Exhibit
10.4

    [First
Reliance Bancshares Letterhead]

    


    FORM
OF SENIOR EXECUTIVE OFFICER LETTER AGREEMENT

    


    March __,
2009

    


    Via Hand
Delivery

    [Name of
Senior Executive Officer]

     [Title
of Senior Executive Officer]

     2170
West Palmetto Street

    Florence,
SC  29501

    


    Dear
______________________,

    


              First
Reliance Bancshares (the “Company”) anticipates entering into a Securities
Purchase Agreement (the “Investment Agreement”), with the United States
Department of Treasury (the “Treasury”) that provides for the Company’s
participation in the Treasury’s TARP Capital Purchase Program (the
“CPP”).  If the Company does not participate in the CPP, this letter
shall be of no further force and effect.  If the Company ceases at any
time to participate in the CPP, this letter shall only be in effect to the
extent required by the Treasury with respect to compensation earned or paid
during the period the Treasury holds preferred stock of the Company (the “CPP
Covered Period”).

    


              For
the Company to participate in the CPP, and as a condition to the closing of the
investment contemplated by the Investment Agreement, the Company is required to
establish specified standards for incentive compensation payable to its senior
executive officers and certain highly compensated employees and to make changes
to its compensation arrangements.  To comply with these requirements,
and in consideration of the benefits that you will receive as a result of the
Company’s participation in the CPP, you agree as follows:

    


    
      	
              1.

            	
              No Golden Parachute
      Payments.  So long as you are an SEO or one of the next
      five most highly compensated employees of the Company, you are prohibited
      from receiving any Golden Parachute Payment from the Company during any
      CPP Covered Period.

            


    

    


    
      	
              2.

            	
              Recovery of Bonus and
      Incentive Compensation.  Any bonus and incentive
      compensation paid to you during a CPP Covered Period is subject to
      recovery or “clawback” by the Company if the payments were based on
      materially inaccurate financial statements or any other materially
      inaccurate performance metric
criteria.

            


    

    


    
      	
              3.

            	
              Compensation Program
      Amendments.  Each of the Company’s compensation, bonus,
      incentive, deferred compensation and other benefit plans, arrangements and
      agreements (including golden parachute, severance, change in control and
      employment agreements now in effect or adopted in the future)
      (collectively, “Benefit Plans”) with respect to you is hereby amended to
      the extent necessary to (a) give effect to Provisions 1, 2, 3, and 4
      above, and (b) comply with Section 111 of EESA, as amended from time to
      time, and any guidance issued
thereunder.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              4.

            	
              Recovery of Prior
      Compensation of Bonus Payments.   So long as you are an
      SEO or more of the next 20 most highly compensated employees of the
      Company, if the Secretary of the Treasury determines that any bonus,
      retention award or other compensation paid to you by the Company prior to
      the enactment of the American Recovery and Reinvestment Act was
      inconsistent with the provisions of Section 111 of EESA, the TARP CPP or
      otherwise contrary to the public interest, the Secretary of Treasury will
      seek to negotiate with you and the Company for appropriate reimbursement
      to the Federal Government with respect to the bonus, retention award or
      other compensation in question.

            


    

    


               The
Company is also required to review its Benefit Plans to ensure that they do not
encourage Senior Executive Officers to take unnecessary and excessive risks that
threaten the value of the Company during the CPP Covered Period. To the extent
any such review requires revisions to any Benefit Plan with respect to you, you
and the Company agree to negotiate such changes promptly and in good faith so as
to not encourage unnecessary and excessive risks.

    


    The
letter shall be interpreted in light of the following definitions:

    


    
      	
               
      

            	
              a.

            	
              “Senior
      Executive Officer” or “SEO” means one of the Company’s “senior executive
      officers” as defined in subsection 111(a)(1) of the
  EESA

            


    

    


    
      	
               
      

            	
              b.

            	
              “Golden
      Parachute Payment” is used with the same meaning as in Section 111(a)(2)
      of EESA.

            


    

    


    
      	
               
      

            	
              c.

            	
              “EESA”
      means the Emergency Economic Stabilization Act of 2008, as amended from
      time to time, and as supplemented by guidance or regulation issued by the
      Treasury.

            


    

    


    
      	
               
      

            	
              d.

            	
              The
      term “Closing Date” means the date the transaction between the Company and
      the Treasury closes.

            


    

    


    
      	
               
      

            	
              e.

            	
              The
      term “Company” includes any TARP Recipient (as defined in
      Section 111(a)(3) of the EESA) treated as a single employer with the
      Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
      are also delivering a Waiver pursuant to the Investment Agreement, and, as
      between the Company and you, the term “employer” in that waiver will be
      deemed to mean the Company as used in this
  letter.

            


    

    


    
      	
               
      

            	
              f.

            	
              The
      term “CPP Covered Period” shall be limited by, and interpreted in a manner
      consistent with, Section 111(a)(5) of the
  EESA.

            


    

    


              Provisions
1, 2, 3 and 4 of this letter are intended to, and will be interpreted,
administered and construed to comply with Section 111 of the EESA and
guidance issued thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter). In the event that Section 111
of the EESA or any rules or regulations promulgated thereunder are inconsistent
with any of the terms above, Section 111 of the EESA and such rules and
regulations promulgated thereunder shall control. To the extent not subject to
federal law, this letter will be governed by and construed in accordance with
the laws of the State of South Carolina. This letter may be executed in two or
more counterparts, each of which will be deemed to be an original. A signature
transmitted by facsimile will be deemed an original signature.


    
      
         


      

      
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               The
Company’s Board of Directors appreciates the concessions you are making and
looks forward to your continued leadership during these financially turbulent
times.

    


    
      
        
          	
                  Yours
      sincerely,

                
	 
      
	
                  FIRST
      RELIANCE BANCSHARES, INC.

                
	 
      
	
                  By:

                	
                    

                


        

      

    

    


              Intending
to be legally bound, I agree with and accept the foregoing terms as of the date
set forth below.

    


    
      
        
          	 
      
	
                  [Name]

                


        

      

    

    


    
      
        
          	 
      
	
                  Date

                


        

      

    


    
      
         


      

      
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