FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1996 Commission file number 0-13759
ANCHOR FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0778015
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
2002 Oak St., Myrtle Beach, S. C. 29577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 448-1411
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 3, 1996
(Common stock, $6.00 par value) 2,551,595
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
PAGE NO.
Part I - Financial Information
Consolidated balance sheet - March 31, 1996
and December 31, 1995 1
Consolidated statement of income - three months
ended March 31, 1996 and 1995 2
Consolidated statement of cash flows -
three months ended March 31, 1996 and 1995 3
Notes to consolidated financial statements 4-7
Management's Discussion and Analysis of
Financial Condition and Results of Operation 8-10
Part II - Other Information
Item 1 - Legal Proceedings 11
Item 2 - Changes in Securities 11
Item 3 - Defaults Upon Senior Securities 11
Item 4 - Submission of Matters to a Vote
of Security-Holders 11
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited) <F1>
<S> <C> <C>
Assets
Cash and due from banks $18,367,798 $20,516,188
Interest-bearing balances due from banks 99,000 99,000
Federal funds sold 13,660,000 0
Investment securities:
Held-to-maturity, at amortized cost (fair
value of $25,782,082 in 1996 and $31,521,870
in 1995) 25,762,860 31,403,494
Available-for-sale, at fair value (amortized
cost of $69,058,489 in 1996 and $51,594,192
in 1995) 69,112,932 52,043,206
Total investment securities 94,875,792 83,446,700
Loans 301,517,432 285,129,012
Less - unearned income (25,285) (25,477)
- allowance for loan losses (3,194,241) (3,045,656)
Net loans 298,297,906 282,057,879
Premises and equipment 14,360,076 13,866,646
Other assets 10,411,798 7,520,004
Total assets $450,072,370 $407,506,417
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand deposits $ 68,243,906 $ 61,748,670
NOW and Money Market accounts 194,286,030 168,984,005
Time deposits $100,000 and over 40,305,055 35,505,253
Other time and savings deposits 89,141,301 87,637,828
Total deposits 391,976,292 353,875,756
Federal funds purchased and securities sold
under agreements to repurchase 575,682 1,748,127
Other short-term borrowings 2,090,610 954,451
Long-term debt 18,000,000 15,000,000
Subordinated notes 5,000,000 5,000,000
Other liabilities 3,379,053 2,386,065
Total liabilities 421,021,637 378,964,399
Stockholders' Equity:
Common stock, $6.00 par value; 4,000,000 shares
authorized; shares issued and outstanding -
2,551,595 in 1996 and 2,540,985 in 1995 15,309,570 15,245,910
Surplus 873,682 875,331
Retained earnings 13,641,157 12,964,631
Unrealized gains on investment securities
available-for-sale, net of tax 35,933 292,755
Unearned ESOP shares (809,609) (836,609)
Total stockholders' equity 29,050,733 28,542,018
Total liabilities and
stockholders' equity $450,072,370 $407,506,417
<F1> Obtained from audited financial statements.
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1996 1995
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $6,966,701 $5,719,912
Interest on investment
securities:
Taxable 1,217,189 1,067,123
Non-taxable 51,390 47,300
Other interest income 169,249 63,203
Total interest income 8,404,529 6,897,538
INTEREST EXPENSE:
Interest on deposits 3,437,819 2,750,946
Interest on short-term
borrowings 25,054 121,394
Interest on long-term debt 266,747 0
Interest on subordinated notes 109,353 108,759
Total interest expense 3,838,973 2,981,099
Net interest income 4,565,556 3,916,439
Provision for loan losses 160,000 134,500
Net interest income after
provision for loan losses 4,405,556 3,781,939
NONINTEREST INCOME:
Service charges on deposit
accounts 447,367 364,491
Commissions and fees 172,288 147,848
Trust income 57,313 47,808
Gains on the sales of
mortgage loans 60,087 48,339
Other operating income 43,575 63,258
Total noninterest income 780,630 671,744
NONINTEREST EXPENSE:
Salaries and employee
benefits 1,975,859 1,643,598
Net occupancy expense 315,417 239,367
Equipment expense 288,578 244,987
Other operating expense 1,150,829 1,020,513
Total noninterest expense 3,730,683 3,148,465
Income before income taxes 1,455,503 1,305,218
Provision for income taxes 523,611 461,468
Net income $ 931,892 $ 843,750
Net income per share $ 0.36 $ 0.34
Weighted average common
shares outstanding 2,605,565 2,527,166
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these financial statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 931,892 $ 843,750
Adjustments to reconcile net income to net cash
provided by operating activities:
Accretion and amortization of investment securities (12,037) 28,964
Depreciation of premises and equipment 287,273 238,125
Amortization of intangible assets 99,500 74,499
Provision for loan losses 160,000 134,500
Gains on sales of mortgage loans (60,087) (48,339)
Gains on sales of premises and equipment 4,078 (20,530)
Change in interest receivable (1,005,494) (348,859)
Change in prepaid expenses 13,882 100,194
Change in income taxes payable 546,815 522,248
Change in deferred taxes (198,303) 63,118
Change in interest payable 293,691 268,760
Change in accrued expenses (43,962) 11,286
Origination of mortgage loans held for sale (3,095,850) (2,066,260)
Proceeds from sales of mortgage loans held for sale 3,243,587 2,136,001
Net cash provided by operating activities 1,164,985 1,937,457
Cash flows from investing activities:
Purchase of investment securities held-to-maturity (2,053,594) 0
Proceeds from maturities of investment
securities held-to-maturity 7,694,851 3,223,479
Purchase of investment securities available-
for-sale (19,852,882) (411,700)
Proceeds from sales of investment securities
available-for-sale 0 282,200
Proceeds from maturities of investment
securities available-for-sale 2,400,000 725,090
Net change in loans (16,487,678) (13,687,040)
Capital expenditures (841,371) (1,232,542)
Proceeds from sale of premises and equipment 56,590 0
Other, net (1,467,187) (140,674)
Net cash used for investing activities (30,551,271) (11,241,187)
Cash flows from financing activities:
Net change in deposits 38,100,537 12,503,866
Net change in federal funds purchased and
securities sold under agreements to repurchase (1,172,445) (4,434,082)
Net change in short-term borrowings 1,136,159 (1,289,036)
Proceeds from issuance of long-term debt 3,000,000 0
Proceeds from issuance of stock in
accordance with:
Stock Option Plan 62,010 0
Net change in unearned ESOP Shares 39,500 (25,000)
Cash dividends paid (267,865) (228,638)
Net cash provided by financing activities 40,897,896 6,527,110
Net change in cash and cash equivalents 11,511,610 (2,776,620)
Cash and cash equivalents at January 1 20,615,188 19,937,551
Cash and cash equivalents at March 31 $32,126,798 $17,160,931
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these financial statements.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The accompanying consolidated financial statements are
unaudited; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair
statement of the financial position and operating results of
Anchor Financial Corporation and its subsidiaries (the
"Corporation") for the periods presented. A summary of the
Corporation's significant accounting policies is set forth in
Note 1 to the Consolidated Financial Statements in the
Corporation's Annual Report on Form 10-K for 1995.
The results of operations for the three month period ended
March 31, 1996 are not necessarily indicative of the results
to be expected for the full year.
For purposes of the Consolidated Statement of Cash Flows, the
Corporation has defined cash and cash equivalents as cash on
hand, amounts due from banks, and federal funds sold.
Generally, federal funds are purchased and sold for one-day
periods.
NOTE 2: RESERVE FOR LOAN LOSSES
Transactions to the reserve for loan losses for the three
months ended March 31, 1996 and 1995 are summarized as
follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Balance, beginning of year $3,045,656 $2,795,941
Provision charged to operations 160,000 134,500
Recoveries of charged off loans 6,558 32,795
Loans charged off (17,973) (104,150)
$3,194,241 $2,859,086
</TABLE>
NOTE 3: NONPERFORMING ASSETS
The following is a summary of nonperforming assets at
March 31, 1996 and 1995. The income effect of interest
foregone on these assets is not material. The Corporation
did not have any loans with reduced interest rates because of
troubled debt restructuring, foreign loans, or loans for
highly leveraged transactions. Management is not aware of
any situation, other than those included in the summary
below, where known information about a borrower would require
disclosure as a potential problem loan.
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Nonaccrual loans $ 332,262 $1,127,309
Loans past due ninety days or more 7,841 158,049
Total nonperforming assets $ 340,103 $1,285,358
</TABLE>
NOTE 4: INCOME TAXES
The significant components of the Corporation's deferred tax
assets and (liabilities) recorded pursuant to Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes," and included in other assets in the consolidated
balance sheet as of March 31, are as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Deferred tax liabilities:
Tax depreciation over book ($530,404) ($494,193)
Net unrealized gain SFAS 115 (18,894) 0
Other, net (177,531) (159,865)
Total deferred tax liabilities (726,829) (654,058)
Deferred tax assets:
Allowance for loan losses 779,463 667,893
Deferred loan fees and costs 231,425 224,997
Deferred compensation 173,102 163,661
Net unrealized loss SFAS 115 0 109,145
Other, net 132,314 97,103
Total deferred tax assets 1,316,304 1,262,799
Net deferred tax asset $589,475 $608,741
</TABLE>
<PAGE>
ANCHOR FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5: LONG-TERM DEBT
Long-term debt at March 31 is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Parent Company:
8.60% subordinated notes due in 2003 <F2> $5,000,000 $5,000,000
Subsidiaries:
5.71% Federal Home Loan Bank advance due
in 1998 5,000,000 0
5.48% Federal Home Loan Bank advance due
in 1999 3,000,000 0
6.08% Federal Home Loan Bank advance due
in 2000 5,000,000 0
7.21% Federal Home Loan Bank advance due
in 2005 5,000,000 0
Total long-term debt $23,000,000 $5,000,000
<F2> Debt qualifies for inclusion in the determination of
total capital under the Risk-Based Capital Guidelines.
</TABLE>
The principal maturity of long-term debt for the next five
years subsequent to March 31, 1996 is $5,000,000 in 1998,
$3,000,000 in 1999, and $5,000,000 in 2000.
NOTE 6: PER SHARE DATA
Net income per share is computed by dividing net income by the
weighted average number of shares outstanding and dilutive
common share equivalents using the treasury stock method.
Common share equivalents include common shares issuable upon
exercise of outstanding stock options. Unallocated common
shares held by the Employee Stock Ownership Plan are excluded
from the weighted average number of common shares outstanding.
NOTE 7: IMPAIRED LOANS
Adoption of SFAS Nos. 114 and 118 resulted in the identification
of certain loans which were considered impaired under the
provisions of SFAS No. 114. Impaired loans are loans for which
it is probable that all amounts, including principal and
<PAGE>
interest, will not be collected in accordance with the contractual
terms of the loan agreement. Impaired (including cash basis) loans
at March 31, all of which are held by the bank subsidiaries, are
summarized in Note 3.
At March 31, 1996, impaired loans had a related specific allowance
for loan losses totaling $33,000. There were no material commitments
to lend additional funds to customers whose loans were classified
as impaired at March 31, 1996.
At March 31, 1996 and 1995, the Corporation did not have any loans
for which terms had been modified in troubled debt restructurings.
NOTE 8: OTHER MATTERS
At March 31, 1996, outstanding standby letters of credit
totaled $524,416.
For the three months ended March 31, 1996 and 1995, the
Corporation paid interest of $3,545,281 and $2,712,339
respectively. The Corporation paid income taxes of $37,500
during the first three months of 1996 and $123,898 during the
same period in 1995.
<PAGE>
Management's Discussion and Analysis
Net Income
Net income for the first quarter of 1996 was $931,892, an
increase of $88,142 or 10.4% from the $843,750 for the same period in
1995. Net income per share for the first quarter increased 7.1% from
$0.34 in 1995 to $0.36 in 1996.
The primary factors affecting the increase in net income
were increases of $649,117 in net interest income and $108,886 in
noninterest income. These positive factors were partially offset by
increases in noninterest expense of $582,218, the provision for loan
losses of $25,500, and the provision for income taxes of $62,143.
Annualized return on average total assets for the first quarter of
1996 was 0.88% compared with 0.97% in 1995. Annualized return on average
stockholders' equity for the first quarter of 1996 was 12.67% compared with
12.74% in 1995.
Net Interest Income
Net interest income, the major component of the Corporation's net
income, was $4,565,556 for the first quarter of 1996, an increase of
$649,117 or 16.6% from the $3,916,439 reported for the same period in
1995. This increase was primarily attributable to the increased volume
of earning assets during the period since the tax equivalent net yield on
earning assets decreased from 4.95% in 1995 to 4.72% in 1996. The decrease
in net yield during the first quarter reflects the effect of a slight change
in the mix of earning assets and the increased cost of funding sources. The
increased volume of earning assets was primarily the result of quality loan
demand and strong deposit growth.
Interest income increased $1,506,991 or 21.8% for the three months
ended March 31, 1996 compared with the same period in 1995. The
increase was due to an increase in the volume of earning assets since the
yield on earning assets decreased from 8.70% in 1995 to 8.66% in
1996. Average loans increased $52.1 million or 21.5% and average
investment securities increased $7.2 million or 9.4% during the first
quarter of 1996 compared with the same period in 1995. Average interest
earning assets represented 91.6% of average total assets during the first
quarter of 1996 compared with 91.8% in 1995. The composition of
average interest-earning assets changed slightly as the percentage of
average loans to average interest-earning assets decreased from 75.3%
in 1995 to 75.2% in 1996.
Interest expense increased $857,874 or 28.8% for the three months
ended March 31, 1996 compared with the same period in 1995. The
increase in interest expense was due to an increase in the volume of
average interest-bearing liabilities and the rate paid on these funds
during the period. Average interest-bearing liabilities increased
$61.0 million or 22.8% for the first quarter of 1996 compared with the
same period in 1995. The rate paid on average interest-bearing
liabilities increased from 4.45% for the three months ended March 31,
1995 to 4.63% in 1996. Average interest-bearing liabilities
represented 85.1% of funding sources during the first quarter of 1996
compared with 84.3% in 1995.
<PAGE>
Provision for Loan Losses
A $160,000 provision for loan losses was made during the first
quarter of 1996 compared with a provision of $134,500 in 1995. The
provision for loan losses was higher during the first quarter of 1996
primarily due to loan growth since the levels of net charge-offs and
nonperforming loans decreased.
At March 31, 1996 and 1995 the ratio of annualized net charge-
offs to average loans was 0.02% and 0.12%, respectively. The ratio of
nonperforming assets to total loans and other real estate owned was
0.11% at March 31, 1996 compared with 0.51% at March 31, 1995.
The reserve for loan losses at March 31, 1996 represented 1.06%
of total loans outstanding compared with 1.07% at December 31, 1995.
Based on the current evaluation of the loan portfolio, management
believes the reserve at March 31 is adequate to cover potential losses
in the portfolio.
Noninterest Income
Noninterest income for the first quarter of 1996 increased
$108,886 or 16.2% from the same period in 1995. The primary
reasons for this increase were increases in service charges on deposit
accounts of $82,876 or 22.7%, gains on sales of mortgage loans of $11,748
or 24.3%, commissions and fees of $24,440 or 16.5%, and trust income of
$9,505 or 19.9%.
The increase in service charges on deposit accounts was due to
the significant growth in deposits and an increase in certain prices.
Gains on sales of mortgage loans increased during 1996 primarily
due to a higher level of refinancing activity.
Noninterest Expense
Noninterest expense for the first quarter of 1996 increased $582,218
or 18.5% from the same period in 1995. This increase was the result of
increases in each category of noninterest expense caused by the significant
growth of the Corporation.
Salaries and employee benefits for the first quarter of 1996 increased
$332,261 or 20.2% from the same period in 1995. This increase was primarily
due to the increased number of employees from expansion into new markets and
investments in new personnel to further develop the infrastructure of the
Corporation.
Net occupancy expense increased $76,050 or 31.8% and equipment expense
increased $43,591 or 17.8% for the first three months of 1996 compared with
the same period in 1995. These increases were primarily due to the addition
of banking locations in Mt. Pleasant, South Carolina and Wilmington, North
Carolina.
Other operating expense for the three months ended March 31, 1996
increased $130,316 or 12.8% compared with the same period in 1995. A primary
cause of this increase was the launching of an extensive marketing campaign.
Income Taxes
The provision for income taxes for the first quarter of 1996
increased $62,143 or 13.5% from the same period in 1995. The provision
for income taxes increased in 1996 primarily due to higher income before
taxes since tax rates remained approximately the same as 1995.
<PAGE>
Financial Position
For the first quarter of 1996, average total assets increased 21.8%
while average deposits increased 19.9% from the first quarter of 1995.
Due to the seasonal nature of the Myrtle Beach and Hilton Head
Island market areas, deposit growth is strong during the summer months
and loan demand usually reaches its peak during the winter months.
Thus, the Corporation historically has a more favorable liquidity
position during the summer months. To meet loan demand and liquidity
needs during the winter months, the Corporation typically invests
sizable amounts of its deposit growth during the summer months in
temporary investments and short-term securities maturing in the winter
months. Additionally, the Corporation has access to other funding
sources including federal funds purchased from correspondent banks, a
line of credit with the Federal Home Loan Bank ("FHLB"), and a seasonal
borrowing privilege from the Federal Reserve Bank.
The Corporation utilizes long-term advances from the FHLB
as part of its funding strategy. FHLB advances totaled $18,000,000
at March 31, 1996 versus none at March 31, 1995.
The Corporation continues to have a strong capital position by
industry standards with the ratio of average stockholders' equity to
average total assets for the first three months of 1996 being 6.9%
versus 7.6% for the same period in 1995. At March 31, 1996, the
total risk-based capital ratio was 11.6% compared with 12.2% at
December 31, 1995. The leverage ratio at March 31, 1996 was 6.5%
compared with 6.8% at December 31, 1995.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
On April 24, 1996, the Corporation held its 1996 Annual Meeting of
Shareholders. At the 1996 Annual Meeting, the following individuals
were elected as Directors with the votes indicated.
Director For Withheld Abstain
C. Jason Ammons, Jr. 1,538,326 171,222 17,092
Admah Lanier, Jr. 1,702,362 7,186 17,092
Tommy E. Looper 1,704,184 5,364 17,092
W. Gairy Nichols, III 1,676,579 32,969 17,092
Thomas J. Rogers 1,709,548 0 17,092
Zeb M. Thomas, Sr. 1,704,716 4,832 17,092
Howell V. Bellamy, Jr., W. Cecil Brandon, Jr., James E. Burroughs,
C. Donald Cameron, Stephen L. Chryst, John D. Flowers, J. Bryan Floyd,
Ruppert L. Piver, Albert A. Springs, III, J. Roddy Swaim, and Harry A.
Thomas continued in their terms of office as directors of the
Corporation.
The following is a brief description of other matters voted upon at the
1996 Annual Meeting and the number of votes cast for and withheld, as
well as, the number of abstentions.
Proposal to amend the Corporation's Articles of Incorporation to
increase the authorized shares of common stock to 7,000,000 shares.
For - 1,678,999 Withheld - 22,342 Abstain - 25,298
Proposal to adopt the Anchor Financial Corporation, The Anchor Bank and
The Anchor Bank of North Carolina Incentive Stock Option Plan of 1996,
to be effective as of April 25, 1996.
For - 1,639,424 Withheld - 59,775 Abstain - 22,574
Proposal to ratify the selection of Price Waterhouse LLP as independent
public accountants for the Corporation for the year ending December 31,
1996.
For - 1,698,048 Withheld - 154 Abstain - 28,437
<PAGE>
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 10.1 Salary Continuation Agreement with Stephen L Chryst dated
February 27, 1996
10.2 Salary Continuation Agreement with Robert E. Coffee, Jr.
dated February 27, 1996
10.3 Salary Continuation Agreement with Robert R. Durant, III
dated February 27, 1996
10.4 Salary Continuation Agreement with Tommy E. Looper dated
February 27, 1996
27 Financial Data Schedule (for SEC purposes only)
No reports on Form 8-K have been filed during the quarter ended
March 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Stephen L. Chryst
Stephen L. Chryst, President and
Chief Executive Officer
/s/ Tommy E. Looper
Tommy E. Looper, Executive Vice
President and Chief Financial
Officer
/s/ John J. Moran
John J. Moran, Vice President and
Comptroller
Date : May 3, 1996
<PAGE>
THE ANCHOR BANK
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 27th day of February,
1996 by and between Anchor Financial Corporation and its wholly
owned subsidiary, The Anchor Bank, Myrtle Beach, South Carolina
(collectively herein called the "Company"), and Stephen L.
Chryst (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the
Company, the Company is willing to provide salary continuation
benefits to the Executive.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Anniversary Date" means the 1st day of January of each
calendar year.
1.1.2 "Cause" shall mean (A) the breach by Executive of any
material provision of such Executive's Employment Agreement
with The Anchor Bank, provided that the Anchor Bank gives
the Executive written notice of such failure and such failure
is not cured within thirty (30) days thereafter; (B) the
willful and continued failure by the Executive to substantially
perform his duties under such Employment Agreement (other than
the Executive's inability to perform, with or without reasonable
accommodation, resulting from his incapacity due to physical or
mental illness or impairment), after a demand for substantial
performance is delivered to him by the Board of Directors of The
Anchor Bank, which demand specifically identifies the manner in
which the Executive is alleged to have not substantially
performed his duties; (C) the willful engaging by the Executive
in misconduct (criminal, immoral or otherwise) which is
materially injurious to The Anchor Bank, its officers,
directors, shareholders, employees, or customers, monetarily or
otherwise; (D) the Executive's conviction of a felony; or (E)
the commission in the course of the Executive's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not
<PAGE>
resulting in criminal prosecution or conviction), or any act or
practice which The Anchor Bank shall, in good faith, deem to
have resulted in the Executive becoming unbondable under The
Anchor Bank's "banker's blanket bond". Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until Executive has
been afforded a reasonable opportunity, together with his
counsel, to be heard before the Board of Directors of The
Anchor Bank, and a written finding has been delivered to him
to the effect that in the good faith opinion of the Board of
Directors of The Anchor Bank, the Executive was guilty of
conduct as set forth under clause (A), (B), (C),
(D) or (E) of the first sentence of this sub-paragraph,
specifying in writing the particulars thereof in detail.
1.1.3 "Change of Control" means either
(A) the acquisition, directly or indirectly, by any
"person" (as such term is defined for purposes of Section 13(d)
and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than by The Anchor Bank, Anchor
Financial Corporation or any subsidiary controlled by Anchor
Financial Corporation or any person so defined who on the date
of this Agreement is a director of The Anchor Bank or Anchor
Financial Corporation, or whose shares of stock therein are
treated as "beneficially owned" (as such term is defined for
purposes of Rule 13d-3 of the Exchange Act) by any such
director, of the beneficial ownership [as such term is defined
for purposes of Section 13(d) (1) of the Exchange Act] of shares
in The Anchor Bank or Anchor Financial Corporation which, when
added to any other shares the beneficial ownership of which is
held by such acquiror, shall have fifty percent (50%) or more
of the combined voting power of The Anchor Bank or Anchor
Financial Corporation's then outstanding voting securities; or
(B) the occurrence of any merger, consolidation or
reorganization to which The Anchor Bank or Anchor Financial
Corporation is a party and to which The Anchor Bank or Anchor
Financial Corporation (or an entity controlled by The Anchor
Bank or Anchor Financial Corporation ) is not a surviving
entity, or the sale of all or substantially all of the assets of
The Anchor Bank or Anchor Financial Corporation.
The merger, combination, or consolidation of The Anchor Bank
with Anchor Financial Corporation or any other wholly owned
Subsidiary of Anchor Financial Corporation shall not be
construed as a Change in Control.
<PAGE>
1.1.4 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be
that section as it now exists and to any successor provision.
1.1.5 "Disability" means the Executive's failure to
satisfactorily perform the essential functions of his office on
a full-time basis for one hundred and eighty (180) consecutive
days, with or without accommodation, by reason of the
Executive's incapacity resulting from physical or mental illness
or impairment, except where within fifteen (15) days after a
written notice of termination is given following such absence,
the Executive shall have returned to the satisfactory, full time
performance of such duties. Any determination of Disability
hereunder shall be made by the Board of Directors of The Anchor
Bank in good faith and on the basis of the certificates of at
least three (3) qualified physicians chosen by it for such
purpose, one (1) of whom shall be the Executive's regular
attending physician.
1.1.6 "Termination Date" means the date of Termination of
Employment in any year before the Executive attains the Normal
Retirement Date.
1.1.7 "Effective Date" means the 1st day of January, 1996.
1.1.8 "Month of Service" means each completed full month of a
Year of Service.
1.1.9 "Normal Retirement Date" means the Anniversary Date
following Executive attaining age 65.
1.1.10 "Termination of Employment" means the Executive's
ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved
leave of absence.
1.1.11 "Years of Service" means the total number of consecutive
twelve-month periods during which the Executive is employed on a
full-time or part-time basis by the Company, inclusive of any
approved leaves of absence, from the Effective Date of this
Agreement until Termination of Employment.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates
employment on or after the Normal Retirement Date for reasons
other than death, the Company shall pay to the Executive the
benefit described in this Section 2.1.
<PAGE>
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is one hundred fifty thousand six hundred dollars ($150,600)
per year for 15 consecutive years.
2.1.2 Payment of Benefit. The Company shall pay twelve
thousand five hundred fifty dollars ($12,550) to the Executive
on the first day of each month commencing with the month
following the Normal Retirement Date and continuing for 179
additional months. No interest shall accrue on any portion of
the unpaid balance of the amount of benefit.
2.2 Termination Benefit. If the Executive terminates employment
before the Normal Retirement Date for reasons other than death
or Disability or prior to a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The termination benefit under this
Section 2.2 is the Executive's vested percentage of the accrued
liability listed on Schedule A (for each Month of Service in a
partial year, the accrued liability in the year of Termination
of Employment will be increased as follows: the annual increase
in the accrued liability divided by twelve (12) times the number
of Months of Service), determined as of the date of Termination
of Employment.
<PAGE>
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Executive on the first day of each month commencing with the
month following the Executive's Termination Date and continuing
in equal monthly payments, including interest at 8.0% per year
on the unpaid balance of the total payments, for 179 additional
months.
2.3 Disability Benefit. If the Executive terminates employment
because of Disability prior to a Change In Control and prior to
the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Disability Benefit. The Disability Benefit
under this Section 2.3 is 100% of the accrued liability listed
on Schedule A (for each Month of Service in a partial year, the
accrued liability in the year of Termination of Employment will
be increased as follows [the annual increase in the accrued
liability divided by twelve (12) times the number of Months of
Service]), determined as of the date of Termination of
Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Executive, at the Company's discretion, in either a lump sum
payment within 60 days of Executive's termination, or in equal
monthly payments, including interest at 8.0% per year on the
unpaid balance of the total payments, beginning with
<PAGE>
the month following the Executive's disability and continuing
for 179 months.
2.4 Change of Control Benefit. Upon a Change of Control while
the Executive is in the employment of the Company, 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. The Change of Control benefit shall
be 100% vesting in the Normal Retirement Benefit in Section
2.1.1.
2.4.2 Payment of Benefit. After a Change In Control while the
Executive is in the employment of the Company, the Company shall
pay the Normal Retirement Benefit as set forth in Sec. 2.4.1 to
the Executive as described in Section 2.1.2, in lieu of any
other benefit under this Agreement.
2.4.3 Death Benefit After Change In Control. In the event of
the Executive's death after a Change In Control, regardless of
whether or not the Executive is in the active service of the
Company, the Death Benefit as described in Sec. 3.1.1 will be
paid to the Executive's beneficiary. If the Executive dies
after the benefit payments have commenced under this Article but
before receiving all payments the Company shall pay the
remaining benefits to the Executive's beneficiary as set forth
in Sec. 3.2.
2.4.4 Disability Benefit After Change In Control. If the
Executive terminates employment because of Disability after a
Change In Control and prior to the Normal Retirement Date, the
Company shall pay to the Executive the benefit described in this
Subscription 2.3.1.
a. The amount of the Disability Benefit under this
Subsection 2.4.4 is $150,600 per year for 15
consecutive years.
b. The Company shall pay $12,550 of the Disability Benefit
to the Executive on the first day of each month
commencing with the month following the Executive's
disability and continuing for 179 months. No interest
shall accrue on any portion of the unpaid balance of the
amount of benefit.
Article 3
Death Benefits
<PAGE>
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.
3.1.1 Amount of Benefit. The Death Benefit under Section 3.1
shall be annual payments of one hundred fifty thousand six
hundred dollars ($150,600) per year for 15 consecutive years.
3.1.2 Payment of Benefit. The Company shall pay twelve
thousand five hundred fifty dollars ($12,550) to the beneficiary
on the first day of each month commencing with the month
following the Executive's death and continuing for 179
additional months.
3.2 Death During Benefit Period. If the Executive dies after
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 the benefit would have been paid to the
Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
Primary and Contingent 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. A beneficiary's 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 surviving spouse, if any, and if none,
to the Executive's surviving children in equal shares per
survivor, and if no survivors, to the Executive's estate.
4.2 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.
<PAGE>
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement for
the following reasons:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for Cause.
5.2 Suicide. No benefits shall be payable if the Executive
commits suicide within two years after the Effective Date of
this Agreement, or if the Executive has made any material
misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the claimant in
writing, within ninety (90) days of the claimant's written
application for benefits, of eligibility or non eligibility 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
claimant's 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 ninety-day period.
6.2 Review Procedure. If the claimant is determined by the
Company not to be eligible for benefits, or if the claimant
believes that claimant 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 sixty (60) days after receipt of the
notice issued by the Company. Said petition shall state the
specific reasons which the claimant believes entitle claimant to
benefits or to greater or different benefits. Within sixty (60) days
after receipt by the Company of the petition, the Company shall
afford the claimant (and counsel,
<PAGE>
if any) an opportunity to present claimant's position to the Company
orally, or in writing, and the claimant (or counsel) shall have the
right to review the pertinent documents. The Company shall notify the
claimant of its decision in writing within the sixty-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 sixty-day
period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the claimant.
Article 7
Amendments and Termination
The Company reserves the right to amend or terminate this
Agreement at any time. In the event of termination of this
Agreement, the benefit to the Executive shall be 100% of the
accrued liability listed on Schedule A (for each Month of
Service in a partial year, the accrued liability in the year of
termination of Agreement will be increased as follows: the
annual increase in the accrued liability divided by twelve (12)
times the number of Months of Service), determined as of the
date of termination of Agreement. The Company shall pay the
benefit to the Executive, at the Company's discretion, in either
lump sum payment within 60 days of Executive's termination, or
in equal monthly payments, including interest at 8.0% per year,
beginning with the month following the Executive's termination
of employment and continuing for 179 months. In the event of
Amendment, the nonforfeitable benefit accrued as of the
effective date of the Amendment shall not be reduced by the
Amendment.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors,
administrators.
8.2 No Guaranty 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, transformed, assigned, pledged, attached or encumbered
in any manner.
<PAGE>
8.4 Tax Withholding. The Company shall withhold any taxes that
are required to be withheld from the benefits provided under
this Agreement.
8.5 Applicable Law. The Agreement and all rights thereunder
shall be governed by the laws of South Carolina, except to the
extent preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and any 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. Insurance on the
Executive's life, if any, is a general asset of the Company to
which the Executive and any beneficiary shall have no preferred
or secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company
officer have signed this Agreement.
EXECUTIVE: COMPANY: Anchor Financial
The Anchor Bank Corporation
/s/ Stephen L. Chryst By: /s/ Zeb M. Thomas By: /s/ Zeb M. Thomas
Stephen L. Chryst
<PAGE>
STEPHEN L. CHRYST
SCHEDULE A
<TABLE>
<CAPTION>
ACCRUED VESTED
YEAR LIABILITY %
<C> <C> <C>
1 42,225 30.00%
2 87,954 40.00%
3 137,479 50.00%
4 191,114 60.00%
5 249,201 70.00%
6 312,109 80.00%
7 380,238 90.00%
8 454,022 100.00%
9 533,930 100.00%
10 620,471 100.00%
11 714,194 100.00%
12 815,696 100.00%
13 925,623 100.00%
14 1,044,674 100.00%
15 1,173,606 100.00%
16 1,313,239 100.00%
</TABLE>
<PAGE>
THE ANCHOR BANK
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 27th day of February,
1996 by and between Anchor Financial Corporation and its wholly
owned subsidiary, The Anchor Bank, Myrtle Beach, South Carolina
(collectively herein called the "Company"), and Robert E.
Coffee, Jr. (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the
Company, the Company is willing to provide salary continuation
benefits to the Executive.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Anniversary Date" means the 1st day of January of each
calendar year.
1.1.2 "Cause" shall mean (A) the breach by Executive of any
material provision of such Executive's Employment Agreement with
The Anchor Bank, provided that the Anchor Bank gives the
Executive written notice of such failure and such failure is not
cured within thirty (30) days thereafter; (B) the willful and
continued failure by the Executive to substantially perform his
duties under such Employment Agreement (other than the
Executive's inability to perform, with or without reasonable
accommodation, resulting from his incapacity due to physical or
mental illness or impairment), after a demand for substantial
performance is delivered to him by the Board of Directors of The
Anchor Bank, which demand specifically identifies the manner in
which the Executive is alleged to have not substantially
performed his duties; (C) the willful engaging by the Executive
in misconduct (criminal, immoral or otherwise) which is
materially injurious to The Anchor Bank, its officers,
directors, shareholders, employees, or customers, monetarily or
otherwise; (D) the Executive's conviction of a felony; or (E)
the commission in the course of the Executive's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not
<PAGE
resulting in criminal prosecution or conviction), or any act or
practice which The Anchor Bank shall,in good faith, deem to
have resulted in the Executive becoming unbondable under The
Anchor Bank's "banker's blanket bond". Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until Executive has been
afforded a reasonable opportunity, together with his counsel,
to be heard before the Board of Directors of The Anchor
Bank, and a written finding has been delivered to him to the
effect that in the good faith opinion of the Board of
Directors of The Anchor Bank, the Executive was guilty of
conduct as set forth under clause (A), (B), (C), (D) or (E) of
the first sentence of this sub-paragraph, specifying in writing
the particulars thereof in detail.
1.1.3 "Change of Control" means either
(A) the acquisition, directly or indirectly, by any
"person" (as such term is defined for purposes of Section 13(d)
and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than by The Anchor Bank, Anchor
Financial Corporation or any subsidiary controlled by Anchor
Financial Corporation or any person so defined who on the date
of this Agreement is a director of The Anchor Bank or Anchor
Financial Corporation, or whose shares of stock therein are
treated as "beneficially owned" (as such term is defined for
purposes of Rule 13d-3 of the Exchange Act) by any such
director, of the beneficial ownership [as such term is defined
for purposes of Section 13(d)(1) of the Exchange Act] of shares
in The Anchor Bank or Anchor Financial Corporation which, when
added to any other shares the beneficial ownership of which is
held by such acquiror, shall have fifty percent (50%) or more
of the combined voting power of The Anchor Bank or Anchor
Financial Corporation's then outstanding voting securities; or
(B) the occurrence of any merger, consolidation or
reorganization to which The Anchor Bank or Anchor Financial
Corporation is a party and to which The Anchor Bank or Anchor
Financial Corporation (or an entity controlled by The Anchor
Bank or Anchor Financial Corporation ) is not a surviving
entity, or the sale of all or substantially all of the assets of
The Anchor Bank or Anchor Financial Corporation.
The merger, combination, or consolidation of The Anchor Bank
with Anchor Financial Corporation or any other wholly owned
Subsidiary of Anchor Financial Corporation shall not be
construed as a Change in Control.
<PAGE>
1.1.4 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be
that section as it now exists and to any successor provision.
1.1.5 "Disability" means the Executive's failure to
satisfactorily perform the essential functions of his office on
a full-time basis for one hundred and eighty (180) consecutive
days, with or without accommodation, by reason of the
Executive's incapacity resulting from physical or mental illness
or impairment, except where within fifteen (15) days after a
written notice of termination is given following such absence,
the Executive shall have returned to the satisfactory, full time
performance of such duties. Any determination of Disability
hereunder shall be made by the Board of Directors of The Anchor
Bank in good faith and on the basis of the certificates of at
least three (3) qualified physicians chosen by it for such
purpose, one (1) of whom shall be the Executive's regular
attending physician.
1.1.6 "Termination Date" means the date of Termination of
Employment in any year before the Executive attains the Normal
Retirement Date.
1.1.7 "Effective Date" means the 1st day of January, 1996.
1.1.8 "Month of Service" means each completed full month of a
Year of Service.
1.1.9 "Normal Retirement Date" means the Anniversary Date
following Executive attaining age 65.
1.1.10 "Termination of Employment" means the Executive's
ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved
leave of absence.
1.1.11 "Years of Service" means the total number of consecutive
twelve-month periods during which the Executive is employed on a
full-time or part-time basis by the Company, inclusive of any
approved leaves of absence, from the Effective Date of this
Agreement until Termination of Employment.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates
employment on or after the Normal Retirement Date for reasons
other than death, the Company shall pay to the Executive the
benefit described in this Section 2.1.
<PAGE>
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is thirty-six thousand nine hundred dollars ($36,900) per
year for 15 consecutive years.
2.1.2 Payment of Benefit. The Company shall pay three thousand
seventy-five dollars ($3,075) to the Executive on the first day
of each month commencing with the month following the Normal
Retirement Date and continuing for 179 additional months. No
interest shall accrue on any portion of the unpaid balance of
the amount of benefit.
2.2 Termination Benefit. If the Executive terminates employment
before the Normal Retirement Date for reasons other than death
or Disability or prior to a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The termination benefit under this
Section 2.2 is the Executive's vested percentage of the accrued
liability listed on Schedule A (for each Month of Service in a
partial year, the accrued liability in the year of Termination
of Employment will be increased as follows: the annual increase
in the accrued liability divided by twelve (12) times the number
of Months of Service), determined as of the date of Termination
of Employment.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Executive on the first day of each month commencing with the
month following the Executive's Termination Date and continuing
in equal monthly payments, including interest at 8.0% per year
on the unpaid balance of the total payments, for 179 additional
months.
2.3 Disability Benefit. If the Executive terminates employment
because of Disability prior to a Change In Control and prior to
the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Disability Benefit. The Disability Benefit
under this Section 2.3 is 100% of the accrued liability listed
on Schedule A (for each Month of Service in a partial year, the
accrued liability in the year of Termination of Employment will
be increased as follows [the annual increase in the accrued
liability divided by twelve (12) times the number of Months of
Service]), determined as of the date of Termination of
Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Executive, at the Company's discretion, in either a lump sum
payment within 60 days of Executive's termination, or in equal
monthly payments, including interest at 8.0% per year on the
unpaid balance of the total payments, beginning with
<PAGE>
the month following the Executive's disability and continuing
for 179 months.
2.4 Change of Control Benefit. Upon a Change of Control while
the Executive is in the employment of the Company, 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. The Change of Control benefit shall
be 100% vesting in the Normal Retirement Benefit in Section
2.1.1.
2.4.2 Payment of Benefit. After a Change In Control while the
Executive is in the employment of the Company, the Company shall
pay the Normal Retirement Benefit as set forth in Sec. 2.4.1 to
the Executive as described in Section 2.1.2, in lieu of any
other benefit under this Agreement.
2.4.3 Death Benefit After Change In Control. In the event of
the Executive's death after a Change In Control, regardless of
whether or not the Executive is in the active service of the
Company, the Death Benefit as described in Sec. 3.1.1 will be
paid to the Executive's beneficiary. If the Executive dies
after the benefit payments have commenced under this Article but
before receiving all payments the Company shall pay the
remaining benefits to the Executive's beneficiary as set forth
in Sec. 3.2.
2.4.4 Disability Benefit After Change In Control. If the
Executive terminates employment because of Disability after a
Change In Control and prior to the Normal Retirement Date, the
Company shall pay to the Executive the benefit described in this
Subscription 2.3.1.
a. The amount of the Disability Benefit under this
Subsection 2.4.4 is $36,900 per year for 15 consecutive
years.
b. The Company shall pay $3,075 of the Disability Benefit
to the Executive on the first day of each month
commencing with the month following the Executive's
disability and continuing for 179 months. No interest
shall accrue on any portion of the unpaid balance of the
amount of benefit.
Article 3
Death Benefits
<PAGE>
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.
3.1.1 Amount of Benefit. The Death Benefit under Section 3.1
shall be annual payments of thirty-six thousand nine hundred
dollars ($36,900) per year for 15 consecutive years.
3.1.2 Payment of Benefit. The Company shall pay three thousand
seventy-five dollars ($3,075) to the beneficiary on the first
day of each month commencing with the month following the
Executive's death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after
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 the benefit would have been paid to the
Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
Primary and Contingent 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. A beneficiary's 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 surviving spouse, if any, and if none,
to the Executive's surviving children in equal shares per
survivor, and if no survivors, to the Executive's estate.
4.2 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.
<PAGE>
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement for
the following reasons:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for Cause.
5.2 Suicide. No benefits shall be payable if the Executive
commits suicide within two years after the Effective Date of
this Agreement, or if the Executive has made any material
misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the claimant in
writing, within ninety (90) days of the claimant's written
application for benefits, of eligibility or non eligibility 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
claimant's 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 ninety-day period.
6.2 Review Procedure. If the claimant is determined by the
Company not to be eligible for benefits, or if the claimant
believes that claimant 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 sixty (60) days after receipt of the
notice issued by the Company. Said petition shall state the
specific reasons which the claimant believes entitle claimant to
benefits or to greater or different benefits. Within sixty (60)
days after receipt by the Company of the petition, the Company shall
afford the claimant (and counsel,
<PAGE>
if any) an opportunity to present claimant's position to the Company
orally, or in writing, and the claimant (or counsel) shall have the
right to review the pertinent documents. The Company shall notify the
claimant of its decision in writing within the sixty-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 sixty-day
period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the claimant.
Article 7
Amendments and Termination
The Company reserves the right to amend or terminate this
Agreement at any time. In the event of termination of this
Agreement, the benefit to the Executive shall be 100% of the
accrued liability listed on Schedule A (for each Month of
Service in a partial year, the accrued liability in the year of
termination of Agreement will be increased as follows: the
annual increase in the accrued liability divided by twelve (12)
times the number of Months of Service), determined as of the
date of termination of Agreement. The Company shall pay the
benefit to the Executive, at the Company's discretion, in either
lump sum payment within 60 days of Executive's termination, or
in equal monthly payments, including interest at 8.0% per year,
beginning with the month following the Executive's termination
of employment and continuing for 179 months. In the event of
Amendment, the nonforfeitable benefit accrued as of the
effective date of the Amendment shall not be reduced by the
Amendment.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors,
administrators.
8.2 No Guaranty 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, transformed, assigned, pledged, attached or encumbered
in any manner.
<PAGE>
8.4 Tax Withholding. The Company shall withhold any taxes that
are required to be withheld from the benefits provided under
this Agreement.
8.5 Applicable Law. The Agreement and all rights thereunder
shall be governed by the laws of South Carolina, except to the
extent preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and any 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. Insurance on the
Executive's life, if any, is a general asset of the Company to
which the Executive and any beneficiary shall have no preferred
or secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company
officer have signed this Agreement.
EXECUTIVE: COMPANY: Anchor Financial
The Anchor Bank Corporation
/s/ Robert E. Coffee, Jr. By: /s/ Zeb M. Thomas By: /s/ Zeb M. Thomas
Robert E. Coffee, Jr.
<PAGE>
ROBERT E. COFFEE, JR.
SCHEDULE A
<TABLE>
<CAPTION>
ACCRUED VESTED
YEAR LIABILITY %
<C> <C> <C>
1 9,278 30.00%
2 19,326 40.00%
3 30,207 50.00%
4 41,992 60.00%
5 54,755 70.00%
6 68,577 80.00%
7 83,546 90.00%
8 99,758 100.00%
9 117,315 100.00%
10 136,330 100.00%
11 156,923 100.00%
12 179,225 100.00%
13 203,378 100.00%
14 229,536 100.00%
15 257,865 100.00%
16 288,545 100.00%
17 321,771 100.00%
</TABLE>
<PAGE>
THE ANCHOR BANK
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 27th day of February,
1996 by and between Anchor Financial Corporation and its wholly
owned subsidiary, The Anchor Bank, Myrtle Beach, South Carolina
(collectively herein called the "Company"), and Robert R.
Durant, III (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the
Company, the Company is willing to provide salary continuation
benefits to the Executive.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Anniversary Date" means the 1st day of January of each
calendar year.
1.1.2 "Cause" shall mean (A) the breach by Executive of any
material provision of such Executive's Employment Agreement with
The Anchor Bank, provided that the Anchor Bank gives the
Executive written notice of such failure and such failure is not
cured within thirty (30) days thereafter; (B) the willful and
continued failure by the Executive to substantially perform his
duties under such Employment Agreement (other than the
Executive's inability to perform, with or without reasonable
accommodation, resulting from his incapacity due to physical or
mental illness or impairment), after a demand for substantial
performance is delivered to him by the Board of Directors of The
Anchor Bank, which demand specifically identifies the manner in
which the Executive is alleged to have not substantially
performed his duties; (C) the willful engaging by the Executive
in misconduct (criminal, immoral or otherwise) which is
materially injurious to The Anchor Bank, its officers,
directors, shareholders, employees, or customers, monetarily or
otherwise; (D) the Executive's conviction of a felony; or (E)
the commission in the course of the Executive's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not
<PAGE>
resulting in criminal prosecution or conviction), or any act
or practice which The Anchor Bank shall, in good faith, deem
to have resulted in the Executive becoming unbondable under
The Anchor Bank's "banker's blanket bond". Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until Executive has
been afforded a reasonable opportunity, together with his
counsel, to be heard before the Board of Directors of The Anchor
Bank, and a written finding has been delivered to him to the
effect that in the good faith opinion of the Board of
Directors of The Anchor Bank, the Executive was guilty of
conduct as set forth under clause (A), (B), (C), (D) or (E) of
the first sentence of this sub-paragraph, specifying in writing
the particulars thereof in detail.
1.1.3 "Change of Control" means either
(A) the acquisition, directly or indirectly, by any
"person" (as such term is defined for purposes of Section 13(d)
and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than by The Anchor Bank, Anchor
Financial Corporation or any subsidiary controlled by Anchor
Financial Corporation or any person so defined who on the date
of this Agreement is a director of The Anchor Bank or Anchor
Financial Corporation, or whose shares of stock therein are
treated as "beneficially owned" (as such term is defined for
purposes of Rule 13d-3 of the Exchange Act) by any such
director, of the beneficial ownership [as such term is defined
for purposes of Section 13(d)(1) of the Exchange Act] of shares
in The Anchor Bank or Anchor Financial Corporation which, when
added to any other shares the beneficial ownership of which is
held by such acquiror, shall have fifty percent (50%) or more
of the combined voting power of The Anchor Bank or Anchor
Financial Corporation's then outstanding voting securities; or
(B) the occurrence of any merger, consolidation or
reorganization to which The Anchor Bank or Anchor Financial
Corporation is a party and to which The Anchor Bank or Anchor
Financial Corporation (or an entity controlled by The Anchor
Bank or Anchor Financial Corporation ) is not a surviving
entity, or the sale of all or substantially all of the assets of
The Anchor Bank or Anchor Financial Corporation.
The merger, combination, or consolidation of The Anchor Bank
with Anchor Financial Corporation or any other wholly owned
Subsidiary of Anchor Financial Corporation shall not be
construed as a Change in Control.
<PAGE>
1.1.4 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be
that section as it now exists and to any successor provision.
1.1.5 "Disability" means the Executive's failure to
satisfactorily perform the essential functions of his office on
a full-time basis for one hundred and eighty (180) consecutive
days, with or without accommodation, by reason of the
Executive's incapacity resulting from physical or mental illness
or impairment, except where within fifteen (15) days after a
written notice of termination is given following such absence,
the Executive shall have returned to the satisfactory, full time
performance of such duties. Any determination of Disability
hereunder shall be made by the Board of Directors of The Anchor
Bank in good faith and on the basis of the certificates of at
least three (3) qualified physicians chosen by it for such
purpose, one (1) of whom shall be the Executive's regular
attending physician.
1.1.6 "Termination Date" means the date of Termination of
Employment in any year before the Executive attains the Normal
Retirement Date.
1.1.7 "Effective Date" means the 1st day of January, 1996.
1.1.8 "Month of Service" means each completed full month of a
Year of Service.
1.1.9 "Normal Retirement Date" means the Anniversary Date
following Executive attaining age 65.
1.1.10 "Termination of Employment" means the Executive's
ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved
leave of absence.
1.1.11 "Years of Service" means the total number of consecutive
twelve-month periods during which the Executive is employed on a
full-time or part-time basis by the Company, inclusive of any
approved leaves of absence, from the Effective Date of this
Agreement until Termination of Employment.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates
employment on or after the Normal Retirement Date for reasons
other than death, the Company shall pay to the Executive the
benefit described in this Section 2.1.
<PAGE>
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is forty-six thousand three hundred eight dollars ($46,308)
per year for 15 consecutive years.
2.1.2 Payment of Benefit. The Company shall pay three thousand
eight hundred fifty-eight dollars and thirty-four cents
($3,858.34) to the Executive on the first day of each month
commencing with the month following the Normal Retirement Date
and continuing for 179 additional months. No interest shall
accrue on any portion of the unpaid balance of the amount of
benefit.
2.2 Termination Benefit. If the Executive terminates employment
before the Normal Retirement Date for reasons other than death
or Disability or prior to a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The termination benefit under this
Section 2.2 is the Executive's vested percentage of the accrued
liability listed on Schedule A (for each Month of Service in a
partial year, the accrued liability in the year of Termination
of Employment will be increased as follows: the annual increase
in the accrued liability divided by twelve (12) times the number
of Months of Service), determined as of the date of Termination
of Employment.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Executive on the first day of each month commencing with the
month following the Executive's Termination Date and continuing
in equal monthly payments, including interest at 8.0% per year
on the unpaid balance of the total payments, for 179 additional
months.
2.3 Disability Benefit. If the Executive terminates employment
because of Disability prior to a Change In Control and prior to
the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Disability Benefit. The Disability Benefit
under this Section 2.3 is 100% of the accrued liability listed
on Schedule A (for each Month of Service in a partial year, the
accrued liability in the year of Termination of Employment will
be increased as follows [the annual increase in the accrued
liability divided by twelve (12) times the number of Months of
Service]), determined as of the date of Termination of
Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Executive, at the Company's discretion, in either a lump sum
payment within 60 days of Executive's termination, or in equal
monthly payments, including interest at 8.0% per year on the
unpaid balance of the total payments, beginning with
<PAGE>
the month following the Executive's disability and continuing
for 179 months.
2.4 Change of Control Benefit. Upon a Change of Control while
the Executive is in the employment of the Company, 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. The Change of Control benefit shall
be 100% vesting in the Normal Retirement Benefit in Section
2.1.1.
2.4.2 Payment of Benefit. After a Change In Control while the
Executive is in the employment of the Company, the Company shall
pay the Normal Retirement Benefit as set forth in Sec. 2.4.1 to
the Executive as described in Section 2.1.2, in lieu of any
other benefit under this Agreement.
2.4.3 Death Benefit After Change In Control. In the event of
the Executive's death after a Change In Control, regardless of
whether or not the Executive is in the active service of the
Company, the Death Benefit as described in Sec. 3.1.1 will be
paid to the Executive's beneficiary. If the Executive dies
after the benefit payments have commenced under this Article but
before receiving all payments the Company shall pay the
remaining benefits to the Executive's beneficiary as set forth
in Sec. 3.2.
2.4.4 Disability Benefit After Change In Control. If the
Executive terminates employment because of Disability after a
Change In Control and prior to the Normal Retirement Date, the
Company shall pay to the Executive the benefit described in this
Subscription 2.3.1.
a. The amount of the Disability Benefit under this
Subsection 2.4.4 is $46,308 per year for 15 consecutive
years.
b. The Company shall pay $3,858.34 of the Disability
Benefit to the Executive on the first day of each month
commencing with the month following the Executive's
disability and continuing for 179 months. No interest
shall accrue on any portion of the unpaid balance of the
amount of benefit.
Article 3
Death Benefits
<PAGE>
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.
3.1.1 Amount of Benefit. The Death Benefit under Section 3.1
shall be annual payments of forty-six thousand three hundred
eight dollars ($46,308) per year for 15 consecutive years.
3.1.2 Payment of Benefit. The Company shall pay three thousand
eight hundred fifty-eight dollars and thirty-four cents
($3,858.34) to the beneficiary on the first day of each month
commencing with the month following the Executive's death and
continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after
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 the benefit would have been paid to the
Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
Primary and Contingent 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. A beneficiary's 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 surviving spouse, if any, and if none,
to the Executive's surviving children in equal shares per
survivor, and if no survivors, to the Executive's estate.
4.2 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.
<PAGE>
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement for
the following reasons:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for Cause.
5.2 Suicide. No benefits shall be payable if the Executive
commits suicide within two years after the Effective Date of
this Agreement, or if the Executive has made any material
misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the claimant in
writing, within ninety (90) days of the claimant's written
application for benefits, of eligibility or non eligibility 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
claimant's 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 ninety-day period.
6.2 Review Procedure. If the claimant is determined by the
Company not to be eligible for benefits, or if the claimant
believes that claimant 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 sixty (60) days after receipt of the
notice issued by the Company. Said petition shall state the
specific reasons which the claimant believes entitle claimant to
benefits or to greater or different benefits. Within sixty (60)
days after receipt by the Company of the petition, the Company shall
afford the claimant (and counsel,
<PAGE>
if any) an opportunity to present claimant's position to the Company
orally, or in writing, and the claimant (or counsel) shall have the
right to review the pertinent documents. The Company shall notify the
claimant of its decision in writing within the sixty-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 sixty-day
period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the claimant.
Article 7
Amendments and Termination
The Company reserves the right to amend or terminate this
Agreement at any time. In the event of termination of this
Agreement, the benefit to the Executive shall be 100% of the
accrued liability listed on Schedule A (for each Month of
Service in a partial year, the accrued liability in the year of
termination of Agreement will be increased as follows: the
annual increase in the accrued liability divided by twelve (12)
times the number of Months of Service), determined as of the
date of termination of Agreement. The Company shall pay the
benefit to the Executive, at the Company's discretion, in either
lump sum payment within 60 days of Executive's termination, or
in equal monthly payments, including interest at 8.0% per year,
beginning with the month following the Executive's termination
of employment and continuing for 179 months. In the event of
Amendment, the nonforfeitable benefit accrued as of the
effective date of the Amendment shall not be reduced by the
Amendment.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors,
administrators.
8.2 No Guaranty 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, transformed, assigned, pledged, attached or encumbered
in any manner.
<PAGE>
8.4 Tax Withholding. The Company shall withhold any taxes that
are required to be withheld from the benefits provided under
this Agreement.
8.5 Applicable Law. The Agreement and all rights thereunder
shall be governed by the laws of South Carolina, except to the
extent preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and any 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. Insurance on the
Executive's life, if any, is a general asset of the Company to
which the Executive and any beneficiary shall have no preferred
or secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company
officer have signed this Agreement.
EXECUTIVE: COMPANY: Anchor Financial
The Anchor Bank Corporation
/s/ Robert R. Durant, III By: /s/ Zeb M. Thomas By: /s/ Zeb M. Thomas
Robert R. Durant, III
<PAGE>
ROBERT R. DURANT, III
SCHEDULE A
<TABLE>
<CAPTION>
ACCRUED VESTED
YEAR LIABILITY %
<C> <C> <C>
1 14,526 30.00%
2 30,258 40.00%
3 47,295 50.00%
4 65,746 60.00%
5 85,729 70.00%
6 107,370 80.00%
7 130,808 90.00%
8 156,191 100.00%
9 183,681 100.00%
10 213,452 100.00%
11 245,694 100.00%
12 280,612 100.00%
13 318,429 100.00%
14 359,384 100.00%
15 403,739 100.00%
</TABLE>
<PAGE>
THE ANCHOR BANK
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 27th day of February,
1996 by and between Anchor Financial Corporation and its wholly
owned subsidiary, The Anchor Bank, Myrtle Beach, South Carolina
(collectively herein called the "Company"), and Tommy E. Looper
(the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the
Company, the Company is willing to provide salary continuation
benefits to the Executive.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Anniversary Date" means the 1st day of January of each
calendar year.
1.1.2 "Cause" shall mean (A) the breach by Executive of any
material provision of such Executive's Employment Agreement with
The Anchor Bank, provided that the Anchor Bank gives the
Executive written notice of such failure and such failure is not
cured within thirty (30) days thereafter; (B) the willful and
continued failure by the Executive to substantially perform his
duties under such Employment Agreement (other than the
Executive's inability to perform, with or without reasonable
accommodation, resulting from his incapacity due to physical or
mental illness or impairment), after a demand for substantial
performance is delivered to him by the Board of Directors of The
Anchor Bank, which demand specifically identifies the manner in
which the Executive is alleged to have not substantially
performed his duties; (C) the willful engaging by the Executive
in misconduct (criminal, immoral or otherwise) which is
materially injurious to The Anchor Bank, its officers,
directors, shareholders, employees, or customers, monetarily or
otherwise; (D) the Executive's conviction of a felony; or (E)
the commission in the course of the Executive's employment of an
act of fraud, embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute a felony,
(whether or not
<PAGE>
resulting in criminal prosecution or conviction), or any act
or practice which The Anchor Bank shall, in good faith, deem
to have resulted in the Executive becoming unbondable under
The Anchor Bank's "banker's blanket bond". Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until Executive has
been afforded a reasonable opportunity, together with his
counsel, to be heard before the Board of Directors of The Anchor
Bank, and a written finding has been delivered to him to the
effect that in the good faith opinion of the Board of
Directors of The Anchor Bank, the Executive was guilty of
conduct as set forth under clause (A), (B), (C), (D) or (E) of
the first sentence of this sub-paragraph, specifying in writing
the particulars thereof in detail.
1.1.3 "Change of Control" means either
(A) the acquisition, directly or indirectly, by any
"person" (as such term is defined for purposes of Section 13(d)
and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than by The Anchor Bank, Anchor
Financial Corporation or any subsidiary controlled by Anchor
Financial Corporation or any person so defined who on the date
of this Agreement is a director of The Anchor Bank or Anchor
Financial Corporation, or whose shares of stock therein are
treated as "beneficially owned" (as such term is defined for
purposes of Rule 13d-3 of the Exchange Act) by any such
director, of the beneficial ownership [as such term is defined
for purposes of Section 13(d) (1) of the Exchange Act] of shares
in The Anchor Bank or Anchor Financial Corporation which, when
added to any other shares the beneficial ownership of which is
held by such acquiror, shall have fifty percent (50%) or more
of the combined voting power of The Anchor Bank or Anchor
Financial Corporation's then outstanding voting securities; or
(B) the occurrence of any merger, consolidation or
reorganization to which The Anchor Bank or Anchor Financial
Corporation is a party and to which The Anchor Bank or Anchor
Financial Corporation (or an entity controlled by The Anchor
Bank or Anchor Financial Corporation ) is not a surviving
entity, or the sale of all or substantially all of the assets of
The Anchor Bank or Anchor Financial Corporation.
The merger, combination, or consolidation of The Anchor Bank
with Anchor Financial Corporation or any other wholly owned
Subsidiary of Anchor Financial Corporation shall not be
construed as a Change in Control.
<PAGE>
1.1.4 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be
that section as it now exists and to any successor provision.
1.1.5 "Disability" means the Executive's failure to
satisfactorily perform the essential functions of his office on
a full-time basis for one hundred and eighty (180) consecutive
days, with or without accommodation, by reason of the
Executive's incapacity resulting from physical or mental illness
or impairment, except where within fifteen (15) days after a
written notice of termination is given following such absence,
the Executive shall have returned to the satisfactory, full time
performance of such duties. Any determination of Disability
hereunder shall be made by the Board of Directors of The Anchor
Bank in good faith and on the basis of the certificates of at
least three (3) qualified physicians chosen by it for such
purpose, one (1) of whom shall be the Executive's regular
attending physician.
1.1.6 "Termination Date" means the date of Termination of
Employment in any year before the Executive attains the Normal
Retirement Date.
1.1.7 "Effective Date" means the 1st day of January, 1996.
1.1.8 "Month of Service" means each completed full month of a
Year of Service.
1.1.9 "Normal Retirement Date" means the Anniversary Date
following Executive attaining age 65.
1.1.10 "Termination of Employment" means the Executive's
ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved
leave of absence.
1.1.11 "Years of Service" means the total number of consecutive
twelve-month periods during which the Executive is employed on a
full-time or part-time basis by the Company, inclusive of any
approved leaves of absence, from the Effective Date of this
Agreement until Termination of Employment.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates
employment on or after the Normal Retirement Date for reasons
other than death, the Company shall pay to the Executive the
benefit described in this Section 2.1.
<PAGE>
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is fifty-three thousand three hundred dollars ($53,300) per
year for 15 consecutive years.
2.1.2 Payment of Benefit. The Company shall pay four thousand
four hundred forty-one dollars and sixty-seven cents ($4,441.67)
to the Executive on the first day of each month commencing with
the month following the Normal Retirement Date and continuing
for 179 additional months. No interest shall accrue on any
portion of the unpaid balance of the amount of benefit.
2.2 Termination Benefit. If the Executive terminates employment
before the Normal Retirement Date for reasons other than death
or Disability or prior to a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The termination benefit under this
Section 2.2 is the Executive's vested percentage of the accrued
liability listed on Schedule A (for each Month of Service in a
partial year, the accrued liability in the year of Termination
of Employment will be increased as follows: the annual increase
in the accrued liability divided by twelve (12) times the number
of Months of Service), determined as of the date of Termination
of Employment.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Executive on the first day of each month commencing with the
month following the Executive's Termination Date and continuing
in equal monthly payments, including interest at 8.0% per year
on the unpaid balance of the total payments, for 179 additional
months.
2.3 Disability Benefit. If the Executive terminates employment
because of Disability prior to a Change In Control and prior to
the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Disability Benefit. The Disability Benefit
under this Section 2.3 is 100% of the accrued liability listed
on Schedule A (for each Month of Service in a partial year, the
accrued liability in the year of Termination of Employment will
be increased as follows [the annual increase in the accrued
liability divided by twelve (12) times the number of Months of
Service]), determined as of the date of Termination of
Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Executive, at the Company's discretion, in either a lump sum
payment within 60 days of Executive's termination, or in equal
monthly payments, including interest at 8.0% per year on the
unpaid balance of the total payments, beginning with
<PAGE>
the month following the Executive's disability and continuing
for 179 months.
2.4 Change of Control Benefit. Upon a Change of Control while
the Executive is in the employment of the Company, 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. The Change of Control benefit shall
be 100% vesting in the Normal Retirement Benefit in Section
2.1.1.
2.4.2 Payment of Benefit. After a Change In Control while the
Executive is in the employment of the Company, the Company shall
pay the Normal Retirement Benefit as set forth in Sec. 2.4.1 to
the Executive as described in Section 2.1.2, in lieu of any
other benefit under this Agreement.
2.4.3 Death Benefit After Change In Control. In the event of
the Executive's death after a Change In Control, regardless of
whether or not the Executive is in the active service of the
Company, the Death Benefit as described in Sec. 3.1.1 will be
paid to the Executive's beneficiary. If the Executive dies
after the benefit payments have commenced under this Article but
before receiving all payments the Company shall pay the
remaining benefits to the Executive's beneficiary as set forth
in Sec. 3.2.
2.4.4 Disability Benefit After Change In Control. If the
Executive terminates employment because of Disability after a
Change In Control and prior to the Normal Retirement Date, the
Company shall pay to the Executive the benefit described in this
Subscription 2.3.1.
a. The amount of the Disability Benefit under this
Subsection 2.4.4 is $53,300 per year for 15 consecutive
years.
b. The Company shall pay $4,441.67 of the Disability
Benefit to the Executive on the first day of each month
commencing with the month following the Executive's
disability and continuing for 179 months. No interest
shall accrue on any portion of the unpaid balance of
the amount of benefit.
Article 3
Death Benefits
<PAGE>
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.
3.1.1 Amount of Benefit. The Death Benefit under Section 3.1
shall be annual payments of fifty-three thousand three hundred
dollars ($53,300) per year for 15 consecutive years.
3.1.2 Payment of Benefit. The Company shall pay four thousand
four hundred forty-one dollars and sixty-seven cents ($4,441.67)
to the beneficiary on the first day of each month commencing
with the month following the Executive's death and continuing
for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after
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 the benefit would have been paid to the
Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
Primary and Contingent 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. A beneficiary's 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 surviving spouse, if any, and if none,
to the Executive's surviving children in equal shares per
survivor, and if no survivors, to the Executive's estate.
4.2 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.
<PAGE>
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement for
the following reasons:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for Cause.
5.2 Suicide. No benefits shall be payable if the Executive
commits suicide within two years after the Effective Date of
this Agreement, or if the Executive has made any material
misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the claimant in
writing, within ninety (90) days of the claimant's written
application for benefits, of eligibility or non eligibility 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
claimant's 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 ninety-day period.
6.2 Review Procedure. If the claimant is determined by the
Company not to be eligible for benefits, or if the claimant
believes that claimant 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 sixty (60) days after receipt of the
notice issued by the Company. Said petition shall state the
specific reasons which the claimant believes entitle claimant to
benefits or to greater or different benefits. Within sixty (60)
days after receipt by the Company of the petition, the Company
shall afford the claimant (and counsel,
<PAGE>
if any) an opportunity to present claimant's position to the Company
orally, or in writing, and the claimant (or counsel) shall have the
right to review the pertinent documents. The Company shall notify the
claimant of its decision in writing within the sixty-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 sixty-day
period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the claimant.
Article 7
Amendments and Termination
The Company reserves the right to amend or terminate this
Agreement at any time. In the event of termination of this
Agreement, the benefit to the Executive shall be 100% of the
accrued liability listed on Schedule A (for each Month of
Service in a partial year, the accrued liability in the year of
termination of Agreement will be increased as follows: the
annual increase in the accrued liability divided by twelve (12)
times the number of Months of Service), determined as of the
date of termination of Agreement. The Company shall pay the
benefit to the Executive, at the Company's discretion, in either
lump sum payment within 60 days of Executive's termination, or
in equal monthly payments, including interest at 8.0% per year,
beginning with the month following the Executive's termination
of employment and continuing for 179 months. In the event of
Amendment, the nonforfeitable benefit accrued as of the
effective date of the Amendment shall not be reduced by the
Amendment.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors,
administrators.
8.2 No Guaranty 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, transformed, assigned, pledged, attached or encumbered
in any manner.
<PAGE>
8.4 Tax Withholding. The Company shall withhold any taxes that
are required to be withheld from the benefits provided under
this Agreement.
8.5 Applicable Law. The Agreement and all rights thereunder
shall be governed by the laws of South Carolina, except to the
extent preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and any 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. Insurance on the
Executive's life, if any, is a general asset of the Company to
which the Executive and any beneficiary shall have no preferred
or secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company
officer have signed this Agreement.
EXECUTIVE: COMPANY: Anchor Financial
The Anchor Bank Corporation
/s/ Tommy E. Looper By: /s/ Zeb M. Thomas By: /s/ Zeb M. Thomas
Tommy E. Looper
<PAGE>
TOMMY E. LOOPER
SCHEDULE A
<TABLE>
<CAPTION>
ACCRUED VESTED
YEAR LIABILTIY %
<C> <C> <C>
1 13,401 30.00%
2 27,914 40.00%
3 43,632 50.00%
4 60,654 60.00%
5 79,089 70.00%
6 99,054 80.00%
7 120,676 90.00%
8 144,093 100.00%
9 169,454 100.00%
10 196,919 100.00%
11 226,664 100.00%
12 258,878 100.00%
13 293,766 100.00%
14 331,549 100.00%
15 372,468 100.00%
16 416,784 100.00%
17 464,778 100.00%
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 18,367,798
<INT-BEARING-DEPOSITS> 99,000
<FED-FUNDS-SOLD> 13,660,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 69,112,932
<INVESTMENTS-CARRYING> 25,762,860
<INVESTMENTS-MARKET> 25,782,082
<LOANS> 301,492,147
<ALLOWANCE> 3,194,241
<TOTAL-ASSETS> 450,072,370
<DEPOSITS> 391,976,292
<SHORT-TERM> 2,666,292
<LIABILITIES-OTHER> 3,379,053
<LONG-TERM> 23,000,000
<COMMON> 15,309,570
0
0
<OTHER-SE> 13,741,163
<TOTAL-LIABILITIES-AND-EQUITY> 450,072,370
<INTEREST-LOAN> 6,966,701
<INTEREST-INVEST> 1,268,579
<INTEREST-OTHER> 169,249
<INTEREST-TOTAL> 8,404,529
<INTEREST-DEPOSIT> 3,437,819
<INTEREST-EXPENSE> 3,838,973
<INTEREST-INCOME-NET> 4,565,556
<LOAN-LOSSES> 160,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,730,683
<INCOME-PRETAX> 1,455,503
<INCOME-PRE-EXTRAORDINARY> 1,455,503
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 931,892
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
<YIELD-ACTUAL> 4.72
<LOANS-NON> 332,262
<LOANS-PAST> 7,841
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,045,656
<CHARGE-OFFS> 17,973
<RECOVERIES> 6,558
<ALLOWANCE-CLOSE> 3,194,241
<ALLOWANCE-DOMESTIC> 2,694,241
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 500,000
</TABLE>
