Document:

Exhibit
10.5

 

LOWCOUNTRY
NATIONAL BANK

DIRECTOR
DEFERRED FEE AGREEMENT

 

THIS AGREEMENT is made this           day
of
                       ,
2005, by and between LOWCOUNTRY NATIONAL BANK, a nationally-chartered
commercial bank, located in Beaufort, South Carolina (the “Company”), and                        (the
“Director”).

 

INTRODUCTION

 

To encourage the Director to remain a member of the Company’s Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director’s benefits from the Company’s
general assets.

 

AGREEMENT

 

The Director 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                                 “Change of Control” means the transfer of shares of the Company’s
voting common stock such that one entity or one person acquires (or is deemed
to acquire when applying Section 318 of the Code) more than 50 percent of
the Company’s outstanding voting common stock

 

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

 

1.3                                 “Deferral  Account” means the Company’s accounting of the Director’s accumulated Deferrals
plus accrued interest.

 

1.4                                 “Deferrals” means the amount of the Director’s Fees, which
the Director elects to defer according to this Agreement.

 

1.5                                 “Disability” means, if the Director is covered by a
Company-sponsored disability policy, total disability as defined in such policy
without regard to any waiting period, If the Director is not covered by such a
policy, Disability means the Director suffering a sickness, accident or injury
which, in the judgment of a physician who is satisfactory to the Company, prevents
the Director from performing substantially all of the Director’s normal duties
for the Company. As a condition to receiving any Disability benefits, the
Company may require the Director to submit to such physical or mental
evaluations and tests as the Company’s Board of Directors deems appropriate and
reasonable.

 

1.6                                 “Effective Date” means January 1, 2004.

 

1

 

1.7                                 “Election Form” means the Form attached as Exhibit 1.

 

1.8                                 “Fees” means the total fees payable to the Director
during a Plan Year.

 

1.9                                 “Normal Retirement Age” means the Director’s 70th birthday.

 

1.10                           “Normal Retirement Date” means the later of the Normal Retirement Age
or Termination of Service.

 

1.11                           “Plan Year” means the calendar year.

 

1.12                           “Return on Equity’’ means the Company’s after tax net income for
the quarter divided by the Company’s equity at the beginning of the quarter, as
determined by the Company’s independent auditor based on financial statements
for the pertinent year.

 

1.13                           “Termination of Service” means that the Director ceases to be a member
of the Company’s Board of Directors for any reason, voluntary or involuntary,
other than by reason of a leave of absence approved by the Company.

 

1.14                           “Projected Deferral Account
Balance” means the balance
that would have accumulated in the Director’s Deferral Account at Normal
Retirement Age if it is assumed that the Director: (1) continued to defer Fees
at the same rate that the Director had been deferring Fees on the date of the
Director’s Termination of Service; and (2) the Director reached Normal Retirement
Age.

 

Article 2 

Deferral
Election

 

2.1                                 Initial Election. The Director shall make an initial deferral
election under this Agreement by filing with the Company a signed Election Form
within 30 days after the Effective Date of this Agreement. The Election Form shall
set forth the amount of Fees to be deferred and shall be effective to defer
only Fees earned after the date the Election Form is received by the Company.

 

2.2                                 Election Changes

 

2.2.1                        Generally. Upon the
Company’s approval, the Director may modify the amount of Fees to be
deferred annually by filing a new Election Form with the Company prior to the
beginning of the Plan Year in which the Fees are to be deferred. The modified deferral
election shall not be effective until the calendar year following the year in
which the subsequent Election Form is received and approved by the Company.

 

2.2.2                        Hardship. If an unforeseeable financial emergency arising from the death of a
family member, divorce, sickness, injury, catastrophe or similar event outside
the control of the Director occurs, the Director, by written instructions to
the Company, may reduce future deferrals under this Agreement.

 

2

 

Article 3

Deferral
Account

 

3.1                                 Establishing and Crediting.
The Company shall establish
a Deferral Account on its books for the Director and shall credit to the
Deferral Account the following amounts:

 

3.1.1                        Deferrals. The Fees deferred by the Director as of the time the Fees would have
otherwise been paid to the Director.

 

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 until
commencement of the benefit payments under this Agreement, unless otherwise
stated, interest is to be credited on the account balance at an annual rate,
compounded 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 the Director,
within 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 Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director’s rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by the Director’s creditors.

 

Article 4 

Benefits During Lifetime

 

4.1                                 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company shall
pay to the Director 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 Director’s Normal Retirement Date.

 

4.1.2                        Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director’s Normal
Retirement Date.

 

4.2                                 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director 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 Director’s Termination of Service.

 

3

 

4.2.2                        Payment, of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following Termination of Service.

 

4.3                                 Disability Benefit. If the Director terminates service as a
Director due to Disability prior to Normal Retirement Age, the Company shall
pay to the Director 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 Director’s Termination of Service.

 

4.3.2                        Payment of Benefit. The Company shall pay the benefit to the
Director in a lump stun within 60 days following Termination of Service.

 

4.4                                 Change of Control Benefit. Upon a Change of Control, followed by the
Director’s Termination of Service for reasons other than death, Disability or
retirement, the Company shall pay to the Director 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 shall be the Projected Deferral
Account Balance.

 

4.4.2                        Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following Termination of Service.

 

4.5                                 Hardship Distribution. Upon the Board of Director’s determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the
Company shall distribute to the Director all or a portion of the Deferral
Account balance as determined by the Company, but in no event shall the
distribution be greater than is necessary to relieve the financial hardship.

 

Article 5

Death Benefits

 

5.1                                 Death During Active
Service. If the Director
dies while in the active service of the Company, the Company shall pay to the
Director’s 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 Deferral Account balance
at the Director’s death.

 

5.1.2                        Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days after the Director’s Termination of
Service.

 

5.2                                 Death During Payment of a
Benefit. If the Director
dies after benefit payments have commenced under this Agreement but before
receiving all such payments, the Company shall pay the remaining benefits to
the Director’s beneficiary at the same time and in the same amounts they would
have been paid to the Director had the Director survived.

 

4

 

5.3                                 Death After Termination of
Service But Before Benefit Payments Commence. If the Director is entitled to benefit
payments under this Agreement, but dies prior to the commencement of said
benefit payments, the Company shall pay the benefit payments to the Director’s
beneficiary that the Director was entitled to prior to death except that the
benefit payments shall commence on the first day of the month following the
date of the Director’s death.

 

Article 6

Beneficiaries

 

6.1                                 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and acknowledged
by the Company during the Director’s lifetime. The Director’s beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Director or if the Director names a spouse as beneficiary and
the marriage is subsequently dissolved.  
If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director’s estate.

 

6.2                                 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person. The Company may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.

 

Article 7

General Limitations

 

7.1                                 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any benefit under this
Agreement that is in excess of the Director’s Deferrals (i.e., the interest
earned on the Deferral Account) if the Company terminates the Director’s
service for:

 

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

 

(b)                                 Commission of a felony or of a gross misdemeanor
involving moral turpitude in connection with the Director’s service to the
Company; or

 

(c)                                  Fraud or willful violation of any law or
significant Company policy committed in connection with the Director’s service
and resulting in an adverse effect on the Company.

 

The
Director’s Deferrals shall be paid to the Director in a lump sum within 60 days
from Termination of Service.

 

5

 

7.2                                 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement exceeding the Deferral Account if the Director commits suicide
within three years after the date of this Agreement. In addition, the Company
shall not pay any benefit under this Agreement if the Director has made any
material misstatement of fact on a resume provided to the Company, or on any
application for any benefits provided by the Company to the Director.

 

Article 8

Claims and Review Procedure

 

8.1                                 Claims Procedure. Any person or entity who has not received
benefits under this Agreement that he or she believes should be paid (“claimant”)
shall make a claim for such benefits as follows:

 

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

 

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

 

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

 

(a)                                  The specific reasons for the denial,

 

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

 

(c)                                  A description of any additional information
or material necessary for the claimant to perfect the claim and an explanation
of why it is needed,

 

(d)                                 An explanation of the Agreement’s review
procedures and the time limits applicable to such procedures, and

 

(e)                                  A statement of the claimant’s right to bring
a civil action under ER1SA Section 502(a) following an adverse benefit
determination on review.

 

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

 

8.2.1                        Initiation — Written Request. To
initiate the review, the claimant, within 60 days after receiving the Company’s
notice of denial, must file with the Company a written request for review.

 

6

 

8.2.2                        Additional Submissions — Information
Access. The claimant shall then have the opportunity to submit
written comments, documents, records and other information relating to the
claim. The Company shall also provide the claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the claimant’s
claim for benefits.

 

8.2.3                        Considerations on Review. In considering the review, the Company shall take
into account all materials and information the claimant submits relating to the
claim, without regard to whether such information was submitted or considered
in the initial benefit determination.

 

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

 

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

 

(a)                                  The specific reasons for the denial,

 

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

 

(c)                                  A statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulation) to the claimant’s claim for benefits, and

 

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

 

Article 9 

Amendments and Termination

 

This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.

 

Article 10 

Miscellaneous

 

10.1                           Binding Effect. This Agreement shall bind the Director and
the Company, and their beneficiaries, survivors, executors, administrators and
transferees.

 

10.2                           No Guarantee of Service. This Agreement is not a contract for
services. It does not give the Director the right to remain in the service of
the Company, nor does it interfere with the

 

7

 

shareholders
rights to replace the Director. It also does not require the Director to remain
in the service of the Company nor interfere with the Director’s right to
terminate services at any time.

 

10.3                           Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

 

10.4                           Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

 

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

 

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

 

10.7                           Reorganization The Company shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all of its
assets to another company, firm, or person unless such succeeding or continuing
company, firm, or person agrees to assume and discharge the obligations of the
Company under this Agreement. Upon the occurrence of such event, the term “Company”
as used in this Agreement shall be deemed to refer to the successor or survivor
company.

 

10.8                           Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Director as to the subject matter hereof.
No rights are granted to the Director by virtue of this Agreement other than
those specifically set forth herein.

 

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

 

(a)                                  Interpreting the provisions of the Agreement;

 

(b)                                 Establishing and revising the method of
accounting for the Agreement;

 

(c)                                  Maintaining a record of benefit payments; and

 

(d)                                 Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.

 

10.10                     Named Fiduciary.  The Company shall be the named fiduciary and plan administrator under
the Agreement. The named fiduciary may delegate to others certain aspects

 

8

 

of
the management and operation responsibilities of the plan including the Service
of advisors and the delegation of ministerial duties to qualified individuals.

 

IN WITNESS WHEREOF, the Director and a duly authorized Company officer
have signed this Agreement.

 

 

	
  Director

  	
  Company

  
	
   

  	
   

  
	
   

  	
  LOWCOUNTRY NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
  Title

  	
   

  
					

 

9

 

EXHIBIT 1

TO

LOWCOUNTRY NATIONAL BANK DIRECTOR
DEFERRED FEE AGREEMENT

Deferral Election

 

I
elect to defer my Fees pursuant to this Director Deferred Fee Agreement with
the Company, as follows;

 

	
  Amount of Deferral

  	
   

  	
  Duration

  
	
  [Initial and Complete one]

  	
   

  	
  [Initial One]

  
	
   

  	
   

  	
   

  
	
             I
  elect to defer         %
  of my Fees annually.

  	
   

  	
             One
  Year only

  
	
   

  	
   

  	
   

  
	
             I
  elect to defer $         
  of my Fees annually.

  	
   

  	
             For           [Insert
  Number] Years

  
	
   

  	
   

  	
   

  
	
             I
  elect not to defer any of my Fees.

  	
   

  	
             Until
  Termination of Service

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
             Until                                 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
             (date)

  

 

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

 

 

	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
				

 

 

Received
by the Company this                day
of                            ,
20    .

 

 

	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
				

 

10

 

Beneficiary
Designation

 

LOWCOUNTRY
NATIONAL BANK

DIRECTOR DEFERRED FEE AGREEMENT

 

I
designate the following as beneficiary of benefits under this Agreement payable
following my death;

 

 

	
  Primary:

  	
   

  
	
   

  
	
   

  
	
   

  
	
  Contingent:

  	
   

  
	
   

  
	
   

  
			

 

 

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

 

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

 

 

	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
				

 

 

Acknowledged
by the Company this day of
                 ,
20    .

 

 

	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
				

 

11Exhibit 10.6

 

LOWCOUNTRY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

THIS AGREEMENT is made
this    day of                                         ,
20       , by and between LOWCOUNTRY NATIONAL
BANK, a nationally-chartered
commercial bank, located in Beaufort, South Carolina (the “Company”), and
                         (the
“Executive”).

 

INTRODUCTION

 

To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive
a deferred compensation opportunity. The Company will pay the Executive’s
benefits 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                                 “Change
of Control” means the transfer of shares of the Company’s
voting common stock such that one entity or one person acquires (or is deemed
to acquire when applying Section 318 of the Code) more than 50 percent of the Company’s
outstanding 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                                 “Deferral
Account” means the Company’s accounting of the Executive’s
accumulated Deferrals plus seemed interest.

 

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

 

1.6                                 “Disability”
means the Participant’s suffering a sickness, accident or injury which
has been determined by the carrier of any individual or group disability
insurance 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 Company
of the carrier’s or Social Security Administration’s determination upon
the request of the Company.

 

1

 

1.7                                 “Effective
Date” means January 1, 2004.

 

1.8                                 “Election
Form” means the Form attached as Exhibit 1.

 

1.9                                 “Normal
Retirement Age” means the Executive’s 65th birthday.

 

1.10                           “Normal
Retirement Date” means the later of the Normal Retirement Age
or Termination of Employment.

 

1.11                           “Plan Year” means the calendar year.

 

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

 

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

 

1.14                           “Projected
Deferral Account Balance” means the balance that would have
accumulated in the Executive’s Deferral Account at Normal Retirement Age if it
is assumed that the Executive:  (1) 
continued to defer Compensation at the same rate that the Executive had been deferring
Compensation on the date of the Executive’s Termination of Service; and (2) the
Executive reached Normal Retirement Age.

 

Article 2

Deferral Election

 

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

 

2.2                                 Election Changes

 

2.2.1                        Generally.  Upon the
Company’s approval, the Executive may modify the amount of
Compensation to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Compensation
is to be deferred. The modified deferral election shall not be effective until
the calendar year following the year. in which the subsequent Election Form is
received and approved by the Company.

 

2

 

2.2.2                        Hardship. If an unforeseeable
financial emergency arising from the death
of 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 reduce
future deferrals under this Agreement.

 

Article 3

Deferral Account

 

3.1                                 Establishing and Crediting. The Company 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. At the end of each Plan Year under this Agreement and immediately prior to the payment of any benefits, but only until
commencement of the benefit payments
under 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 the
Executive, within 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 Company for the payment of benefits. The benefits represent the
mere Company promise to pay 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 Normal Retirement Date,
the Company shall pay 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 Date.

 

4.1.2                        Payment of Benefit. The Company shall pay the benefit to the Executive in 120
equal monthly installments commencing on the first day of the month following
the Executive’s Normal Retirement
Date. The Company shall credit
interest at an annual rate equal to the Prime rate plus two percent (2%),
compounded monthly on the remaining account balance during any applicable installment
period.

 

3

 

4.2                                 Early Retirement Benefit. Upon Termination of Employment
prior to the Normal Retirement Age for reasons other than death, Change of
Control or Disability, the Company shall pay 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 Executive’s Termination of Employment.

 

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

 

4.3                                 Disability Benefit. If the Executive terminates employment due to Disability prior
to Normal Retirement Age, the Company shall pay 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 Termination of Employment.

 

4.3.2                        Payment of Benefit. The Company shall pay the benefit to the Executive in a lump
sum 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 than
death, Disability or retirement, the Company shall pay 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 Projected
Deferral Account Balance.

 

4.4.2                        Payment of Benefit. The Company shall
pay the benefit to the Executive in 120
equal 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 rate
plus two percent (2%),
compounded monthly on the remaining
account balance during any
applicable installment period.

 

4.5                                 Hardship Distribution. Upon the Board of Director’s determination (following petition by the Executive) that the Executive has
suffered an unforeseeable financial emergency as described in Section 2.2.2, the Company shall distribute to the Executive all or a portion of the
Deferral Account balance as determined
by the Company, but in no event
shall the distribution be greater than is necessary to relieve the finanncia1
hardship.

 

Article 5

Death Benefits

 

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

 

4

 

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

 

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

 

5.2                                 Death During Payment of a Benefit. If the Executive dies after any
benefit payments have commenced under this Agreement but before receiving all
such payments, the Company shall pay the remaining benefits to the Executive’s
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.

 

5.3                                 Death After Termination of Employment But Before
Benefit Payments Commence. If
the Executive is entitled to benefit payments under this Agreement, but
dies prior to the commencement of said benefit payments, the Company shall pay
the same benefit payments to the Executive’s beneficiary that the Executive was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Executive’s death.

 

Article 6

Beneficiaries

 

6.1                                 Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with the Company. The Executive may
revoke or modify the designation at any time by filing a new designation.  However, designations will only be effective
if signed by the Executive and received by the Company during the Executive’s
lifetime. The Executive’s beneficiary designation shall be deemed automatically
revoked if the beneficiary predeceases the Executive or if the Executive names
a spouse as beneficiary and the marriage is subsequently dissolved.  If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive’s estate.

 

6.2                                 Facility of Payment. If a benefit is payable to
a minor, to a person declared incompetent, or to a person incapable of handling
the disposition of his or her property, the
Company may pay such benefit to
the guardian, legal representative or person having the care
or custody of such minor, incompetent person or incapable person. The Company
may require proof of incompetence, minority
or guardianship as it may deem
appropriate prior to distribution of
the benefit.  Such distribution
shall completely discharge the Company
from all liability with respect to
such benefit.

 

Article 7

General Limitations

 

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

 

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

 

5

 

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

 

(c)                     Fraud
or willful violation of any law or significant Company policy committed in
connection with the Executive’s employment and resulting in an adverse effect
on the Company.

 

The Executive’s Deferrals shall
be paid to the Executive in a lump
sum within 60 days following Termination of Employment.

 

7.2                                 Suicide or Misstatement. The Company shall not pay any
benefit under this Agreement exceeding the Deferral Account if the Executive
commits suicide within three years after the date of this Agreement. In
addition, the Company shall not pay a benefit under this Agreement exceeding
the Deferral Account if the Executive has made any material misstatement of
fact on an employment application or resume provided to the Company, or on any
application 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 received
benefits under the Plan that he or she believes should be paid shall make a
claim for such benefits as follows:

 

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

 

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

 

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

 

(a)                         The
specific reasons for the denial,

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

(c)                         A
description of any additional information or material necessary for the claimant to perfect the claim and
an explanation of why it is needed,

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

 

6

 

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

 

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

 

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

 

8.2.2                        Additional Submissions
— Information
Access. The claimant shall then have the
opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 

8.2.3                        Considerations on Review.  In
considering the review, the Company shall take into account all materials and
information the claimant submits relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.

 

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

 

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

 

(a)                         The
specific reasons for the denial,

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

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

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

 

7

 

Article 9

Amendments and Termination

 

This Agreement may be amended
or terminated only by a written agreement signed by the Company and the
Executive.

 

Article 10

Miscellaneous

 

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

 

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

 

10.3                           Non-Transferability. Benefits under this Agreement cannot
be sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

10.4                           Tax Withholding. The Company shall
withhold any taxes that are required to be withheld from the benefits
provided 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’s
beneficiary are general unsecured creditors of the Company for the payment of
benefits under this Agreement. The benefits represent the mere promise by the
Company to pay such benefits. The rights to benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors. Any insurance on the
Executive’s life is a general asset of the Company to which the Executive and
the Executive’s beneficiary have no preferred or secured claim.

 

10.7                           Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize. or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term “Company” as
used in this Agreement shall be deemed to refer to the successor or survivor
company.

 

10.8                           Entire Agreement. This
Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof. No
rights are granted to the Executive by virtue of this Agreement other than
those specifically set forth herein.

 

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

 

(a)                      Interpreting
the provisions of the Agreement;

 

8

 

(b)                     Establishing
and revising the method of accounting for the Agreement;

(c)                     Maintaining a
record of benefit payments; and

(d)                    Establishing rules and
prescribing any forms necessary or
desirable to administer the Agreement.

 

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

 

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

 

 

	
  Executive:

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  Lowcountry
  National Bank

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

9

 

EXHIBTT 1

TO

LOWCOIJNTRY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

Deferral Election

 

I elect to defer my Compensation pursuant
to this Agreement with the
Company, 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 amount
and duration of my deferrals by filing a new election form with the Company;
provided, however, that any subsequent election will not be effective until the
calendar year following the year in which the new election is received by the
Company.

 

 

	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
	
   

  
	
  Received by
  the Company this           
  day of                         
  , 20     .

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

10

 

Beneficiary Designation

 

LOWCOUNTRY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

 

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

 

 

	
  Primary:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Contingent:

  	
   

  
	
   

  	
   

  

 

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

 

 

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

 

 

	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
	
   

  
	
   

  
	
  Acknowledged
  by the Company this day of
                          
  , 20     .

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
						

 

11

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