FIRST AMENDMENT TO
AMENDED DEFERRED COMPENSATION
AND INCOME CONTINUATION AGREEMENT
First Amendment, dated
as of November 17, 2008 (the "Amendment"), to the
Amended Deferred
Compensation and Income Continuation Agreement, dated as of
March 15, 2004 (as amended, the "Agreement"), by and among Citizens South
Bank
(the "Bank") and _______________ (the "Director"). Capitalized terms which are
not defined herein shall have the same meaning as set forth in the
Agreement.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Agreement to comply with
the final
regulations issued in
April 2007 by the Internal Revenue Service under Section
409A of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, pursuant
to Section
8.1 of the
Agreement,
the parties to the
Agreement desire to amend the Agreement;
NOW,
THEREFORE,
in consideration of
the premises, the
mutual agreements
herein set forth and such other consideration the sufficiency of
which is hereby
acknowledged, the Bank and the Director hereby agree as
follows:
Section 1. Amendment
to Section 1.4 of the
Agreement. The
definition of
Change in Control in Section 1.4 of the Agreement is hereby amended to read in
its entirety as follows:
"Change in Control means a change in the ownership of Citizens South
Banking Corporation
(the "Company") or the Bank, a change in the effective
control of the
Company or the Bank or a change in the ownership of a
substantial portion of
the assets of the Company or the Bank, in each case
as
provided under Section 409A of the Code and the regulations
thereunder."
Section 2. Amendment
to Section 1.5 of the
Agreement. The
definition of
Disability in Section
1.5 of the
Agreement is hereby amended to read in its
entirety as follows:
"Disability means
the Director (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 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 12 months, receiving income
replacement benefits
for a period of not
less than three months
under an
accident and health agreement covering employees of the Bank (or would
be
receiving such benefits if he was eligible to participate in such
plan)."
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Section 3. Amendment to Section 1.14 of the Agreement. Section 1.14 of the
Agreement is hereby amended to read in its entirety as follows:
"Termination of Service," for purposes of this Agreement, shall
mean a
"Separation from
Service" as such term
is defined in Section
409A of the
Code
and the final regulations issued thereunder, provided that whether a
Separation from
Service has occurred shall be determined based on whether
the
facts and circumstances indicate that the Bank and the Director
reasonably anticipated
that no further services would be performed after a
certain date or that the level of bona fide services the Director would
perform after
such date (whether as an employee or as an independent
contractor) would permanently decrease to less than fifty
percent (50%) of
the
average level of bona fide services performed (whether as an employee
or
an independent
contractor) over the
immediately preceding
thirty-six
(36)
month period (or the full period of services to the Bank if the
Director has been providing serv
