Exhibit 10.1


 


BEACH FIRST NATIONAL BANK


Amended &
Restated Salary Continuation Agreement


 


FIRST AMENDMENT


TO THE


BEACH FIRST NATIONAL BANK


AMENDED & RESTATED


SALARY CONTINUATION AGREEMENT


DATED                  ,
200  


FOR


 






 


THIS FIRST AMENDMENT is
adopted this          day of             
200  , by and between BEACH FIRST NATIONAL BANK, a nationally-chartered
commercial bank located in Myrtle Beach, South Carolina (the “Bank”), and             
(the “Executive”).


 


The Bank and the Executive executed
the Amended & Restated Salary Continuation Agreement on             
    , 200   effective as of                 ,
200   (the “Agreement”).


 


The undersigned hereby
amend the Agreement for the purpose of bringing the (1) changing the
payment streams in the Normal Retirement, Early Termination, Disability and
Change in Control provisions and (2) updating the Agreement to reflect the
Final Regulations of Section 409A of the Internal Revenue Code.  Therefore, the following changes shall be
made:


 


Section 1.6 of the
Agreement shall be deleted in its entirety and replaced with the following:


 


1.6           “Early Termination”
means Separation from Service before Normal Retirement Age for reasons other
than death, Disability, Termination for Cause, or Change in Control.


 


Section 1.9 of the
Agreement shall be deleted in its entirety.


 


The following Section 1.17a shall be added to the Agreement
immediately following Section 1.17:


 


1.17a       “Specified Employee” means an employee who at the time of
Separation from Service is a key employee of the Bank or the Company, if any
stock of the Bank or the Company is publicly traded on an established
securities market or otherwise.  For
purposes of this Agreement, an employee is a key employee if the employee meets
the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied
in accordance with the regulations thereunder and disregarding section
416(i)(5)) at any time during the twelve (12) month period ending on a
Separation from Service.


 


Section 2.1.2 of the Agreement shall be deleted in its entirety
and replaced by the following:


 


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2.1.2        Distribution of Benefit. 
The Bank shall distribute the annual benefit to the Executive in twelve
(12) equal monthly installments commencing on the first day of the month
following the Normal Retirement Date. 
The annual benefit shall be distributed to the Executive for the greater
of (i) seventeen (17) years or (ii) the Executive’s lifetime.


 


Sections 2.2.1 and 2.2.2 of the Agreement shall be deleted in their
entirety and replaced by the following:


 


2.2.1        Amount of Benefit.  The benefit under this Section 2.2
is determined by multiplying the Vesting Percentage by the Account Value for
the Plan Year ending immediately prior to Early Termination and then increasing
the vested balance at an annual rate of six percent (6.0%), compounded monthly,
until commencement of benefit payments under this Section 2.2.  The annual benefit is determined by
calculating a two hundred four (204) month fixed annuity from the vested
inflated Account Value, crediting interest on the unpaid balance at an annual
rate of six percent (6.0%), compounded monthly.


 


2.2.2        Distribution of Benefit. 
The Bank shall distribute the annual benefit to the Executive in twelve
(12) equal monthly installments commencing on the first day of the month
following Normal Retirement Age.  The
annual benefit shall be distributed to the Executive for the greater of (i) seventeen
(17) years or (ii) the Executive’s lifetime.


 


Sections 2.3, 2.3.1 and 2.3.2 of the Agreement shall be deleted in their
entirety and replaced by the following:


 


2.3           Disability Benefit. 
If the Executive experiences a Disability prior to Normal Retirement
Age, the Bank shall distribute the benefit described in this Section 2.3
in lieu of any other benefit under this Agreement.


 


2.3.1        Amount of Benefit. 
The benefit under this Section 2.3
is determined by multiplying one hundred percent (100%) of the Account Value
for the Plan Year ending immediately prior to Disability and then increasing
the balance at an annual rate of six percent (6.0%), compounded monthly, until
commencement of benefit payments under this Section 2.3.  The annual benefit is determined by
calculating a two hundred four (204) month fixed annuity from the vested inflated
Account Value, crediting interest on the unpaid balance at an annual rate of
six percent (6.0%), compounded monthly.


 


2.3.2        Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal monthly installments commencing
on the first day of the month following Normal Retirement Age.  The annual benefit shall be distributed to
the Executive for the greater of (i) seventeen (17) years or (ii) the
Executive’s lifetime.


 


Sections 2.4, 2.4.1, 2.4.2 and 2.4.3 of the Agreement shall be deleted
in their entirety and replaced by the following:


 


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2.4           Change in Control Benefit. 
Upon a Change in Control, the Bank shall distribute to the Executive the
benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.


 


2.4.1        Amount of Benefit.  The
benefit under this Section 2.4 is the present value of the Projected Benefit
using a six percent (6%) interest rate and a seventeen (17) year payment stream.


 


2.4.2        Payment of Benefit. 
The Bank shall distribute the benefit to the Executive in a lump sum
within ninety (90) days following a Change in Control.


 


2.4.3        Internal
Revenue Service Section 280G Gross Up.  If, as a result of a Change in Control, the
Executive becomes entitled to benefits under this Agreement or under any other
benefit, compensation or incentive plan or arrangement with the Bank
(collectively, the “Total Benefits”), and if any part of the Total Benefits is
subject to the Excise Tax under Section 280G and Section 4999 of the
Internal Revenue Code (the “Excise Tax”), the Bank shall pay to the Executive
the following additional amounts, consisting of (a) a payment equal to the
Excise Tax payable by the Executive on the Total Benefits under Section 4999
of the Internal Revenue Code (the “Excise Tax Payment”), and (b) a payment
equal to the amount necessary to provide the Excise Tax payment net of all
income, payroll and excise taxes.  Any
payment pursuant to this Section 2.4.3 shall be made at the latest by the
end of the Executive’s taxable year next following the calendar year in which
the Change in Control event occurred. Payment of the additional amounts
described in clauses (a) and (b) shall be made in addition to the
amount set forth in Section 2.4.1 above.


 


The following Section 2.4.4
shall be added to the Agreement immediately following Section 2.4.3:


 


2.4.4        Reimbursement
of Legal Fees.  If the Executive seeks any legal action to
compel the bank to pay the Change in Control benefit, the Bank shall reimburse
the Executive any legal fees incurred. 
The Executive shall be reimbursed on the 30th day following the date that
the Executive substantiates any expense incurred pursuant to this Section 2.4.4
with respect to
which reimbursement is applicable.


 


Section 2.5 of the Agreement shall be deleted in its entirety and
replaced by the following:


 


2.5           Restriction on Commencement of
Distributions. 
Notwithstanding any provision of this Agreement to the contrary, if the
Executive is considered a Specified Employee at Separation from Service or at
any time during the 12-month period ending on a Separation from Service, the
provisions of this Section 2.5 shall govern all distributions
hereunder.  If benefit distributions
which would otherwise be made to the Executive due to Separation from Service
are limited because the Executive is a Specified Employee, 


 


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then
such distributions shall not be made during the first six (6) months
following Separation from Service. 
Rather, any distribution which would otherwise be paid to the Executive
during such period shall be accumulated and paid to the Executive in a lump sum
on the first day of the seventh month following Separation from Service.  All subsequent distributions shall be paid in
the manner specified.


 


The following Sections 2.6 and 2.7 shall be added to the Agreement
immediately following Section 2.5:


 


2.6           Distributions Upon Taxation of Amounts
Deferred. If,
pursuant to Code Section 409A, the Federal Insurance Contributions Act or
other state, local or foreign tax, the Executive becomes subject to tax on the
amounts deferred hereunder, then, to the extent such tax liability can be paid
by the amount that may be currently distributed to the Executive under Sections
2.1-2.4 of this Agreement without the imposition of additional tax liability
under Section 409A of the Code, the Bank may make a limited distribution
to the Executive as soon as is administratively practicable following the
discovery of the tax liability of an amount not to exceed the amount that
becomes subject to tax, in accordance with the provisions of Treasury
Regulations Section 1.409A-3(j)(vi), (vii) and (xi).  Any such distribution will decrease the
Executive’s benefit hereunder.


 


2.7           Change in Form or Timing of
Distributions.  All changes in the form or timing of
distributions hereunder must comply with the following requirements.  The changes:


 


(a)           may not accelerate the time or schedule of any distribution, except as provided
in Code Section 409A and the regulations thereunder;


(b)           must, for benefits distributable under Sections 2.2 and 2.3, be made at
least twelve (12) months prior to the first scheduled distribution;


(c)           must, for benefits distributable under Sections 2.1, 2.2 and 2.4, 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 of the Agreement
shall be deleted in its entirety and replaced by the following:


 


Article 3


Distribution at Death


 


3.1           Death During
Active Service.  If the Executive dies prior to Separation
from Service, the Executive’s Beneficiary shall be entitled to an amount equal
to the Account Value less any amount the Beneficiary is entitled to receive
under any split dollar arrangement 


 


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between
the Bank and the Executive, in a single lump sum on the first day of the fourth
month following the Executive’s death. 
The Beneficiary shall be required to provide to the Bank the Executive’s
death certificate.


 


3.2           Death During
Distribution of a Benefit.  If the Executive dies after any benefit
distributions have commenced under this Agreement but before receiving the
minimum seventeen (17) years of such distributions, the Bank shall distribute
to the Beneficiary the present value of the remaining portion of the minimum
seventeen (17) years of benefits due under this Agreement, in a single lump sum
on the first day of the fourth month following the Executive’s death.  The Beneficiary shall be required to provide
to the Bank the Executive’s death certificate.


 


3.3           Death Before
Benefit Distributions Commence. 
If the Executive is entitled
to benefit distributions under this Agreement but dies prior to the date that
commencement of said benefit distributions are scheduled to be made under this
Agreement, the Bank shall distribute to the Beneficiary the present value of
the minimum seventeen (17) years of benefits due under this Agreement, in a
single lump sum on the first day of the fourth month following the Executive’s
death.  The Beneficiary shall be required
to provide to the Bank the Executive’s death certificate.


 


Article 7 of the Agreement shall be deleted in its entirety and
replaced by the following:


 


Article 7


Amendments and Termination


 


7.1           Amendments.  This Agreement may be amended
only by a written agreement signed by the Bank and the Executive.  However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its auditors or
banking regulators or to comply with legislative changes or tax law, including
without limitation Section 409A of the Code and any and all Treasury
regulations and guidance promulgated thereunder.


 


7.2           Plan Termination Generally.  This
Agreement may be terminated only by a written agreement signed by the Bank and
the Executive.  The benefit hereunder
shall be the Account Value as of the date the Agreement is terminated.  Except as provided in Section 7.3, the
termination of this Agreement shall not cause a distribution of benefits under
this Agreement.  Rather, after such
termination benefit distributions will be made at the earliest distribution
event permitted under Article 2.


 


7.3           Plan Terminations Under Section 409A. 
Notwithstanding anything to the contrary in Section 7.2, if this
Agreement terminates in the following circumstances:


 


(a)           Within thirty (30) days before, or twelve (12) months after a Change in
Control, provided that all distributions are made no later than twelve (12)
months following such termination of this Agreement and provided that all
agreements, 


 


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methods, programs, and other arrangements sponsored
by the Bank or the Company immediately after the Change in Control with respect
to which deferrals of compensation are treated as having been deferred under a
single plan under §1.409A-1(c) (“Similar Arrangements”) are terminated and liquidated with respect to
each participant that experienced the Change in Control and all participants
receive all amounts of compensation deferred under this Agreement and
all Similar Arrangements within twelve
(12) months of the date the Bank or Company irrevocably takes all necessary
action to terminate and liquidate this Agreement and all Similar
Arrangements;


(b)           Upon the Bank’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the Executive’s
gross income in the latest of (i) the calendar year in which the Agreement
terminates; (ii) the calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or (iii) the first calendar
year in which the distribution is administratively practical; or


(c)           Upon the Bank’s termination of this Agreement and all Similar
Arrangements, provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii) all
termination distributions are made no earlier than twelve (12) months and no
later than twenty-four (24) months following such termination, and (iii) the
Bank does not adopt any new arrangement that would be a Similar Arrangement for
a minimum of three (3) years following the date the Bank takes all
necessary action to irrevocably terminate and liquidate the Agreement;


 


the Bank may distribute the Account Value,
determined as of the date of the termination of this Agreement, to the
Executive in a lump sum subject to the above terms.


 


The following Section 8.14
shall be added to the Agreement immediately following Section 8.13:


 


8.14         Compliance with Code Section 409A.  This
Agreement shall be interpreted and administered consistent with Code Section 409A.


 


IN
WITNESS OF THE ABOVE,
the Bank and the Executive hereby consent to this First Amendment.


 


 


	
  Executive:

  	
  Beach First National Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
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