Exhibit 10.7

GREER STATE BANK

SALARY CONTINUATION AGREEMENT

THIS SALARY CONTINUATION AGREEMENT (the “Agreement”) is made and entered into
this 24 day of NOVEMBER, 1997 by and between Greer State Bank with a principal
office in Greer, South Carolina (the “Bank”), and R. Dennis Hennett (the
“Executive”).

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank
is willing to provide salary continuation benefits to the Executive.

Now, Therefore, in consideration of the mutual covenants and agreements herein,
the Executive and Bank 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 “Board” or “Board of Directors” means the Board of Directors of Bank.

 

  1.1.2 “Change of Control” means:

 

  (i) the acquisition, directly or indirectly, (including beneficial ownership)
by any “person” as this term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended within any twelve (12) consecutive
month period of the Bank’s securities representing an aggregate of fifty
(50%) percent or more of the Bank’s combined voting power then outstanding
securities; or

 

  (ii) consummation of merger, sale, acquisition, or liquidation of all, or
substantially all, of the Bank’s assets or outstanding stock; or

 

  (iii) the occurrence of any other event or circumstance which is not covered
by 1.1.2 (i) through 1.1.2 (ii) which the Board determines affects the Bank’s
control and, to implement the purposes of this Agreement, adopts a resolution
that the event or circumstances constitutes a Change in Control for the purposes
of this Agreement.

 

  (iv)

Notwithstanding any other provision in this Agreement, “Change of Control” shall
not be construed to mean the formation of a

 

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bank holding company or other entity approved in advance by the Bank’s Board of
Directors or any changes in ownership of the Bank’s assets or stock as the
result of the formation of such an entity.

 

  1.1.3  “Code” means the Internal Revenue Code of 1986, as amended. References
to a Code section shall be deemed to be to that section as it now exists and to
any successor provision.

 

  1.1.4  “Date of Employment” means October 19, 1987.

 

  1.1.5  “Disability” means sickness, accident or injury which, in the judgment
of a physician appointed and paid by the Bank, prevents the Executive from
performing all of the Executive’s customary duties for the Bank. As a condition
to any benefits, the Bank may require the Executive to submit to such physical
or mental evaluations and tests as the Bank’s Board of Directors deems
appropriate.

 

  1.1.6  “Early Retirement Date “means the first day of the calendar month after
Executive has completed ten (10) Years of Service with Bank.

 

  1.1.7  “Effective Date” means the 1st day of November, 1997.

 

  1.1.8  “Month of Service” means each completed full month in a Year of
Service.

 

  1.1.9  “Normal Retirement Date” means the date upon which the Executive
attains age sixty-five (65) years.

 

  1.1.10  “Plan Year” means the twelve (12) consecutive month period beginning
on each November 1 and ending on October 31. The first Plan Year shall commence
on the Effective Date.

 

  1.1.11  “Termination of Employment” means the Executive’s ceasing to be an
employee of the Bank for any reason whatsoever, voluntary or involuntary.

 

  1.1.12  “Year of Service” means a twelve (12) consecutive month period
beginning on November 1 and ending on October 31 during which the Executive is
employed on a full-time basis by the Bank, inclusive of any approved leaves of
absence.

 

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Article 2

Lifetime Benefits

 

2.1 Normal Retirement Benefit. If Executive’s employment terminates with Bank on
or after Executive’s Normal Retirement Date for any reason other than
Executive’s death, the Bank shall pay to Executive as a Normal Retirement
Benefit the sum of three thousand three hundred thirty three dollars and thirty
four cents ($3,333.34) each month for one hundred eighty (180) consecutive
calendar months. The first such monthly payment shall commence on the first day
of the calendar month following Executive’s termination of employment after
Executive’s Normal Retirement Date and thereafter on the first day of each
subsequent calendar month until paid in full.

 

2.2 Early Retirement Benefit. If the Executive’s employment terminates with Bank
after Executive’s Early Retirement Date but before Executive’s Normal Retirement
Date and before a Change of Control, and for reasons other than death or
Disability, Bank shall pay to the Executive the Early Retirement Benefit
described in this Section 2.2.

 

  2.2.1  Amount of Benefit. The Early Retirement Benefit under this Section 2.2
is the Executive’s vested amount of the final benefit which is listed on
Schedule A for the Plan Year completed immediately prior to the Executive’s
Termination of Employment which shall be increased by an amount determined using
the following formula:

 

  2.2.1.2  The vested amount set forth in Schedule A for the Plan Year in which
the Executive’s Termination of Employment occurred; less

 

  2.2.1.3  The amount set forth in Schedule A in the Plan Year completed
immediately prior to the date of the Executive’s Termination of Employment;
multiplied times

 

  2.2.1.4  A fraction where the numerator is the number of Months of Service
completed since Plan Year completed immediately prior to the Executive’s
Termination of Employment and the denominator is 12.

 

  2.2.2  Payment of Benefit. The Bank shall pay the Early Retirement Benefit to
Executive in one hundred eighty (180) consecutive monthly payments. The first
such monthly payment shall commence on the first day of each calendar month
following the Executive’s Normal Retirement Date and thereafter on the first day
of each subsequent calendar month until paid in full.

 

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2.3 Disability Benefit. If Executive’s employment terminates with Bank because
of Disability prior to Executive’s Normal Retirement Date, the Bank shall pay to
Executive the Disability Benefit described in this Section 2.3.

 

  2.3.1  Amount of Disability Benefit. The Disability Benefit under this
Section 2.3 is the amount listed in Schedule A determined as of the Plan Year
completed immediately prior to the Executive’s Termination of Employment.

 

  2.3.2  Payment of Benefit. The Bank shall pay the Disability Benefit to the
Executive, at the Bank’s discretion, in either a lump sum payment within sixty
(60) days following Executive’s Termination of Employment, or in one hundred
eighty (180) consecutive monthly payments. The first such monthly payment shall
commence on the first day of the calendar month following the Executive’s
Termination of Employment and thereafter on the first day of each calendar month
until paid in full. If the Disability Benefit is paid in monthly installments it
shall be paid as an annuity in substantially equal installments with interest
credited over the payment period at an annual rate of eight percent (8%),
compounded monthly.

 

2.4 Change of Control Benefit. If Executive’s employment terminates with Bank
before Executive’s Normal Retirement Date (other than by reason of death or
Disability) but after a Change of Control, the Bank shall pay to Executive
following Executive’s termination of employment a Change of Control Benefit
described in this Section 2.4 in lieu of (and not in addition to) 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 paid in Section 2.1.

 

  2.4.2  Payment of Benefit. Within sixty (60) days following Executive’s
termination of employment after the Change of Control, the Bank shall pay the
Change of Control Benefit to the Executive, as described in Section 2.1 in a
lump sum present value payment based on an 8% discount rate.

Article 3

Death Benefits

 

3.1 Death During Active Service. If the Executive dies while employed with Bank
and Executive has completed at least ten (10) Years of Service with Bank, then
Bank shall pay to the Executive’s beneficiary as a Death Benefit the sum of
three thousand three hundred thirty three dollars and thirty four cents
($3,333.34) per month for one hundred eighty (180) consecutive calendar months.
The first such monthly payment shall commence on the first day of the calendar
month following the Executive’s date of death and thereafter on the first day of
each subsequent calendar month until paid in full.

 

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3.2 Death During Benefit Period. If the Executive dies after benefit payments
have commenced under Section 2 of this Agreement but before receiving all such
payments, the Bank 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 beneficiary designation with the
Bank. 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 Bank during the Executive’s lifetime. A
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved through divorce. 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
descendants, per stirpes, and if no surviving spouse and descendants, to the
Executive’s estate. If Executive dies and subsequently the beneficiary receiving
benefit payments dies, then any remaining payments shall be paid pursuant to a
written beneficiary designation filed with Bank made by such beneficiary, or if
none to such beneficiary’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 Bank may pay such benefit to the guardian, conservator,
legal representative or person having the care or custody of such minor,
incompetent person or incapable person. The Bank 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
Bank from all liability with respect to such benefit.

Article 5

General Limitations

Notwithstanding any provision of this Agreement to the contrary, Executive shall
irrevocably forfeit and Bank shall not pay any benefit under this Agreement for
the following reasons:

 

5.1 Termination for Cause. If Bank terminates Executive’s employment for:

 

  5.1.1  Gross negligence or gross neglect of duties prior to a Change of
Control;

 

  5.1.2  Conviction of a felony; or

 

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  5.1.3 Fraud, disloyalty, dishonesty or willful violation of any law or
material Bank policy in connection with the Executive’s employment.

 

5.2 Suicide. No benefits shall be payable if the Executive commits suicide
within two (2) 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 Bank.

 

5.3 Excess Parachute Payment. Notwithstanding anything in this Agreement to the
contrary, in the event that the benefit payable to Executive pursuant to this
Agreement should cause a “parachute payment,” as defined in Code
Section 280G(b)(2) of the Code, then such benefit shall be reduced One Dollar
($1.00) at a time until the payment will not constitute a parachute payment. In
the event the benefit Executive receives under this Agreement should be
incorrectly calculated so that such amount constitutes a parachute payment, then
Executive will promptly refund to Bank the excess amount. Excess amount shall
mean the amount in excess of Executive’s base amount, as defined in Code
Section 280G(b)(3), multiplied by 2.999.

 

5.4 Non-Competition Covenant. While Executive is employed by the Bank and during
the period of time the Executive is receiving any benefit payments pursuant to
this Agreement, the Executive will not, for himself or on behalf of, or in
conjunction with any other person or persons, company, partnership, limited
liability company, proprietorship, trust, company, bank, financial services
institution, or other entity, directly or indirectly, own, manage, operate,
control, be employed by, consult with, participate in, or be connected in any
manner with the ownership, employment, management, operation, consulting or
control of any financial services institution that competes with Bank. In the
event of any actual breach by the Executive of the provisions of this
non-competition covenant, all payments under this Agreement payable to the
Executive shall irrevocably terminate and no further amount shall be due or
payable to the Executive pursuant to this Agreement. The Executive specifically
acknowledges that the restrictions as set forth above are reasonable and bear a
valid connection with the business operations of Bank, and specifically admits
that Executive is capable of obtaining suitable employment not in competition
with Bank. If any one of the restrictions contained herein shall for any reason
be held to be excessively broad as to duration or geographical area, it shall be
deemed amended by limiting and reducing it so as to be valid and enforceable to
the extent compatible with applicable state law as it shall then appear.
Executive acknowledges that the Bank would not have entered into this Agreement
without the non-competition covenant contained herein. This covenant not to
compete shall not prohibit the Executive from owning stock in any publicly
traded company provided the Executive’s stock ownership is five (5%) percent or
less of the issued and outstanding stock of such publicly traded company and the
Executive has no corporate responsibility other than the Executive’s rights as a
stockholder.

 

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5.5 No Duplication of Benefits. Each of the benefits described in Article 2 and
3 are intended to be separate benefits and mutually exclusive of the other so
that once benefit payments commence under one Section Executive (or his
beneficiary, as the case may be) shall not thereafter receive payments or become
entitled to benefits under another Section.

Article 6

Claims and Review Procedures

 

  6.1 Claims Procedure. The Bank shall notify the claimant in writing, within
ninety (90) days of the claimants written application for benefits, of
eligibility or non eligibility for benefits under the Agreement. If the Bank
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 claimants 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 Bank determines that there are special circumstances requiring
additional time to make a decision, the Bank 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 Bank 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 Bank by filing a petition for review with the Bank
within sixty (60) days after receipt of the notice issued by the Bank. 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 Bank of the petition, the Bank shall afford the claimant
(and counsel, if any) an opportunity to present claimant’s position to the Bank
orally or in writing, and the claimant (or counsel) shall have the right to
review the pertinent documents. The Bank shall notify the claimant of its
decision in writing within the sixty (60) day period, stating specifically the
basis of its decision, written in a manner calculated to be understood by the
claimant and the specific provisions of the Agreement on which the decision is
based. If, because of the need for a hearing, the sixty (60) day period is not
sufficient, the decision may be deferred for up to another sixty (60) day period
at the election of the Bank, but notice of this deferral shall be given to the
claimant.

 

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Article 7

Amendment and Termination

The Bank reserves the right to amend or terminate this Agreement at any time. In
the event of termination of this Agreement, the Executive shall be vested in the
Disability Benefit described in Section 2.3 as if the Executive had terminated
employment because of Disability as of the date of termination of the Agreement.
The Bank shall pay the benefit to the Executive, at the Bank’s discretion, in
either a lump sum payment within sixty (60) days of termination of this
Agreement, or in one hundred eighty (180) equal consecutive monthly payments.
The first such monthly payment shall commence on the first day of the calendar
month following the termination of this Agreement, and thereafter on the first
day of each subsequent calendar month until paid in full. In the event of
amendment, the vested benefit amount accrued under Section 2.2 as of the
effective date of the amendment shall not be reduced by the amendment.

Article 8

Miscellaneous

 

8.1 Binding Effect and Merger. This Agreement shall bind the Executive and the
Bank, and their heirs, beneficiaries, legal representatives, executors,
administrators, successors and assigns. The Bank will not merge with any other
entity without such entity agreeing to the terms and conditions of this
Agreement.

 

8.2 No Guaranty of Employment. This Agreement is not an employment policy or
contract. This Agreement does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank’s right to discharge
the Executive. This Agreement also does not require the Executive to remain an
employee nor interfere with the Executive’s right to terminate employment at any
time. Nothing in this Agreement shall be construed as an employment agreement,
either express or implied.

 

8.3 Non-Transferability. No amounts payable under this Agreement shall be
transferable by the Executive. Further, Executive may not sell, assign,
alienate, pledge or otherwise encumber any benefits under this Plan.

 

8.4 Tax Withholding. The Bank 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 hereunder shall be governed by
the laws of the State of South Carolina, except to the extent preempted by the
laws of the United States of America.

 

8.6

Unfunded Arrangement. The Executive and any beneficiary are general unsecured
creditors of the Bank for the payment of benefits under this Agreement. This
Agreement shall always be an unfunded arrangement. The benefits represent the
mere promise by the Bank 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 Bank to which the Executive
and any beneficiary shall have no preferred or secured claim. Title

 

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to an beneficial ownership of any cash or assets Bank may earmark to pay
Executive or his beneficiary shall at all times remain with Bank.

 

8.7 Named Fiduciary. The Bank shall be the named fiduciary. The Board of
Directors of the Bank shall have full power and authority to interpret, construe
and administer this Agreement and the Board’s interpretations and construction
thereof, and actions thereunder, or the amount or recipient of the payment to be
made hereunder, shall be binding and conclusive on all persons for all purposes.
No member of the Board shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his own willful misconduct or lack of good
faith.

 

8.8 No Trust Created. Nothing contained in this Agreement, and no action taken
pursuant to its provisions by either party hereto, shall create, nor be
construed to create, a trust of any kind or a fiduciary relationship between the
Bank and the Executive, his designated beneficiary, any other beneficiary of the
Executive or any other person.

 

8.9 Date of Birth. Executive hereby represents to Bank that his date of birth is
August 3, 1942.

IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
executed and sealed this Agreement as the date first above written.

 

Witnesses:     Bank:     Greer State Bank /s/ Gaye Burroughs     By:   /s/
Walter M. Burch

/s/ J. Richard Medlock, Jr.

    Its:   director Witnesses:     EXECUTIVE

/s/ Gaye Burroughs

    /s/ R. Dennis Hennett

/s/ J. Richard Medlock, Jr.

    R. DENNIS HENNETT

 

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1993 Bank Compensation Strategies Group

BOARD RESOLUTION

ADOPTING SALARY CONTINUATION AGREEMENT

The Board desires to retain R. Dennis Hennett (“Executive”), a key employee, in
the Bank’s employ. To encourage such retention, the Board desires to enter into
the Salary Continuation Agreement attached to these minutes. Under the
Agreement, the Bank promises to pay certain supplemental retirement or death
benefits to the Executive, pursuant to the terms and conditions contained
therein.

THEREFORE, IT IS RESOLVED that the Salary Continuation Agreement is Adopted by
the Bank effective as of NOVEMBER 1, 1997.

RESOLVED FURTHER, that the Bank’s officers are authorized to take any and all
necessary financial, legal and accounting actions necessary to implement the
supplemental retirement or death benefit plan.

 

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