Exhibit 10.2


 


BEACH
FIRST NATIONAL BANK


Amended &
Restated Director Retirement Agreement


 


FIRST AMENDMENT


TO
THE


BEACH FIRST NATIONAL BANK


AMENDED & RESTATED


DIRECTOR RETIREMENT 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 “Director”).


 


The Bank and the Director executed the Amended &
Restated Director Retirement Agreement on             
    , 200   effective as of July 1, 2002
(the “Agreement”).


 


The
undersigned hereby amend the Agreement for the purpose of (1) changing the
Normal Retirement Age (2) changing the payment streams for the Normal
Retirement, Early Termination and Disability benefits, (3) changing the
Early Involuntary Separation from Service benefit to a Change in Control
benefit and (4) updating the Agreement to reflect the Final Regulations of
Section 409A of the Internal Revenue Code. Therefore, the following
changes shall be made:


 


Section 1.7 of the Agreement shall be deleted in its entirety and
replaced by the following:


 


1.7           “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.


 


Section 1.10 of the Agreement shall be deleted in its entirety and
replaced by the following:


 


1.10       “Normal Retirement Age” means age sixty-five (65).


 


The following Section 1.16a shall be added to the Agreement
immediately following Section 1.16:


 


1.16a                     “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 


 


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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:


 


2.1.2        Distribution of Benefit. The Bank shall distribute the annual
benefit to the Director 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 Director for the greater of (i) seventeen (17)
years or (ii) the Director’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 Director 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 Director for the greater of (i) seventeen (17)
years or (ii) the Director’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 Director 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 one
hundred percent (100%) of the Account Value determined as of the end of the
Plan Year preceding Disability.


 


2.3.2        Distribution of Benefit. The Bank shall distribute the benefit
to the Director in a lump sum within ninety (90) days following such
Disability.


 


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 Sections 2.4, 2.4.1, 2.4.2 and
2.4.3:


 


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


 


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


 


2.4.2        Payment of Benefit. The Bank shall distribute the benefit
to the Director 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 Director 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 Director
the following additional amounts, consisting of (a) a payment equal to the
Excise Tax payable by the Director 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 Director’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 Director seeks any legal action
to compel the bank to pay the Change in Control benefit, the Bank shall
reimburse the Director any legal fees incurred. The Director shall be reimbursed
on the 30th day following the date that the Director substantiates any expense
incurred pursuant to this Section 2.4.4 with respect to which
reimbursement is applicable.


 


The following Sections 2.5, 2.6 and 2.7 shall be added to the Agreement
immediately following Section 2.4.4:


 


2.5           Restriction on Commencement of Distributions.  Notwithstanding any provision of this
Agreement to the contrary, if the Director 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 Director due to Separation from Service are limited because the Director
is a Specified Employee, 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 Director during such period
shall be accumulated and paid to the Director 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.


 


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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 Director 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 Director 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 Director 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 Director’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 2.1 and 2.2, 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
Director dies prior to Separation from Service, the Director’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 between
the Bank and the Director, in a single lump sum on the first day of the fourth
month following the Director’s death. The Beneficiary shall be required to
provide to the Bank the Director’s death certificate.


 


3.2           Death During
Distribution of a Benefit. If
the Director 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 Director’s death. The Beneficiary shall be required to provide to
the Bank the Director’s death certificate.


 


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3.3           Death Before
Benefit Distributions Commence.
If the Director 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 Director’s
death. The Beneficiary shall be required to provide to the Bank the Director’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 Director. 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 Director. 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, 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 Director’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 


 


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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 the Agreement, to the Director
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 Section Code 409A. This Agreement shall be interpreted and
administered consistent with Code Section 409A.


 


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


 


 


	
  Director:

  	
  Beach
  First National Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
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