Exhibit 10.5

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated as of
the 30th day of September, 2013 (the “Effective Date”), is made by and between
Southern First Bank (the “Bank“) and Southern First Bancshares, Inc. (the
“Company” and together with the Bank the “Employer”), having its principal
office at 100 Verdae Boulevard, Suite 100, Greenville, South Carolina 29607, and
R. Arthur Seaver, Jr. (hereinafter called “Employee”), a resident of the State
of South Carolina.  This Agreement amends and restates that certain existing
employment agreement between the parties dated December 17, 2008.

Employer presently employs Employee as its Chief Executive Officer.  Employer
desires to provide for the continued employment of Employee and to make certain
changes in Employee’s employment arrangements which Employer has determined will
reinforce and encourage the continued dedication of Employee to Employer. 
Employee is willing to terminate Employee’s interests and rights under the
existing employment agreement with Employer and to continue to serve Employer on
the terms and conditions herein provided. 

 

In consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                1.            Employment.  Employer shall continue to employ
Employee, and Employee shall continue to serve Employer, as Chief Executive
Officer and in such capacity shall perform such duties as are consistent with
that position, and as Employer from time to time may direct.   Employee shall
also serve on the Boards of Directors of the Employer.  Employee shall have such
authority and responsibilities consistent with Employee’s position as are set
forth in Employer’s Bylaws or assigned by Employer’s Board of Directors (the
“Board”) from time to time.  Employee shall devote Employee’s full business
time, attention, skill and efforts to the performance of Employee’s duties
hereunder, except during periods of illness or periods of vacation and leaves of
absence consistent with Employer’s policy.  Such duties shall be performed at
Employer’s principal corporate offices or subsidiary offices as agreed upon by
Employer and Employee.  Employer reserves the right from time to time to extend,
curtail or change the title and duties of Employee.  Employee may devote
reasonable periods to service as a director or advisor to other organizations,
to charitable and community activities, and to managing Employee’s personal
investments; provided that such activities do not materially interfere with the
performance of Employee’s duties hereunder and are not in conflict or
competitive with, or adverse to, the interests of Employer. Unless otherwise
specified hereafter, any services performed by the Employee shall be for the
benefit of the Bank and, therefore, any payments or benefits paid to the
Employee pursuant to this Agreement shall be the sole responsibility of the
Bank; provided, however, the Bank’s obligation to make any payments owed to the
Employee under this Agreement shall be discharged to the extent compensation
payments are made by the Company.

 

 

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2.                   Term.  Unless earlier terminated as provided in section 13
below, Employee’s employment under this Agreement shall commence on the
Effective Date and be for a term ending January 31, 2016 (the “Term”).  At the
end of January 2014 and on the last day of January each year thereafter, the
Term shall be extended for an additional one (1) year so that the remaining Term
shall continue to be three (3) years; provided that Employer or Employee may at
any time, by written notice, fix the Term to a finite term of three (3) years
commencing with the year of the notice. 

3.                   Base Salary.  For all services rendered by Employee under
this Agreement, Employer shall pay Employee a rate of base salary of $410,000
per year (the “Base Salary”).  The Base Salary shall be reviewed annually by the
Board, and may be increased by the Board or a duly appointed committee thereof,
in its sole discretion.  The Base Salary shall be paid in accordance with
Employer’s standard payroll procedures, but in any case, no less frequently than
monthly.

4.                   Benefits.

(a)          Employee shall be entitled, to the extent that Employee’s position,
title, tenure, salary, age, health and other qualifications make Employee
eligible, to participate in such pension, profit sharing, bonus, life insurance,
hospitalization, major medical, and other employee benefit plans or programs of
Employer currently in existence on the date hereof or later established that
generally are provided to executive employees of Employer.  Employee’s
participation in any such plan or program shall be subject to the provisions,
rules and regulations applicable thereto.  Any Company stock options or similar
awards shall be issued to Employee at an exercise price per share of not less
than the fair market value per share of the corresponding shares as of the date
of grant and the number of shares subject to such grant shall be fixed on such
date.  Any and all bonus payments made to Employee shall be paid by the earlier
of: (i) seventy (70) days after the end of the year in which the bonus was
earned by Employee or (ii) with the first payroll cycle following the Company’s
press release announcing its previous year’s financial performance.

 

(b)          Employer shall reimburse Employee, or pay directly, for a term life
insurance policy providing for death benefits totaling $400,000 payable to the
Employee’s spouse and heirs (and may provide for additional death benefits of up
to $600,000 payable to the Employer), and the Employee shall cooperate with the
Employer in the securing and maintenance of such policy.  Employer shall
reimburse Employee, or pay directly, for such term life insurance policy within
sixty (60) days of Employee’s written notice to Employer of such expenses. 
Employer shall also pay for an accident liability policy on the Employee
totaling $1,000,000 to protect the Employer from damages or lawsuits resulting
from injuries to third parties caused by the Employee.

 

(c)           At Employer’s election, Employer shall provide Employee with an
automobile owned or leased by Employer of a make and model appropriate to
Employee’s status, paid in accordance with Employer’s standard payroll
procedures, but in any case, no less frequently than monthly.  If Employer
provides Employee with an automobile, Employer shall reimburse Employee for
reasonable expenses associated with the automobile, including, but not limited
to, insurance, taxes, mileage, maintenance, etc., to be paid within sixty (60)
days of Employee’s written notice to Employer of such expenses. 

 

(d)          Employer shall reimburse Employee, or pay directly, for Employee’s
annual membership dues at the Thornblade Country Club, in a reasonable amount
per year, for so long as the Employee remains an Employee of Employer and this
Agreement remains in force.  Employer shall reimburse Employee, or pay directly,
for such annual membership dues within sixty (60) days of Employee’s written
notice to Employer of such expenses.

 

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5.            Working Facilities.  Employee shall be furnished with an office
and such other facilities and services as may be necessary or suitable to
Employee’s position and adequate for the performance of Employee’s duties.

 

6.            Expenses.  Employee is authorized to incur reasonable expenses for
promoting the business of Employer, including expenses for entertainment, travel
and similar items, but only to the extent that such expenses are allowable
deductions to Employer on its Federal income tax return.  Expenses for which
there is a fifty percent (50%) tax deduction limitation for entertainment,
travel and similar items shall be considered reimbursable expenses.  Employer
shall reimburse Employee for all such expenses within sixty (60) days of
Employee’s written notice to Employer of such expenses.  Employee shall repay to
Employer the amounts of any expenses claimed which, for lack of proper
documentation or otherwise, are not allowed to Employer as deductions for
Federal income tax purposes.

 

7.            Vacations.  Employee shall be entitled each fiscal year to twenty
(20) paid days off, which shall be granted on a noncumulative basis from
year-to-year, as granted by Employer to employees of similar tenure and
compensation rank, pursuant to Employer’s paid days off policy.  Employer
reserves the right to modify this and any other personnel policy from time to
time.  Any payments made by the Employer to the Employee as compensation for
paid vacation leave shall be paid in accordance with the Employer’s standard
payroll procedures.

 

8.            Ownership of Work Product.

 

(a)                Employee shall diligently disclose to Employer as soon as it
is created or conceived by Employee, and Employer shall own, all Work Product
(as defined below).  To the extent permitted by law, all Work Product shall be
considered work made for hire by Employee and owned by Employer.

 

(b)                 If any of the Work Product may not, by operation of law, be
considered work made for hire by Employee for Employer (or if ownership of all
right, title and interest of the intellectual property rights therein shall not
otherwise vest exclusively in Employer), Employee agrees to assign, and upon
creation thereof automatically assigns, without further consideration, the
ownership of all Work Product to Employer, its successors and assigns.

 

(c)                  Employer, its successors and assigns, shall have the right
to obtain and hold in its or their own name copyrights, registrations, and any
other protection available in the foregoing.

 

(d)                 Employee agrees to perform upon the reasonable request of
Employer, during or after Employee’s employment, such further acts as may be
necessary or desirable to transfer, perfect and defend Employer’s ownership of
the Work Product.  When requested, Employee will:

 

(i)                 Execute, acknowledge and deliver any requested affidavits
and documents of assignment and conveyance;

 

(ii)               Obtain and aid in the enforcement of copyrights (and, if
applicable, patents) with respect to the Work Product in any countries;

 

(iii)             Provide testimony in connection with any proceeding affecting
the right, title or interest of Employer in any Work Product; and

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(iv)             Perform any other acts deemed necessary or desirable to carry
out the purposes of this Agreement.

 

(e)                  Employer shall reimburse all reasonable out-of-pocket
expenses incurred by Employee at Employer’s request in connection with
subsection 8(d) within sixty (60) days of Employee’s written notice to Employer
of such expenses.

 

(f)                  For purposes hereof, “Work Product” shall mean all
intellectual property rights, including all Trade Secrets (as defined below),
U.S. and international copyrights, patentable inventions, discoveries and
improvements, and other intellectual property rights, in any programming,
documentation, technology or other work product that relates to the business and
interests of Employer and that Employee conceives, develops, or delivers to
Employer at any time during the Term of Employee’s employment.  “Work Product”
shall also include all intellectual property rights in any programming,
documentation, technology or other work product that is now contained in any of
the products or systems (including development and support systems) of Employer
to the extent Employee conceived, developed or delivered such Work Product to
Employer prior to the date of this Agreement while Employee was engaged as an
independent contractor or employee of Employer.  Employee hereby irrevocably
relinquishes for the benefit of Employer and its assigns any moral rights in the
Work Product recognized by applicable law.

 

9.            Protection of Trade Secrets and Confidential Information. 

 

(a)          Through exercise of Employee’s rights and performance of Employee’s
obligations under this Agreement, Employee will be exposed to “Trade Secrets”
and “Confidential Information” (as those terms are defined below).  “Trade
Secrets” shall mean information or data of or about Employer or any Affiliates
(as defined in subsection 26(a)), including, but not limited to, technical or
non-technical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential customers, clients, distributors,
or licensees, that: (i) derive economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from their disclosure or use;
and (ii) are the subject of efforts that are reasonable under the circumstances
to maintain their secrecy.  To the extent that the foregoing definition is
inconsistent with the definition of “trade secret” mandated under applicable
law, the latter definition shall govern for purposes of interpreting Employee’s
obligations under this Agreement.  Except as required to perform Employee’s
obligations under this Agreement, or except with Employer’s prior written
permission, Employee shall not use, redistribute, market, publish, disclose or
divulge to any other person or entity any Trade Secrets of Employer.  Employee’s
obligations under this provision shall remain in force (during and after the
Term) for so long as such information or data shall continue to constitute a
Trade Secret under applicable law.  Employee agrees to cooperate with any and
all confidentiality requirements of Employer, and Employee shall immediately
notify Employer of any unauthorized disclosure or use of any Trade Secrets of
which Employee becomes aware.

 

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(b)          Employee agrees to maintain in strict confidence and, except as
necessary to perform Employee’s duties for Employer, not to use or disclose any
Confidential Information at any time, either during the Term of Employee’s
employment or for a period of two (2) years after Employee’s last date of
employment, so long as the pertinent data or information remains Confidential
Information.  “Confidential Information” shall mean any non-public information
of a competitively sensitive or personal nature, other than Trade Secrets,
acquired by Employee during Employee’s employment, relating to Employer or
Employer’s business, operations, customers, suppliers, products, employees,
financial affairs or industrial practices.  Notwithstanding anything herein to
the contrary, no obligation or liability shall accrue hereunder with respect to
any information that is or becomes publicly available without the fault of
Employee.

 

(c)           Employee will abide by Employer’s policies and regulations, as
established from time to time, for the protection of its Confidential
Information.  Employee acknowledges that all records, files, data, documents,
and the like relating to suppliers, customers, costs, prices, systems, methods,
personnel, technology and other materials relating to Employer or its Affiliated
entities shall be and remain the sole property of Employer and/or such
Affiliated entity.  Employee agrees, upon the request of Employer, and in any
event upon termination of Employee’s employment, to turn over all copies of all
media, records, documentation, etc., pertaining to Employer (together with a
written statement certifying as to Employee’s compliance with the foregoing).

 

10.          Non-Solicitation of Customers.  During the Employee’s employment
with the Employer and for a period of one (1) year following termination or
expiration of this Agreement, Employee shall not (except on behalf of or with
the prior written consent of the Employer) directly or indirectly solicit any
individual or entity which was a customer or client of Employer or any of its
Affiliates for the purpose of providing a service or product to such customer or
client which is the same type of service or product offered or provided by
Employer or any of its Affiliates; provided, however, that this restriction
shall apply only to those customers or clients with whom Employee had contact in
connection with services or products provided by Employer or any of its
Affiliates within two (2) years prior to the date of termination of such
employment.

 

11.          Non-Solicitation of Employees.  During the Employee’s employment
with the Employer and for a period of one (1) year following termination or
expiration of this Agreement, Employee shall not, directly or indirectly, on the
Employee’s own behalf or in the service of or on behalf of others, induce or
solicit, or attempt to induce or solicit, for employment purposes or for any
type of consulting purposes any employee of or consultant to the Employer or any
of its Affiliates for the purpose of providing services that are the same or
similar to the types of services offered or engaged in by any employee of or
consultant to the Employer or any of its Affiliates at the time of termination
of Employee’s employment with Employer. 

 

12.          Non-Competition Agreement.  During Employee’s employment with the
Employer and for a period of one (1) year following termination or expiration of
this Agreement, Employee shall not (without the prior written consent of
Employer) compete with Employer or any of its Affiliates, directly or
indirectly, engage in forming, serving as an organizer, director, officer of,
employee or agent, or consultant to, or acquiring or maintaining more than a one
percent (1%) passive investment in, a depository financial institution or
holding company thereof if such depository institution or holding company has,
or upon formation will have, one or more offices or branches located within
thirty (30) miles of any office or branch of Employer or any of its Affiliates
in existence at the time Employee’s employment with Employer is terminated (the
“Territory”).  Notwithstanding the foregoing, Employee may serve as an officer
of or consultant to a depository institution or holding company thereof even
though such institution operates one or more offices or branches in the
Territory, if Employee’s employment does not directly involve, in whole or in
part, the depository financial institution’s or holding company’s operations in
the Territory. 

 

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13.          Termination and Severance Payments.

 

(a)                  Employee’s employment under this Agreement may be
terminated prior to the end of the Term only as follows:

 

(i)                 upon the death of Employee;

 

(ii)               by Employer upon the Disability (as defined in subsection
26(d)) of Employee for a period of one hundred and eighty (180) days;

 

(iii)             by Employer for Cause (as defined in subsection 26(b)) upon
delivery of a Notice of Termination (as defined in subsection 26(g)) to
Employee;

 

(iv)             by Employer without Cause upon delivery of a Notice of
Termination to Employee;

 

(v)               by Employee for Good Reason (as defined in subsection 26(e))
upon delivery of a Notice of Termination to the Employer within a ninety (90)
day period beginning on the thirtieth (30th) day after the occurrence of a
Change in Control (as defined in subsection 26(c)) or within a ninety (90) day
period beginning on the one (1) year anniversary of the occurrence of a Change
in Control; or

 

(vi)             by Employee upon delivery of a Notice of Termination to
Employer.

 

(b)                  If Employee’s employment is terminated because of the
Employee’s death, Employer shall pay Employee’s estate:

                               

(i)            any sums due Employee as Base Salary and/or reimbursement of
expenses through the end of the month during which death occurred, paid in
accordance with Employer’s standard payroll procedures, but in any case, no less
frequently than monthly; and

 

(ii)           any bonus earned or accrued through the date of death.  Any bonus
for previous years which was not yet paid will be paid pursuant to the terms as
set forth in Section 4(a).  Any bonus that is earned in the year of death will
be paid on the earlier of: (i) seventy (70) days after the end of the year in
which the Employee died or (ii) with the first payroll cycle following the
Company’s press release announcing its financial performance for the year in
which the Employee died.  To the extent that the bonus is performance-based, the
amount of the bonus will be calculated by taking into account the performance of
the Employer for the entire year and prorating this through the date of
Employee’s death. 

               

(c)    During the period of any Disability leading up to the termination of
Employee’s employment as a result of the Disability, Employer shall:

 

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(i)            continue to pay the Employee’s full Base Salary at the rate then
in effect and all perquisites and other benefits (other than any bonus) in
accordance with Employer’s standard payroll procedures, but in any case, no less
frequently than monthly, until Employee becomes eligible for benefits under any
long-term disability plan or insurance program maintained by Employer; provided
that the amount of any such payments to Employee shall be reduced by the sum of
the amounts, if any, payable to Employee for the same period under any
disability benefit or pension plan covering the Employee; and

 

(ii)           pay Employee any bonus earned or accrued through the date of
Disability.  Any bonus for previous years which was not yet paid will be paid
pursuant to the terms as set forth in Section 4(a).  Any bonus that is earned in
the year of Disability will be paid on the earlier of: (i) seventy (70) days
after the end of the year in which Employee became Disabled or (ii) with the
first payroll cycle following the Company’s press release announcing its
financial performance for the year in which the Employee became Disabled. 

 

(d)          If Employee’s employment is terminated for Cause, Employee shall
receive only any sums due Employee as Base Salary and/or reimbursement of
expenses through the date of termination, paid in accordance with Employer’s
standard payroll procedures, but in any case, no less frequently than monthly.

 

(e)          If Employee’s employment is terminated by Employer without Cause,
conditioned upon the effectiveness of the release described in Section 13(i)
below and subject to the possibility of a six-month delay described below in
Section 29(a), beginning on the first day of the month following the date of the
Employee’s termination, and continuing on the first day of the month for the
next eleven (11) months, the Employer shall pay to the Employee monthly
severance compensation in cash in an amount equal to one-twelfth (1/12th) of the
Employee’s annual rate of Base Salary at the date of termination.  Employer
shall also pay Employee any bonus earned or accrued through the date of
termination.  Any bonus for previous years, which was not yet paid, will be paid
as stated in Section 4(a) of this Agreement.  The restrictive covenants
contained in sections 10, 11 and 12 shall not apply to Employee.

 

(f)           If Employee’s employment is terminated by Employee for Good
Reason, in addition to other rights and remedies available in law or equity,
Employee shall be entitled to the following:

 

(i)            Subject to the possibility of a six-month delay described below
in Section 29(a), beginning on the date following the date of the Employee’s
termination, the Employer shall provide Employee with the same severance
compensation and accrued bonus set forth in Section 13(e). 

 

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(ii)           Employee may continue participation, in accordance with the terms
of the applicable benefits plans, in the Company’s group health plan pursuant to
plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”).  In accordance with COBRA, assuming Employee is covered under the
Company’s group health plan as of his date of termination, Employee will be
entitled to elect COBRA continuation coverage for the legally required COBRA
period (the “Continuation Period”).  If Employee elects COBRA coverage for group
health coverage, he will be obligated to pay the portion of the full COBRA cost
of the coverage equal to an active employee’s share of premiums for coverage for
the respective plan year and the Company’s share of such premiums shall be
treated as taxable income to Employee.  Notwithstanding the above, the
Employer’s obligations hereunder with respect to the foregoing benefits provided
in this subsection (ii) shall be limited to the extent that if Employee obtains
any coverage pursuant to a subsequent employer’s benefit plans which duplicates
the Employer’s coverage, the duplicative coverage may be terminated by
Employer.  This subsection (ii) shall not be interpreted so as to limit any
benefits to which Employee or his dependents or beneficiaries may be entitled
under any of Employer’s employee benefit plans, programs, or practices following
the Employee’s Termination of Employment, including, without limitation, retiree
medical and life insurance benefits;

 

(iii)          the restrictive covenants contained in sections 10, 11 and 12
shall not apply to Employee.

 

                        (g)          If Employee’s employment is terminated by
Employee without Good Reason, Employee shall receive only any sums due Employee
as Base Salary and/or reimbursement of expenses through the date of termination,
paid in accordance with Employer’s standard payroll procedures, but in any case,
no less frequently than monthly.

 

(h)          With the exceptions of the provisions of this Section 13, and the
express terms of any benefit plan under which Employee is a participant, it is
agreed that, upon termination of Employee’s employment, Employer shall have no
obligation to Employee for, and Employee waives and relinquishes, any further
compensation or benefits (exclusive of COBRA benefits).  Unless otherwise stated
in this Section 13, the effect of termination on any outstanding incentive
awards, stock options, stock appreciation rights, performance units, or other
incentives shall be governed by the terms of the applicable benefit or incentive
plan and/or the agreements governing such incentives. Within sixty (60) days of
termination of Employee’s employment, and as a condition to the Employer’s
obligation to pay any severance hereunder, the Employee shall execute, and not
timely revoke during any revocation period provided pursuant to such release, a
mutually satisfactory form of release acknowledging such remaining obligations
and discharging both parties, as well as Employer’s officers, directors and
employees with respect to their actions for or on behalf of Employer, from any
other claims or obligations arising out of or in connection with Employee’s
employment by Employer, including the circumstances of such termination.  In
most instances, payment will be made, or in the case of installment payments,
will begin as soon as practicable after such release is effective. However, if
the 60-day period spans two calendar years, such severance payment will be made
as soon as possible in the subsequent taxable year.

 

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(i)            The parties intend that the severance payments and other
compensation provided for herein are reasonable compensation for Employee’s
services to Employer and shall not constitute “excess parachute payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), and any regulations thereunder.  If the Employer’s independent
accountants acting as auditors for the Employer determine that any or the
aggregate value (as determined pursuant to Section 280G of the Code) of all
payments, distributions, accelerations of vesting, awards and provisions of
benefits by the Employer to or for the benefit of Employee (whether paid or
payable, distributed or distributable, accelerated, awarded or provided pursuant
to the terms of this Agreement or otherwise), (a “Payment”) would constitute an
excess parachute payment and be subject to the excise tax imposed by Section
4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least
extent necessary so that no portion of the Payment shall be subject to the
Excise Tax, but only if, by reason of such reduction, the net after-tax benefit
received by the Employee as a result of such reduction will exceed the net
after-tax benefit that would have been received by the Employee if no such
reduction were made.  The Payment shall be reduced, if applicable, by the
Employer in the following order of priority: (A) reduction of any cash payments
otherwise payable to the Employee pursuant to a supplemental executive
retirement plan including, without limitation, any salary continuation agreement
between the Employee and the Employer; (B) reduction of any cash severance
payments otherwise payable to the Employee that are exempt from Section 409A of
the Code; (C) reduction of any other cash payments or benefits otherwise payable
to the Employee that are exempt from Section 409A of the Code, but excluding any
payments attributable to any acceleration of vesting or payments with respect to
any equity award that are exempt from Section 409A of the Code; (D) reduction of
any payments attributable to any acceleration of vesting or payments with
respect to any equity award that are exempt from Section 409A of the Code, in
each case beginning with payments that would otherwise be made last in time; and
(E) reduction of any other payments or benefits otherwise payable to the
Employee on a pro-rata basis or such other manner that complies with Section
409A of the Code, but excluding any payments attributable to any acceleration of
vesting and payments with respect to any equity award that are exempt from
Section 409A of the Code.  If, however, such Payment is not reduced as described
above, then such Payment shall be paid in full to the Employee and the Employee
shall be responsible for payment of any Excise Taxes relating to the Payment.

 

14.         Oral Modification Not Binding.  This Agreement supersedes all prior
agreements and understandings between the parties and may not be changed or
terminated orally, and no change or attempted waiver of the provisions hereof
shall be binding unless in writing and signed by the party against whom the same
is sought to be enforced; provided, however, that Employee’s compensation may be
increased at any time by Employer without in any way affecting any of the other
terms and conditions of this Agreement, which in all other respects shall remain
in full force and effect. 

 

15.         Governing Law.  This Agreement and all rights hereunder shall be
governed by the laws of the State of South Carolina, except to the extent
governed by the laws of the United States of America in which case federal laws
shall govern. Any action brought by any party to this Agreement shall be brought
and maintained in a court of competent jurisdiction in the State of South
Carolina.

 

16.          Remedies for Breach; Non-Waiver.  Employee recognizes and agrees
that a breach by Employee of any covenant contained in this Agreement would
cause immeasurable and irreparable harm to Employer.  In the event of a breach
or threatened breach of any covenant contained herein, Employer shall be
entitled to temporary and permanent injunctive relief, restraining Employee from
violating or threatening to violate any covenant contained herein, as well as
all costs and fees incurred by Employer, including attorneys’ fees, as a result
of Employee’s breach or threatened breach of the covenant.  Employer and
Employee agree that the relief described herein is in addition to such other and
further relief as may be available to Employer at equity or by law.  Nothing
herein shall be construed as prohibiting Employer from pursuing any other
remedies available to it for such breach of threatened breach, including the
recovery of damages from Employee.  Failure of the Employer to enforce any of
the provisions of this Agreement or any rights with respect thereto shall in no
way be considered a waiver of such provisions or rights or in any way otherwise
affect the validity of this Agreement.

 

17.          Consideration.  Employee acknowledges and agrees that valid
consideration has been given to Employee by Employer in return for the promises
of Employee set forth herein.

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18.          Covenants are Independent.  The covenants on the part of Employee
contained herein shall each be construed as agreements independent of each other
and of any other provisions in this Agreement and the unenforceability of one
shall not affect the enforceability of the remaining covenants.

 

19.          Severability and Substitution of Valid Provisions.  To the extent
that any provision or language of this Agreement is deemed unenforceable, by
virtue of the scope of the business activity prohibited or the length of time
the activity is prohibited, Employer and Employee agree that this Agreement
shall be enforced to the fullest extent permissible under the laws and public
policies of the State of South Carolina.

 

20.          Extension of Periods.  Each of the time periods described in
Sections 9-12 of this Agreement shall be automatically extended by any length of
time during which Employee is in breach of the corresponding covenant contained
herein.  Such provisions of this Agreement shall continue in full force and
effect throughout the duration of the extended periods.

 

21.          Reasonable Restraint.  It is agreed by the parties that the
foregoing covenants in this Agreement are necessary for the legitimate business
interests of Employer and impose a reasonable restraint on Employee in light of
the activities and business of Employer on the date of the execution of this
Agreement.

 

22.          Withholding of Taxes.  Employer may withhold from any amounts
payable to Employee under this Agreement all federal, state, city or other taxes
and withholdings as shall be required pursuant to any applicable law, rule or
regulation.

 

23.          Notices.  Any notice required or permitted to be given under this
Agreement shall be sufficient if given in writing and either personally
delivered or sent by registered or certified mail to Employee’s residence in the
case of Employee or to its principal office in the case of Employer.

 

24.          Assignment.  The rights and obligations of the parties to this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer.  This Agreement shall not be terminated by any merger
or consolidation whether or not the Employer or the Company is the consolidated
or surviving corporation or by transfer of all or substantially all of the
assets of the Employer or the Company to another corporation if there is a
surviving or resulting corporation in such transfer.

 

25.          Severability. It is not the intent of any party hereto to violate
any public policy of any jurisdiction in which this Agreement may be enforced. 
If any provision of this Agreement or the application of any provision hereof to
any person or circumstances is held invalid, unenforceable or otherwise
unlawful, the remainder of this Agreement and the application of such provision
to any other person or circumstances shall not be affected.  In addition, the
applicable provision shall be reformed to the extent (and only to the extent)
necessary to make it valid, enforceable and legal.

 

26.          Certain Definitions.

 

(a)          “Affiliate” shall mean any business entity controlled by the
Employer or the Company, controlling or under common control with the Employer
or the Company.

> > > > > > > > > > > > > > >  
> > > > > > > > > > > > > > > 
> > > > > > > > > > > > > > > 10

 

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(b)          “Cause” shall consist of any of:

 

(i)          the commission by Employee of a willful act (including, without
limitation, a dishonest or fraudulent act) or a grossly negligent act, or the
willful or grossly negligent omission to act by Employee, which is intended to
cause, causes or is reasonably likely to cause material harm to Employer
(including harm to its business reputation);

 

(ii)           the indictment of Employee for the commission or perpetration by
Employee of any felony or any crime involving dishonesty, moral turpitude or
fraud;

 

(iii)          the material breach by Employee of this Agreement that, if
susceptible of cure, remains uncured thirty (30) days following written notice
to Employee of such breach;

 

(iv)         the receipt of any form of notice, written or otherwise, that any
regulatory agency having jurisdiction over Employer intends to institute any
form of formal or informal (e.g., a memorandum of understanding which relates to
Employee’s performance) regulatory action against Employee or Employer (provided
that the Board determines in good faith, with Employee abstaining from
participating in the consideration of and vote on the matter, that the subject
matter of such action involves acts or omissions by or under the supervision of
Employee or that termination of Employee would materially advance Employer’s
compliance with the purpose of the action or would materially assist Employer in
avoiding or reducing the restrictions or adverse effects to Employer related to
the regulatory action);

 

(v)          the exhibition by Employee of a standard of behavior within the
scope of Employee’s employment that is materially disruptive to the orderly
conduct of Employer’s business operations (including, without limitation,
substance abuse or sexual misconduct) to a level which, in the Board’s good
faith and reasonable judgment, with Employee abstaining from participating in
the consideration of and vote on the matter, is materially detrimental to
Employer’s best interest, that, if susceptible of cure remains uncured ten (10)
days following written notice to Employee of such specific inappropriate
behavior; or

 

(vi)         the failure of Employee to devote Employee’s full business time and
attention to Employee’s employment as provided under this Agreement that, if
susceptible of cure, remains uncured thirty (30) days following written notice
to Employee of such failure.

 

(c)           “Change in Control" shall mean the occurrence during the Term of
any of the following events, unless such event is a result of a Non-Control
Transaction:

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 (i)           the individuals who, as of the date of this Agreement, are
members of the Board of Directors of the Company (the “Incumbent Board";) cease
for any reason to constitute at least fifty percent (50%) of the Board of
Directors of the Company; provided, however, that if the election, or nomination
for election by the Company’s shareholders, of any new director was approved in
advance by a vote of at least fifty percent (50%) of the Incumbent Board, such
new director shall, for purposes of this Agreement, be considered as a member of
the Incumbent Board; provided, further, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened election contest, or other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors of the Company, including by reason of any
agreement intended to avoid or settle any election contest or proxy contest;

 

(ii)           an acquisition (other than directly from the Company) of any
voting securities of the Company (the “Voting Securities”) by any “Person” (as
the term “person” is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) immediately after which
such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of the
combined voting power of the Company’s then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a Non-Control Transaction shall not
constitute an acquisition which would cause a Change in Control; 

 

(iii)          consummation of: (a) a merger, consolidation, or reorganization
involving the Company; (b) a complete liquidation or dissolution of the Company;
or (c) the sale or other disposition of all or substantially all of the assets
of the Company to any Person (other than a transfer to a subsidiary); or

 

(iv)         a notice of an application is filed with the South Carolina Board
of Financial Institutions, the Office of Comptroller of the Currency (the “OCC”)
or the Federal Reserve Board or any other bank or thrift regulatory approval (or
notice of no disapproval) is granted by the Federal Reserve, South Carolina
Board of Financial Institutions, the OCC, the Federal Deposit Insurance
Corporation, or any other regulatory authority for permission to acquire control
of the Company or any of its banking subsidiaries; provided, however, that if
the application is filed in connection with a transaction which has been
approved by the Board of Directors of the Company, then the Change in Control
shall not be deemed to occur until consummation of the transaction.

 

(d)            “Disability” or “Disabled” shall mean as defined by Treasury
Regulation       § 1.409A-3(i)(4).                       

 

(e)            “Good Reason” shall mean the occurrence after a Change in Control
of any of the events or conditions described in subsections (i) through (vii)
hereof:

 

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(i)                  a change in the Employee’s status, title, position or
responsibilities (including reporting responsibilities) which, in the Employee’s
reasonable judgment, represents an adverse change from Employee’s status, title,
position or responsibilities as in effect at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter; the
assignment to the Employee of any duties or responsibilities which, in the
Employee’s reasonable judgment, are inconsistent with Employee’s status, title,
position or responsibilities as in effect at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter; any removal
of the Employee from or failure to reappoint or reelect Employee to any of such
offices or positions, except in connection with the termination of Employee’s
employment for Disability or Cause, as a result of Employee’s death, or by the
Employee other than for Good Reason, or any other change in condition or
circumstances that in the Employee’s reasonable judgment makes it materially
more difficult for the Employee to carry out the duties and responsibilities of
the Employee’s office than existed at any time within ninety (90) days preceding
the date of Change in Control or at any time thereafter;

 

(ii)                a reduction in the Employee’s Base Salary or any failure to
pay the Employee any compensation or benefits to which Employee is entitled
within five (5) days of the date due;

 

(iii)                the Employer’s requiring the Employee to be based at any
place outside a thirty (30) - mile radius from the executive offices occupied by
the Employee immediately prior to the Change in Control, except for reasonably
required travel on the Employer’s business which is not materially greater than
such travel requirements prior to the Change in Control;

 

(iv)               the failure by the Employer to (A) continue in effect
(without reduction in benefit level and/or reward opportunities) any material
compensation or employee benefit plan in which the Employee was participating at
any time within ninety (90) days preceding the date of a Change in Control or at
any time thereafter, unless such plan is replaced with a plan that provides
substantially equivalent compensation or benefits to the Employee, or (B)
provide the Employee with compensation and benefits, in the aggregate, at least
equal (in terms of benefit levels and/or reward opportunities) to those provided
for under each other employee benefit plan, program and practice in which the
Employee was participating at any time within ninety (90) days preceding the
date of a Change in Control or at any time thereafter;

 

(v)                 any material breach by the Employer of any material
provision of this Agreement; or

 

(vi)              any purported termination of the Employee’s employment for
Cause by the Employer which does not comply with the terms of this Agreement.

 

Employee’s right to terminate Employee’s employment for Good Reason shall not be
affected by Employee’s incapacity due to physical or mental illness.

 

(f)           “Non-Control Transaction” shall mean a transaction described
below:

 

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                (i)            the shareholders of the Company, immediately
before such merger, consolidation or reorganization own, directly or indirectly,
immediately following such merger, consolidation or reorganization, at least
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger, consolidation or
reorganization (the “Surviving Corporation”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization; and

 

                (ii)           immediately following such merger, consolidation
or reorganization, the number of directors on the board of directors of the
Surviving Corporation who were members of the Incumbent Board shall at least
equal the number of directors who were affiliated with or appointed by the other
party to the merger, consolidation or reorganization.

 

(g)          “Notice of Termination” shall mean a written notice of termination
from one party to the other which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon, and,
in the case of (i) a termination for Cause, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Employee’s
employment under the provision so indicated, or (ii) in the case of a
termination for Good Reason, sets forth the Good Reason event which occurred no
more than ninety (90) days prior to the date of the notice and provides the
Employer not less than thirty (30) days to remedy this condition;

 

(h)          “Terminate”, “terminated”, “termination”, or “Termination of
Employment” shall mean separation from service as defined by Treasury Regulation
§ 1.409A-1(h).

 

27.          Compliance with Regulatory Restrictions.  Notwithstanding anything
to the contrary herein, and in addition to any restrictions stated in Section 13
hereof, any compensation or other benefits paid to the Employee shall be limited
to the extent required by any federal or state regulatory agency having
authority over the Company or the Employer.  The Employee agrees that compliance
by the Company or the Employer with such regulatory restrictions, even to the
extent that compensation or other benefits paid to the Employee are limited,
shall not be a breach of this Agreement by the Company or the Employer.

 

28.          Compliance with Dodd–Frank Wall Street Reform and Consumer
Protection Act.  Notwithstanding anything to the contrary herein, any incentive
payments to the Employee shall be limited to the extent required under the
Dodd–Frank Wall Street Reform and Consumer Protection Act (the “Act”),
including, but not limited to, clawbacks for such incentive payments as required
by the Act.  The Employee agrees to such amendments, agreements, or waivers that
are required by the Act or requested by the Company to comply with the terms of
the Act. 

 

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29.          Compliance with Internal Revenue Code Section 409A.  All payments
that may be made and benefits that may be provided pursuant to this Agreement
are intended to qualify for an exclusion from Section 409A of the Code and any
related regulations or other pronouncements thereunder and, to the extent not
excluded, to meet the requirements of Section 409A of the Code.  Any payments
made under Section 13 of this Agreement which are paid on or before the last day
of the applicable period for the short-term deferral exclusion under Treasury
Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term
deferral exclusion.  Any remaining payments under Section 13 are intended to
qualify for the exclusion for separation pay plans under Treasury Regulation §
1.409A-1(b)(9). Each payment made under Section 13 shall be treated as a
“separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for
purposes of Code Section 409A.  Further, notwithstanding anything to the
contrary, all severance payments payable under the provisions of Section 13
shall be paid to the Employee no later than the last day of the second calendar
year following the calendar year in which occurs the date of Employee’s
termination of employment. None of the payments under this Agreement are
intended to result in the inclusion in Employee’s federal gross income on
account of a failure under Section 409A(a)(1) of the Code.  The parties intend
to administer and interpret this Agreement to carry out such intentions. 
However, Company does not represent, warrant or guarantee that any payments that
may be made pursuant to this Agreement will not result in inclusion in
Employee’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the
Code or any similar state statute or regulation.  Notwithstanding any other
provision of this Agreement, to the extent that the right to any payment
(including the provision of benefits) hereunder provides for the “deferral of
compensation” within the meaning of Section 409A(d)(1) of the Code, the payment
shall be paid (or provided) in accordance with the following:

 

            (a)          If the Employee is a “Specified Employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Employee’s
termination (the “Separation Date”), and if an exemption from the six month
delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no
such payment shall be made or commence during the period beginning on the
Separation Date and ending on the date that is six months following the
Separation Date or, if earlier, on the date of the Employee’s death.  The amount
of any payment that would otherwise be paid to the Employee during this period
shall instead be paid to the Employee on the first day of the first calendar
month following the end of the period. 

 

            (b)      Payments with respect to reimbursements of expenses or
benefits or provision of fringe or other in-kind benefits shall be made on or
before the last day of the calendar year following the calendar year in which
the relevant expense or benefit is incurred.  The amount of expenses or benefits
eligible for reimbursement, payment or provision during a calendar year shall
not affect the expenses or benefits eligible for reimbursement, payment or
provision in any other calendar year.

 

30.          Entire Agreement.  This Agreement supersedes any other agreements,
oral or written, between the parties with respect to the subject matter hereof,
and contains all of the agreements and understandings between the parties with
respect to the employment of Employee by Employer.  Any waiver or modification
of any term of this Agreement shall be effective only if it is set forth in
writing signed by all parties hereto.

 

31.          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.

 

[Signatures appear on the following page.]

 

 

 

 

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                IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.

 

                                                                                                                                              
EMPLOYER:

 

                                                                                                                                               
SOUTHERN FIRST BANK

 

 

[CORPORATE SEAL]                                        
                                                                        By:
/s/James B. Orders, III                           

                                                                               
                                                                     Name: James
B. Orders, III

Attest:                                                                                 
                                                         Title:  Member of the
Board

 

 

/s/Julie A. Fairchild                            

Secretary

 

                                                                                                                                               
SOUTHERN FIRST BANCSHARES, INC.

 

 

 

[CORPORATE SEAL]                                        
                                                                        By:
/s/James B. Orders, III                           

                                                                               
                                                                     Name: James
B. Orders, III

Attest:                                                                                 
                                                         Title:  Chairman of the
Board

 

 

/s/Julie A. Fairchild                            

Secretary

               

                                                                                                                                               
EMPLOYEE:

 

 

 

                                                                                               
                                                 /s/R. Arthur Seaver,
Jr.                     

                                                                               
                                                                     R. Arthur
Seaver, Jr.

 

 

 

 

 

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