GREENE COUNTY BANK EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

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                                                                   EXHIBIT 10.16

 

GREENE COUNTY BANK

Executive Deferred Compensation Agreement

 

                               GREENE COUNTY BANK

                   EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

      THIS AGREEMENT is made this 11th day of March, 2005, by and between GREENE

COUNTY BANK (the "Bank"), a state-chartered commercial bank located in

Greeneville, Tennessee and R. STAN PUCKETT (the "Executive").

 

                                   INTRODUCTION

 

      To encourage the Executive to remain an employee of the Bank, the Bank is

willing to provide a deferred compensation benefit to the Executive. The Bank

will distribute the benefit from its general assets.

 

                                     ARTICLE 1

                                   DEFINITIONS

 

      Whenever used in this Agreement, the following words and phrases shall

have the meanings specified:

 

1.1    "Beneficiary" means each designated person, or the estate of the deceased

       Executive, entitled to benefits, if any, upon the death of the Executive

      determined pursuant to Article 6.

 

1.2    "Board" means the Board of Directors of the Bank as from time to time

      constituted.

 

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    "Code" means the Internal Revenue Code of 1986, as amended.

 

1.5    "Compensation" means the salary and bonus that would be paid to the

      Executive during a Plan Year, absent deferrals, less FICA taxes associated

      with such salary and bonus.

 

1.6    "Deferral Account" means the Bank's accounting of the Executive's

      accumulated Deferrals, plus accrued interest.

 

1.7    "Deferrals" means the amount of the Executive's Compensation which the

      Executive elects to defer according to this Agreement.

 

1.8    "Disability" means the Executive (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 3

      months under an accident and health plan covering directors of the Bank.

      Medical determination of Disability may be made by either the Social

      Security Administration or by the provider of an accident or health plan

      covering directors of the Bank. The Executive must submit proof to the

      Plan Administrator of Social Security Administration's or the provider's

      determination upon the request of the Plan Administrator.

 

1.9    "Early Retirement" means after reaching Early Retirement Age and before

      Normal Retirement Age, the Executive chooses not to stand for reelection

      to the Board.

 

1.10   "Early Retirement Age" means the Executive attaining age fifty five (55)

      with ten (10) or more years of service.

 

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GREENE COUNTY BANK

Executive Deferred Compensation Agreement

 

1.11   "Early Termination" means Separation from Service before Normal Retirement

      Age for reasons other than death, Disability, or Early Retirement.

 

1.12   "Effective Date" means March 11, 2005.

 

1.13   "Election 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 make elections under the Agreement.

 

1.14   "Normal Retirement Age" means the Executive attaining age sixty (60).

 

1.15   "Plan Administrator" means the plan administrator described in Article 8.

 

1.16   "Plan Year" means a twelve-month period commencing on January 1st and

      ending on December 31st of each year. The initial Plan Year shall commence

      on the Effective Date of this Agreement.

 

1.17   "Secretary" means the Secretary of the United States Department of the

      Treasury.

 

1.18   "Separation from Service" means that the Executive's service, as an

      employee and independent contractor, to the Bank and any member of a

      controlled group as defined in Section 414 of the Code to which the Bank

      belongs, has terminated for any reason, other than by reason of a leave of

      absence approved by the Bank or the death of the Executive.

 

                                    ARTICLE 2

 

                                DEFERRAL ELECTION

 

2.1    Generally. Unless otherwise provided for by the Secretary, the Executive

      may file annually Compensation Election Form(s) with the Plan

      Administrator no later than the end of the Plan Year preceding the Plan

      Year in which services leading to such Compensation will be performed

      (e.g., by December 31, 20XX for Compensation to be deferred in 20XX+1).

      The Election Form(s) shall set forth the amount of Compensation to be

      deferred and shall be effective to defer only Compensation earned for

      services performed after the date the Election Form(s) are received by the

      Plan Administrator. The maximum annual amount the Executive can defer is

      $12,000.

 

2.2    First Year of Eligibility. To defer Compensation for services performed in

      the first Plan Year, the Executive may make a deferral election under this

      Agreement by delivering to the Plan Administrator a signed Election

      Form(s) within thirty (30) days after the date of notification of the

      Executive's eligibility to participate in the plan. The Election Form(s)

      shall set forth the amount of Compensation to be deferred and shall be

      effective to defer only Compensation earned for services performed after

      the date the Election Form(s) are received by the Plan Administrator. The

      maximum annual amount the Executive can defer is $12,000.

 

2.3    Change in Form or Timing of Distributions. For distribution of benefits

      under Article 4, the Executive may elect to delay the timing or change the

      form of distributions by submitting the appropriate Election Form(s) to

      the Plan Administrator. Any such elections:

 

            (a)    may not accelerate the time or schedule of any distribution,

                  except as allowed by the

 

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GREENE COUNTY BANK

Executive Deferred Compensation Agreement

 

 

                  Secretary;

 

            (b)    must, for benefits payable under Section 4.1, be made at least

                  twelve (12) months prior to the first scheduled distribution;

 

            (c)    must, for benefits payable under Sections 4.1 and 4.2, delay

                  the commencement of distributions for a minimum of five (5)

                  years from the date the first distribution was originally

                   scheduled to be made; and

 

            (d)    must take effect not less than twelve (12) months after the

                  election is made.

 

                                   ARTICLE 3

                                DEFERRAL ACCOUNT

 

3.1    Establishing and Crediting. The Bank shall establish a Deferral Account on

      its books for the Executive and shall credit to the Deferral Account the

      following amounts:

 

      3.1.1 Deferrals. The Compensation deferred by the Executive as of the time

            the Compensation would have otherwise been paid to the Executive.

 

      3.1.2 Interest. (a) On the last day of each month prior to Separation from

            Service, interest shall be credited on the Deferral Account at an

             annual rate equal to ten percent (10%), compounded monthly.

 

            (b)    On the last day of each month following Separation from

                  Service, including Normal Retirement, Early Retirement, or

                  Disability and during any applicable installment period,

                  interest shall be credited on the unpaid Deferral Account

                  balance at an annual rate equal to seven and one-half percent

                  (7.5%), compounded monthly.

 

3.2    Statement of Accounts. The Plan Administrator shall provide to the

      Executive, within one hundred twenty (120) days after the end of each Plan

      Year, a statement setting forth the Deferral Account balance.

 

3.3    Accounting Device Only. The Deferral Account is solely a device for

      measuring amounts to be paid under this Agreement. The Deferral Account is

      not a trust fund of any kind. The Executive is a general unsecured

      creditor of the Bank for the distribution of benefits. The benefits

      represent the mere Bank promise to distribute such benefits. The

      Executive's rights are not subject in any manner to anticipation,

      alienation, sale, transfer, assignment, pledge, encumbrance, attachment,

      or garnishment by the Executive's creditors.

 

                                    ARTICLE 4

                            BENEFITS DURING LIFETIME

 

4.1    Normal Retirement Benefit. Upon the Executive reaching Normal Retirement

      Age, the Bank shall distribute to the Executive the benefit described in

      this Section 4.1 in lieu of any other benefit under this Agreement.

 

      4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the

            Deferral Account balance at the Executive's Normal Retirement Age.

 

      4.1.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Executive in one hundred twenty (120) consecutive equal monthly

            installments commencing the month following Normal Retirement Age.

 

4.2    Early Retirement Benefit. Upon the Executive's Early Retirement, the Bank

      shall distribute to the Executive the benefit described in this Section

      4.2 in lieu of any other benefit under this Agreement.

 

      4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the

            Deferral Account balance at the date

 

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GREENE COUNTY BANK

Executive Deferred Compensation Agreement

 

            selected by the Executive on the Election Form.

 

      4.2.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Executive in one hundred twenty (120) consecutive monthly

            installments commencing on the date selected by the Executive on the

            Election Form.

 

4.3    Early Termination Benefit. Upon the Executive's Early Termination, the

      Bank shall distribute to the Executive the benefit described in this

      Section 4.3 in lieu of any other benefit under this Agreement.

 

      4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the

            Deferral Account balance at the Executive's Separation from Service.

 

      4.3.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Executive in a lump sum within sixty (60) days following

             Separation from Service.

 

4.4    Disability Benefit. If the Executive separates from service due to

      Disability prior to Normal Retirement Age, the Bank shall distribute to

      the Executive the benefit described in this Section 4.4 in lieu of any

      other benefit under this Agreement.

 

      4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the

            Deferral Account balance at the Executive's Separation from Service.

 

      4.4.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Executive in one hundred twenty (120) consecutive monthly

            installments commencing within sixty (60) days following the

            Executive's Separation from Service due to Disability.

 

                                     ARTICLE 5

                                 DEATH BENEFITS

 

5.1    Death During Active Service Prior to Normal Retirement Age. If the

      Executive dies while in the service of the Bank prior to Normal Retirement

      Age, the Bank shall distribute to the Executive's designated Beneficiary

      the benefit described in this Section 5.1 in lieu of any other benefit

      under this Agreement.

 

      5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the

            Executive's projected Deferral Account balance at Normal Retirement

            Age as shown on Addendum A.

 

      5.1.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Beneficiary in one hundred twenty (120) consecutive equal

             monthly installments commencing within sixty (60) days following

            receipt by the Bank of the Executive's death certificate.

 

5.2    Death Following Separation from Service Due to Early Retirement, Early

      Termination, or Disability. If the Executive dies following Separation

      from Service due to Early Retirement, Early Termination, or Disability,

      the Bank shall distribute to the Executive's designated Beneficiary the

      benefit described in this Section 5.2 in lieu of any other benefit under

      this Agreement.

 

      5.2.1 Amount of Benefit. The benefit under this Section 5.2 is the

            remaining Deferral Account balance at the Executive's death.

 

      5.2.2 Distribution of Benefit. The Bank shall distribute the benefit to

            the Beneficiary in a lump sum within sixty (60) days following

            receipt by the Bank of the Executive's death certificate.

 

5.3    Death During Distribution of the Normal Retirement Benefit. If the

      Executive dies after the Normal Retirement Benefit distributions have

      commenced under Section 4.1 of this Agreement but before receiving

 

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GREENE COUNTY BANK

Executive Deferred Compensation Agreement

 

      all such distributions, the Bank shall distribute to the Beneficiary the

      remaining Deferral Account balance on the same schedule as if the

      Executive had not died.

 

                                    ARTICLE 6

                                  BENEFICIARIES

 

6.1    Beneficiary. The Executive shall have the right, at any time, to designate

      a Beneficiary(ies) to receive any benefits distributable under the

      Agreement to a beneficiary upon the d