Exhibit
10.25


First
Reliance Bank


Salary
Continuation Agreement





This Salary
Continuation Agreement (this “Agreement”) is entered into as of June 2,
2008, by and between First Reliance Bank, a South Carolina-chartered bank (the
“Bank”), and Craig Evans, an officer of the Bank (the “Executive”).





Whereas,
the Executive has, and will, contribute substantially to the Bank’s success and
the Bank desires that the Executive continue in its employ,





Whereas,
to encourage the Executive to remain a Bank employee, the Bank is willing to
provide to the Executive salary continuation benefits payable from the Bank’s
general assets,





Whereas,
none of the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or,
to the best knowledge of the Bank, is contemplated insofar as the Bank is
concerned, and





Whereas,
the parties hereto intend that this Agreement shall be considered an unfunded
arrangement maintained primarily to provide supplemental retirement benefits for
the Executive, and to be considered a non-qualified benefit plan for purposes of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).  The parties do not intend that this Agreement be
considered an employment agreement or contract.  The Executive is
fully advised of the Bank’s financial status.





Now
Therefore, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Executive and the Bank hereby agree as follows.





Article
1


Definitions





1.1           “Accrual Balance” means the
liability that should be accrued by the Bank under generally accepted accounting
principles (“GAAP”) for the Bank’s obligation to the Executive under this
Agreement, applying Accounting Principles Board Opinion No. 12, as amended by
Statement of Financial Accounting Standards No. 106.  The Accrual
Balance shall be calculated using a discount rate determined by the Plan
Administrator, resulting in an Accrual Balance at the Executive’s Normal
Retirement Age that is equal to the present value of the normal retirement
benefits.  The discount rate means the rate used by the Plan
Administrator to determine the Accrual Balance.  In its sole
discretion the Plan Administrator may adjust the discount rate to maintain the
rate within reasonable standards according to GAAP.





1.2           “Beneficiary” means each
designated person, or the estate of the deceased Executive, entitled to
benefits, if any, upon the death of the Executive, determined according to
Article 4.





1.3           “Beneficiary Designation Form”
means the form established from time to time by the Plan Administrator that the
Executive completes, signs, and returns to the Plan Administrator to designate
one or more Beneficiaries.








1.4           “Change in Control” means a
change in control as defined in Internal Revenue Code section 409A and rules,
regulations, and guidance of general application thereunder issued by the
Department of the Treasury, including –





(a)           Change in ownership: a change
in ownership of First Reliance Bancshares, Inc., a South Carolina corporation of
which the Bank is a wholly owned subsidiary, occurs on the date any one person
or group accumulates ownership of First Reliance Bancshares, Inc. stock
constituting more than 50% of the total fair market value or total voting power
of First Reliance Bancshares, Inc. stock, or





(b)           Change in effective control:
(x) any one person or
more than one person acting as a group acquires within a 12-month period
ownership of First Reliance Bancshares, Inc. stock possessing 30% or more of the
total voting power of First Reliance Bancshares, Inc., or (y) a majority of First
Reliance Bancshares, Inc.’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed in advance by
a majority of First Reliance Bancshares, Inc.’s board of directors,
or





(c)           Change in ownership of a substantial
portion of assets: a change in ownership of a substantial portion of
First Reliance Bancshares, Inc.’s assets occurs if in a 12-month period any one
person or more than one person acting as a group acquires from First Reliance
Bancshares, Inc. assets having a total gross fair market value equal to or
exceeding 40% of the total gross fair market value of all of First Reliance
Bancshares, Inc.’s assets immediately before the acquisition or
acquisitions.  For this purpose, gross fair market value means the
value of First Reliance Bancshares, Inc.’s assets, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
the assets.





1.5           “Code” means the Internal
Revenue Code of 1986, as amended, and rules, regulations, and guidance of
general application issued thereunder by the Department of the
Treasury.





1.6           “Disability”  means,
because of a medically determinable physical or mental impairment that can be
expected to result in death or that can be expected to last for a continuous
period of at least 12 months, (x) the Executive is unable to
engage in any substantial gainful activity, or (y) the Executive is receiving
income replacement benefits for a period of at least three months under an
accident and health plan of the employer.  Medical determination of
disability may be made either by the Social Security Administration or by the
provider of an accident or health plan covering employees of the
Bank.  Upon request of the Plan Administrator, the Executive must
submit proof to the Plan Administrator of the Social Security Administration’s
or provider’s determination.





1.7           “Early Termination” means
Separation from Service before Normal Retirement Age for reasons other than
death, Disability, or Termination with Cause.  Early Termination
excludes a Separation from Service governed by section 2.4.





1.8           “Effective Date” means January
1, 2009.





1.9           “Intentional,” for purposes of
this Agreement, no act or failure to act on the Executive’s part shall be deemed
to have been intentional if it was due primarily to an error in judgment or
negligence.  An act or failure to act on the Executive’s part shall be
considered intentional if it is not in good faith and if it is without a
reasonable belief that the action or failure to act is in the Bank’s best
interests.





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


2





1.11           “Plan Administrator” or “Administrator” means the plan
administrator described in Article 8.





1.12           “Plan Year” means a
twelve-month period commencing on January 1 and ending on December 31 of each
year.  The initial Plan Year shall commence on the effective date of
this Agreement.





1.13           “Separation from Service” means
separation from service as defined in Internal Revenue Code section 409A and
rules, regulations, and guidance of general application thereunder issued by the
Department of the Treasury, including termination for any reason of the
Executive’s service as an executive and independent contractor to the Bank and
any member of a controlled group, as defined in Code section 414, other than
because of a leave of absence approved by the Bank or the Executive’s
death.  For purposes of this Agreement, if there is a dispute about
the employment status of the Executive or the date of the Executive’s Separation
from Service, the Bank shall have the sole and absolute right to decide the
dispute unless a Change in Control shall have occurred.





1.14           “Termination” and Termination for
Cause” shall have the same meaning specified in any effective severance
or employment agreement existing on the date hereof or hereafter entered into
between the Executive and the Bank or between the Executive and First Reliance
Bancshares, Inc.





1.15           “Voluntary Termination with Good
Reason” means a voluntary Separation from Service by the Executive within
24 months after a Change in Control if the following conditions (x) and (y) are satisfied: (x) a voluntary Separation
from Service by the Executive will be considered a Voluntary Termination with
Good Reason if any of the following occur without the Executive’s advance
written consent –





1)           a
material diminution of the Executive’s base salary,





2)           a
material diminution of the Executive’s authority, duties, or
responsibilities,





3)           a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report,





4)           a
material diminution in the budget over which the Executive retains
authority,





5)           a
material change in the geographic location at which the Executive must perform
services for the Bank, or





6)           any
other action or inaction that constitutes a material breach by the Bank of the
agreement under which the Executive provides services to the Bank.





(y)           the
Executive must give notice to the Bank of the existence of one or more of the
conditions described in clause (x) within 90 days after the
initial existence of the condition, and the Bank shall have 30 days thereafter
to remedy the condition.  In addition, the Executive’s voluntary
termination because of the existence of one or more of the conditions described
in clause (x) must
occur within 24 months after the earlier of the initial existence of the
condition or the date of the Change in Control.




3


Article
2


Lifetime
Benefits





2.1           Normal
Retirement.  Unless Separation from Service occurs before
Normal Retirement Age, when the Executive attains Normal Retirement Age the Bank
shall pay to the Executive the benefit described in this section 2.1 instead of
any other benefit under this Agreement.  If the Executive’s Separation
from Service is a Termination with Cause or if this Agreement terminates under
Article 5, no further benefits shall be paid.





2.1.1         Amount of
benefit.  The annual benefit under this section 2.1 is
$87,678.





2.1.2         Payment of
benefit.  The Bank shall pay the annual benefit to the
Executive in 12 equal monthly installments on the first day of each month,
beginning with the month immediately after the month in which the Executive
attains Normal Retirement Age.  The annual benefit shall be paid to
the Executive for 15 years.





2.2           Early
Termination.  If Early Termination occurs both (x) on or after the date the
Executive attains age 55 and (y) after the Executive has
been continuously employed by the Bank for at least ten consecutive years when
Early Termination occurs, including employment before the Effective Date of this
Agreement, the Bank shall pay to the Executive the benefit described in this
section 2.2 instead of any other benefit under this Agreement.  If
Early Termination occurs before the Executive attains age 55 and before the
Executive has been continuously employed by the Bank for at least ten
consecutive years when Early Termination occurs, including employment before the
Effective Date of this Agreement, no benefit shall be payable under this section
2.2 or any other section of this Agreement.  Neither the Bank nor the
Executive shall be entitled to elect in the 24-month period after a Change in
Control between the benefit under this section 2.2 versus the benefit under
section 2.4.  If the Executive’s Separation from Service within 24
months after a Change in Control is an involuntary termination without Cause or
a Voluntary Termination with Good Reason, no benefit shall be payable under this
section 2.2 and the Executive shall instead be entitled to the benefit under
section 2.4 or, if the Executive first attained Normal Retirement Age, section
2.1.  No benefits shall be payable under this Agreement if the
Executive’s Separation from Service is a Termination with Cause or if this
Agreement terminates under Article 5.





2.2.1         Amount of
benefit.  The annual benefit under this section 2.2 is
calculated as the amount that fully amortizes the Accrual Balance existing at
the end of the month immediately before the month in which Separation from
Service occurs, amortizing that Accrual Balance over the period beginning with
the Executive’s Normal Retirement Age and taking into account interest at the
discount rate or rates established by the Plan Administrator.





2.2.2         Payment of
benefit.  Beginning with the later of (x) the seventh month after
the month in which the Executive’s Separation from Service occurs, or (y) the month immediately
after the month in which the Executive attains Normal Retirement Age, the Bank
shall pay the annual benefit to the Executive in equal monthly installments on
the first day of each month.  The annual benefit shall be paid to the
Executive for 15 years.





2.3           Disability.  Upon
Separation from Service because of Disability before Normal Retirement Age, the
Bank shall pay to the Executive the benefit described in this section 2.3
instead of any other benefit under this Agreement.





2.3.1         Amount of
benefit.   The annual benefit under this section 2.3 is
calculated as the amount that fully amortizes the Accrual Balance existing at
the end of the month immediately before the month in which Separation from
Service occurs, amortizing that Accrual Balance over 15 years and taking into
account interest at the discount rate or rates established by the Plan
Administrator.


4





2.3.2         Payment of
benefit.  Beginning with the later of (x) the seventh month after
the month in which the Executive’s Separation from Service occurs, or (y) the month immediately
after the month in which the Executive attains Normal Retirement Age, the Bank
shall pay the annual benefit to the Executive in 12 equal monthly installments
on the first day of each month.  The annual benefit shall be paid to
the Executive for 15 years.





2.4           Change in
Control.  If the Executive’s Separation from Service is a
termination by Bank other than a Termination for Cause or is a Voluntary
Termination with Good Reason, in either case within 24 months after a Change in
Control, the Bank shall pay to the Executive the benefit described in this
section 2.4 instead of any other benefit under this
Agreement.  Neither the Bank nor the Executive shall be entitled to
elect in the 24-month period after a Change in Control between the benefit under
this section 2.4 versus the Early Termination benefit under section
2.2.  If the Executive’s Separation from Service within 24 months
after a Change in Control is an involuntary termination without Cause or a
Voluntary Termination with Good Reason, no benefit shall be payable under
section 2.2 and the Executive shall instead be entitled to the benefit under
this section 2.4.  But if the Executive shall have attained Normal
Retirement Age when Separation from Service within 24 months after a Change in
Control occurs, whether Separation from Service is voluntary or involuntary for
any reason other than Termination for Cause, the Executive shall be entitled
solely to the benefit provided by section 2.1, not this section 2.4 or section
2.2.  No benefits shall be payable under this Agreement if the
Executive’s Separation from Service is a Termination with Cause or if this
Agreement terminates under Article 5.





2.4.1         Amount of
benefit.  The benefit under this section 2.4 is the Accrual
Balance maintained by the Bank as of the end of the month immediately before the
month in which Separation from Service occurs, plus interest to the date of
payment at a rate or rates determined by the Plan Administrator.





2.4.2         Payment of
benefit.  The Bank shall pay the benefit under this section 2.4
to the Executive in a single lump sum on the first day of the seventh month
after the month in which the Executive’s Separation from Service
occurs.





2.5           Lump-sum Payment of Normal Retirement
Benefit, Early Termination Benefit, or Disability Benefit Being Paid to the
Executive when a Change in Control Occurs.  If when a Change in
Control occurs the Executive is receiving the benefit under section 2.1, the
Bank shall pay the remaining salary continuation benefits to the Executive in a
single lump sum within three days after the Change in Control.  If
when a Change in Control occurs the Executive is receiving or is entitled at
Normal Retirement Age to receive the benefit under sections 2.2 or 2.3, the Bank
shall pay the remaining salary continuation benefits to the Executive in a
single lump sum on the later of (x) the third day after the
Change in Control or (y) the first day of the
seventh month after the month in which the Executive’s Separation from Service
occurs.  The lump-sum payment due to the Executive as a result of a
Change in Control shall be an amount equal to the Accrual Balance amount
corresponding to the particular benefit when the Change in Control
occurs.





2.6           Contradiction Between the Agreement
and Schedule A.  If there is a contradiction between this
Agreement and Schedule A attached hereto concerning the actual amount of a
particular benefit due to the Executive under sections 2.1, 2.2, 2.3, or 2.4
hereof, the amount of the benefit determined under this Agreement shall
control.  If the Plan Administrator changes the discount rate employed
for purposes of calculating the Accrual Balance, the Plan Administrator shall
prepare or cause to be prepared a revised Schedule A, which shall supersede and
replace any and all Schedules A previously prepared under or attached to this
Agreement.


5





2.7           Savings Clause Relating to Compliance
with Code Section 409A.  The Bank and Executive intend that
their exercise of authority or discretion under this Agreement shall comply with
Code section 409A, as amended.  Despite any contrary provision of this
Agreement, if when the Executive’s employment terminates the Executive is a
specified employee, as defined in Code section 409A, and if any payments under
Article 2 of this Agreement will result in additional tax or interest to the
Executive because of section 409A, the Executive shall not be entitled to the
payments under Article 2 until the earliest of (x) the date that is at least
six months after termination of the Executive’s employment for reasons other
than the Executive’s death, (y) the date of the
Executive’s death, or (z) any earlier date that does
not result in additional tax or interest to the Executive under section
409A.  If any provision of this Agreement would subject the Executive
to additional tax or interest under section 409A, the Bank shall reform the
provision.  However, the Bank shall maintain to the maximum extent
practicable the original intent of the applicable provision without subjecting
the Executive to additional tax or interest, and the Bank shall not be required
to incur any additional compensation expense as a result of the reformed
provision.





2.8           One Benefit
Only.  Despite anything to the contrary in this Agreement, the
Executive and Beneficiary are entitled to one benefit only under this Agreement,
which shall be determined by the first event to occur that is dealt with by this
Agreement.  Except as provided in section 2.5 or Article 3, subsequent
occurrence of events dealt with by this Agreement shall not entitle the
Executive or Beneficiary to other or additional benefits under this
Agreement.





Article
3


Death
Benefits





3.1           Death Before Separation from
Service.  Except as provided in section 5.2, if the Executive
dies before Separation from Service, the Executive’s Beneficiary shall be
entitled at the Executive’s death to an amount in cash equal to the Accrual
Balance existing at the Executive’s death.  If a benefit is payable to
the Executive’s Beneficiary under this section 3.1, the benefit shall be paid in
a single lump 90 days after the Executive’s death.  However, no
benefits under this Agreement shall be paid or payable to the Executive or the
Executive’s Beneficiary if this Agreement is terminated under Article
5.





3.2           Death after Separation from
Service.  If the Executive dies after Separation from Service
and if Separation from Service was not a Termination with Cause, at the
Executive’s death the Executive’s Beneficiary shall be entitled to an amount in
cash equal to the Accrual Balance remaining at the Executive’s death, unless the
Change-in-Control benefit shall have previously been paid to the Executive under
section 2.4 or unless a Change-in-Control payout shall have occurred under
section 2.5.  If a benefit is payable to the Executive’s Beneficiary
under this section 3.2, the benefit shall be paid in a single lump sum 90 days
after the Executive’s death.  However, no benefits under this
Agreement shall be paid or payable to the Executive or the Executive’s
Beneficiary if this Agreement is terminated under Article 5.





Article
4


Beneficiaries





4.1           Beneficiary
Designations.  The Executive shall have the right to designate
at any time a Beneficiary to receive any benefits payable under this Agreement
at the Executive’s death.  The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designation under
any other benefit plan of the Bank in which the Executive
participates.


6





4.2           Beneficiary Designation:
Change.  The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form and delivering it to the
Plan Administrator or its designated agent.  The Executive’s
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Executive or if the Executive names a spouse as Beneficiary and
the marriage is subsequently dissolved.  The Executive shall have the
right to change a Beneficiary by completing, signing, and otherwise complying
with the terms of the Beneficiary Designation Form and the Plan Administrator’s
rules and procedures, as in effect from time to time.  Upon the
acceptance by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled.  The
Plan Administrator shall be entitled to rely on the last Beneficiary Designation
Form filed by the Executive and accepted by the Plan Administrator before the
Executive’s death.





4.3           Acknowledgment.  No
designation or change in designation of a Beneficiary shall be effective until
received, accepted, and acknowledged in writing by the Plan Administrator or its
designated agent.





4.4           No Beneficiary
Designation.  If the Executive dies without a valid beneficiary
designation or if all designated Beneficiaries predecease the Executive, the
Executive’s spouse shall be the designated Beneficiary.  If the
Executive has no surviving spouse the benefits shall be paid to the personal
representative of the Executive’s estate.





4.5           Facility of Payment. If a
benefit is payable to a minor, to a person declared incapacitated, or to a
person incapable of handling the disposition of his or her property, the Bank
may pay the benefit to the guardian, legal representative, or person having the
care or custody of the minor, incapacitated person, or incapable
person.  The Bank may require proof of incapacity, minority, or
guardianship as it may deem appropriate before distribution of the
benefit.  Distribution shall completely discharge the Bank from all
liability for the benefit.





Article
5


General
Limitations





5.1           Termination with
Cause.  Despite any contrary provision of this Agreement, the
Bank shall not pay any benefit under this Agreement and this Agreement shall
terminate if Separation from Service is a Termination with Cause.





5.2           Suicide or
Misstatement.  The Bank shall not pay any benefit under this
Agreement if the Executive commits suicide within two years after the date of
this Agreement or if the Executive makes any material misstatement of fact on
any application or resume provided to the Bank or on any application for
benefits provided by the Bank.





5.3           Removal.  If the
Executive is removed from office or permanently prohibited from participating in
the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations
of the Bank under this Agreement shall terminate as of the effective date of the
order.




7


5.4           Default.  Despite
any contrary provision of this Agreement, if the Bank is in “default” or “in
danger of default,” as those terms are defined in section 3(x) of the Federal
Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement
shall terminate.





5.5           FDIC Open-Bank
Assistance.  All obligations under this Agreement shall
terminate, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank, when the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Federal Deposit Insurance
Act section 13(c).  12 U.S.C. 1823(c).  Rights of the
parties that have already vested shall not be affected by such action,
however.





5.6           Covenant Not to
Compete.  Despite any contrary provision of this Agreement, the
Bank shall not pay any benefit under this Agreement and this Agreement shall
terminate if the Executive violates the covenant against competition set forth
in Article 9.





Article
6


Claims
and Review Procedures





6.1           Claims Procedure.  A
person or beneficiary (“claimant”) who has not received benefits under this
Agreement that he or she believes should be paid shall make a claim for such
benefits as follows –





6.1.1         Initiation – written
claim.  The claimant initiates a claim by submitting to the
Administrator a written claim for the benefits.  If the claim relates
to the contents of a notice received by the claimant, the claim must be made
within 60 days after the notice was received by the claimant.  All
other claims must be made within 180 days after the date of the event that
caused the claim to arise.  The claim must state with particularity
the determination desired by the claimant.





6.1.2         Timing of Bank
response.  The Bank shall respond to the claimant within 90
days after receiving the claim.  If the Bank determines that special
circumstances require additional time for processing the claim, the Bank may
extend the response period by an additional 90 days by notifying the claimant in
writing before the end of the initial 90-day period that an additional period is
required.  The notice of extension must state the special
circumstances and the date by which the Bank expects to render its
decision.





6.1.3         Notice of
decision.  If the Bank denies part or all of the claim, the
Bank shall notify the claimant in writing of the denial.  The Bank
shall write the notification in a manner calculated to be understood by the
claimant.  The notification shall set forth –





6.1.3.1
            the
      specific reasons for the denial,





6.1.3.2
            a
      reference to the specific provisions of the Agreement on which the denial
      is based,





6.1.3.3
            a
      description of any additional information or material necessary for the
      claimant to perfect the claim and an explanation of why it is
      needed,




8


6.1.3.4
            an
      explanation of the Agreement’s review procedures and the time limits
      applicable to such procedures, and





6.1.3.5
            a
      statement of the claimant’s right to bring a civil action under ERISA
      section 502(a) following an adverse benefit determination on
      review.





6.2           Review
Procedure.  If the Bank denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Bank of
the denial, as follows –





6.2.1         Initiation – written
request.  To initiate the review, the claimant, within 60 days
after receiving the Bank’s notice of denial, must file with the Bank a written
request for review.





6.2.2         Additional submissions – information
access.  The claimant shall then have the opportunity to submit
written comments, documents, records, and other information relating to the
claim.  The Bank shall also provide the claimant, upon request and
free of charge, reasonable access to and copies of all documents, records, and
other information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits.





6.2.3         Considerations on
review.  In considering the review, the Bank shall take into
account all materials and information the claimant submits relating to the
claim, without regard to whether the information was submitted or considered in
the initial benefit determination.





6.2.4         Timing of Bank
response.  The Bank shall respond in writing to the claimant
within 60 days after receiving the request for review.  If the Bank
determines that special circumstances require additional time for processing the
claim, the Bank may extend the response period by an additional 60 days by
notifying the claimant in writing before the end of the initial 60-day period
that an additional period is required.  The notice of extension must
state the special circumstances and the date by which the Bank expects to render
its decision.





6.2.5         Notice of
decision.  The Bank shall notify the claimant in writing of its
decision on review.  The Bank shall write the notification in a manner
calculated to be understood by the claimant.  The notification shall
set forth –





6.2.5.1
            the
      specific reason for the denial,





6.2.5.2
            a
      reference to the specific provisions of the Agreement on which the denial
      is based,





6.2.5.3
            a
      statement that the claimant is entitled to receive, upon request and free
      of charge, reasonable access to and copies of all documents, records, and
      other information relevant (as defined in applicable ERISA regulations) to
      the claimant’s claim for benefits,
and





6.2.5.4
            a
      statement of the claimant’s right to bring a civil action under ERISA
      section 502(a).




9


Article
7


Miscellaneous





7.1           Amendments and
Termination.  This Agreement may be amended solely by a written
agreement signed by the Bank and by the Executive, and except for termination
occurring under Article 5 this Agreement may be terminated solely by a written
agreement signed by the Bank and by the Executive.





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





7.3           No Guarantee of
Employment.  This Agreement is not an employment policy or
contract.  It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank’s right to discharge
the Executive.  It also does not require the Executive to remain an
employee or interfere with the Executive’s right to terminate employment at any
time.





7.4           Non-Transferability.  Benefits
under this Agreement may not be sold, transferred, assigned, pledged, attached,
or encumbered.





7.5           Successors; Binding
Agreement.  The Bank shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of the Bank, by an assumption
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform this Agreement had no
succession occurred.





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





7.7           Applicable
Law.  This 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.





7.8           Unfunded
Arrangement.  The Executive and Beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement.  The benefits represent the mere promise by the Bank to pay
benefits.  Rights to benefits are not subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors.  Any insurance on the Executive’s life is a
general asset of the Bank to which the Executive and Beneficiary have no
preferred or secured claim.





7.9           Entire
Agreement.  This Agreement constitutes the entire agreement
between the Bank and the Executive concerning the subject matter.  No
rights are granted to the Executive under this Agreement other than those
specifically set forth.





7.10         Severability.  If
any provision of this Agreement is held invalid, such invalidity shall not
affect any other provision of this Agreement not held invalid, and each such
other provision shall continue in full force and effect to the full extent
consistent with law.  If any provision of this Agreement is held
invalid in part, such invalidity shall not affect the remainder of the provision
not held invalid, and the remainder of such provision together with all other
provisions of this Agreement shall continue in full force and effect to the full
extent consistent with law.




10


7.11         Headings.  Caption
headings and subheadings herein are included solely for convenience of reference
and shall not affect the meaning or interpretation of any provision of this
Agreement.





7.12         Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party may
designate by like notice.  If to the Bank, notice shall be given to
the board of directors, First Reliance Bank, 2170 West Palmetto Street,
Florence, South Carolina 29501, or to such other or additional person or persons
as the Bank shall have designated to the Executive in writing.  If to
the Executive, notice shall be given to the Executive at the Executive’s address
appearing on the Bank’s records, or to such other or additional person or
persons as the Executive shall have designated to the Bank in
writing.





7.13         Payment of Legal
Fees.  The Bank is aware that after a Change in Control
management of the Bank could cause or attempt to cause the Bank to refuse to
comply with its obligations under this Agreement, or could institute or cause or
attempt to cause the Bank to institute litigation seeking to have this Agreement
declared unenforceable, or could take or attempt to take other action to deny
Executive the benefits intended under this Agreement.  In these
circumstances the purpose of this Agreement would be frustrated.  The
Bank desires that the Executive not be required to incur the expenses associated
with the enforcement of rights under this Agreement, whether by litigation or
other legal action, because the cost and expense thereof would substantially
detract from the benefits intended to be granted to the Executive
hereunder.  The Bank desires that the Executive not be forced to
negotiate settlement of rights under this Agreement under threat of incurring
expenses.  Accordingly, if after a Change in Control occurs it appears
to the Executive that (x) the Bank has failed to
comply with any of its obligations under this Agreement, or (y) the Bank or any other
person has taken any action to declare this Agreement void or unenforceable, or
instituted any litigation or other legal action designed to deny, diminish, or
to recover from the Executive the benefits intended to be provided to the
Executive hereunder, the Bank irrevocably authorizes the Executive from time to
time to retain counsel of the Executive’s choice, at the Bank’s expense as
provided in this section 7.13, to represent the Executive in the initiation or
defense of any litigation or other legal action, whether by or against the Bank
or any director, officer, stockholder, or other person affiliated with the Bank,
in any jurisdiction.  Despite any existing or previous attorney-client
relationship between the Bank and any counsel chosen by the Executive under this
section 7.13, the Bank irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel, and the Bank and the Executive
agree that a confidential relationship shall exist between the Executive and
that counsel.  The fees and expenses of counsel selected from time to
time by the Executive as provided in this section shall be paid or reimbursed to
the Executive by the Bank on a regular, periodic basis upon presentation by the
Executive of a statement or statements prepared by counsel in accordance with
counsel’s customary practices, up to a maximum aggregate amount of $100,000,
whether suit be brought or not, and whether or not incurred in trial,
bankruptcy, or appellate proceedings.  The Bank’s obligation to pay
the Executive’s legal fees provided by this section 7.13 operates separately
from and in addition to any legal fee reimbursement obligation the Bank may have
with the Executive under any separate employment, severance, or other agreement
between the Executive and the Bank.  Despite any contrary provision
within this Agreement however, the Bank shall not be required to pay or
reimburse the Executive’s legal expenses if doing so would violate section 18(k)
of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the
Federal Deposit Insurance Corporation [12 CFR 359.3].





11


Article
8


Administration
of Agreement





8.1           Plan Administrator
Duties.  This Agreement shall be administered by a Plan
Administrator consisting of the Bank’s board of directors or such committee or
person(s) as the board shall appoint.  The Executive may not be a
member of the Plan Administrator.  The Plan Administrator shall have
the discretion and authority to (x) make, amend, interpret,
and enforce all appropriate rules and regulations for the administration of this
Agreement and (y)
decide or resolve any and all questions that may arise, including
interpretations of this Agreement.





8.2           Agents.  In the
administration of this Agreement the Plan Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting
through a duly appointed representative) and may from time to time consult with
counsel, who may be counsel to the Bank.





8.3           Binding Effect of
Decisions.  The decision or action of the Plan Administrator
concerning any question arising out of the administration, interpretation, and
application of the Agreement and the rules and regulations promulgated hereunder
shall be final and conclusive and binding upon all persons having any interest
in the Agreement.  No Executive or Beneficiary shall be deemed to have
any right, vested or nonvested, regarding the continued use of any previously
adopted assumptions, including but not limited to the discount rate and
calculation method described in section 1.1.





8.4           Indemnity of Plan
Administrator.  The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages,
expenses, or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.





8.5           Bank
Information.  To enable the Plan Administrator to perform its
functions, the Bank shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circumstances of the
retirement, Disability, death, or Separation from Service of the Executive and
such other pertinent information as the Plan Administrator may reasonably
require.





Article
9


Competition
After Separation from Service





9.1           Covenant Not to Solicit
Employees.  The Executive agrees not to solicit the services of
any officer or employee of the Bank for one year after the Executive’s
Separation from Service.





9.2           Covenant Not to
Compete.  (a)  The Executive covenants and agrees
that the Executive will not, without advance written consent of the Bank,
compete directly or indirectly with the Bank for two years after Separation from
Service, plus any period during which the Executive is in violation of this
covenant not to compete and any period during which the Bank seeks by litigation
to enforce this covenant not to compete.  For purposes of this section
–





1)            the
term “compete” means





(a)           providing
financial products or services on behalf of any financial institution for any
person residing in the territory,




12


(b)           assisting
(other than through the performance of ministerial or clerical duties) any
financial institution in providing financial products or services to any person
residing in the territory, or





(c)           inducing
or attempting to induce any person who was a customer of the Bank at the date of
the Executive’s Separation from Service to seek financial products or services
from another financial institution.





2)           
the phrase “compete directly or indirectly” means –





(a)           acting
as a consultant, officer, director, independent contractor, incorporator,
organizer, or employee of any financial institution in competition with the Bank
in the territory, or





(b)           communicating
to such financial institution the names or addresses or any financial
information concerning any person who was a customer of the Bank at the
Executive’s Separation from Service.





3)
            the
      term “customer” means any person to whom the Bank is providing financial
      products or services on the date of the Executive’s Separation from
      Service.





4)
            the
      term “financial institution” means any bank, savings association, or bank
      or savings association holding company, or any other institution,
      including a financial institution in organization, the business of which
      is or will be engaging in activities that are financial in nature or
      incidental to such financial activities as described in section 4(k) of
      the Bank Holding Company Act of 1956, other than the Bank or any of its
      affiliated corporations.





5)
            “financial
      product or service” means any product or service that a financial
      institution or a financial holding company could offer by engaging in any
      activity that is financial in nature or incidental to such a financial
      activity under section 4(k) of the Bank Holding Company Act of 1956 and
      that is offered by the Bank or an affiliate on the date of the Executive’s
      Separation from Service, including but not limited to banking activities
      and activities that are closely related to and a proper incident to
      banking.





6)
            the
      term “person” means any individual or individuals, corporation,
      partnership, fiduciary or
association.





7)
            the
      term “territory” means the State of South Carolina.  Executive
      agrees to this territory since he is a senior officer with
      responsibilities over all offices and is involved in plans and decisions
      for future expansion of the Bank.





(b)           If
any provision of this section or any word, phrase, clause, sentence or other
portion thereof (including, without limitation, the geographical and temporal
restrictions contained therein) is held to be unenforceable or invalid for any
reason, the unenforceable or invalid provision or portion shall be modified or
deleted so that the provisions hereof, as modified, are legal and enforceable to
the fullest extent permitted under applicable law.




13


9.3           Remedies.  Because
of the unique character of the services to be rendered by the Executive
hereunder, the Executive understands that the Bank would not have an adequate
remedy at law for the material breach or threatened breach by the Executive of
any one or more of the Executive’s covenants set forth in this Article
9.  Accordingly, the Executive agrees that the Bank’s remedies for a
material breach or threatened breach of this Article 9 include but are not
limited to (x)
forfeiture of any money representing accrued salary, contingent payments, or
other fringe benefits due and payable to the Executive, (y) forfeiture of any benefits
under this Agreement, and (z) a suit in equity by the
Bank to enjoin the Executive from the breach or threatened breach of such
covenants.  The Executive hereby waives the claim or defense that an
adequate remedy at law is available to the Bank and the Executive agrees not to
urge in any such action the claim or defense that an adequate remedy at law
exists.  Nothing herein shall be construed to prohibit the Bank from
pursuing any other remedies for the breach or threatened breach.





9.4           Article 9 Survives
Termination.  The rights and obligations set forth in this
Article 9 shall survive termination of this Agreement.





9.5           Article 9 Not Affected by Other
Agreements.  This Article 9 shall apply to this Agreement and
benefits received thereunder regardless of any other covenants not to compete
contained in any employment agreement or any other agreement between Executive
and the Bank or between Executive and First Reliance Bancshares,
Inc.








In Witness
Whereof, the Executive and a duly authorized officer of the Bank have
executed this Salary Continuation Agreement as of the date first written
above.





Executive:
            
            Bank:First
      Reliance Bank/s/
      Craig Evans
            
            By:
            /s/
      F.R. SaundersCraig
      Evans
            
            
            F.R.
      SaundersIts:
      President and Chief Executive
Officer








And
      By:
            /s/
      Leonard A. HoogenboomLeonard
      A. HoogenboomIts:
            Chairman
      of the Board


14


Beneficiary
Designation


First
Reliance Bank


Salary
Continuation Agreement





I, Craig Evans, designate the following
as beneficiary of any death benefits under this Salary Continuation Agreement
–





Primary:.Contingent:.





Note:  To name a trust as
beneficiary, please provide the name of the trustee(s) and the exact name and
date of the trust agreement.





I understand that I may change these
beneficiary designations by filing a new written designation with the
Bank.  I further understand that the designations will be
automatically revoked if the beneficiary predeceases me, or if I have named my
spouse as beneficiary and our marriage is subsequently dissolved.





Signature:Craig
      EvansDate:
            ,
      2008








Accepted by the Bank this  day of , 2008





By:Print
      Name:Title:


15


Schedule
A


First
Reliance Bank


Salary
Continuation Agreement





Craig
Evans


Plan
      Year
            
            Plan
      Year ending December 31,
            
            age
      at Plan Year end
            
            Accrual
      Balance @ 6.25% (1)
            
            Early
      Termination annual benefit payable at Normal Retirement Age
      (2)
            
            Disability
      annual benefit payable at Normal Retirement Age (2)
            
            Change-in-Control
      benefit payable in a lump sum (3)1
            
            2009
            
            47
            
            $15,553
            
            0
            
            $4,739
            
            $15,5532
            
            2010
            
            48
            
            $33,107
            
            0
            
            $9,479
            
            $33,1073
            
            2011
            
            49
            
            $52,855
            
            0
            
            $14,218
            
            $52,8554
            
            2012
            
            50
            
            $75,007
            
            0
            
            $18,957
            
            $75,0075
            
            2013
            
            51
            
            $99,789
            
            0
            
            $23,697
            
            $99,7896
            
            2014
            
            52
            
            $127,449
            
            0
            
            $28,436
            
            $127,4497
            
            2015
            
            53
            
            $158,255
            
            0
            
            $33,175
            
            $158,2558
            
            2016
            
            54
            
            $192,496
            
            0
            
            $37,915
            
            $192,4969
            
            2017
            
            55
            
            $230,488
            
            0
            
            $42,654
            
            $230,48810
            
            2018
            
            56
            
            $272,570
            
            $47,394
            
            $47,394
            
            $272,57011
            
            2019
            
            57
            
            $319,113
            
            $52,133
            
            $52,133
            
            $319,11312
            
            2020
            
            58
            
            $370,515
            
            $56,872
            
            $56,872
            
            $370,51513
            
            2021
            
            59
            
            $427,209
            
            $61,612
            
            $61,612
            
            $427,20914
            
            2022
            
            60
            
            $489,664
            
            $66,351
            
            $66,351
            
            $489,66415
            
            2023
            
            61
            
            $558,386
            
            $71,090
            
            $71,090
            
            $558,38616
            
            2024
            
            62
            
            $633,923
            
            $75,830
            
            $75,830
            
            $633,92317
            
            2025
            
            63
            
            $716,866
            
            $80,569
            
            $80,569
            
            $716,86618
            
            2026
            
            64
            
            $807,857
            
            $85,308
            
            $85,308
            
            $807,85719
            
            2027
            
            65
            
            $856,585
      (4)
            
            $87,678
            
            $87,678
            
            $856,585








(1)           Calculations
are approximations.  Benefit calculations are based on prior year-end
accrual balances for illustrative purposes.  The accrual balance
reflects payment at the beginning of each month, beginning July 1,
2027.





(2)           The
Early Termination and Disability benefits are calculated as the annual amount
that fully amortizes the Accrual Balance existing at the end of the month
immediately before the month in which Separation from Service occurs, amortizing
that Accrual Balance over 15 years and taking into account interest at the
discount rate or rates established by the Plan Administrator.  Using a
standard discount rate, Early Termination and Disability benefits are shown for
illustrative purposes only.  The Early Termination and Disability
benefits shown assume the Executive’s Separation from Service occurs more than
six months before the Executive’s Normal Retirement Age and that the Early
Termination benefit and the Disability benefit therefore become payable
beginning in the month after the Executive attains the Normal Retirement
Age.


16





The Executive is entitled to no Early
Termination benefit unless (x) the Executive has attained
age 55 when Separation from Service occurs and (y) the Executive has at least
ten consecutive years of continuous employment with the Bank when Separation
from Service occurs.  For purposes of illustration only, this Schedule
A assumes the Executive has had ten consecutive years of continuous employment
with the Bank when the Executive attains age 55.  The Executive’s
service with the Bank actually began on June 2, 2008.  Accordingly,
the Executive is entitled to no Early Termination benefit unless Separation from
Service occurs ten or more years after that date.





(3)           The
Change-in-Control benefit is the Accrual Balance when Separation from Service
occurs if (x)
Separation from Service occurs within 24 months after a Change in Control and
(y) Separation from
Service is an involuntary termination without Cause or a Voluntary termination
with Good Reason.  Shown for illustrative purposes only, the
Change-in-Control benefit assumes the Executive’s Separation from Service occurs
on the day after the plan year end.





(4)           The
Executive’s date of birth is June 1, 1962.  The Executive attains
Normal Retirement Age on June 1, 2027.





If there is a contradiction between the
terms of the Agreement and Schedule A concerning the actual amount of a
particular benefit amount due the Executive under sections 2.1, 2.2, 2.3, or 2.4
of the Agreement, the actual amount of the benefit determined under the
Agreement shall control.  If the Plan Administrator changes the
discount rate employed for purposes of calculating the Accrual Balance, the Plan
Administrator shall prepare or cause to be prepared a revised Schedule A, which
shall supersede and replace any and all Schedules A previously prepared under or
attached to the Agreement.




17