**Exhibit 10.1**

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), made as of the 1st day ofApril, 2004, to be effective December 1, 2003 (the “Effective Date”) byand between Greenville First Bank, N.A. and Greenville First Bancshares, Inc.(hereinafter collectively called “Employer” or “Company”), having its principal office at 112 Haywood Road, Greenville,South Carolina 29607, and James M. Austin, III (hereinafter called “Employee”),whose residence address is 103 W Shallowstone Road/Greer/South Carolina/29650.

 

In consideration of the mutual covenants and promises herein made, theparties hereto agree as follows:

 

1.                                       Employment.  The Employer shall employ the Employee, andthe Employee shall serve the Employer, as Executive Vice President and theChief Financial Officer and in such capacity shall perform such duties as areconsistent with that position, and as Employer from time to time maydirect.  The Employee shall have suchauthority and responsibilities consistent with his position as are set forth inthe Company’s Bylaws or assigned by the Company’s Board of Directors (the“Board”) or Chief Executive Officer (CEO) from time to time.  The Employee shall devote his full businesstime, attention, skill and efforts to the performance of his duties hereunder,except during periods of illness or periods of vacation and leaves of absenceconsistent with the Employer’s policy. Such duties shall be performed at Employer’s principal corporate officesor subsidiary office as agreed upon by Employer and Employee. Employer reservesthe right from time to time to extend, curtail or change the title and dutiesof Employee.  The Employee may devotereasonable periods to service as a director or advisor to other organizations,to charitable and community activities, and to managing his personalinvestments; provided that such activities do not materially interferewith the performance of his duties hereunder and are not in conflict orcompetitive with, or adverse to, the interests of the Company.

 

2.                                       Term.  Unless earlier terminated as provided inSection 13 below, the Employee’s employment under this Agreement shallcommence on the Effective Date and be for a term ending January 31, 2006(the “Term”).  At the end ofJanuary 2005 and on the last day of January each year thereafter, theTerm shall be extended for an additional one (1) year so that the remainingterm shall continue to be two (2) years; provided that the Employer orthe Employee may at any time, by written notice, fix the Term to a finite termof two (2) years commencing with the year of the notice.

 

3.                                       BaseSalary.  For all services renderedby Employee under this Agreement, Employer shall pay Employee a base salary of$135,000.00 per year, which may be increased from the previous base annualsalary beginning February 1 of each year (the “Base Salary”).  The base salary shall be reviewed annuallyby the Employer’s Board of Directors (the “Board”), and may be increased by theBoard, or a duly appointed Committee thereof, in its sole discretion.  The Base Salary shall be payable inaccordance with the salary practices of the employer.

 

4.                                       Benefits.

 

(a)                                  Employeeshall be entitled, to the extent that Employee’s position, title, tenure,salary, age, health and other qualifications make him eligible, to participatein such pension, profit sharing, bonus, life insurance, hospitalization, majormedical, and other employee benefit plans or programs of Employer currently inexistence on the date hereof or later established that generally are provided to

 

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executive employees of the Company. Employee’s participation in any such plan or program shall be subject tothe provisions, rules and regulations applicable thereto.

 

(b) At the Company’s election, the Company shall provide the Employeewith either an automobile owned or leased by the Company of a make and modelappropriate to the Employee’s status, or a $500 monthly automobileallowance.  If the Company provides theEmployee with an automobile, the Company shall provide for reasonable expensesassociated with the automobile, including, but not limited to insurance, taxes,mileage, maintenance, etc.

 

5.                                       WorkingFacilities.  Employee shall befurnished with an office and such other facilities and services as may benecessary or suitable to his position and adequate for the performance of hisduties.

 

6.                                       Expenses.  Employee is authorized to incur reasonableexpenses for promoting the business of Employer, including expenses forentertainment, travel and similar items, but only to the extent that such expensesare allowable deductions to Employer on its Federal income tax return,excluding those expenses for which there is a fifty percent (50%) tax deductionlimitation for entertainment, travel and similar items.  Employer shall promptly reimburse Employeefor all such expenses upon the presentation by Employee, from time to time, ofan itemized account of such expenditures. Employee shall repay to Employer the amounts of any expenses claimedwhich, for lack of proper documentation or otherwise, are not allowed toEmployer as deductions for Federal income tax purposes.

 

7.                                       Vacations.  Employee shall be entitled each fiscal yearto twenty (20) days paid days off granted by Employer to employees of similartenure and compensation rank, pursuant to Employer’s paid days off policy.  Employer reserves the right to modify thisand any other personnel policy from time to time.

 

8.                                       Ownershipof Work Product.

 

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

 

(b)                                 Ifany of the Work Product may not, by operation of law, be considered work madefor hire by Employee for Employer (or if ownership of all right, title andinterest of the intellectual property rights therein shall not otherwise vestexclusively in Employer), Employee agrees to assign, and upon creation thereofautomatically assigns, without further consideration, the ownership of all WorkProduct to Employer, its successors and assigns.

 

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

 

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

 

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

 

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

 

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

 

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

 

Employer shall reimburse all reasonable out-of-pocket expenses incurredby Employee at Employer’s request in connection with the foregoing.

 

(3)                                  Forpurposes hereof, “Work Product” shall mean all intellectual property rights,including all Trade Secrets, U.S. and international copyrights, patentableinventions, discoveries and improvements, and other intellectual propertyrights, in any programming, documentation, technology or other work productthat relates to the business and interests of Employer and that Employeeconceives, develops, or delivers to Employer at any time during the term ofEmployee’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 ofthe products or systems (including development and support systems) of Employerto the extent Employee conceived, developed or delivered such Work Product toEmployer prior to the date of this Agreement while Employee was engaged as anindependent contractor or employee of Employer.  Employee hereby irrevocably relinquishes for the benefit ofEmployer and its assigns any moral rights in the Work Product recognized byapplicable law.

 

9.                                       Protectionof Trade Secrets and Confidential Information.

 

(a)                                  Throughexercise of his rights and performance of his obligations under this Agreement,Employee will be exposed to “Trade Secrets” and “Confidential Information” (asthose terms are defined below).  “TradeSecrets” shall mean information or data of or about Employer or any Affiliates,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 actualor potential customers, clients, distributors, or licensees, that: (i) deriveeconomic value, actual or potential, from not being generally known to, and notbeing readily ascertainable by proper means by, other persons who can obtaineconomic value from their disclosure or use; and (ii) are the subject ofefforts that are reasonable under the circumstances to maintain their secrecy.  To the extent that the foregoing definitionis inconsistent with the definition of “trade secret” mandated under applicablelaw, the latter definition shall govern for purposes of interpreting Employee’sobligations under this Agreement. Except as required to perform his obligations under this Agreement, orexcept with Employer’s prior written permission, Employee shall not use,redistribute, market, publish, disclose or divulge to any other person orentity 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 shallcontinue to constitute a Trade Secret under applicable law.  Employee agrees to cooperate with any andall confidentiality requirements of Employer, and Employee shall immediatelynotify Employer of any unauthorized disclosure or use of any Trade Secrets ofwhich Employee becomes aware.

 

(b)                                 Employeeagrees to maintain in strict confidence and, except as necessary to perform hisduties for Employer, not to use or disclose any Confidential Information at anytime, either during the term of his employment or for a period of one yearafter Employee’s last date of employment, so long as the pertinent data orinformation remains Confidential Information. “Confidential Information” shall mean any non-public information of acompetitively sensitive or personal nature, other than Trade Secrets, acquiredby Employee during his employment, relating to Employer or Employer’s business,operations, customers, suppliers, products, employees, financial affairs orindustrial practices.  Notwithstandinganything herein to the contrary, no obligation or liability shall accruehereunder with respect to any information that is or becomes publicly availablewithout the fault of Employee.

 

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(c)                                  Employeewill abide by Employer’s policies and regulations, as established from time totime, 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 toEmployer or its Affiliated entities shall be and remain the sole property ofEmployer and/or such Affiliated entity. Employee agrees, upon the request of Employer, and in any event upontermination of his employment, to turn over all copies of all media, records,documentation, etc., pertaining to Employer (together with a written statementcertifying as to his compliance with the foregoing).

 

10.                                 Non-Solicitationof Customers.  During the term ofhis employment with Employer, and for a period of one (1) year thereafter,Employee shall not directly or indirectly solicit any individual or entitywhich was a customer or client of Employer for the purpose of providing aservice or product to such customer or client which is the same type of serviceor product offered or provided by Employer; provided, however, that thisrestriction shall apply only to those customers or clients with whom Employeehad contact in connection with services or products provided by Employer withintwo (2) years prior to the date of termination of such employment.

 

11.                                 Non-Solicitationof Employees.  During the term ofEmployee’s employment with Employer, and for a period of one (1) year followingthe termination of Employee’s employment with Employer or the resignation ofEmployee (the “Non-Solicitation Period”), Employee shall not, directly orindirectly, induce or solicit for employment any employee of Employer for thepurpose of providing services that are the same or similar to the types ofservices offered or engaged in by Employer at the time of termination ofEmployee’s employment with Employer.

 

12.                                 Non-CompetitionAgreement.  During Employee’semployment with Employer and for a period of one (1) year thereafter, Employeeshall not (without the prior written consent of Employer) compete with Employeror any of its subsidiaries, directly or indirectly, engage in forming, servingas an organizer, director, officer of, employee or agent, or consultant to, oracquiring or maintaining more than a 1% passive investment in, a depositoryfinancial institution or holding company thereof if such depository institutionor holding company has one or more offices or branches located within thirty(30) miles of any office or branch of Employer in existence at the timeEmployee’s employment with Employer is terminated (the “Territory”).  Notwithstanding the foregoing, Employee mayserve as an officer of or consultant to a depository institution or holdingcompany thereof even though such institution operates one or more offices orbranches in the Territory, if Employee’s employment does not directly involve,in whole or in part, the depository financial institution’s or holdingcompany’s operations in the Territory.  

 

13.                                 Termination.

 

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

 

(i)                                     upon the death ofthe Employee;

 

(ii)                                  upon the disabilityof the Employee for a period of one hundred and eighty (180) days which, in theopinion of the Board of Directors, renders him unable to perform the essentialfunctions of his job and for which reasonable accommodation is unavailable.  For purposes of this Agreement, a“disability” is defined as a physical or mental impairment that substantiallylimits one or more major life activities, and a “reasonable accommodation” isone that does not impose an undue hardship on the Employer;

 

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(iii)                               by the Employer forCause upon delivery of a Notice of Termination to the Employee;

 

(iv)                              by the Employee for GoodReason upon delivery of a Notice of Termination to the Employer within a ninety(90) day period beginning on the thirtieth (30th) day after theoccurrence of a Change in Control or within a ninety (90) day period beginningon the one (1) year anniversary of the occurrence of a Change in Control; and

 

(v)                                 by the Employeeeffective upon the thirtieth (30th) day after delivery of a Noticeof Termination.

 

(b)                                 Ifthe Employee’s employment is terminated because of the Employee’s death, theEmployee’s estate shall receive any sums due him as base salary and/orreimbursement of expenses through the end of the month during which deathoccurred, plus any bonus earned or accrued through the date of death (includingany amounts awarded for previous years but which were not yet paid).

 

(c)                                  Duringthe period of any incapacity leading up to the termination of the Employee’semployment as a result of disability, the Employer shall continue to pay theEmployee his full base salary at the rate then in effect and all perquisitesand other benefits (other than any bonus) until the Employee becomes eligiblefor benefits under any long-term disability plan or insurance programmaintained by the Employer; provided that the amount of any suchpayments to the Employee shall be reduced by the sum of the amounts, if any,payable to the Employee for the same period under any disability benefit orpension plan of the Employer or any of its subsidiaries. Furthermore, theEmployee shall receive any bonus earned or accrued through the date ofincapacity (including any amounts awarded for previous years but which were notyet paid).

 

(d)                                 Ifthe Employee’s employment is terminated for Cause as provided above, or if theEmployee resigns, the Employee shall receive any sums due him as base salaryand/or reimbursement of expenses through the date of such termination.

 

(e)                                  Ifthe Employee’s employment is terminated by the Employee pursuant to clause (iv)of Section 13(a), in addition to other rights and remedies available inlaw or equity, the Employee shall be entitled to the following:

 

(i)                                     the Employer shallpay the Employee severance compensation in an amount equal to 100% of his thencurrent monthly base salary each month for twelve (12) months from his date oftermination, plus any bonus earned or accrued through the date of termination(including any amounts awarded for previous years but which were not yet paid).

 

(ii)                                  for the period fromthe date of termination through the date that the Employee attains the age ofsixty-five (65) (the “Continuation Period”), the Employer shall at its expensecontinue on behalf of the Employee and his dependents and beneficiaries thelife insurance, disability, medical, dental, and hospitalization benefitsprovided (x) to the Employee at any time during the ninety (90) day periodprior to the Change in Control or at any time thereafter or (y) to othersimilarly situated executives who continue in the employ of the Employer duringthe Continuation Period. Such coverage and benefits (including deductibles andcosts) shall be no less favorable to the Employee and his dependents andbeneficiaries than the most favorable of such coverages and benefits during anyof the periods referred to above.  TheEmployer’s obligation hereunder with respect to the foregoing benefits shall belimited to the extent that the Employee obtains any such benefits pursuant to asubsequent employer’s benefit plans, in which case the Employer may reduce thecoverage of any benefits it is required to provide the Employee hereunder

 

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as long as the aggregate coverages and benefits of the combined benefitplans is no less favorable to the Employee than the coverages and benefitsrequired to be provided hereunder.  Thissubsection (ii) shall not be interpreted so as to limit any benefits to whichthe Employee or his dependents or beneficiaries may be entitled under any ofthe Employer’s employee benefit plans, programs, or practices following theEmployee’s termination of employment, including, without limitation, retireemedical and life insurance benefits; and

 

(iii)                               the restrictions on anyoutstanding incentive awards (including restricted stock) granted to theEmployee under the Company’s, or the holding company thereof, long-term equityincentive program or any other incentive plan or arrangement shall lapse andbecome 100% vested, all stock options and stock appreciation rights granted tothe Employee shall become immediately exercisable and shall become 100% vested,all performance units granted to the Employee shall become 100% vested, and therestrictive covenants contained in Sections 10, 11 and 12 shall not apply tothe Employee.

 

(f)                                    Ifthe Employer terminates the Employee’s employment other than pursuant toclauses (i), (ii), (iii) or (v) of Section 13(a), the Employer shall payto the Employee severance compensation in an amount equal to 100% of his thencurrent monthly base salary each month for twelve (12)  months from the date of termination, plusany bonus earned or accrued through the date of termination (including anyamounts awarded for previous years but which were not yet paid).

 

(g)                                 Withthe exceptions of the provisions of this Section 13, and the express termsof any benefit plan under which the Employee is a participant, it is agreedthat, upon termination of the Employee’s employment, the Employer shall have noobligation to the Employee for, and the Employee waives and relinquishes, anyfurther compensation or benefits (exclusive of COBRA benefits).  At the time of termination of employment,the Employer and the Employee shall enter into a mutually satisfactory form ofrelease acknowledging such remaining obligations and discharging both parties,as well as the Employer’s officers, directors and employees with respect totheir actions for or on behalf of the Employer, from any other claims orobligations arising out of or in connection with the Employee’s employment bythe Employer, including the circumstances of such termination.

 

(h)                                 Theparties intend that the severance payments and other compensation provided forherein are reasonable compensation for the Employee’s services to the Employerand shall not constitute “excess parachute payments” within the meaning ofSection 280G of the Internal Revenue Code of 1986 and any regulationsthereunder.  In the event that the Employer’sindependent accountants acting as auditors for the Employer on the date of aChange in Control determine that the payments provided for herein constitute“excess parachute payments,” then the compensation payable hereunder shall beincreased, on a tax gross-up basis, so as to reimburse the Employee for the taxpayable by the Employee, pursuant to Section 4999 of the Internal RevenueCode, on such “excess parachute payments,” taking into account all taxespayable by the Employee with respect to such tax gross-up payments hereunder,so that the Employee shall be, after payment of all taxes, in the samefinancial position as if no taxes under Section 4999 had been imposed uponhim.

 

14.                                 OralModification Not Binding.  ThisAgreement supersedes all prior agreements and understandings between the partiesand may not be changed or terminated orally, and no change or attempted waiverof the provisions hereof shall be binding unless in writing and signed by theparty against whom the same is sought to be enforced; provided, however, thatEmployee’s compensation may be increased at any time by Employer without in anyway affecting any of the other terms and conditions of this Agreement, which inall other respects shall remain in full force and effect.

 

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15.                                 GoverningLaw.  This Agreement has beenentered into in the State of South Carolina and shall be governed by the lawsof such State.

 

16.                                 Remediesfor Breach.                                Employeerecognizes and agrees that a breach by Employee of any covenant contained inthis Agreement would cause immeasurable and irreparable harm to Employer.  In the event of a breach or threatenedbreach of any covenant contained herein, Employer shall be entitled totemporary and permanent injunctive relief, restraining Employee from violatingor threatening to violate any covenant contained herein, as well as all costsand fees incurred by Employer, including attorneys’ fees, as a result ofEmployee’s breach or threatened breach of the covenant.  Employer and Employee agree that the reliefdescribed herein is in addition to such other and further relief as may beavailable to Employer at equity or by law. Nothing herein shall be construed as prohibiting Employer from pursuingany other remedies available to it for such breach of threatened breach,including the recovery of damages from Employee.

 

17.                                 Consideration.  Employee acknowledges and agrees that validconsideration has been given to Employee by Employer in return for the promisesof Employee set forth herein.

 

18.                                 Covenantsare Independent.  The covenants onthe part of Employee contained herein shall each be construed as agreementsindependent of each other and of any other provisions in this Agreement and theunenforceability of one shall not effect the remaining covenants.

 

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

 

20.                                 Extensionof Periods.  Each of the timeperiods described in this Agreement shall be automatically extended by anylength of time during which Employee is in breach of the corresponding covenantcontained herein.  The provisions ofthis Agreement shall continue in full force and effect throughout the durationof the extended periods.

 

21.                                 ReasonableRestraint.  It is agreed by theparties that the foregoing covenants in this agreement are necessary for thelegitimate business interests of Employer and impose a reasonable restrainingon Employee in light of the activities and business of Employer on the date ofthe execution of this Agreement.

 

22.                                 Withholdingof Taxes.  Employer may withholdfrom any amounts payable to Employee under this Agreement all federal, state,city or other taxes and withholdings as shall be required pursuant to anyapplicable law, rule or regulation.

 

23.                                 Notices.  Any notice required or permitted to be givenunder this Agreement shall be sufficient if given in writing and sent byregistered or certified mail to his residence in the case of Employee or to itsprincipal office in the case of Employer.

 

24.                                 Assignment.  The rights and obligations of the parties tothis Agreement shall inure to the benefit of and shall be binding upon thesuccessors and assigns of Employer. This Agreement shall not be terminated by any merger or consolidationwhether or not Employer is the consolidated or surviving corporation or bytransfer of all or substantially all of the assets of Employer to anothercorporation if there is a surviving or resulting corporation in such transfer.

 

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

 

26.                                 CertainDefinitions.

 

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

 

(b)                                 “Cause”shall consist of any of (A) the commission by the Employee of a willful act(including, without limitation, a dishonest or fraudulent act) or a grosslynegligent act, or the willful or grossly negligent omission to act by theEmployee, which is intended to cause, causes or is reasonably likely to causematerial harm to the Employer (including harm to its business reputation), (B)the indictment of the Employee for the commission or perpetration by theEmployee of any felony or any crime involving dishonesty, moral turpitude orfraud, (C) the material breach by the Employee of this Agreement that, ifsusceptible of cure, remains uncured ten (10) days following written notice tothe Employee of such breach, (D) the receipt of any form of notice, written orotherwise, that any regulatory agency having jurisdiction over the Employerintends to institute any form of formal or informal (e.g., a memorandum ofunderstanding which relates to the Employee’s performance) regulatory actionagainst the Employee or the Employer or the Employer (provided that theBoard of Directors determines in good faith, with the Employee abstaining fromparticipating in the consideration of and vote on the matter, that the subjectmatter of such action involves acts or omissions by or under the supervision ofthe Employee or that termination of the Employee would materially advance theEmployer’s compliance with the purpose of the action or would materially assistthe Employer in avoiding or reducing the restrictions or adverse effects to theEmployer related to the regulatory action); (E) the exhibition by the Employeeof a standard of behavior within the scope of his employment that is materiallydisruptive to the orderly conduct of the Employer’s business operations (including,without limitation, substance abuse or sexual misconduct) to a level which, inthe Board of Directors’ good faith and reasonable judgment, with the Employeeabstaining from participating in the consideration of and vote on the matter,is materially detrimental to the Employer’s best interest, that, if susceptibleof cure remains uncured ten (10) days following written notice to the Employeeof such specific inappropriate behavior; or (F) the failure of the Employee todevote his full business time and attention to his employment as provided underthis Agreement that, if susceptible of cure, remains uncured thirty (30) daysfollowing written notice to the Employee of such failure.

 

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

 

(i)                                     The individualswho, as of the date of this Agreement, are members of the Board of Directors ofthe Employer (the “Incumbent Board”) cease for any reason to constitute atleast fifty percent of the Board of Directors of the Employer; provided,however, that if the election, or nomination for election by theEmployer’s shareholders, of any new director was approved in advance by a voteof at least fifty percent of the Incumbent Board, such new director shall, forpurposes of this Agreement, be considered as a member of the Incumbent Board; provided,further, that no individual shall be considered a member of theIncumbent Board if such individual initially assumed office as a result ofeither an actual or threatened “Election Contest” (as described in Rule 14a-11promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), orother actual or threatened solicitation of proxies or consents by or on behalf ofany person other than the Board of

 

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Directors of the Employer (a “Proxy Contest”), including by reason ofany agreement intended to avoid or settle any Election Contest or ProxyContest.

 

(ii)                                  An acquisition (otherthan directly from the Employer) of any voting securities of the Employer (the“Voting Securities”) by any “Person” (as the term “person” is used for purposesof Section 13(d) or 14(d) of the Exchange Act) immediately after whichsuch Person has “Beneficial Ownership” (within the meaning of Rule 13d-3promulgated under the Exchange Act) of 20% or more of the combined voting powerof the Employer’s then outstanding Voting Securities; provided, however,that in determining whether a Change in Control has occurred, Voting Securitieswhich are acquired in a Non-Control Acquisition shall not constitute anacquisition which would cause a Change in Control.

 

(iii)                               Approval by theshareholders of the Employer of:  (i) amerger, consolidation, or reorganization involving the Employer; (ii) acomplete liquidation or dissolution of the Employer; or (iii) an agreement forthe sale or other disposition of all or substantially all of the assets of theEmployer to any Person (other than a transfer to a Subsidiary).

 

(iv)                              A notice of anapplication is filed with 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, the OCC, theFederal Deposit Insurance Corporation, or any other regulatory authority forpermission to acquire control of the Employer or any of its bankingsubsidiaries.

 

(e)                                  “GoodReason” shall mean the occurrence after a Change in Control of any of theevents or conditions described in subsections (i) through (viii) hereof:

 

(i)                                     a change in theEmployee’s status, title, position or responsibilities (including reportingresponsibilities) which, in the Employee’s reasonable judgment, represents anadverse change from his status, title, position or responsibilities as ineffect at any time within ninety (90) days preceding the date of a Change inControl or at any time thereafter; the assignment to the Employee of any dutiesor responsibilities which, in the Employee’s reasonable judgment, areinconsistent with his status, title, position or responsibilities as in effectat any time within ninety (90) days preceding the date of a Change in Controlor at any time thereafter; any removal of the Employee from or failure toreappoint or reelect him to any of such offices or positions, except inconnection with the termination of his employment for Disability or Cause, as aresult of his death, or by the Employee other than for Good Reason, or anyother change in condition or circumstances that in the Employee’s reasonablejudgment makes it materially more difficult for the Employee to carry out theduties and responsibilities of his office than existed at any time withinninety (90) days preceding the date of Change in Control or at any timethereafter;

 

(ii)           areduction in the Employee’s base salary or any failure to pay the Employee anycompensation or benefits to which he is entitled within five (5) days of thedate due;

 

(iii)                               the Employer’s requiringthe Employee to be based at any place outside a 30-mile radius from theexecutive offices occupied by the Employee immediately prior to the Change inControl, except for reasonably required travel on the Employer’s business whichis not materially greater than such travel requirements prior to the Change inControl;

 

(iv)                              the failure by theEmployer to (A) continue in effect (without reduction in benefit level and/orreward opportunities) any material compensation or employee benefit plan inwhich the Employee was participating at any time within ninety (90) dayspreceding the date of a Change in

 

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Control or at any time thereafter, unless such plan is replaced with aplan that provides substantially equivalent compensation or benefits to theEmployee, or (B) provide the Employee with compensation and benefits, in theaggregate, at least equal (in terms of benefit levels and/or rewardopportunities) to those provided for under each other employee benefit plan,program and practice in which the Employee was participating at any time withinninety (90) days preceding the date of a Change in Control or at any timethereafter;

 

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

 

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

 

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

 

(viii)                        the failure of the Employer toobtain an agreement, satisfactory to the Employee, from any successor or assignto assume and agree to perform this Agreement, as contemplated inSection 11 hereof.

 

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

 

(g)                                 “Non-ControlTransaction”  shall mean atransaction described below:

 

(i)                                     the shareholdersof the Employer, immediately before such merger, consolidation orreorganization, own, directly or indirectly, immediately following such merger,consolidation or reorganization, at least 50% of the combined voting power ofthe outstanding voting securities of the corporation resulting from suchmerger, consolidation or reorganization (the “Surviving Corporation”) insubstantially the same proportion as their ownership of the Voting Securitiesimmediately before such merger, consolidation or reorganization; and

 

(ii)                                  immediately followingsuch merger, consolidation or reorganization, the number of directors on theboard of directors of the Surviving Corporation who were members of theIncumbent Board shall at least equal the number of directors who wereaffiliated with or appointed by the other party to the merger, consolidation orreorganization.

 

(h)                                 “Noticeof Termination” shall mean a written notice of termination from theEmployer of the Employee which specifies an effective date of termination,indicates the specific termination provision in this Agreement relied upon, andsets forth in reasonable detail the facts and circumstances claimed to providea basis for termination of the Employee’s employment under the provision soindicated.

 

27.                                 EntireAgreement.  This Agreementsupersedes any other agreements, oral or written, between the parties with respectto the subject matter hereof, and contains all of the agreements andunderstandings between the parties with respect to the employment of Employeeby Employer.  Any waiver or modificationof any term of this Agreement shall be effective only if it is set forth inwriting signed by all parties hereto.

 

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28.                                 GenderNeutrality.  The terms “he,” “him,”“his,” and “himself,” where used in this Agreement, shall refer to both themasculine and feminine genders, as may be appropriate.

 

29.                                 Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall be deemed to be an original but all ofwhich together will constitute one and the same Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the date first above written on this 12th day of May, 2004.

 
|                 |   | EMPLOYER:                         |                                         |
|----------------------|--------|-----------------------------------|----------------------------------------------|
|                 |   |                              |                                         |   |
|                 |   | GREENVILLE FIRST BANK, N.A.       |                                         |
|                 |   |                              |                                         |   |
|                 |   |                              |                                         |
| [CORPORATE SEAL]     |   | By:                               |  /s/ R. Arthur Seaver, Jr.              |   |
|                 |   |                              | Name: R. Arthur Seaver, Jr.                  |
| Attest:              |   |                              | Title: President and Chief Executive Officer |
|                 |   |                              |                                         |   |
|                 |   |                              |                                         |   |
| /s/ Fred Gilmer, Jr. |   |                              |                                         |   |
| Secretary            |   |                              |                                         |   |
|                 |   |                              |                                         |   |
|                 |   | GREENVILLE FIRST BANCSHARES, INC. |
|                 |   |                              |                                         |   |
|                 |   |                              |                                         |   |
| [CORPORATE SEAL]     |   | By:                               |  /s/ R. Arthur Seaver, Jr.              |   |
|                 |   |                              | Name: R. Arthur Seaver, Jr.                  |
| Attest:              |   |                              | Title: President and Chief Executive Officer |
|                 |   |                              |                                         |   |
|                 |   |                              |                                         |   |
| /s/ Fred Gilmer, Jr. |   |                              |                                         |   |
| Secretary            |   |                              |                                         |   |
|                 |   |                              |                                         |   |
|                 |   | EMPLOYEE:                         |
|                 |   |                              |                                         |
|                 |   |                              |                                         |
|                 |   | /s/ James M. Austin, III          |                                         |
|                 |   | James M. Austin, III              |
|                      |        |                                   |                                              |  |  |  |  |

 

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