Exhibit 10.3





 


 


 


Exhibit 10.3



EMPLOYMENT AGREEMENT


THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is made as of and effective on the   17th
 day of   November  , 2008 (the “Effective Date”) by and between
Southern First Bancshares, Inc. and Southern First Bank, National Association
(hereinafter collectively called “Employer” or the “Company”), having its
principal office at 100 Verdae Boulevard, Suite 100, Greenville, South Carolina
29607, and R. Arthur Seaver, Jr. (hereinafter called “Employee”), whose
residence address is 226 Northbrook Way, Greenville, South Carolina 29615.


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


 


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


            1.         Employment. 
Employer shall continue to employ
Employee, and Employee shall continue to serve Employer, as Chief Executive
Officer and in such capacity shall perform such duties as are consistent with
that position, and as Employer from time to time may direct.   Employee shall
also serve on the Boards of Directors of the Employer.  Employee shall have
such authority and responsibilities consistent with Employee’s position as are
set forth in Employer’s Bylaws or assigned by Employer’s Board of Directors (the
“Board”) from time to time.  Employee shall devote Employee’s full business
time, attention, skill and efforts to the performance of Employee’s duties
hereunder, except during periods of illness or periods of vacation and leaves
of absence consistent with Employer’s policy.  Such duties shall be performed
at Employer’s principal corporate offices or subsidiary offices as agreed upon
by Employer and Employee.  Employer reserves the right from time to time to
extend, curtail or change the title and duties of Employee.  Employee may
devote reasonable periods to service as a director or advisor to other
organizations, to charitable and community activities, and to managing
Employee’s personal investments; provided that such activities do not
materially interfere with the performance of Employee’s duties hereunder and
are not in conflict or competitive with, or adverse to, the interests of
Employer.


2.           
Term.  Unless earlier terminated as
provided in section 13 below, Employee’s employment under this Agreement shall
commence on the Effective Date and be for a term ending January 31, 2012 (the
“Term”).  At the end of January 2010 and on the last day of January each year
thereafter, the Term shall be extended for an additional one (1) year so that
the remaining Term shall continue to be three (3) years; provided that
Employer or Employee may at any time, by written notice, fix the Term to a
finite term of three (3) years commencing with the year of the notice. 
Notwithstanding the foregoing, the Term of employment hereunder will end on the
date that Employee attains the retirement age, if any, specified in the Bylaws
of the Employer for directors of the Employer.


 










 

 


3.           
Base
Salary.  For all services rendered by Employee under this
Agreement, Employer shall pay Employee a base salary of $240,000.00 per year
(the “Base Salary”).  Employee shall receive a minimum annual increase in
Employee’s Base Salary equal to the previous year’s Base Salary times the
increase in the Consumer Price Index during the previous year as stated in a
nationally recognized financial news source, such as the Wall Street Journal
(the “Mandatory Annual Increase”).  The Base Salary shall be reviewed annually
by the Board, and may be increased above the Mandatory Annual Increase,
beginning February 1 of each year, by the Board or a duly appointed committee
thereof, in its sole discretion.  The Base Salary shall be paid in accordance
with Employer’s standard payroll procedures, but in any case, no less
frequently than monthly.


            Notwithstanding
anything in this Agreement to the contrary, any payments to the Employee shall
be limited to the extent required under the United States Treasury Capital
Purchase Program (the "Program") and related regulations in the event
that the Employer participates in the Program.  The Employee agrees to such
amendments, agreements, or waivers that may be required by the United States
Treasury or requested by the Employer to comply with the terms of the Program. 


 


4.           
Benefits.


(a)        Employee shall be entitled, to the extent
that Employee’s position, title, tenure, salary, age, health and other
qualifications make Employee eligible, to participate in such pension, profit
sharing, bonus, life insurance, hospitalization, major medical, and other
employee benefit plans or programs of Employer currently in existence on the
date hereof or later established that generally are provided to executive
employees of Employer.  Employee’s participation in any such plan or program
shall be subject to the provisions, rules and regulations applicable thereto. 
Employer shall reimburse Employee, or pay directly, for Employee’s annual
medical insurance premium, to be paid by Employer to Employee, or paid
directly, within sixty (60) days of Employee’s written notice to Employer of
such expenses.  Any Company stock options or similar awards shall be issued to
Employee at an exercise price per share of not less than the fair market value
per share of the corresponding shares as of the date of grant and the number of
shares subject to such grant shall be fixed on such date.  Southern First Bank,
National Association, opened for business as Greenville First Bank, N.A. in
January 2000 (the “Opening Date”).  On each anniversary of the Opening Date,
Employee shall be eligible to receive a cash bonus equaling up to five percent
(5%) of the net pre-tax income of the Employer if the Employer achieves certain
performance levels as established from time to time by the Board.  Any and all
bonus payments made to Employee shall be paid by the earlier of: (i) seventy
(70) days after the previous year end for which the bonus was earned by
Employee and became a payable of Employer or (ii) with the first payroll cycle
following the Company’s press release announcing its previous year’s financial
performance. 


 


(b)        Employer
shall reimburse Employee, or pay directly, for a term life insurance policy
providing for death benefits totaling $300,000 payable to the Employee’s spouse
and heirs (and may provide for additional death benefits of up to $700,000
payable to the Employer), and the Employee shall cooperate with the Employer in
the securing and maintenance of such policy.  Employer shall reimburse
Employee, or pay directly, for such term life insurance policy within sixty
(60) days of Employee’s written notice to Employer of such expenses.  Employer
shall also pay for an accident liability policy on the Employee totaling
$1,000,000 to protect the Employer from damages or lawsuits resulting from
injuries to third parties caused by the Employee.


 




	
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(c)        At Employer’s election, Employer shall
provide Employee with either an automobile owned or leased by Employer of a
make and model appropriate to Employee’s status, or a $750 monthly automobile
allowance, paid in accordance with Employer’s standard payroll procedures, but
in any case, no less frequently than monthly.  If Employer provides Employee
with an automobile instead of a monthly automobile allowance, Employer shall
reimburse Employee for reasonable expenses associated with the automobile,
including, but not limited to, insurance, taxes, mileage, maintenance, etc., to
be paid within sixty (60) days of Employee’s written notice to Employer of such
expenses.  


 


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


 


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


 


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


 


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


 


8.        Ownership of Work Product.


 


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


 


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


 


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


 


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

 




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


 


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


 


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


 


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


 


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


 


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


 


9.         Protection of Trade Secrets
and Confidential Information.  


 




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


 


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


 


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


 


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


 


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


 




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


 


13.       Termination.


 


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


 


(i)           
upon the death of Employee;


 


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


 


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


 


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


 


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


 


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


 


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


                        


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


 


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

 




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


 


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


 


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


 


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


 


(e)        If Employee’s employment is terminated by
Employer without Cause, beginning on the date that is six (6) months and one
(1) day following the date of the Employee’s termination, and continuing on the
first day of the month for the next twelve (12) months, the Employer shall pay
to the Employee severance compensation in cash in an amount equal to one
hundred percent (100%) of the Employee’s Base Salary at the date of
termination.  Employer shall also pay Employee any bonus earned or accrued
through the date of termination.  Any bonus for previous years which was not
yet paid will be paid in a lump sum on the date that is six (6) months and one
(1) day following the date of the Employee’s termination.  Any bonus that is
earned in the year of the Employee’s termination will be paid on the later of:
(i) the date that is six (6) months and one (1) day following the date of the
Employee’s termination or (ii) with the first payroll cycle following the
Company’s press release announcing its financial performance for the year of
the Employee’s termination.  The restrictive covenants contained in sections
10, 11 and 12 shall not apply to Employee. 


 


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


 




	
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(i)         Employer shall pay Employee,
beginning on the date that is six (6) months and one (1) day following the date
of the Employee’s termination, and continuing on the first day of the month for
the next twelve (12) months, severance compensation in cash in an amount equal
to one hundred percent (100%) of the Employee’s Base Salary at the date of
termination.  Employer shall also pay Employee any bonus earned or accrued
through the date of termination.  Any bonus for previous years which was not
yet paid will be paid in a lump sum on the date that is six (6) months and one
(1) day following the date of the Employee’s termination.  Any bonus that is
earned in the year of the Employee’s termination will be paid on the later of:
(i) the date that is six (6) months and one (1) day following the date of the Employee’s
termination or (ii) with the first payroll cycle following the Company’s press
release announcing its financial performance for the year of the Employee’s
termination;


 


(ii)        for the period from the date
of termination through the date that Employee attains the age of sixty-five
(65) years (the “Continuation Period”), Employer shall at its expense continue
on behalf of Employee and Employee’s spouse, dependents and beneficiaries the
life insurance, disability, medical, dental, and hospitalization benefits
provided (x) to Employee at any time during the ninety (90) day period
prior to the Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of Employer during the
Continuation Period.  Such coverage and benefits (including deductibles and
costs) shall be no less favorable to Employee, Employee’s spouse, dependents
and beneficiaries than the most favorable of such coverages and benefits during
any of the periods referred to above.  Employer’s obligation hereunder with
respect to the foregoing benefits shall be limited to the extent that Employee
obtains any such benefits pursuant to a subsequent employer’s benefit plans, in
which case Employer may reduce the coverage of any benefits it is required to
provide Employee hereunder as long as the aggregate coverages and benefits of
the combined benefit plans is no less favorable to Employee than the coverages
and benefits required to be provided hereunder.  This subsection (ii) shall not
be interpreted so as to limit any benefits to which Employee, Employee’s
spouse, dependents or beneficiaries may be entitled under any of Employer’s
employee benefit plans, programs, or practices following Employee’s termination
of employment, including, without limitation, retiree medical and life
insurance benefits;


 


(iii)       the restrictions on any
outstanding incentive awards (including restricted stock) granted to Employee
under the Company’s or the Employer’s long-term equity incentive program or any
other incentive plan or arrangement shall lapse and become one hundred percent
(100%) vested and any Employee election rights thereto must be exercised
contemporaneously with the Change in Control;


 


(iv)       all stock options and stock
appreciation rights granted to Employee shall become immediately exercisable
and shall become one hundred percent (100%) vested and must be exercised, if
exercised, contemporaneously with the Change in Control;


 


(v)        all performance units granted
to Employee shall become one hundred percent (100%) vested and any compensation
associated with such units must be paid contemporaneously with the Change in
Control; and 


 


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


 




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


 


(h)        With the exceptions of the provisions of
this section 13, and the express terms of any benefit plan under which Employee
is a participant, it is agreed that, upon Employee’s Termination of Employment,
Employer shall have no obligation to Employee for, and Employee waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits).  Unless otherwise stated in this section 13, the effect of
termination on any outstanding incentive awards, stock options, stock
appreciation rights, performance units, or other incentives shall be governed
by the terms of the applicable benefit or incentive plan and/or the agreements
governing such incentives.  At the time of Termination of Employment, Employer
and Employee shall enter into a mutually satisfactory form of release
acknowledging such remaining obligations and discharging both parties, as well
as Employer’s officers, directors and employees with respect to their actions
for or on behalf of Employer, from any other claims or obligations arising out
of or in connection with Employee’s employment by Employer, including the
circumstances of such termination.


 


(i)         The parties intend that the severance
payments and other compensation provided for herein are reasonable compensation
for Employee’s services to Employer and shall not constitute “excess parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “I.R.C.”), and any regulations thereunder.  In the event that
Employer’s independent accountants acting as auditors for Employer on the date
of a Change in Control determine that the payments provided for herein
constitute “excess parachute payments,” then the compensation payable hereunder
shall be increased, on a tax gross-up basis, so as to reimburse Employee for
the tax payable by Employee, pursuant to Section 4999 of the I.R.C., on such
“excess parachute payments,” taking into account all taxes payable by Employee
with respect to such tax gross-up payments hereunder, so that Employee shall
be, after payment of all taxes, in the same financial position as if no taxes
under Section 4999 of I.R.C. had been imposed upon Employee.


 


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


 


15.      Governing Law.  This Agreement has
been entered into in the State of South Carolina and shall be governed by the
laws of such State 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.


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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

 




	
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26.       Certain Definitions. 


 


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


                        


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 




	
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Any event or condition described in clause (i) through
(vii) above which occurs prior to a Change in Control but which the Employee
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. 
Employee’s right to terminate Employee’s employment for Good Reason shall not
be affected by Employee’s incapacity due to physical or mental illness.


 


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


 


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


 


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


 


(g)        “Notice of Termination” shall mean a
written notice of termination from one party to the other which specifies an
effective date of termination, indicates the specific termination provision in
this Agreement relied upon, and, in the case of 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 Employee’s employment under the
provision so indicated.


 


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


 


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


 


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


 




	
  [Signatures appear on the
  following page.]
  

	 

	14

  









 










 


 


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


 


                                                                        EMPLOYER:


 


                                                                        SOUTHERN
FIRST BANK, 


NATIONAL ASSOCIATION


 


 


 


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


                                                                            
Name: James B. Orders, III


Attest:                                                                  
Title:  Member of the Board


 


 


                                                


Secretary


 


                                                                        SOUTHERN
FIRST BANCSHARES, INC.


 


 


 


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


                                                                            
Name: James B. Orders, III


Attest:                                                                  
Title:  Chairman of the Board


 


 


                                                


Secretary


            


                                                                        EMPLOYEE:


 


 


 


                                                                        _/s/R.
Arthur Seaver, Jr.        


                                                                        R.
Arthur Seaver, Jr.


 


 


 


 


 




	
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