Exhibit
10.1


 


Final
for Execution


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (this “Agreement”) dated as of October 20, 2010, is
made by and between Congaree Bancshares, Inc., a South Carolina
corporation (the “Company”), which is the holding company for Congaree State
Bank, a South Carolina state bank (the “Bank”), and Charles A. Kirby, an
individual resident of South Carolina (the “Executive”).  All references to the term “Employer” as used
herein shall refer to the Company and the Bank.


 


The Employer desires to employ the Executive as President and Chief
Executive Officer of the Bank and of the Company.  The Employer recognizes that the Executive’s
contribution to the growth and success of the Employer will be
substantial.  The Employer desires to provide
for the employment of the Executive in a manner which will reinforce and
encourage the dedication of the Executive to the Employer and will promote the
best interests of the Bank, the Company, and the Company’s shareholders.  The Executive is willing to serve the
Employer on the terms and conditions herein provided.  Certain terms used in this Agreement are
defined in Section 17 hereof. 
Unless otherwise specified hereafter, any services performed by the
Executive shall be for the benefit of the Bank and therefore any payments or
benefits paid to the Executive 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 Executive under this Agreement shall be discharged to the
extent compensation payments are made by the Company.


 


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


 


1.             Employment.  The Employer shall employ the Executive, and
the Executive shall serve the Employer, as President and Chief Executive
Officer of the Bank and of the Company upon the terms and conditions set forth
herein.  The Executive shall have such
authority and responsibilities consistent with his position as are set forth in
the Company’s or the Bank’s Bylaws or assigned by the Company’s or the Bank’s
Board of Directors (collectively, the “Board”) from time to time.  The Executive shall devote his full business
time, attention, skill and efforts to the performance of his duties hereunder,
except during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy.  The
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing
his personal investments, provided that such activities do not
materially interfere with the performance of his duties hereunder and are not
in conflict or competitive with, or adverse to, the interests of the Company or
the Bank.


 


2.             Term.  Unless earlier terminated as provided herein,
the Executive’s employment under this Agreement shall commence on the date
hereof and be for a term of three years (the “Initial Term”).  The employment shall be extended for
additional terms of one year each (“Additional Term”) unless a Notice of
Termination, as defined hereinafter, shall be delivered by the Bank and the
Company to Executive not less than six months prior to the end of the Initial
Term or six months prior to the end of the Additional Term, if applicable.


 


3.             Compensation
and Benefits.  Any
payments made under this Agreement shall be subject to such deductions as are
required by law or regulation or as may be agreed to by the Employer and the
Executive.


 


(a)  The Employer shall pay the Executive an initial annual base
salary of $150,000, which shall be paid in accordance with the Employer’s
standard payroll procedures, which shall be no less frequently than
monthly.  The Board (or an appropriate
committee of the Board) shall review the Executive’s performance and salary at
least annually and may increase the Executive’s base salary if it determines in
its sole discretion that an additional increase is appropriate.


 


(b)  The Executive shall be eligible to receive a cash bonus
equaling up to 50% of the previous year’s salary and compensation if the Bank
achieves certain performance levels established by the Board from time to time
(the “Bonus Plan”).  Any bonus payment
made pursuant to this Section 3(b) shall be made the earlier of (i) 70
calendar days after the previous year end for which the bonus was earned by the
Executive and became a payable


 

















 


of
the Employer or (ii) the first pay period following the Employer’s press
release announcing its previous year’s financial performance.


 


(c)  The Executive, along with all other eligible employees of the
Company, shall participate in the Bank’s long-term equity incentive program and
be eligible for the grant of stock options, restricted stock, and other awards
thereunder or under any similar plan adopted by the Company.  Any options or similar awards shall be issued
to Executive at an exercise price of not less than the stock’s current fair
market value as of the date of grant, and the number of shares subject to such
grant shall be fixed on the date of grant. 
Nothing herein shall be deemed to preclude the granting to the Executive
of warrants or options under a director option plan in addition to the options
granted hereunder.


 


(d)  The Executive shall be eligible to participate in all
retirement, medical, dental welfare and other benefit plans or programs of the
Employer now or hereafter applicable generally to employees of the Employer or
to a class of employees that includes senior executives of the Employer.


 


(e)  The Employer shall provide the Executive with a term life
insurance policy providing for death benefits totaling $1,000,000 payable to
the Employer, and the Executive shall cooperate with the Employer in the
securing and maintenance of such policy.


 


(f)  The Employer shall pay the Executive $500 per month for
expenses relating to an automobile either owned or leased by the Executive,
which shall be paid in accordance with the Company’s standard payroll
procedures.  In addition, the Employer
shall reimburse the Executive for expenses related to routine maintenance on
such automobile in amounts not to exceed $150 per month.  The Employer shall reimburse the Executive
for such expenses within 60 days of Executive’s incurring of such expense.


 


(g)  In addition, at a time deemed appropriate by the Board, the
Employer shall reimburse Executive for dues pertaining to an area country club
for so long as the Executive remains the President and Chief Executive Officer
of the Employer and this Agreement remains in force.  The Employer shall reimburse the Executive
for such expenses within 60 days of Executive’s incurring of such expense.


 


(h)   The Employer shall
reimburse the Executive for reasonable travel and other expenses, including
cell phone expenses related to the Executive’s duties which are incurred and
accounted for in accordance with the normal practices of the Employer.  The Employer shall reimburse the Executive
for such expenses within 60 days of Executive’s incurring of such expense.


 


(i)   The Employer shall
provide the Executive with four weeks’ paid vacation per year, which shall be
taken in accordance with any banking rules or regulations governing
vacation leave.


 


4.              Termination.


 


(a)   The Executive’s employment
under this Agreement may be terminated prior to the end of the Term only as
follows, and the effect of such termination shall be as set forth in Sections 4(b) through
4(j):


 


(i)            upon the death of the Executive;


 


(ii)           upon the Disability of the Executive for a period of
180 days;


 


(iii)          by the Employer for Cause upon delivery of a Notice
of Termination to the Executive;


 


(iv)          by the Executive for Good Reason upon delivery of a
Notice of Termination to the Employer within a 90-day period beginning on the
30th day after the occurrence of a Change in Control or within a 90-day period
beginning on the one year anniversary of the occurrence of a Change in Control;


 


(v)           by the Employer without Cause upon delivery of a
Notice of Termination; and


 


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(vi)          by the Executive effective upon the 30th day after
delivery of a Notice of Termination.


 


(b)   If the Executive’s
employment is terminated because of the Executive’s death, the Employer shall
pay Executive’s estate any sums due him as base salary and reimbursement of
expenses through the end of the month during which death occurred in accordance
with the Employer’s normal payroll practices, which shall mean no less
frequently than monthly.  The Employer
shall also pay the Executive’s estate any bonus earned or accrued under the
Bonus Plan 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 3(b).  Any bonus that is earned in the year of death
will be paid on the earlier of (i) 70 calendar days after the year end in
which the Executive died or (ii) the first pay period following the
Employer’s press release announcing its financial performance for the year in
which the Executive 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 Company for the entire year and
prorated through the date of Executive’s death.


 


(c)   During the period of any
Disability leading up to the Executive’s Termination of Employment under this
provision, the Employer shall continue to pay the Executive his full base
salary at the rate then in effect and all perquisites and other benefits (other
than any bonus) in accordance with the Employer’s normal payroll schedule (and
in no event less frequently than monthly) until the Executive becomes eligible
for benefits under any long-term disability plan or insurance program
maintained by the Employer, provided that the amount of any such payments to
the Executive shall be reduced by the sum of the amounts, if any, payable to
the Executive for the same period under any disability benefit or pension plan
of the Employer or any of its subsidiaries. Furthermore, the Employer shall pay
the Executive any bonus earned or accrued under the Bonus Plan 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 3(b).  Any bonus that is
earned in the year of Disability will be paid on the earlier of (i) 70
calendar days after the year end in which Executive became Disabled or (ii) the
first pay period following the Employer’s press release announcing its
financial performance for the year in which the Executive became Disabled.


 


(d)   If the Executive’s
employment is terminated for Cause as provided above, or if the Executive
resigns, as set forth in clause (vi) of Section 4(a) (except for
a termination of employment pursuant to Section 4(e)), the Executive shall
receive any sums due him as base salary and reimbursement of expenses through
the date of termination, which shall be paid in accordance with the Employer’s
normal payroll practices, which shall mean no less frequently than monthly.


 


(e)   If the Executive’s
employment is terminated (1) by the Executive pursuant to clause (iv) of
Section 4(a) or (2) by the Employer pursuant to clause (v) of Section 4(a) within
two years following a Change in Control, then in addition to other rights and
remedies available in law or equity, the Executive shall be entitled to the
following:


 


(i)            the Employer shall pay the
Executive: (1) severance compensation in an amount equal to six months of
his then current monthly base salary in a lump sum on the date that is six
months and one day following the date of the Executive’s termination; and (2) severance
compensation in an amount equal to 100% of his then current monthly base salary
each month for 12 months following the date of such lump sum payment as set
forth in Section 4(e)(i)(1) above; provided however, if at any time
the Bank is deemed to be in “troubled condition” (as such term is defined by
applicable regulations of the appropriate federal banking agency), the Employer’s
obligations to make those the monthly payments under Section 4(e)(i)(2) above
shall be limited to a period of six months. 
The Employer shall also pay the Executive any bonus earned or accrued
under the Bonus Plan through the date of termination.  Any bonus for previous years which was not
yet paid will be paid in a lump sum on the date that is six months and one day
following the date of the Executive’s termination.  Any bonus that is earned in the year of the
Executive’s termination will be paid on the later of (A) the date that is
six months and one day following the date of the Executive’s termination or (B) the
first pay period following the Employer’s press release announcing its
financial performance for the year of the Executive’s termination; and


 


(ii)           Executive 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


 


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under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  In accordance with COBRA, assuming Executive
is covered under the Company’s group health plan as of his date of termination,
Executive will be entitled to elect COBRA continuation coverage for the legally
required COBRA 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 of coverage and the
Company’s share of such premiums shall be treated as taxable income to the
Executive.  Following the end of the
COBRA coverage period, Executive will be entitled to continue group health plan
coverage through the remainder of the Term on the same payment/tax sharing
basis.  The Company shall provide such
benefits to the Executive in a manner and amount that would place the Executive
in an after-tax-equivalent position with respect to such benefits compared to
the benefits Executive would have received if his employment had continued
through the remainder of the Term.


 


(f)    If the Employer terminates
the Executive’s employment pursuant to clause (v) of Section 4(a) before
a Change in Control, beginning on the date that is six months and one day
following the date of the Executive’s termination, and continuing on the first
day of the month for the next 12 months, the Employer shall pay to the
Executive severance compensation in an amount equal to 100% of his then current
monthly base salary.  Employer shall also
pay the Executive any bonus earned or accrued under the Bonus Plan through the
date of termination (including any amounts awarded for previous years but which
were not yet vested). Any bonus for previous years which was not yet paid will
be paid in a lump sum on the date that is six months and one day following the
date of the Executive’s termination.  Any
bonus that is earned in the year of the Executive’s termination will be paid on
the later of (i) the date that is six months and one day following the
date of Executive’s termination or (ii) the first pay period following the
Employer’s press release announcing its financial performance for the year of
the Executive’s termination.


 


(g)   With the exceptions of the
provisions of this Section 4, and the express terms of any benefit plan
under which the Executive is a participant, it is agreed that, upon Executive’s
Termination of Employment, the Employer shall have no obligation to the
Executive for, and the Executive waives and relinquishes, any further
compensation or benefits (exclusive of COBRA benefits).  Within 45 days of the Executive’s Termination
of Employment, and as a condition to the Employer’s obligation to pay any
severance hereunder, the Employer and the Executive shall enter into a release
substantially in the form attached hereto as Exhibit A, and may not
revoke such release within the revocation period stated in such release, which
shall acknowledge such remaining obligations and discharge both parties, as
well as the Employer’s officers, directors and employees with respect to their
actions for or on behalf of the Employer, from any other claims or obligations
arising out of or in connection with the Executive’s employment by the
Employer, including the circumstances of such termination.


 


(h)   In the event that the
Executive’s employment is terminated for any reason, as a condition to the
Employer’s obligation to pay any severance hereunder, the Executive shall (and
does hereby) tender his resignation as a director of the Company, the Bank, and
any other subsidiaries, effective as of the date of termination.


 


(i)    The Company is aware that
upon the occurrence of a Change in Control, the Board or a shareholder of the
Company may then cause or attempt to cause the Company to refuse to comply with
its obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to take, other action
to deny the Executive the benefits intended under this Agreement.  In these circumstances, the purpose of this
Agreement could be frustrated.  It is the
intent of the parties that the Executive not be required to incur the legal
fees and expenses associated with the protection or enforcement of the
Executive’s rights under this Agreement by litigation or other legal action because
such costs would substantially detract from the benefits intended to be
extended to the Executive hereunder, nor be bound to negotiate any settlement
of the Executive’s rights hereunder under threat of incurring such costs.  Accordingly, if at any time after a Change in
Control, it should appear to the Executive that the Company is acting or has
acted contrary to or is failing or has failed to comply with any of its
obligations under this Agreement for the reason that it regards this Agreement
to be void or unenforceable or for any other reason, or that the Company has
purported to terminate the Executive’s employment for Cause or is in the course
of doing so in either case contrary to this Agreement, or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action


 


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designed to deny, diminish or recover (other than as required by law)
from the Executive the benefits provided or intended to be provided to the
Executive hereunder, and the Executive has acted in good faith to perform the Executive’s
obligations under this Agreement, the Company irrevocably authorizes the
Executive from time to time to retain counsel of the Executive’s choice at the
expense of the Company to represent the Executive in connection with the
protection and enforcement of the Executive’s rights hereunder, including
without limitation representation in connection with termination of the
Executive’s employment contrary to this Agreement or with the initiation or
defense of any litigation or other legal action, whether by or against the
Executive or the Company or any director, officer, shareholder or other person
affiliated with the Company, in any jurisdiction.  The reasonable fees and expenses of counsel
selected from time to time by the Executive as hereinabove provided shall be
paid or reimbursed to the Executive by the Company on a regular, periodic basis
upon presentation by the Executive of a statement or statements prepared by
such counsel.  If other officers or key
executives of the Company have retained counsel in connection with the
protection and enforcement of their rights under similar agreements between
them and the Company, and, unless in the Executive’s sole judgment use of
common counsel could be prejudicial to the Executive or would not be likely to
reduce the fees and expenses chargeable hereunder to the Company, the Executive
agrees to use the Executive’s best efforts to agree with such other officers or
executives to retain common counsel.


 


(j)    The parties intend that the
severance payments and other compensation provided for herein are reasonable
compensation for the Executive’s services to the Employer and shall not
constitute “excess parachute payments” within the meaning of Section 280G
of the Internal Revenue Code of 1986 and any regulations thereunder.  To prevent the aggregate payments or benefits
to be made or afforded to the Executive as provided for herein from
constituting an excess parachute payment, the severance payments will be
reduced, if necessary, to an amount, the value of which is one dollar less than
an amount equal to three times the Executive’s “base amount,” as determined in
accordance with Section 280G.  The
allocation of any reduction required with respect to the severance payments
shall be determined by the Executive.


 


(k)   Notwithstanding anything
contained in this Agreement to the contrary, it is understood and agreed that
the Employer (or any of its successors in interest) shall not be required to
make any payment or take any action under this Agreement if:


 


(i)   the Bank is declared by any governmental
agency having jurisdiction over the Bank to be insolvent, in default or
operating in an unsafe or unsound manner; provided however that, if the
Executive’s employment with the Employer shall terminate as described in Section 4
hereof within 90 days of such declaration, then Section 9 of this
Agreement shall not apply to the Executive following such termination;


 


(ii)   in the opinion of counsel to the Employer,
such payment or action would be prohibited by or would violate any provision of
under the United States Treasury Capital Purchase Program and related
regulations for so long as the Company participates in such Program; further
provided that, the Executive agrees to such amendments, agreements, or waivers
that are required by the United States Treasury or requested by the Company to
comply with the terms of such program; or


 


(iii)   in the opinion of counsel to the Employer,
such payment or action (i) would be prohibited by or would violate any
provision of state or federal law applicable to the Employer, including,
without limitation, the Federal Deposit Insurance Act as now in effect or
hereafter amended, (ii) would be prohibited by or would violate any
applicable rules, regulations, orders or statements of policy, whether now
existing or hereafter promulgated, of any governmental agency having
jurisdiction over the Bank or the Company, or (iii) otherwise would be
prohibited by any governmental agency having jurisdiction over the Bank or the
Company.


 


5.             Ownership of
Work Product.  The
Employer shall own all Work Product arising during the course of the Executive’s
employment (prior, present or future). 
For purposes hereof, “Work Product” shall mean all intellectual property
rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, and other intellectual property rights in any
programming, documentation, technology or other work product that relates to
the Employer, its business or its customers and that the Executive conceives,
develops, or delivers to the Employer at any time during his employment, during
or outside normal working hours, in or away from the facilities


 


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of the Employer, and whether or not requested by the Employer.  If the Work Product contains any materials,
programming or intellectual property rights that the Executive conceived or
developed prior to, and independent of, the Executive’s work for the Employer,
the Executive agrees to point out the pre-existing items to the Employer and
the Executive grants the Employer a worldwide, unrestricted, royalty-free
right, including the right to sublicense such items.  The Executive agrees to take such actions and
execute such further acknowledgments and assignments as the Employer may
reasonably request to give effect to this provision.


 


6.             Protection of
Trade Secrets.  The
Executive agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, the Executive agrees not to use or disclose
any Trade Secrets of the Employer during or after his employment.  “Trade Secret” means information, including a
formula, pattern, compilation, program, device, method, technique, process,
drawing, cost data or customer list, that: (i) derives 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 its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.


 


7.             Protection of
Other Confidential Information.  In addition, the Executive agrees to maintain
in strict confidence and, except as necessary to perform his duties for the
Employer, not to use or disclose any Confidential Business Information of the
Employer during his employment and for a period of 24 months following
termination of the Executive’s employment (regardless of whether this Agreement
terminates or expires).  “Confidential
Business Information” shall mean any internal, non-public information (other
than Trade Secrets already addressed above) concerning the Employer’s financial
position and results of operations (including revenues, assets, net income, etc.);
annual and long-range business plans; product or service plans; marketing plans
and methods; training, educational and administrative manuals; customer and
supplier information and purchase histories; and employee lists.  The provisions of Sections 6 and 7 shall also
apply to protect Trade Secrets and Confidential Business Information of third
parties provided to the Employer under an obligation of secrecy.


 


8.             Return of
Materials.  The
Executive shall surrender to the Employer, promptly upon its request and in any
event upon termination of the Executive’s employment (regardless of whether
this Agreement terminates or expires), all media, documents, notebooks,
computer programs, handbooks, data files, models, samples, price lists,
drawings, customer lists, prospect data, or other material of any nature whatsoever
(in tangible or electronic form) in the Executive’s possession or control,
including all copies thereof, relating to the Employer, its business, or its
customers.  Upon the request of the
Employer, the Executive shall certify in writing compliance with the foregoing
requirement.


 


9.             Restrictive
Covenants.


 


(a)           No Solicitation
of Customers.  During the
Executive’s employment with the Employer and for a period of 12 months
thereafter (regardless of whether this Agreement terminates or expires), the Executive
shall not (except on behalf of or with the prior written consent of the
Employer), either directly or indirectly, on the Executive’s own behalf or in
the service or on behalf of others, (A) solicit, divert, or appropriate to
or for a Competing Business, or (B) attempt to solicit, divert, or
appropriate to or for a Competing Business, any person or entity that is or was
a customer of the Employer or any of its Affiliates at any time during the 12
months prior to the date of termination and with whom the Executive has had
material contact.  The parties agree that
solicitation of such a customer to acquire stock in a Competing Business during
this time period would be a violation of this Section 9(a).


 


(b)           No Recruitment of Personnel.  During the Executive’s employment with the
Employer and for a period of 12 months thereafter (regardless of whether this
Agreement terminates or expires), the Executive shall not, either directly or
indirectly, on the Executive’s own behalf or in the service or on behalf of
others, (A) solicit, divert, or hire away, or (B) attempt to solicit,
divert, or hire away, to any Competing Business located in the Territory, any
employee of or consultant to the Employer or any of its Affiliates, regardless
of whether the employee or consultant is full-time or temporary, the employment
or engagement is pursuant to written agreement, or the employment is for a
determined period or is at will.  For
purposes of this Section, “employee of or consultant to the Employer” shall
mean (A) any individual employed by the Employer at the time of the actual
or attempted solicitation, diversion or hiring, or (B) any individual
employed by the Employer at the time of Employee’s termination of employment
with the Employer.


 


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(c)           Non-Competition
Agreement. During the Executive’s employment with the
Employer and for a period of 12 months following any termination (as opposed to
expiration) of this Agreement, the Executive shall not (without the prior written
consent of the Employer) compete with the Employer or any of its Affiliates by,
directly or indirectly, forming, serving as an organizer or officer of, or
consultant to, or acquiring or maintaining more than a 1% passive investment
in, a depository financial institution or holding company therefor if such
depository institution or holding company has, or upon formation will have, one
or more offices or branches located in the Territory.  Notwithstanding the foregoing, the Executive
may serve as an officer of or consultant to a depository institution or holding
company therefor even though such institution operates one or more offices or
branches in the Territory, if the Executive’s employment does not directly
involve, in whole or in part, the depository financial institution’s or holding
company’s operations in the Territory.


 


(d)           Bank
Receivership. 
Notwithstanding Sections 9(a-c) above, if Executive’s employment with
the Employer shall terminate due to the Bank being taken into receivership by
the FDIC, then the restrictive covenants of this Section 9 shall not apply
to the Executive beginning as of the date of such receivership.


 


10.          Independent
Provisions.  The
provisions in each of the above Sections 9(a), 9(b), and 9(c) are
independent, and the unenforceability of any one provision shall not affect the
enforceability of any other provision.


 


11.          Successors;
Binding Agreement. The rights and obligations of this Agreement shall
bind and inure to the benefit of the surviving corporation in any merger or
consolidation in which the Employer is a party, or any assignee of all or
substantially all of the Employer’s business and properties.  The Executive’s rights and obligations under
this Agreement may not be assigned by him, except that his right to receive
accrued but unpaid compensation, unreimbursed expenses and other rights, if
any, provided under this Agreement which survive termination of this Agreement
shall pass after death to the personal representatives of his estate.


 


12.          Notice.  For the purposes of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or sent
by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided, however,
that all notices to the Employer shall be directed to the attention of the
Employer with a copy to the Secretary of the Employer.  All notices and communications shall be
deemed to have been received on the date of delivery thereof.


 


13.          Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the conflict of laws principles thereof.  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.


 


14.          Non-Waiver.  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 to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.


 


15.          Enforcement.  The Executive agrees that in the event of any
breach or threatened breach by the Executive of any covenant contained in Section 9(a),
9(b), or 9(c) hereof, the resulting injuries to the Employer would be
difficult or impossible to estimate accurately, even though irreparable injury
or damages would certainly result.  Accordingly,
an award of legal damages, if without other relief, would be inadequate to
protect the Employer.  The Executive,
therefore, agrees that in the event of any such breach, the Employer shall be
entitled to obtain from a court of competent jurisdiction an injunction to
restrain the breach or anticipated breach of any such covenant, and to obtain
any other available legal, equitable, statutory, or contractual relief.  Should the Employer have cause to seek such
relief, no bond shall be required from the Employer, and the Executive shall
pay all attorney’s fees and court costs which the Employer may incur to the
extent the Employer prevails in its enforcement action.


 


16.          Saving Clause.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.  If any provision or clause of this Agreement,
or portion thereof, shall be held by any court or other tribunal of competent
jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the
remainder of such provision shall not be


 


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thereby affected and shall be given full effect, without regard to the
invalid portion.  It is the intention of
the parties that, if any court construes any provision or clause of this
Agreement, or any portion thereof, to be illegal, void, or unenforceable
because of the duration of such provision or the area or matter covered
thereby, such court shall reduce the duration, area, or matter of such
provision, and, in its reduced form, such provision shall then be enforceable
and shall be enforced. The Executive and the Employer hereby agree that they
will negotiate in good faith to amend this Agreement from time to time to
modify the terms of Sections 9(a), 9(b) or 9(c), the definition of the
term “Territory,” and the definition of the term “Business,” to reflect changes
in the Employer’s business and affairs so that the scope of the limitations
placed on the Executive’s activities by Section 9 accomplishes the parties’
intent in relation to the then current facts and circumstances.  Any such amendment shall be effective only
when completed in writing and signed by the Executive and the Employer.


 


17.          Certain
Definitions.


 


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


 


(b)           “Business”
shall mean the operation of a depository financial institution, including,
without limitation, the solicitation and acceptance of deposits of money and
commercial paper, the solicitation and funding of loans and the provision of
other banking services, and any other related business engaged in by the
Employer or any of its Affiliates as of the date of termination.


 


(c)           “Cause”
shall consist of any of (A) the commission by the Executive 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 the
Executive, which is intended to cause, causes or is reasonably likely to cause
material harm to the Employer (including harm to its business reputation), (B) the
indictment of the Executive for the commission or perpetration by the Executive
of any felony or any crime involving dishonesty, moral turpitude or fraud,
(C) the material breach by the Executive of this Agreement that, if
susceptible of cure, remains uncured 10 days following written notice to the
Executive of such breach, (D) the receipt of any form of notice, written
or otherwise, that any regulatory agency having jurisdiction over the Employer
intends to institute any form of formal or informal (e.g., a memorandum
of understanding which relates to the Executive’s performance) regulatory
action against the Executive or the Employer or the Employer (provided
that the Board of Directors determines in good faith, with the Executive
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 the Executive or that termination of the Executive would
materially advance the Employer’s compliance with the purpose of the action or
would materially assist the Employer in avoiding or reducing the restrictions
or adverse effects to the Employer related to the regulatory action); (E) the
exhibition by the Executive of a standard of behavior within the scope of his
employment that is materially disruptive to the orderly conduct of the Employer’s
business operations (including, without limitation, substance abuse or sexual
misconduct) to a level which, in the Board of Directors’ good faith and
reasonable judgment, with the Executive abstaining from participating in the
consideration of and vote on the matter, is materially detrimental to the
Employer’s best interest, that, if susceptible of cure remains uncured 10 days
following written notice to the Executive of such specific inappropriate
behavior; or (F) the failure of the Executive to devote his full business
time and attention to his employment as provided under this Agreement that, if
susceptible of cure, remains uncured 30 days following written notice to the Executive
of such failure.  In order for the Board
of Directors to make a determination that termination shall be for Cause, the
Board must provide the Executive with an opportunity to meet with the Board in
person.


 


(d)           “Change in
Control” shall mean as defined by Treasury Regulation § 1.409A-3(i)(5).


 


(e)           “Competing Business”
shall mean any business that, in whole or in part, is the same or substantially
the same as the Business.


 


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


 


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


 


(i)            a material
negative change in the Executive’s status, title, position or


 


8

















 


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


 


(ii)           a material
reduction in the Executive’s base salary or any failure to pay the Executive
any compensation or benefits to which he is entitled within five days of the
date due;


 


(iii)          the Employer’s
requiring the Executive to be based at any place outside a 30-mile radius from
the executive offices occupied by the Executive 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 material reduction in
benefit level and/or reward opportunities) any material compensation or
employee benefit plan in which the Executive was participating at any time
within 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 Executive, or
(B) provide the Executive 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 Executive was participating at any time
within 90 days preceding the date of a Change in Control or at any time
thereafter;


 


(v)           the insolvency or the filing
(by any party, including the Company or the Bank) of a petition for bankruptcy
of the Company or the Bank, which petition is not dismissed within 60 days;


 


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


 


(vii)         any purported termination of
the Executive’s employment for Cause by the Employer which does not comply with
the terms of this Agreement; or


 


(viii)        the failure of
the Employer to obtain an agreement, satisfactory to the Executive, from any
successor or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof.


 


Any event or condition described in clause (i) through (viii) above
which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise
arose in connection with, or in anticipation of, a Change in Control which
actually occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control.  The Executive’s right to terminate his
employment for Good Reason shall not be affected by his incapacity due to
physical or mental illness.


 


(h)           “Notice of
Termination” shall mean a written notice of termination from the Employer
or the Executive which specifies an effective date of termination, indicates
the specific termination provision in this Agreement relied upon, and, in the
case of a termination for Good Reason or for Cause, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under


 


9

















 


the provision so indicated.


 


(i)            “Territory”
shall mean a radius of 15 miles from (i) the main office of the Employer
or (ii) any branch office of the Employer.


 


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


 


18.          Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.


 


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


 


20.          Compliance with Internal
Revenue Code Section 409A.  The Employer and the Executive intend that
their exercise of authority or discretion under this Agreement shall comply
with section 409A of the Internal Revenue Code. 
If any provision of this Agreement does not satisfy the requirements of
section 409A, such provision shall nevertheless be applied in a manner
consistent with those requirements. In addition, each payment hereunder is
intended to constitute a separate payment from each other payment for purposes
of Treasury Regulation Section 1.409A-2(b)(2).  References in this Agreement to section 409A
of the Internal Revenue Code of 1986 include rules, regulations, and guidance
of general application issued by the Department of the Treasury under Internal
Revenue Code section 409A.


 


10

















 


IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective
as of the date first above written.


 


	
   

  	
   

  	
   

  	
  CONGAREE
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  X

  	
   

  	
  By:

  	
  /s/
  E. Daniel Scott

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  E.
  Daniel Scott

  
	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONGAREE
  STATE BANK

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  X

  	
   

  	
  By:

  	
  /s/
  E. Daniel Scott

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  E.
  Daniel Scott

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/
  Charles A. Kirby

  
	
   

  	
   

  	
   

  	
  Charles
  A. Kirby

  



 


11

















 


Exhibit A


 


Form of Release of Claims


 


SEVERANCE AGREEMENT AND RELEASE


 


This
Severance Agreement and Release (the “Agreement”) is made between Charles A.
Kirby, an individual resident of South Carolina (“Employee”), and Congaree
State Bank (the “Bank”).


 


As
used in this Agreement, the term “Employee” shall include the employee’s heirs,
executors, administrators, and assigns, and the term “Bank” shall include the
Bank, its holding company, any other related or affiliated entities, and the
current and former officers, directors, shareholders, employees, and agents of
them.


 


On
October 20, 2010, the Bank and Employee entered into an Employment
Agreement governing the relationship between the parties.  Section 4(a)(v) provides that the
Bank may terminate the Employment Agreement without cause.  Section 4 of the Employment Agreement
also provides that Employee shall be entitled to severance pay if the
Employment Agreement is terminated without cause, on the condition that
Employee enter into this release or a substantially similar release.


 


Employee
desires to receive severance pay and the Bank is willing to provide severance
pay on the condition the Employee enter into this Agreement.


 


Now,
in consideration for the mutual promises and covenants set forth herein, and in
full and complete settlement of all matters between Employee and the Bank, the
parties agree as follows:


 


1.             Termination
Date:  The Employee
agrees that his employment with the Bank terminates as of
                                
(the “Termination Date”).


 


2.             Severance
Payments:  Subsequent to
his Termination Date, the Bank shall pay Employee severance pay as noted in
Paragraph 4 of the Employment Agreement, dated October 20, 2010, (the “Severance
Payment”), less applicable deductions and withholdings.


 


3.             Legal
Obligations


 


The
parties acknowledge that pursuant to Section 4(g) of the Employment
Agreement, they agreed that at the time of termination and as a condition of
payment of severance, they would enter into this release acknowledging any
remaining obligations and discharging each other from any other claims or
obligations arising out of or in connection with Employee’s employment by the
Bank, including the circumstances of such termination.


 


Employee
acknowledges that the Bank has no prior legal obligations to make the payments
described in Section 2 above which are exchanged for the promises of
Employee set forth in this Agreement.  It
is specifically agreed that the payments described in Section 2 are
valuable and sufficient consideration for each of the promises of Employee set
forth in this Agreement and are payments in addition to anything of value to
which Employee is otherwise entitled.


 


4.             Waiver
and Release:


 


a)                                     Employee
unconditionally releases and discharges the Bank from any and all causes of
action, suits, damages, claims, proceedings, and demands that the Employee has
ever had, or may now have, against the Bank, whether asserted or unasserted,
whether known or unknown, concerning any matter occurring up to and including
the date of the signing of this Agreement.


 


b)                                     Employee
acknowledges that he is waiving and releasing, to the full extent permitted by
law, all claims against the Bank, including (but not limited to) all claims
arising out of, or related in any way to, his employment with the Bank or the
termination of that employment, including (but not limited to) any and all
breach of contract claims, tort claims, claims of wrongful discharge, claims
for breach of an express or


 


12

















 


implied
employment contract, defamation claims, claims under Title VII of the Civil
Rights Act of 1964 as amended, which prohibits discrimination in employment based
on race, color, national origin, religion or sex, the Family and Medical Leave
Act, which provides for unpaid leave for family or medical reasons, the Equal
Pay Act, which prohibits paying men and women unequal pay for equal work, the
Age Discrimination in Employment Act of 1967, which prohibits age
discrimination in employment, the Americans with Disabilities Act, which
prohibits discrimination based on disability, the Rehabilitation Act of 1973,
the South Carolina Human Affairs Law, any and all other applicable local, state
and federal non-discrimination statutes, the Employee Retirement Income
Security Act, the Fair Labor Standards Act, the South Carolina Payment of Wages
Law and all other statutes relating to employment, the common law of the State
of South Carolina, or any other state, and any and all claims for attorneys’
fees.


 


c)                                      This Waiver and
Release provision ((a) through (c) of this paragraph) shall be
construed to release all claims to the full extent allowed by law.  If any term of this paragraph shall be
declared unenforceable by a court or other tribunal of competent jurisdiction,
it shall not adversely affect the enforceability of the remainder of this
paragraph.


 


d)                                     The Bank
unconditionally releases and discharges Employee from any and all causes of
action, suits, damages, claims, proceedings, and demands that the Bank has ever
had, or may now have, against Employee, whether asserted or unasserted, whether
known or unknown, concerning any matter occurring up to and including the date of
the signing of this Agreement with the exception of any claims for breach of
trust, or any act which constitutes a felony or crime involving dishonesty,
theft, or fraud.


 


5.             Restrictive
Covenants and Other Obligations


 


The
parties agree that Section 5 – “Ownership of Work Product,” Section 6
– “Protection of Trade Secret,” Section 7 – “Protection of Confidential
Information,” Section 8 – “Return of Materials,” Section 9 – “Restrictive
Covenants,” Section 10 – “Independent Provisions,” Section 15 – “Enforcement,”
and Section 16 – “Savings Clause,” of the Employment Agreement shall
remain in full force and effect and that Employee will perform his obligations
under those sections and those sections of the Employment Agreement are
incorporated by reference as if set forth fully herein.  In the event Employee breaches any obligation
under this Section 5, the Bank’s obligation to make severance payments to
Employee shall terminate immediately and the Bank shall have no further
obligations to Employee.


 


6.             Duty
of Loyalty/Nondisparagement


 


The
parties shall not (except as required by law) communicate to anyone, whether by
word or deed, whether directly or through any intermediary, and whether
expressly or by suggestion or innuendo, any statement, whether characterized as
one of fact or of opinion, that is intended to cause or that reasonably would
be expected to cause any person to whom it is communicated to have a lowered
opinion of the other party.


 


7.             Confidentiality
Of The Terms Of This Agreement


 


Employee
agrees not to publicize or disclose the contents of this Agreement, including
the amount of the monetary payments, except (i) to his immediate family; (ii) to
his attorney(s), accountant(s), and/or tax preparer(s); (iii) as may be
required by law; or (iv) as necessary to enforce the terms of this
Agreement.  Employee further agrees that
he will inform anyone to whom the terms of this Agreement are disclosed of the
confidentiality requirements contained herein. 
Notwithstanding the foregoing, the parties agree that where business
needs dictate, Employee may disclose to a third party that he has entered into
an agreement with the Bank, which agreement contains restrictive covenants
including non-competition and nondisclosure provisions, one or more of which
prohibit him from performing the requested service.


 


Employee
recognizes that the disclosure of any information regarding this Agreement by
him, his family, his attorneys, his accountants or financial advisors, could
cause the Bank irreparable injury and damage, the amount of which would be
difficult to determine.  In the event the
Bank establishes a violation of this paragraph of the Agreement by Employee,
his attorneys, immediate family, accountants, or financial advisors, or others
to whom


 


13

















 


Employee
disclosed information in violation of the terms of this Agreement.  The Bank shall be entitled to injunctive
relief without the need for posting a bond and shall also be entitled to
recover from Employee the amount of attorneys’ fees and costs incurred by the
Bank in enforcing the provisions of this paragraph.


 


8.             Continued
Cooperation


 


Employee
agrees that he will cooperate fully with the Bank in the future regarding any
matters in which he was involved during the course of his employment, and in
the defense or prosecution of any claims or actions now in existence or which
may be brought or threatened in the future against or on behalf of the
Bank.  Employee’s cooperation in
connection with such matters, actions and claims shall include, without
limitation, being available to meet with the Bank’s officials regarding
personnel or commercial matters in which he was involved; to prepare for any
proceeding (including, without limitation, depositions, consultation, discovery
or trial); to provide affidavits; to assist with any audit, inspection,
proceeding or other inquiry; and to act as a witness in connection with any
litigation or other legal proceeding affecting the Bank.  Employee further agrees that should he be
contacted (directly or indirectly) by any person or entity adverse to the Bank,
he shall within 48 hours notify the then-current Chairman of the Board of the
Bank.  Employee shall be reimbursed for
any reasonable costs and expenses incurred in connection with providing such
cooperation.


 


9.             Entire Agreement; Modification of
Agreement


 


Except
as otherwise expressly noted herein, this Agreement constitutes the entire
understanding of the parties and supersedes all prior discussions,
understandings, and agreements of every nature between them relating to the
matters addressed herein.  Accordingly,
no representation, promise, or inducement not included or incorporated by
reference in this Agreement shall be binding upon the parties.  Employee affirms that the only consideration
for the signing of this Agreement are the terms set forth above and that no
other promises or assurances of any kind have been made to him by the Bank or
any other entity or person as an inducement for him to sign this Agreement.  This Agreement may not be changed orally, but
only by an agreement in writing signed by the parties or their respective
heirs, legal representatives, successors, and assigns.


 


10.          Partial Invalidity


 


The
parties agree that the provisions of this Agreement and any paragraphs,
subsections, sentences, or provisions thereof shall be deemed severable and
that the invalidity or unenforceability of any paragraph, subsection, sentence,
or provision shall not affect the validity or enforceability of the remainder
of the Agreement.


 


11.          Waiver


 


The
waiver of the breach of any term or provision of this Agreement shall not
operate as or be construed to be a waiver of any other subsequent breach of
this Agreement.


 


12.          Successors and Assigns


 


This
Agreement shall inure to and be binding upon the Bank and Employee, their
respective heirs, legal representatives, successors, and assigns.


 


13.          Governing Law


 


This
Agreement shall be construed in accordance with the laws of the state of South
Carolina and any applicable federal laws.


 


14.          Headings


 


The
headings or titles of sections and subsections of this Agreement are for
convenience and reference only and do not constitute a part of this Agreement.


 


14

















 


15.          Notice


 


Any
notice or communication required or permitted under this Agreement shall be
made in writing and sent by certified mail, return receipt requested, addressed
as follows:


 


	
  If
  to Employee:

  	
   

  	
  [INSERT]

  
	
   

  	
   

  	
   

  
	
  If
  to the Bank:

  	
   

  	
  [INSERT]

  



 


16.          Representations:  Employee acknowledges that:


 


a)            He has read this Agreement
and understands its meaning and effect.


 


b)            He has knowingly and
voluntarily entered into this Agreement of his own free will.


 


c)                                      By signing this
Agreement, Employee has waived, to the full extent permitted by law, all claims
against the Bank based on any actions taken by the Bank up to the date of the
signing of this Agreement, and the Bank may plead this Agreement as a complete
defense to any claim the Employee may assert.


 


d)                                     He would not
otherwise be entitled to the consideration described in this Agreement, and
that the Bank is providing such consideration in return for Employee’s
agreement to be bound by the terms of this Agreement.


 


e)             He has been advised to
consult with an attorney before signing this Agreement.


 


f)             He has been given up to 21
days to consider the terms of this Agreement.


 


g)                                      He has seven
days, after Employee has signed the Agreement and it has been received by the
Bank, to revoke it by notifying the Chairman of the Board of his intent to
revoke acceptance.  For such revocation
to be effective, the notice of revocation must be received no later than 5:00 p.m.
on the seventh day after the signed Agreement is received by the Bank.  This Agreement shall not become effective or
enforceable until the revocation period has expired.


 


h)                                     He is not
waiving or releasing any rights or claims that may arise after the date the
Employee signs this Agreement.


 


	
  As
  to Employee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Charles
  A. Kirby

  
	
   

  	
   

  	
   

  
	
  As
  to the Bank:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  E.
  Daniel Scott, Chairman of the Board

  



 


15