Document:

Exhibit 10.24

 

Exhibit 10.24

THE SOUTH FINANCIAL GROUP

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

Between

THE SOUTH FINANCIAL GROUP, INC.

and

LYNN HARTON

     This Supplemental Executive Retirement Agreement (this “Agreement”) is made and entered into
effective as of this 29 day of January, 2007 (the “Effective Date”), by and between
LYNN HARTON, an individual (the “Executive”), and The South Financial Group, Inc., a South Carolina
corporation and financial institution holding company headquartered in Greenville, South Carolina
(the “Company”).

INTRODUCTION

     The Company wishes to provide the Executive with supplemental retirement benefits and thereby
encourage the Executive to continue providing services to the Company. The Company will pay the
benefits from its general assets.

     The Agreement is intended to be a top-hat plan (i.e., an unfunded deferred compensation plan
maintained for a member of a select group of management or highly compensated employees) pursuant
to Section 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974
(“ERISA”).

     This Agreement is intended to comply with the requirements of Section 409A of the Internal
Revenue Code and the regulations and other guidance issued thereunder, as in effect from time to
time. To the extent a provision of the Agreement is contrary to or fails to address the
requirements of Code Section 409A, the Agreement shall be construed and administered as necessary
to comply with such requirements until the Agreement is appropriately amended to comply with such
requirements.

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 “Affiliated Company” means any company controlled by, controlling or under common control
with the Company.

     1.2 “Benefit Basis” means the average of the highest three fiscal years of annual Compensation
earned by the Executive during the ten fiscal years of the Executive’s employment prior to the
Termination of Employment, or for such lesser number of fiscal years that the

 

 

Executive was employed by the Company prior to the Termination of Employment, including the
year in which Termination of Employment occurs.

     1.3 “Board” means the Board of Directors of The South Financial Group, Inc.

     1.4 “Cause” means (i) the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company or any Affiliated Company (other than any
such failure resulting from incapacity due to physical or mental illness or following the
Executive’s Involuntary Termination), after a written demand for substantial performance is
delivered to the Executive by the Chief Executive Officer that specifically identifies the manner
in which the Chief Executive Officer of the Company believes that the Executive has not
substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in
illegal conduct or gross misconduct, in each case, that is materially and demonstrably injurious to
the Company. For purposes of this definition, no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board, or upon instructions of the Chief Executive Officer or senior
officer, or based upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire membership of the Board
(excluding the Executive, if the Executive is a member of the Board) at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel for the Executive, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in clause (i) or (ii) of this definition, and specifying the particulars thereof
in detail.

     1.5 “Change in Control” means:

     (i) when any Person or Persons acting as a “group” (within the meaning of Section
13(d)(3) or 14(d)(2) of the “Exchange Act” and within the meaning of Code Section 409A and
applicable regulations thereunder) acquires directly or indirectly, securities of the
Company representing an aggregate of more than 50% of the combined voting power of the
Company’s then outstanding voting securities other than an acquisition by:

          (A) any employee plan established by the Company;

          (B) the Company or any of its affiliates (as defined in Rule 12b-2 promulgated
under the Exchange Act);

          (C) an underwriter temporarily holding securities pursuant to an offering of
such securities;

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          (D) a corporation owned, directly or indirectly, by stockholders of the Company
in substantially the same proportions as their ownership of the Company; or

          (E) except as provided in clause (iii) below, merger or consolidation of the
Company with any other corporation which is duly approved by the stockholders of the
Company; or

     (ii) when a majority of the board of directors of the Company is replaced during any
12-month period and such new appointments are not approved by a majority of the members of
the current board prior to the date of appointment or election; or

     (iii) The stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than (A) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of any Company,
at least a majority of the combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation; or (B) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes the beneficial owner
(as defined in clause (i) above), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities acquired
directly from the Company) representing a majority of the combined voting power of the
Company’s then outstanding voting securities; or (C) a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.

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

     1.7 “Company” means The South Financial Group, Inc. and shall include the Company and any and
all of its subsidiaries where the context so applies; provided, however, for purposes of
application of the “Change in Control” definition and related provisions, Company shall mean and be
limited to The South Financial Group, Inc.

     1.8 “Compensation” means the Executive’s annual base salary and annual bonus under the
Company’s Management Incentive Compensation Plan, or any comparable bonus under any predecessor or
successor plan, including any bonus or portion thereof that has been earned but deferred (and
annualized for any fiscal year consisting of less than 12 full months or during which the Executive
was employed for less than 12 full months) for the relevant fiscal year. If the Termination of
Employment occurs prior to the end of the fiscal year, the bonus amount for such fiscal year shall
be equal to the highest of the bonuses earned by the Executive in the prior three fiscal years (or
for such lesser number of fiscal years prior to the Termination of Employment for which the
Executive was eligible to earn such a bonus, and annualized in the case of any bonus earned for a
partial fiscal year).

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     1.9 “Disability” means any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months which results in, (i) the Executive being unable to engage in any substantial gainful
activity or (ii) the Executive receiving income replacement benefits for a period of not less than
3 months under an accident and health plan covering employees of the Company. In addition, the
Executive will be deemed disabled if determined to be totally disabled by the Social Security
Administration, or if determined to be disabled in accordance with a disability insurance program
provided the definition of disability applied under such disability insurance program complies with
the requirements of the preceding sentence.

     1.10 “Early Retirement Age” means the date that the Executive has attained age 55 and
completed seven Years of Service.

     1.11 “Early Retirement Date” means the date that is the later of the Early Retirement Age or
the Termination of Employment, but is before the Normal Retirement Date.

     1.12 “Early Termination” means the Termination of Employment before Early Retirement Age for
reasons other than (i) death, (ii) Disability, (iii) by the Company for Cause, (iv) by the Company
without Cause during the two year period following a Change in Control, or (v) Involuntary
Termination.

     1.13 “Early Termination Date” means the month, day and year in which Early Termination occurs.

     1.14 “Effective Date” means January 29, 2007.

     1.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     1.16 “Involuntary Termination” means a Termination of Employment by the Executive following a
Change in Control which, in the sole judgment of the Executive, is due to (i) a change of the
Executive’s responsibilities, position (including the Executive’s office, title, reporting
relationships or working conditions), authority or duties (including changes resulting from the
assignment to the Executive of any duties inconsistent with his positions, duties or
responsibilities as in effect immediately prior to the Change in Control); or (ii) a reduction in
the Executive’s annual base salary or annual bonus opportunity under the Company’s Management
Incentive Compensation Plan, or any comparable bonus under any predecessor or successor plan,
including any bonus or portion thereof that has been earned but deferred, or benefits; or (iii) a
forced relocation of the Executive outside the Greenville, South Carolina metropolitan area; or
(iv) a significant increase in the Executive’ travel requirements (collectively “Status Changes”);
provided, however, Executive must elect to terminate Executive’s employment within two (2) years of
the Status Change on which Executive bases Executive’s employment termination.

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

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

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     1.19 “Person” means any individual, corporation, bank, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or other entity.

     1.20 “Rate” means the Moody’s Aa corporate bond rate as reported by the Society of Actuaries
as of the Effective Date and updated on each December 31st thereafter.

     1.21 “Termination of Employment” means the termination of the Executive’s employment with the
Company and all of its subsidiaries or affiliates that are considered a single employer within the
meaning of Code Sections 414(b) and 414(c). If the Executive is employed by such a subsidiary or
affiliate, the Executive will be deemed to incur a Termination of Employment if the subsidiary or
affiliate ceases to be such a subsidiary or an affiliate, as the case may be, and the Executive
does not immediately thereafter become an employee of the Company or another such subsidiary or
affiliate. Temporary absences from employment while the Executive is on military leave, sick
leave, or other bona fide leave of absence will not be considered a Termination of Employment if
the period of such leave does not exceed six months, or if longer, so long as the Executive’s right
to reemployment with the Company is provided either by statute or by contract. However, if the
period of leave exceeds six months and the Executive’s right to reemployment is not provided either
by statute or by contract, a Termination of Employment is deemed to occur on the first day
immediately following such six-month period.

     1.22 “Vesting Percentage” is the percentage of the accrual balance in which the Executive is
vested as determined in accordance with Schedule A.

     1.23 “Vesting Start Date” shall be January 29, 2007.

     1.24 “Year of Service” means a twelve-month continuous period of employment or a portion of
such period, including periods of authorized vacation, authorized leave of absence and short-term
disability leave, with the Company or any of its affiliates or their predecessors or successors
rounded up to the nearest whole number commencing on the Vesting Start Date.

Article 2

Lifetime Benefits

     2.1 Normal Retirement Benefit. Upon Termination of Employment (i) on or after Normal
Retirement Age for reasons other than death, or (ii) upon Termination of Employment without Cause
within two years following a Change in Control or (iii) upon Executive’s Involuntary Termination,
the Company shall pay to the Executive the benefit described in this Section 2.1 in lieu of any
other benefit under this Agreement.

     2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is an
amount equal to forty percent (40%) of the Benefit Basis, provided that in the event that
the Executive has completed five Years of Service, the annual benefit under this Section 2.1
is an amount equal to sixty percent (60%) of the Benefit Basis.

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     2.1.2 Payment of Benefit. The Company shall pay the benefit to the Executive as follows:

          (a) payment in a lump sum on the first day of the seventh month following the
Executive’s Normal Retirement Date or, if earlier, on the first day of the seventh
month following the Executive’s Termination of Employment without Cause within two
years following a Change in Control or following the Executive’s Involuntary
Termination, as the case may be; or

          (b) at the Executive’s election (on the Election Form attached as Exhibit A)
made no later than thirty (30) days after the Effective Date (and with respect to
services to be performed after the election), payment in either 60, 120, or 180
equal monthly installments (such installments to be considered a “single” payment
for purposes of Code Section 409A), as selected by the Executive, which installments
may commence no earlier than the first day of the seventh month following the
Executive’s Termination of Employment.

     The Executive may make a subsequent election to further delay a payment or to change
the form of a payment among the methods described above, provided (i) the election does not
take effect until at least twelve (12) months after the date the election is made, (ii) the
payment is deferred for a period of at least five (5) years from the date such payment would
otherwise have been made, and (iii) the election is made at least twelve (12) months prior
to the date any such payment was scheduled to begin.

     Notwithstanding the preceding, no election may be made by the Executive that will
extend payment of the Executive’s benefit more than fifteen (15) years past the date on
which the Executive’s benefit would otherwise have commenced under Section 2.1.2(a)
following Executive’s Normal Retirement Date.

     For purposes of this Section 2.1, a lump sum payment shall be equal to the present
value of the aggregate annual benefits that would have been payable to the Executive had
such benefits been paid to Executive in equal monthly installments over the 180-month period
immediately following the Executive’s Termination of Employment, assuming a discount rate
equal to the Rate. Payments in monthly installments shall be determined based on the
present value of the aggregate annual benefits that would have been payable to Executive had
such benefits been paid to Executive in equal monthly installments over the 180-month period
immediately following Executive’s Termination of Employment. An interest rate equal to the
Rate will be applied to determine the actuarial equivalent of the equal monthly installment
payments under this Section 2.1.

     2.2 Early Retirement Benefit. Upon Termination of Employment on or after Early Retirement Age
but before Normal Retirement Age for reasons other than (i) death, (ii) Disability, (iii) by the
Company without Cause within two years following a Change in Control or (iv) upon Executive’s
Involuntary Termination, the Company shall pay to the Executive the benefit described in this
Section 2.2 in lieu of any other benefits under this Agreement.

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     2.2.1 Amount of Benefit. The annual benefit under this Section 2.2 is an amount equal
to the greater of (i) the product of (A) the sum of (x) thirty percent (30%) and (y) three
percent (e%) for each Year of Service completed by the Executive after the Early Retirement
Age and (B) the Benefit Basis or (ii) the benefit under Section 2.3; provided that in no
event shall the amount payable under this Section 2.2.1 be greater than the benefit set
forth in Section 2.1.1.

     2.2.2 Payment of Benefit. The Company shall pay the benefit to the Executive as
follows:

     (a) payment in a lump sum on the first day of the seventh month following the
Executive’s Termination of Employment in an amount equal to the present value of the
aggregate annual benefits that would have been payable to the Executive had such
benefits been paid to Executive in equal monthly installments over the 180-month
period immediately following the Executive’s Normal Retirement Age, and assuming a
discount rate equal to the Rate; or

     (b) at the Executive’s election (on the Election Form attached as Exhibit A)
made no later than thirty (30) days after the Effective Date (and with respect to
services to be performed after the election), payment in either 60, 120, or 180
equal monthly installments (such installments to be considered a “single” payment
for purposes of Code Section 409A), as selected by the Executive, which installments
may commence no earlier than the first day of the seventh month following the
Executive’s Termination of Employment.

     The Executive may make a subsequent election to delay a payment or to change the form
of a payment among the methods described above, provided (i) the election does not take
effect until at least twelve (12) months after the date the election is made, (ii) the
payment is deferred for a period of at least five (5) years from the date such payment would
otherwise have been made, and (iii) the election is made at least 12 months prior to the
date any such payment was scheduled to begin.

     Notwithstanding the preceding, no election may be made by the Executive that will
extend payment of the Executive’s benefit more than fifteen (15) years past the date on
which the Executive’s benefit would otherwise have commenced under Section 2.2.2(a).

     For purposes of this Section 2.2, any lump sum payment shall be calculated as provided
in Section 2.2.2(a). Payments in monthly installments shall be determined based on the
actuarial equivalent of the lump sum determined under Section 2.2.2(a). An interest rate
equal to the Rate will be applied to determine the actuarial equivalent of the equal monthly
installment payments under this Section 2.2.2.

     The optional forms of benefit payments under Section 2.2.2(b) shall be available to
Executive only upon the Executive’s Termination of Employment on or after Early Retirement
Age but before Normal Retirement Age for reasons other than death;

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Disability; termination by the Company without Cause within two years following a
Change in Control; or upon Executive’s Involuntary Termination.

     2.3 Early Termination Benefit. Upon Early Termination, the Company shall pay to the Executive
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 the Early Termination
Annual Benefit set forth in Schedule A for the year ending immediately prior to the
Early Termination Date.

     2.3.2 Payment of Benefit. The Company shall pay the annual benefit to the Executive in
12 equal monthly installments payable on the first day of each month commencing with the
first month following the Normal Retirement Age; provided, however, that in no event may
such benefit commence earlier than the first day of the seventh month following the
Executive’s Termination of Employment if the Executive is then a “specified employee” of the
Company within the meaning of Treasury Regulations Section 1.409A-1(i). The annual benefit
shall be paid to the Executive for 180 months.

     2.4 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
2.4 in lieu of any other benefit under this Agreement.

     2.4.1 Amount of Benefit. If the Executive terminates employment due to Disability
prior to Normal Retirement Age, but after Early Retirement Age, the benefit under this
Section 2.4 shall be the annual benefit set forth in Section 2.2.1. If the Executive
terminates employment due to Disability prior to Early Retirement Age, the benefit under
this Section 2.4 is the Disability Annual Benefit set forth in Schedule A for the
year ending immediately prior to the Early Termination Date.

     2.4.2 Payment of Benefit. The Company shall pay the annual benefit amount to the
Executive in 12 equal monthly installments payable on the first day of each month commencing
with the month following the Termination of Employment. The annual benefit shall be paid to
the Executive for 180 months.

Article 3

Death Benefits

     3.1 Death During Active Service. If the Executive dies while in the active service of the
Company, the Company shall pay to the Executive’s beneficiary the benefit described in this Section
3.1. This benefit shall be paid in lieu of the Lifetime Benefits of Article 2.

     3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is equal to the
Disability Annual Benefit described in Section 2.4.1.

     3.1.2 Payment of Benefit. The Company shall pay the annual benefit to the Executive’s
beneficiary in 12 equal monthly installments payable on the first day of each

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month commencing with the month following the Executive’s death. The annual benefit
shall be paid to the Executive’s beneficiary for 180 months.

     3.2 Death During Benefit Period. If the Executive dies after the 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.

     3.3 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 to the Executive’s beneficiary the benefit payments
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 4

Beneficiaries

     4.1 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 accepted 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.

     4.2 Facility of Payment. If a benefit is payable to a minor, to a person declared
incapacitated, 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, incapacitated person or incapable person. The Company may require proof of
incapacity, 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 5

General Limitations

     5.1 Termination for Cause. Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement if the Company terminates the
Executive’s employment for Cause.

     5.2 Suicide. The Company shall not pay any benefit under this Agreement if the Executive
commits suicide within two years after the date of this Agreement.

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Article 6

Claims and Review Procedures

     6.1 Claims Procedure. The Company shall notify any person or entity that makes a claim
against the Agreement (the “Claimant”) in writing, within 90 days of Claimant’s written application
for benefits, of his or her eligibility or noneligibility for benefits under the Agreement. If the
Company determines that the Claimant is not eligible for benefits or full benefits, the notice
shall set forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of the Agreement on which the denial is based, (3) a description of any additional
information or material necessary for the Claimant to perfect his or her claim, and a description
of why it is needed, and (4) an explanation of the Agreement’s claims review procedure and other
appropriate information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances requiring additional time
to make a decision, the Company shall notify the Claimant of the special circumstances and the date
by which a decision is expected to be made, and may extend the time for up to an additional 90
days.

     6.2 Review Procedure. If the Claimant is determined by the Company not to be eligible for
benefits, or if the Claimant believes that he or she is entitled to greater or different benefits,
the Claimant shall have the opportunity to have such claim reviewed by the Company by filing a
petition for review with the Company within 60 days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant believes entitle him or
her to benefits or to greater or different benefits. Within 60 days after receipt by the Company
of the petition, the Company shall afford the Claimant (and counsel, if any) an opportunity to
present his or her position to the Company verbally or in writing. Claimant (or counsel) shall
have the opportunity to submit written comments, documents, records, and other information relating
to the claim for benefits, and shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant to the Claimant’s
claim. The review shall take into account all comments, documents, records, and other information
submitted by the Claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination. The Company shall notify the
Claimant of its decision in writing within the 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and the specific
provisions of the Agreement on which the decision is based. If, because of the need for a hearing,
the 60-day period is not sufficient, the decision may be deferred for up to another 60 days at the
election of the Company, but notice of this deferral shall be given to the Claimant.

     6.3 Special Procedures Applicable to Disability Benefits. If a claim for benefits under the
Agreement is contingent on a determination by the Company (or its designee) that the Executive
suffers from a Disability, the Claimant shall receive a written response to the initial claim from
the Company within 45 days, rather than 90 days. If special circumstances require an extension,
the Company shall notify the Claimant within the 45-day processing period that additional time is
needed. If the Company requests additional information so it can process the claim, the Claimant
will have at least 45 days in which to provide the information. Otherwise, the initial extension
cannot exceed 30 days. If circumstances require further extension, the Company will again notify
the Claimant, this time before the end of the initial 30-day extension.

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The notice will state the date a decision can be expected. In no event will a decision be
postponed beyond an additional 30 days after the end of the first 30-day extension. The Claimant
may request a review of the Company’s decision regarding the Disability claim within 180 days,
rather than 60 days. The review must be conducted by a fiduciary different from the fiduciary who
originally denied the claim, the fiduciary also cannot be subordinate to the fiduciary who
originally denied the claim. If the original denial of the claim was based on a medical judgment,
the reviewing fiduciary must consult with an appropriate health care professional who was not
consulted on the original claim and who is not subordinate to someone who was The review must
identify the medical or vocational experts consulted on the original claim. The Claimant may
request, in writing, a list of those medical or vocational experts. The Claimant will receive
notice of the reviewing fiduciary’s final decision regarding the Disability claim within 45 days,
rather than 60 days, of the request for review.

Article 7

Amendments and Termination

     7.1 Amendment. This Agreement may not be amended or modified other than by a written
agreement executed by the parties hereto or their respective successors and legal representatives.

     7.2 Termination. Notwithstanding the preceding Section 7.1, the Company shall have the right
to terminate this Agreement and to accelerate the payment of benefits under the Agreement in
accordance with Code Section 409A and related treasury regulations and other guidance issued under
Section 409A only as follows:

     (i) if all plans or arrangements of a similar type that cover or benefit employees are
terminated; or

     (ii) within 30 days before or 12 months after a Change in Control; or

     (iii) upon the Company’s bankruptcy or dissolution.

Article 8

Miscellaneous

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

     8.2 No Guarantee of Employment. This Agreement is not an employment policy or contract. 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.

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

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     8.4 Successors. This Agreement is personal to the Executive, and, without the prior written
consent of the Company, shall not be assignable by the Executive other than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. Subject to the following sentences of this
Section 8.4, this Agreement shall not be assignable by the Company without the prior written
consent of the Executive. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such succession had
taken place. “Company” means the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or
otherwise.

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

     8.6 Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of
the State of South Carolina, without regard to principles of conflicts of laws.

     8.7 Unfunded Arrangement. The Executive and 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.

     8.8 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. From and after the Effective Date,
this Agreement shall supersede any other agreement between the parties with respect to the subject
matter hereof .

     8.9 Administration and Recordkeeping Authority. Except as otherwise specifically provided
herein, the Company shall have the sole responsibility for and the sole control of the operation,
administration, and recordkeeping of this Agreement and shall have the power and authority to take
all action and to make all decisions and interpretations that may be necessary or appropriate in
order to administer and operate the Agreement, including, without limiting the generality of the
foregoing, the power, duty, and responsibility to:

	 	(i)	 	Resolve and determine all disputes or questions arising under
the Agreement, including the power to determine the rights of the Participant
and beneficiaries and their respective benefits, and to remedy any ambiguities,
inconsistencies, or omissions in the Agreement;
	 
	 	(ii)	 	Adopt such rules of procedure and regulations as in its opinion
may be necessary for the proper and efficient administration of the Agreement
and as are consistent with the Agreement;

12

 

	 	(iii)	 	Implement the Agreement in accordance with its terms;
	 
	 	(iv)	 	Establish and revise the method of accounting for the
Agreement; and
	 
	 	(v)	 	Maintain a record of benefit payments.

     8.10 Named Fiduciary. The Company shall be the named fiduciary and plan administrator under
the Agreement. The named fiduciary may delegate to others certain aspects of the management and
operation responsibilities of the plan including the employment of advisors and the delegation of
ministerial duties to qualified individuals.

     8.11 Captions. The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect.

     8.12 Severability. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement.

     8.13 Delay of Payment. The Company may delay payment of a benefit hereunder upon such events
and conditions as the IRS may permit in generally applicable published regulatory or other guidance
under Code Section 409A, including, without limitation, payments that the Company reasonably
anticipates will be subject to the application of Code Section 162(m), or will violate Federal
securities laws or other applicable law, or will violate a loan covenant or similar contractual
requirement; provided that any such delayed payment will be made at the earliest date at which the
Company reasonably anticipates that the making of the payment would not cause such a violation.

     8.14 Acceleration of Payment. Payment of a benefit hereunder may be accelerated if the
Company determines such payment to a person other than the Executive is necessary to fulfill the
terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)). To the extent
permitted under Code Section 409A and applicable treasury regulations and applicable published
regulatory or other guidance, the Company may authorize payment of any portion of an Executive’s
benefit (i) to pay FICA tax imposed on any amounts under this Agreement and/or (ii) at any time
that the Agreement fails to meet the requirements of Code Section 409A with respect to the
Executive, the amount required to be included in income for the Executive as a result of such
failure, and (iii) to otherwise comply with the requirements of Code Section 409A.

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

	 	 	 	 	 	 	 
	EXECUTIVE:

	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 

	 	THE SOUTH FINANCIAL GROUP, INC.
	 	 
	 
	 	 	 	 	 	 
	/s/ Lynn Harton

	 	By:
	 	/s/ Mary A. Jeffrey	 	 
	 

Lynn Harton

	 	 	 	 

Mary A. Jeffrey
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 

13

 

BENEFICIARY DESIGNATION

THE SOUTH FINANCIAL GROUP

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

LYNN HARTON

I DESIGNATE THE FOLLOWING AS BENEFICIARY OF ANY DEATH BENEFITS UNDER THIS SUPPLEMENTAL EXECUTIVE
RETIREMENT AGREEMENT:

Primary: Flavia Baraldi Harton

Contingent: Sara Elizabeth Harton (50%)

Katherine Leigh Harton (50%)

			
	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: /s/ Lynn Harton

Date: January 29, 2007

Accepted by the Company this 29 day of January, 2007.

By: /s/ Mary A. Jeffrey

Title: EXECUTIVE VICE PRESIDENT

14

 

SCHEDULE A CALCULATIONS

THE SOUTH FINANCIAL GROUP

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

To determine the Executive’s Early Termination Benefit or Disability Retirement Benefit for the
year of the Termination of Employment, the following calculations shall be made:

	 	1.	 	Project the Benefit Basis as of Normal Retirement Age by increasing the Benefit
Basis as of the Executive’s date of Termination of Employment by 5% per year,
compounded annually, until Normal Retirement Age (the “Projected Retirement Benefit
Basis”).
	 
	 	2.	 	Multiply the Projected Retirement Benefit Basis by the applicable percentage
set forth in 2.1.1 (the product, “Annual Projected Retirement Benefit”).
	 
	 	3.	 	Calculate the discounted value at Normal Retirement Age of the aggregate Annual
Projected Retirement Benefit that would have been paid to the Executive in equal
monthly installments over the 180-month period immediately following the Normal
Retirement Date, by using the Rate, compounded monthly (such discounted value, the
“Lump Sum Projected Retirement Benefit”).
	 
	 	4.	 	Calculate the aggregate amount that has accrued through the end of the year
ending immediately prior to the date of the Executive’s Termination of Employment by
accruing each month from the Effective Date through Normal Retirement Age, with
interest on such amounts calculated monthly at the Rate, in order to accumulate to the
Lump Sum Projected Retirement Benefit as of the Normal Retirement Date (the “Accrual
Balance”).

In the case of Early Termination Benefit:

	 	5.	 	Multiply the Accrual Balance by 10% per Year of Service, subject to a maximum
of 100% (the “Vested Accrual Balance”).
	 
	 	6.	 	Increase the Vested Accrual Balance by the Rate, compounded monthly, to the
Normal Retirement Age (the “Inflated Vested Accrual Balance”).
	 
	 	7.	 	Calculate a fixed annuity which is payable in 180 equal monthly installments,
crediting interest on the unpaid balance of the Inflated Vested Accrual Balance at the
Rate, compounded monthly.

In the case of Disability Retirement Benefit:

	 	8.	 	The Disability Annual Benefit amount is determined by calculating a fixed
annuity which is payable in 180 equal monthly installments, crediting interest on the
unpaid balance of the Accrual Balance at the Rate, compounded monthly.

15Exhibit 10.27

 

Exhibit 10.27

FIRST AMENDMENT

TO

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

     This First Amendment to The South Financial Group Supplemental Executive Retirement Agreement
between The South Financial Group, Inc. (“Company”) and Michael W. Sperry (“Executive”) is made and
entered into this ___day of November, 2007.

     WHEREAS, Company and Executive entered into the Supplemental Executive Retirement Agreement
dated July 15, 2003, attached hereto as Exhibit A and incorporated herein by reference
(“Agreement”); and

     WHEREAS, the parties desire to amend the Agreement to provide for a change in the form of
payment upon the Executive’s early retirement, as permitted under IRS Notice 2005-1 and other
guidance under Section 409A of the Internal Revenue Code.

     NOW, THEREFORE, the Agreement is amended as provided below:

	 	1.	 	Section 2.2 of the Agreement is amended in its entirety to read as follows:

     2.2.2 Payment of Benefit. The Company shall pay the annual benefit to
the Executive in equal monthly installments for 120 months on the first day
of each month commencing on the seventh month following the Executive’s
Early Retirement Date. The present value of such monthly payments shall be
equal to the present value of the benefits that would have been payable to
the Executive if the Executive received a monthly benefit for 180 months
beginning at the Executive’s Normal Retirement Age assuming a discount rate
equal to the Rate.

	 	2.	 	A new Section 8.13 is hereby added to the Agreement as follows:

     8.13 Compliance With Section 409A. Notwithstanding any other provision
of this Agreement, to the extent applicable, this Agreement is intended to
comply with Section 409A of the Code and the regulations (or similar
guidance) thereunder. To the extent any provision of this Agreement is
contrary to or fails to address the requirements of Section 409A of the
Code, this Agreement shall be construed and administered as necessary to
comply with such requirements.

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

	 	 	 	 	 	 	 
	EXECUTIVE:	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	THE SOUTH FINANCIAL GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Michael W. Sperry

	 	By:
	 	/s/ Mary A. Jeffrey	 	 
	 

MICHAEL W. SPERRY

	 	 	 	 

	 	 
	 

	 	Title:
	 	EVP — Human Resources

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