of
whether the violation leads to criminal prosecution or
conviction. For purposes of this Agreement, applicable laws
include any statute, rule, regulatory order, statement of policy,
or final cease-and-desist order of any governmental agency or body
having regulatory authority over the Bank or Greenville First
Bancshares, Inc., or
(e) the occurrence of any
event that results in the Executive being excluded from coverage,
or having coverage limited for the Executive as compared to other
executives of the Bank or Greenville First Bancshares, Inc., under
the Bank's or Greenville First Bancshares, Inc.'s blanket bond or
other fidelity or insurance policy covering its directors,
officers, or employees, or
(f) the Executive
is removed from office or permanently prohibited from participating
in the Bank's or Greenville First Bancshares, Inc.'s affairs by an
order issued under section 8(e)(4) or section 8(g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1),
or
(g) conviction of the
Executive for or plea of no contest to a felony or conviction of or
plea of no contest to a misdemeanor involving moral turpitude, or
the actual incarceration of the Executive for forty-five (45)
consecutive days or more.
Article 2
Lifetime
with a Fifteen (15) - Year Term Certain Benefits
Period
2.1 Normal
Retirement Benefit . Unless Separation from Service or a
Change in Control occurs before Normal Retirement Age, when the
Executive attains the Normal Retirement Age the Bank shall pay to
the Executive the benefit described in this section 2.1 instead of
any other benefit under this Agreement. If the Executive's
Separation from Service thereafter is a Termination for Cause or if
this Agreement terminates under Article 5, no further benefits
shall be paid.
2.1.1 Amount of Benefit . The annual benefit
under this section 2.1 is
($
) Dollars.
2.1.2 Payment of Benefit . The Bank
shall pay the annual benefit to the Executive in
(
) equal monthly installments payable on the first (1 st
) day of each month, beginning with the month immediately after the
month in which the Executive attains the Normal Retirement
Age. The Normal Retirement annual benefit shall be paid to
the Executive for the Executive's lifetime with a
(
) -
year term certain period.
2.2 Early
Termination Benefit . Provided the Executive shall have
been continuously employed by the Bank for five (5) consecutive
years from the Effective Date when Early Termination occurs, upon
such Early Termination the Bank shall pay to the Executive the
benefit described in this section 2.2 instead of any other benefit
under this Agreement. The Executive and the Executive's
Beneficiary shall be entitled to no benefits whatsoever under this
Agreement if Early Termination occurs before the Executive shall
have been continuously employed by the Bank for five (5)
consecutive years from the Effective Date; provided,
however, all of the Executive's benefits under this section 2.2
shall be forfeited if at any time from the date of the Executive's
Early Termination and for a period of one (1) year thereafter, the
Executive (without the prior written consent of the Bank) competes
with the Bank or Greenville First Bancshares, Inc. or any of its
subsidiaries, directly or indirectly, by engaging in forming, by
serving as an organizer, director, officer of, employee or agent,
or consultant to, or by acquiring or maintaining more than a one
percent (1%) passive investment in, a depository financial
institution or holding company thereof if such depository financial
institution or holding company has or establishes one (1) or more
offices or branches which are located within thirty (30) miles of
any office or branch of the Bank in existence at the date of the
Executive's Early Termination.
2.2.1 Amount of Benefit . The annual
benefit under this section 2.2 is calculated by taking the Accrual
Balance existing at the end of the month immediately before the
month in which Separation from Service occurs, compounding this
Accrual Balance forward to the Executive's Normal Retirement Age
taking into account interest at the discount rate or rates
established by the Plan Administrator, and amortizing this
resulting amount over the period specified in section 2.2.2
beginning with the Executive's Normal Retirement Age.
2.2.2 Payment of Benefit . The Bank
shall pay the annual benefit to the Executive in twelve (12) equal
monthly installments payable on the first (1 st ) day of
each month, beginning with the later of ( x ) the seventh (7
th ) month after the Executive's Separation from
Service, or ( y ) the month immediately after the month in
which the Executive attains the Normal Retirement Age. The
annual benefit shall be paid to the Executive for the Executive's
lifetime with a
(
) -
year term certain period.
2.3 Disability
Benefit . Upon Separation from Service because of
Disability before Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this section 2.3 instead of any
other benefit under this Agreement.
2.3.1 Amount of Benefit . The
annual benefit under this section 2.3 is calculated by taking the
Accrual Balance existing at the end of the month immediately before
the month in which Separation from Service occurs, compounding this
Accrual Balance forward to the Executive's Normal Retirement Age
taking into account interest at the discount rate or rates
established by the Plan Administrator, and amortizing this
resulting amount over the period specified in section 2.3.2
beginning with the Executive's Normal Retirement Age.
2.3.2 Payment of Benefit . Beginning with
the later of ( x ) the seventh (7 th ) month
after the Executive's Separation from Service, or ( y ) the
month immediately after the month in which the Executive attains
the Normal Retirement Age, the Bank shall pay the Disability
benefit to the Executive in twelve (12) equal monthly installments
on the first (1 st ) day of each month. The annual
benefit shall be paid to the Executive for the Executive's lifetime
with a fifteen (15) - year term certain period.
2.4
Change-in-Control Benefit . If a Change in Control
occurs after the date of this Agreement but before Normal
Retirement Age and before Separation from Service, the Bank shall
pay to the Executive the benefit described in this section 2.4
instead of any other benefit under this Agreement and the Bank
shall exercise its discretion to terminate this
Agreement.
2.4.1 Amount of Benefit . The benefit
under this section 2.4 is the Executive's Accrual Balance at the
Executive's Normal Retirement Age, without additional discount for
the time value of money.
2.4.2 Payment of Benefit . The Bank shall
pay the Change-in-Control benefit under section 2.4 of this
Agreement to the Executive in one lump-sum within three (3) days
after the Change in Control. Payment of the Change-in-Control
benefit shall fully discharge the Bank from all obligations under
this Agreement, except the legal fee reimbursement obligation under
section 7.13 and the obligation to make section 280G excise-tax
gross-up payments under section 7.14.
2.5 Lump-sum Payment
of Normal Retirement Benefit, Early Termination Benefit, or
Disability Benefit Being Paid to the Executive when a Change in
Control Occurs . If a Change in Control occurs at any
time during the salary continuation benefit payment period and if
when the Change in Control occurs the Executive is receiving the
benefit provided by sections 2.1.2, 2.2.2, or 2.3.2, the Bank shall
pay the present value, calculated at the discount rate or rates
established by the Plan Administrator, of the remaining salary
continuation benefits to the Executive in a single lump-sum within
three (3) days after the Change in Control.
2.6 Contradiction
Between the Agreement and Schedule A . Schedule A
attached hereto and incorporated herein contains sample
calculations of the Executive's potential benefits under the
various sections of this Agreement, using certain assumptions as
detailed in the attached Schedule A. These calculations are
for illustrative and informational purposes only and are subject to
change due to changes in the assumptions from time to time, such as
changes in the assumed discount rate, variations between the
assumed timing of certain payments and events and the eventual
actual timing of such payments and events, and other factors.
If there is a contradiction between the terms of this Agreement and
Schedule A concerning the actual amount of a particular benefit
amount due the Executive under this Agreement, then the actual
amount of the benefit as set forth in this Agreement shall
control. If the Plan Administrator changes the discount rate
employed for purposes of calculating the Accrual Balance, the Plan
Administrator shall prepare or cause to be prepared a revised
Schedule A, which shall supersede and replace any and all Schedules
A previously prepared under or attached to this
Agreement.
2.7 Savings Clause
Relating to Compliance with Code Section 409A . Despite
any contrary provision of this Agreement, if when the Executive's
employment terminates the Executive is a specified employee, as
defined in Code section 409A, and if any payments under Article 2
of this Agreement will result in additional tax or interest to the
Executive because of section 409A, the Executive will not be
entitled to the payments under Article 2 until the earliest of (
x ) the date that is at least six (6) months after
termination of the Executive's employment for reasons other than
the Executive's death, ( y ) the date of the Executive's
death, or ( z ) any earlier date that does not result in
additional tax or interest to the Executive under section
409A. If any provision of this Agreement would subject the
Executive to additional tax or interest under section 409A, the
Bank shall reform the provision. However, the Bank shall
maintain to the maximum extent practicable the original intent of
the applicable provision without subjecting the Executive to
additional tax or interest, and the Bank shall not be required to
incur any additional compensation expense as a result of the
reformed provision.
2.8 One Benefit
Only . Despite anything to the contrary in this
Agreement, the Executive and Beneficiary are entitled to one
benefit only under this Agreement, which shall be determined by the
first event to occur that is dealt with by this Agreement.
Except as provided in section 2.5 or Article 3, subsequent
occurrence of events dealt with by this Agreement shall not entitle
the Executive or Beneficiary to other or additional benefits under
this Agreement.
Article 3
Death Benefits
3.1 Death during
Active Service . Except as provided in section 5.2, if
the Executive dies in active service to the Bank before Normal
Retirement Age, the Executive's Beneficiary shall be entitled
to:
3.1.1 Amount of Benefit . The
benefit under this section 3.1 is an amount equal to the
Executive's Accrual Balance at the time of the Executive's
death.
3.1.2 Payment
of Benefit . The Bank shall pay the Death during Active
Service benefit to the Executive's Beneficiary within sixty (60)
days of the Executive's death.
3.2 Death before any
Separation from Service but after Normal Retirement Age and before
the End of the Fifteen (15) - Year Term Certain Period.
If the Executive dies before any Separation from Service and the
Executive is receiving the Executive's normal retirement benefit
provided by section 2.1, but the Executive has not received the
Executive's normal retirement benefit for the full
(
) -
year term certain period, the Executive's Beneficiary shall be
entitled to:
3.2.1 Amount
and Payment of Benefit . At the Bank's sole
discretion upon the Executive's death, the benefit under this
section 3.2 shall be either: (i) the present value, calculated at
the discount rate or rates established by the Plan Administrator,
at the Executive's death of the Executive's remaining salary
continuation benefits as determined under section 2.1, paid to the
Executive's Beneficiary in a lump-sum within sixty (60) days of the
Executive's death; or (ii) the Executive's remaining salary
continuation benefits as determined under section 2.1, paid to the
Executive's Beneficiary at the times specified in section 2.1;
provided , however , that no benefits under this
Agreement shall be paid or payable to the Executive or the
Executive's Beneficiary if this Agreement is terminated under
Article 5.
3.3 Death after
Separation from Service before Normal Re
