**Exhibit 10.6**

 

**LOWCOUNTRY NATIONAL BANK**

**EXECUTIVE DEFERRED COMPENSATION AGREEMENT**

 

THIS AGREEMENT is madethis    day of                                         ,20       , by and between LOWCOUNTRY NATIONALBANK, a nationally-charteredcommercial bank, located in Beaufort, South Carolina (the “Company”), and                         (the“Executive”).

 

**INTRODUCTION**

 

To encourage the Executive to remain an employee of the Company, theCompany is willing to provide to the Executivea deferred compensation opportunity. The Company will pay the Executive’sbenefits from the Company’s general assets.

 

**AGREEMENT**

 

The Executive and the Company agree as follows:

 

**Article 1**

**Definitions**

 

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

 

1.1                                 “*Changeof Control*” means the transfer of shares of the Company’svoting common stock such that one entity or one person acquires (or is deemedto acquire when applying Section 318 of the Code) more than 50 percent of the Company’soutstanding voting common stock.

 

1.2                                 “*Code*”means the Internal Revenue Code of 1986, as amended.

 

1.3                                 “*Compensation*”means the total salary paid to the Executive during a Plan Year.

 

1.4                                 “*DeferralAccount*” means the Company’s accounting of the Executive’saccumulated Deferrals plus seemed interest.

 

1.5                                 “*Deferrals*”means the amount of theExecutive’s Compensation, which theExecutive elects to defer according to this Agreement.

 

1.6                                 “*Disability*”means the Participant’s suffering a sickness, accident or injury whichhas been determined by the carrier of any individual or group disabilityinsurance policy covering the Participant, or by the Social Security Administration.to be a disability rendering the Participant totally and permanently disabled.The Participant must submit proof to the Companyof the carrier’s or Social Security Administration’s determination uponthe request of the Company.

 

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1.7                                 “*EffectiveDate*” means January 1, 2004.

 

1.8                                 “*ElectionForm*” means the Form attached as Exhibit 1.

 

1.9                                 “*NormalRetirement Age*” means the Executive’s 65th birthday.

 

1.10                           “*NormalRetirement Date*” means the later of the Normal Retirement Ageor Termination of Employment.

 

1.11                           “*Plan**Year*” means the calendar year.

 

1.12         “*Terminationof Employment*” means that the Executive ceases to be employedby the Company for any reason, voluntary or involuntary, other than by reasonof a leave of absence approved by the Company.

 

1.13                           “*Return on Equity*” means the Company’s after tax net income for the quarterdivided by the Company’s equity at the beginning of the quarter, as determinedby the Company’s independent auditor based on financial statements for thepertinent year.

 

1.14                           “*ProjectedDeferral Account Balance*” means the balance that would haveaccumulated in the Executive’s Deferral Account at Normal Retirement Age if itis assumed that the Executive:  (1) continued to defer Compensation at the same rate that the Executive had been deferringCompensation on the date of the Executive’s Termination of Service; and (2) theExecutive reached Normal Retirement Age.

 

**Article 2**

**Deferral Election**

 

2.1                                 *Initial Election*. The Executive shall make an initial deferral election underthis Agreement by filing with the Company a signed Election Form within 30days after the Effective Date of this Agreement. The Election Form shallset forth the amount of Compensation to be deferred and shall be effective todefer only Compensation earned after the date the Election Form isreceived by the Company.

 

2.2                                 *Election Changes*

* *

2.2.1                        *Generally*.  **Upon theCompany’s approval**, the Executive may modify the amount ofCompensation to be deferred annually by filing a new Election Form withthe Company prior to the beginning of the Plan Year in which the Compensationis to be deferred. The modified deferral election shall not be effective untilthe calendar year following the year. in which the subsequent Election Form isreceived and approved by the Company.

 

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2.2.2                        *Hardship*. If an unforeseeablefinancial emergency arising from the deathof a family member, divorce, sickness, injury, catastrophe or similar event outside the control of the Executive occurs, the Executive, by written instructions to the Company, may reducefuture deferrals under this Agreement.

 

**Article 3**

**Deferral Account**

 

3.1                                 *Establishing and Crediting*. The Company shall establish aDeferral Account on its books for the Executive and shall credit to theDeferral Account the following amounts:

 

3.1.1                        *Deferrals*. The Compensation deferred by the Executive as of the time theCompensation would have otherwise been paid to the Executive.

 

3.1.2                        *Interest*. At the end of each Plan Year under this Agreement and immediately prior to the payment of any benefits, but only untilcommencement of the benefit paymentsunder this Agreement, unless otherwise stated, interest is to be credited on the account balance at an annual rate, compounded monthly,payable quarterly equal to seventy-five percent (75%) of the previous quarter’s Return on Equity, however, this amount shall not exceed twelve percent (12%).

 

3.2                                 *Statement of Accounts*. The Company shall provide to theExecutive, within 120 days after the end of each Plan Year, a statement settingforth the Deferral Account balance.

 

3.3                                 *Accounting Device Only*. The Deferral Account is solely adevice for measuring amounts to be paid under this Agreement. The DeferralAccount is not a trust fund of any kind. The Executive is a general unsecuredcreditor of the Company for the payment of benefits. The benefits represent themere Company promise to pay such benefits. The Executive’s rights are notsubject 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 Normal Retirement Date,the Company shall pay to the Executive the benefit described in this Section 4.1in lieu of any other benefit under this Agreement.

 

4.1.1                        *Amount of Benefit*. The benefit under this Section 4.1is the Deferral Account balance at the Executive’s Normal Retirement Date.

 

4.1.2                        *Payment of Benefit*. The Company shall pay the benefit to the Executive in 120equal monthly installments commencing on the first day of the month followingthe Executive’s Normal RetirementDate. The Company shall creditinterest at an annual rate equal to the Prime rate plus two percent (2%),compounded monthly on the remaining account balance during any applicable installmentperiod.

 

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4.2                                 *Early Retirement Benefit*. Upon Termination of Employmentprior to the Normal Retirement Age for reasons other than death, Change ofControl or Disability, the Company shall pay to the Executive the benefitdescribed in this Section 4.2 in lieu of any other benefit under ThisAgreement.

 

4.2.1                        *Amount of Benefit*. The benefit under this Section 4.2 is the DeferralAccount balance at the Executive’s Termination of Employment.

 

4.2.2                        *Payment of Benefit*. The Company shall pay the benefit to the Executive in a lumpsum within 60 days following Termination of Employment.

 

4.3                                 *Disability Benefit*. If the Executive terminates employment due to Disability priorto Normal Retirement Age, the Company shall pay to the Executive the benefitdescribed in this Section 4.3 inlieu of any other benefit under this Agreement.

 

4.3.1                        *Amount of Benefit*. The benefit under this Section 4.3 is the DeferralAccount balance at the Executive’s Termination of Employment.

 

4.3.2                        *Payment of Benefit*. The Company shall pay the benefit to the Executive in a lumpsum within 60 days following Termination of Employment.

 

4.4                                 *Change of Control Benefit*. Upon a Change of Control,followed by the Executive’s Termination of Employment for reasons other thandeath, Disability or retirement, the Company shall pay to the Executive thebenefit described in this Section 4.4 in lieu of any other benefit underthis Agreement.

 

4.4.1                        *Amount of Benefit*. The benefit under this Section 4.4 is the ProjectedDeferral Account Balance.

 

4.4.2                        *Payment of Benefit*. The Company shallpay the benefit to the Executive in 120equal monthly installments commencing with the month following the Executive’s Normal Retirement Date.  The Company shall credit interest at an annual rate equal to the Prime rateplus two percent (2%),compounded monthly on the remainingaccount balance during anyapplicable installment period.

 

4.5                                 *Hardship Distribution*. Upon the Board of Director’s determination (following petition by the Executive) that the Executive hassuffered an unforeseeable financial emergency as described in Section 2.2.2, the Company shall distribute to the Executive all or a portion of theDeferral Account balance as determinedby the Company, but in no eventshall the distribution be greater than is necessary to relieve the finanncia1hardship.

 

**Article 5**

**Death Benefits**

 

5.1                                 *Death During Active**Service*.If the Executive dies while in the employment of the Company, the Company shallpay to the Executive’s beneficiary the benefit described in this Section 5.1 in lieu of any other benefitunder this Agreement.

 

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5.1.1                        *Amount of Benefit*. The benefit under this Section 5.1 is the DeferralAccount balance at the Executive’s death.

 

5.1.2                        *Payment of Benefit*. The Company shall pay the benefit to the beneficiary within 60days following the Executive’s death.

 

5.2                                 *Death During Payment of a Benefit*. If the Executive dies after anybenefit payments have commenced under this Agreement but before receiving allsuch payments, the Company shall pay the remaining benefits to the Executive’sbeneficiary at the same time and in the same amounts they would have been paidto the Executive had the Executive survived.

 

5.3                                 *Death After Termination of Employment But BeforeBenefit Payments Commence*. Ifthe Executive is entitled to benefit payments under this Agreement, butdies prior to the commencement of said benefit payments, the Company shall paythe same benefit payments to the Executive’s beneficiary that the Executive wasentitled to prior to death except that the benefit payments shall commence onthe first day of the month following the date of the Executive’s death.

 

**Article 6**

**Beneficiaries**

 

6.1                                 *Beneficiary Designations*. The Executive shall designate abeneficiary by filing a written designation with the Company. The Executive mayrevoke or modify the designation at any time by filing a new designation.  However, designations will only be effectiveif signed by the Executive and received by the Company during the Executive’slifetime. The Executive’s beneficiary designation shall be deemed automaticallyrevoked if the beneficiary predeceases the Executive or if the Executive namesa spouse as beneficiary and the marriage is subsequently dissolved.  If the Executive dies without a validbeneficiary designation, all payments shall be made to the Executive’s estate.

 

6.2                                 *Facility of Payment*. If a benefit is payable toa minor, to a person declared incompetent, or to a person incapable of handlingthe disposition of his or her property, theCompany may pay such benefit tothe guardian, legal representative or person having the careor custody of such minor, incompetent person or incapable person. The Companymay require proof of incompetence, minorityor guardianship as it may deemappropriate prior to distribution ofthe benefit.  Such distributionshall completely discharge the Companyfrom all liability with respect tosuch benefit.

 

**Article 7**

**General Limitations**

 

7.1                                 *Termination for Cause*. Notwithstanding any provision ofthis Agreement to the contrary, the Company shall not pay any benefit under thisAgreement that is in excess of the Executive’s Deferrals (i.e., the interestearned on the Deferral Account) if the Company terminates the Executive’semployment for:

 

(a)                     Grossnegligence or gross neglect of duties to the Company;

 

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(b)                    Commissionof a felony or of a gross misdemeanor involving moral turpitude in connectionwith the Executive’s employment with the Company; or

 

(c)                     Fraudor willful violation of any law or significant Company policy committed inconnection with the Executive’s employment and resulting in an adverse effecton the Company.

 

The Executive’s Deferrals shallbe paid to the Executive in a lumpsum within 60 days following Termination of Employment.

 

7.2                                 *Suicide or Misstatement*. The Company shall not pay anybenefit under this Agreement exceeding the Deferral Account if the Executivecommits suicide within three years after the date of this Agreement. Inaddition, the Company shall not pay a benefit under this Agreement exceedingthe Deferral Account if the Executive has made any material misstatement offact on an employment application or resume provided to the Company, or on anyapplication for any benefits provided by the Company to the Executive.

 

**Article 8**

**Claims and Review Procedures**

 

8.1                                 *Claims Procedure*. A Participant or beneficiary (“claimant”) who has not receivedbenefits under the Plan that he or she believes should be paid shall make aclaim for such benefits as follows:

 

8.1.1                        *Initiation**— Written Claim*. The claimant initiates a claim bysubmitting to the Company a written claim for the benefits.

 

8.1.2                        *Timing of Company Response*. The Company shall respond to suchclaimant within 90 days after receiving the claim. If the Company determinesthat special circumstances require additional time for processing the claim,the Company can extend the response period by an additional 90 days by notifyingthe claimant in writing, prior to the end of the initial 90-day period, that anadditional period is required. The notice of extension must set forth thespecial circumstances and the date by which the Company expects to render itsdecision.

 

8.1.3                        *Notice of Decision*. If the Company denies part or all ofthe claim, the Company shall notify the claimant in writing of such denial. TheCompany shall write the notification in a manner calculated to be understood bythe claimant. The notification shall set forth

 

(a)                         Thespecific reasons for the denial,

(b)                        A reference to the specific provisions of the Plan on which the denial is based,

(c)                         Adescription of any additional information or material necessary for the claimant to perfect the claim andan explanation of why it is needed,

(d)                        Anexplanation of the Plan’s review procedures and the time limits applicable to such procedures, and

 

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(e)                         Astatement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adversebenefit determination on review.

 

8.2                                 *Review Procedure*. If the Company denies part or all of the claim, the claimantshall have the opportunity for a full and fair review by the Company of thedenial, as follows:

 

8.2.1                        *Initiation**— Written Request*. To initiate the review, theclaimant, within 60 days afterreceiving the Company’s notice of denial,must file with the Company a written request for review. -

 

8.2.2                        *Additional Submissions**— InformationAccess*. The claimant shall then have theopportunity to submit written comments, documents, records and otherinformation relating to the claim. The Company shall also provide the claimant,upon request and free of charge, reasonable access to, and copies of, alldocuments, records and other information relevant (as defined in applicableERISA regulations) to the claimant’s claim for benefits.

 

8.2.3                        *Considerations on Review*.  Inconsidering the review, the Company shall take into account all materials andinformation the claimant submits relating to the claim, without regard towhether such information was submitted or considered in the initial benefitdetermination.

 

8.2.4                        *Timing of Company Response*. TheCompany shall respond in writing to such claimant within 60 days afterreceiving the request for review. If the Company determines that specialcircumstances require additional time for processing the claim, the Company canextend the response period by an additional 60 days by notifying the claimantin writing, prior to the end of the initial 60-day period, that an additionalperiod is required.  The notice of extension must set forth thespecial circumstances and the date by which the. Company expects to render its decision.

 

8.2.5                        *Notice of Decision*. The Company shall notify the claimantin writing of its decision on review.The Company shall write the notification in a mannercalculated to be understood by the claimant. The notificationshall set forth:

 

(a)                         Thespecific reasons for the denial,

(b)                        A reference to the specific provisionsof the Plan on which the denialis based,

(c)                         A statement that the claimant isentitled to receive, upon request and free of charge, reasonable access to, andcopies of, all documents, records and other information relevant (as defined inapplicable ERISA regulations) to the claimant’ s claim for benefits, and

(d)                        A statement of the claimant’s right tobring a civil action under ERISA Section 502(a).

 

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**Article 9**

**Amendments and Termination**

 

This Agreement may be amendedor terminated only by a written agreement signed by the Company and theExecutive.

 

**Article 10**

**Miscellaneous**

 

10.1                           *Binding Effect*. This Agreement shall bind the Executive and the Company and their beneficiaries, survivors, executors, administrators andtransferees.

 

10.2                           *No Guarantee of Employment*. This Agreement is not a contractfor employment. It does not give the Executive the right to remain an employeeof the Company, nor does it interfere with the Company’s right to discharge theExecutive. It also does not require the Executive to remain an employee norinterfere with the Executive’s right to terminate employment at any time.

 

10.3                           *Non-Transferability*. Benefits under this Agreement cannotbe sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

10.4                           *Tax Withholding*. The Company shallwithhold any taxes that are required to be withheld from the benefitsprovided under this Agreement.

 

10.5                           *Applicable Law*. The Agreement and all rights hereunder shall be governed by the laws of South Carolina, except to the extent preempted by the laws of the United States of America.

 

10.6                           *Unfunded Arrangement*. The Executive and the Executive’sbeneficiary are general unsecured creditors of the Company for the payment ofbenefits under this Agreement. The benefits represent the mere promise by theCompany to pay such benefits. The rights to benefits are not subject in anymanner to anticipation, alienation, sale, transfer, assignment, pledge,encumbrance, attachment, or garnishment by creditors. Any insurance on theExecutive’s life is a general asset of the Company to which the Executive andthe Executive’s beneficiary have no preferred or secured claim.

 

10.7                           *Reorganization*. The Company shall not merge or consolidate into or withanother company, or reorganize. or sell substantially all of its assets toanother company, firm, or person unless such succeeding or continuing company,firm, or person agrees to assume and discharge the obligations of the Companyunder this Agreement. Upon the occurrence of such event, the term “Company” asused in this Agreement shall be deemed to refer to the successor or survivorcompany.

 

10.8                           *Entire Agreement*. ThisAgreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof. Norights are granted to the Executive by virtue of this Agreement other thanthose specifically set forth herein.

 

10.9                           *Administration*. The Company shall have powers which are necessary toadminister this Agreement, including but not limited to:

 

(a)                      Interpretingthe provisions of the Agreement;

 

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(b)                     Establishingand revising the method of accounting for the Agreement;

(c)                     Maintaining arecord of benefit payments; and

(d)                    Establishing rules andprescribing any forms necessary ordesirable to administer the Agreement.

 

10.10                     *Named Fiduciary*. For purposes of theEmployee Retirement Income Security Act of 1974, if applicable, the Company shall be the named fiduciaryand plan administrator under this Agreement. The named fiduciary may delegateto others certain aspects of the management and operation responsibilities ofthe plan including the employment of advisors and the delegation of ministerialduties to qualified individuals.

 

IN WITNESS WHEREOF, the Executive and a duly authorized Company officerhave signed this Agreement.

 

 
| **Executive:** | **Company:**                  |
|----------------|-------------------------------|
|           |                          |
| ** **     | **Lowcountry  National Bank** |
|           |                          |
|           |                          | By: |   |
|           | Title:                        |   |
|                |                               |  |  |  |

 

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EXHIBTT 1

TO

LOWCOIJNTRY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

Deferral Election

 

I elect to defer my Compensation pursuantto this Agreement with theCompany, as follows:

 
| **Amount of Deferral**                                                                                                                                                                     | ** ** | **Duration**                                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| [Initial and Complete one]                                                                                                                                                                 |       | [Initial One]                                                                                                                                                                                                                                      |
|                                                                                                                                                                                       |       |                                                                                                                                                                                                                                               |
|          I elect to defer              %  of  my Compensation annually. |       |          One Year only                                                                                                                                                                                |
|                                                                                                                                                                                       |       |                                                                                                                                                                                                                                               |
|                                                                                                                                                                                       |       |          For            [Insert  Number]  Years                                                                                           |
|                                                                                                                                                                                       |       |                                                                                                                                                                                                                                               |
|          I elect to defer $              of my Compensation annually              |       |          Until Termination of  Employment                                                                                                                                                             |
|                                                                                                                                                                                       |       |                                                                                                                                                                                                                                               |
|          I elect not to defer any of my Compensation                                                                                          |       |          Until                                (date) |

 

Upon the Company’s approval, I understand that I may change the amountand duration of my deferrals by filing a new election form with the Company;provided, however, that any subsequent election will not be effective until thecalendar year following the year in which the new election is received by theCompany.

 

 
| Signature                                                                                                                                                                                                                                                                                |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                                                                                     |   |   |
| Date                                                                                                                                                                                                                                                                                     |   |   |
|                                                                                                                                                                                                                                                                                     |
| Received by  the Company this             day of                           , 20     . |
|                                                                                                                                                                                                                                                                                     |
| By:                                                                                                                                                                                                                                                                                      |   |   |
|                                                                                                                                                                                                                                                                                     |   |   |
| Title:                                                                                                                                                                                                                                                                                   |   |   |
|                                                                                                                                                                                                                                                                                          |        |        |  |  |  |

 

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**Beneficiary Designation**

 

**LOWCOUNTRY NATIONAL BANKEXECUTIVE DEFERRED COMPENSATION AGREEMENT**

 

 

I designate the following as beneficiary of benefitsunder this Agreement payable following my death:

 

 
| Primary:    |   |
|-------------|--------|
|        |   |
|        |   |
| Contingent: |   |
|        |   |

 

**Note:****                   Toname a trust as beneficiary, please provide the name of the trustee(s) and the exactname and date of the trust agreement.**

 

 

I understand that I may change these beneficiary designations by filinga new written designation with the Company. I further understand that thedesignations will be automatically revoked if the beneficiary predeceases me,or, if I have named my spouse as beneficiary and our marriage is subsequentlydissolved.

 

 
| Signature                                                                                                                                                                                                                       |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                                            |   |   |
| Date                                                                                                                                                                                                                            |   |   |
|                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                            |
| Acknowledged  by the Company this day of                            , 20     . |
|                                                                                                                                                                                                                            |
| By                                                                                                                                                                                                                              |   |   |
|                                                                                                                                                                                                                            |   |   |
| Title                                                                                                                                                                                                                           |   |   |
|                                                                                                                                                                                                                                 |        |        |  |  |  |

 

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