Document:

Exhibit 10.7

EMPLOYMENT AGREEMENT

          This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into effective as of this           day of                                , 2006, by and among First Reliance Bancshares, Inc., a South Carolina corporation (the “Corporation”), First Reliance Bank, a bank chartered under South Carolina law and a wholly owned subsidiary of the Corporation (the “Bank”), and F.R. Saunders Jr., President and Chief Executive Officer of the Corporation and the Bank (the “Executive”).  The Corporation and the Bank are referred to in this Agreement individually and together as the

“Employer.”

          WHEREAS, the Executive is the President and Chief Executive Officer of the Corporation and the Bank, possessing unique skills, knowledge, and experience relating to their business, and the Executive has made and is expected to continue to make major contributions to the profitability, growth, and financial strength of the Corporation and affiliates,

          WHEREAS, the Executive and the Employer are parties to an August 2001 Executive Employment Agreement, but the Executive and the Employer intend that this Agreement supersede and replace the Executive Employment Agreement in its entirety, and

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

          NOW THEREFORE, in consideration of these premises, 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.

ARTICLE 1
 EMPLOYMENT

          1.1          Employment.  The Employer hereby employs the Executive to serve as President and Chief Executive Officer according to the terms and conditions of this Agreement and for the period stated in section 1.3.  The Executive hereby accepts employment according to the terms and conditions of this Agreement and for the period stated in section 1.3.

          1.2          Duties.  As President and Chief Executive Officer, the Executive shall serve under the direction of the Employer’s board of directors and in accordance with the Employer’s Articles of Incorporation and Bylaws, as each may be amended or restated from time to time.  The Executive shall report directly to the board of directors.  The Executive shall serve the Employer faithfully, diligently, competently, and to the best of the Executive’s ability.  The Executive shall exclusively devote full working time, energy, and attention to the business of the Employer and to the promotion of the Employer’s interests throughout the term of this Agreement.  Without the written consent of the board of directors of each of the Corporation and the Bank, during the term of this Agreement the Executive
shall not render services to or for any person, firm, corporation, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and regardless of whether it is paid directly or indirectly to the Executive.  Nothing in this section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

          1.3          Term.  The initial term of employment under this Agreement shall be three years, commencing                                 , 2006.  The term of this Agreement shall automatically be extended at the end of each month for one additional month unless the Bank’s board of directors determines that the term shall not be extended.  If the board of directors decides not to extend the term, the board shall promptly notify the Executive in writing, but this Agreement shall nevertheless remain in force until its current term expires.  The board’s decision not to extend the term shall not – by itself – give the Executive any rights
under this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4 or 5.  References herein to the term of this Agreement mean the initial term, as the same may be extended.  Unless sooner terminated, the Executive’s employment and the term of this Agreement shall terminate when the Executive attains age 65.

          1.4          Service on the Board of Directors.  The Executive is currently serving as a director of each of the Corporation and the Bank.  The Corporation shall nominate the Executive for election as a director at such times as necessary so that the Executive will, if elected by stockholders, remain a director of the Corporation throughout the term of this Agreement.  The Executive hereby consents to serving as a director and to being named as a director of the Corporation in documents filed with the Securities and Exchange Commission.  The board of directors of each of the Corporation and the Bank shall undertake every lawful effort to ensure that the Executive continues throughout the term of his employment to be elected or reelected as a director of the Bank.  The Executive shall be deemed to have resigned as a
director of each of the Corporation and the Bank effective immediately after termination of the Executive’s employment under Article 3 of this Agreement, regardless of whether the Executive submits a formal, written resignation as director.

ARTICLE 2
 COMPENSATION AND BENEFITS

          2.1          Base Salary.  In consideration of the Executive’s performance of the obligations under this Agreement, the Employer shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $275,000, payable in bi-weekly installments or otherwise according to the Employer’s regular pay practices.  The Executive’s salary shall be reviewed annually by the Employer’s board of directors or the board’s Compensation Committee.  The Executive’s salary shall be increased no more frequently than annually to account for cost of living increases.  At the discretion of the Compensation Committee, the Executive’s salary also may be increased beyond the amount necessary to account for cost of living increases.  However, the Executive’s salary shall not be
reduced.  All compensation under this Agreement shall be subject to customary withholding taxes and such other employment taxes as are imposed by law.  The Executive’s salary, as the same may be increased from time to time, is referred to in this Agreement as the “Base Salary.”

          2.2          Benefit Plans and Perquisites.  For as long as the Executive is employed by the Employer the Executive shall be entitled (x) to participate in any and all officer or employee compensation, bonus, incentive, and benefit plans in effect from time to time, including without limitation plans providing pension, retirement, medical, dental, disability, and group life benefits and including stock-based compensation, incentive, bonus, or purchase plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any such plans or benefits, and (y) to receive any and all other fringe benefits provided from time to time, including the following fringe benefits –

          (a)          Club dues.  The Employer shall pay or cause to be paid the Executive’s initiation and membership assessments and dues in civic and social clubs of the Executive’s choice.  The Executive shall be solely responsible for personal expenses for use of the civic and clubs.

          (b)          Reimbursement of business expenses.  The Executive shall be entitled to reimbursement for all reasonable business expenses incurred performing the obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Employer and reasonable expenses for attendance at annual and other periodic meetings of trade associations.

          (c)          Use of automobile.  The Executive shall have the use of an automobile titled in the Employer’s name for use by the Executive to carry out the Executive’s duties, the insurance and maintenance expenses of which shall be paid by the Employer.  As additional compensation, the Executive may use such automobile for personal purposes, provided that the Executive renders an accounting of business and personal use to the Employer in accordance with regulations under the Internal Revenue Code of 1986, as amended.

          (d)          Long-term care insurance.  The Employer shall purchase and maintain long-term care insurance for the benefit of the Executive, which policy shall be fully paid no later than the date on which the Executive attains age 65, provided the Executive remains employed by the Employer to age 65.  The long-term care insurance policy shall be owned by the Executive exclusively.  If before attaining age 65 the Executive’s employment terminates involuntarily but without Cause, voluntarily but with Good Reason, or because of disability, the Executive’s right to the long-term care insurance benefit under this section 2.2(d) shall be determined under section 4.5.

          (e)          Disability insurance.  The Employer shall reimburse the Executive for the Executive’s cost to purchase and maintain disability insurance coverage.  The amount reimbursed by the Employer shall be grossed up to compensate the Executive for federal and state income taxes imposed as a result of the Employer’s reimbursement of the Executive’s cost.  The disability insurance policy shall be owned by the Executive exclusively.

          2.3          Salary Continuation Agreement.  The Bank and the Executive have entered into a Salary Continuation Agreement and accompanying Endorsement Split Dollar Agreement dated as of                                       , 2006.  Unless the Salary Continuation Agreement or the Endorsement Split Dollar Agreement explicitly provides otherwise, whether benefits are properly payable to the Executive under the Salary Continuation Agreement or to the Executive’s beneficiary(ies) under the Endorsement Split Dollar Agreement shall be determined solely by reference to those agreements, as the same may be amended.

          2.4          Vacation.  The Executive shall be entitled to sick leave and paid annual vacation in accordance with policies established from time to time by the Employer.

          2.5          Indemnification and Insurance.  (a)  Indemnification.  The Employer shall indemnify the Executive or cause the Executive to be indemnified for the Executive’s activities as a director, officer, employee, or agent of the Employer or as a person who is serving or has served at the request of the Employer (a “representative”) as a director, officer, employee, agent, or trustee of an affiliated corporation, joint venture trust or other enterprise, domestic or foreign, in which the Employer has a direct or indirect ownership interest against expenses (including without limitation attorneys’ fees, judgments, fines, and amounts paid in settlement) actually and reasonably incurred (“Expenses”) in connection with any claim against the Executive that is the
subject of any threatened, pending, or completed action, suit, or other type of proceeding, whether civil, criminal, administrative, investigative, or otherwise and whether formal or informal (a “Proceeding”), to which the Executive was, is, or is threatened to be made a party by reason of the Executive being or having been such a director, officer, employee, agent, or representative.

          The indemnification provided herein shall not be exclusive of any other indemnification or right to which the Executive may be entitled and shall continue after the Executive has ceased to occupy a position as an officer, director, employee, agent or representative with respect to Proceedings relating to or arising out of the Executive’s acts or omissions during the Executive’s service in such position.  The benefits provided to the Executive under this Agreement for the Executive’s service as a representative shall be payable if and only if and only to the extent that reimbursement to the Executive by the affiliated entity with which the Executive has served as a representative, whether pursuant to agreement, applicable law, articles of incorporation or association, by-laws or regulations of the entity, or insurance maintained by such affiliated entity, is insufficient to
compensate the Executive for Expenses actually incurred and otherwise payable by the Employer under this Agreement.  Any payments in fact made to or on behalf of the Executive directly or indirectly by the affiliated entity with which the Executive served as a representative shall reduce the obligation of the Employer hereunder.

          (b)          Exclusions.  Anything herein to the contrary notwithstanding, however, nothing in this section 2.5 requires indemnification, reimbursement, or payment by the Employer, and the Executive shall not be entitled to demand indemnification, reimbursement or payment –

	
  
 
  	
  
              (1)          if   and to the extent indemnification, reimbursement, or payment constitutes a   “prohibited indemnification payment” within the meaning of Federal Deposit   Insurance Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)], or
  
	
   
  	
  
 
  
	
  
 
  	
  
              (2)          for   any claim or any part thereof for which the Executive shall have been   determined by a court of competent jurisdiction, from which no appeal is or   can be taken, by clear and convincing evidence, to have acted with deliberate   intent to cause injury to the Employer or with reckless disregard for the   best interests of the Employer, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
              (3)          for   any claim or any part thereof arising under section 16(b) of the Securities   Exchange Act of 1934 as a result of which the Executive is required to pay   any penalty, fine, settlement, or judgment, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
              (4)          for   any obligation of the Executive based upon or attributable to the Executive   gaining in fact any personal gain, profit, or advantage to which the   Executive was not entitled, or
  
	
   
  	
  
 
  
	
  
 
  	
  
              (5)          any   proceeding initiated by the Executive without the consent or authorization of   the Employer’s board of directors, but this exclusion shall not apply with   respect to any claims brought by the Executive (x) to enforce the   Executive’s rights under this Agreement, or (y) in any Proceeding   initiated by another person or entity whether or not such claims were brought   by the Executive against a person or entity who was otherwise a party to such   proceeding.
  

          (c)          Insurance.  The Employer shall maintain or cause to be maintained liability insurance covering the Executive throughout the term of this Agreement.

ARTICLE 3
 EMPLOYMENT TERMINATION

          3.1          Termination by the Employer.  (a)  Death or Disability.  The Executive’s employment shall terminate automatically on the date of the Executive’s death.  If the Executive dies in active service to the Employer, for twelve months after the Executive’s death the Employer shall assist the Executive’s family with continuing health care coverage under COBRA substantially identical to that provided for the Executive before death.  By delivery of written notice 30 days in advance to the Executive, the Employer may terminate the Executive’s employment if the Executive is disabled.  For purposes of this Agreement the Executive shall be considered “disabled” if an independent physician selected by the Employer and reasonably acceptable to the Executive or
the Executive’s legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of 90 consecutive days.  The Executive shall not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Employer gives notice of termination due to disability.

          (b)          Termination Without Cause.  With written notice to the Executive 60 days in advance, the Employer may terminate the Executive’s employment without Cause.

          (c)          Termination with Cause.  The Employer may terminate the Executive’s employment with Cause.  The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution duly adopted at a meeting of the board of directors called and held for such purpose, which resolution shall (x) contain findings that, in the good faith opinion of the board, the Executive has committed an act constituting Cause, and (y) specify the particulars thereof.  The resolution of the board of directors shall be deemed to have been duly adopted if and only if it is adopted by the affirmative vote of a majority of the directors of the Employer then in office, excluding the Executive, at a meeting duly called and held for that purpose. 
Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the board’s meeting.  The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board at the meeting.  Nothing in this Agreement limits the Executive’s or beneficiaries’ right to contest the validity or propriety of the board’s determination of Cause.

          (d)          Definition of Cause.  For purposes of this Agreement, “Cause” means any of the following –

	
   
  	
  
                1)          an   act of fraud, embezzlement, or theft by the Executive in the course of   employment,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                2)          intentional   violation of any law or significant policy of the Employer or an affiliate,   which in the Employer’s sole judgement causes material harm to the Employer   or affiliate, regardless of whether the violation leads to criminal   prosecution or conviction.  For   purposes of this Agreement, applicable laws include any statute, rule,   regulatory order, statement of policy, or final cease-and-desist order of any   governmental agency or body having regulatory authority over the Employer,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                3)          the   Executive’s gross negligence in the performance of the Executive’s duties,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                4)          intentional   wrongful damage by the Executive to the business or property of the Employer   or its affiliates, including without limitation the reputation of the   Employer, which in the Employer’s sole judgment causes material harm to the   Employer.  For purposes of this Agreement,   no act or failure to act on the part of the Executive shall be deemed to have   been intentional if it was due primarily to an error in judgment or   negligence.  An act or failure to act   on the Executive’s part shall be considered intentional if it is not in good   faith and if it is without a reasonable belief that the action or failure to   act is in the best interests of the Employer,
  
	
   
  	
  
 
  
	
  
 
  	
  
                5)          a   breach by the Executive of fiduciary duties or misconduct involving   dishonesty, in either case whether in the Executive’s capacity as an officer   or as a director of the Employer,
  

	
  
 
  	
  
                6)          a   breach by the Executive of this Agreement that in the sole judgment of the   Employer is a material breach, which breach is not corrected by the Executive   within 10 days after receiving written notice of the breach,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                7)          removal   of the Executive from office or permanent prohibition of the Executive from   participating in the Employer’s affairs by an order issued under section   8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4)   or (g)(1),
  
	
   
  	
  
 
  
	
  
 
  	
  
                8)          the   occurrence of any event that results in the Executive being excluded from   coverage, or having coverage limited for the Executive as compared to other   executives of the Employer, under the Employer’s blanket bond or other   fidelity or insurance policy covering its directors, officers, or employees,   or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                9)          conviction   of the Executive for or plea of no contest to a felony or conviction of or   plea of no contest to a misdemeanor involving moral turpitude, or the actual   incarceration of the Executive for seven consecutive days or more.
  

          3.2          Termination by the Executive.  The Executive may terminate employment with written notice to the Bank 60 days in advance, whether with or without Good Reason.  If the Executive terminates with Good Reason, the termination will take effect at the end of the 60-day period unless the event or circumstance constituting Good Reason is cured by the Employer or unless the notice of termination for Good Reason is revoked by the Executive within the 60-day period.  For purposes of this Agreement, “Good Reason” means any of the following events occur without the Executive’s written consent –

          (a)          reduction of the Executive’s Base Salary,

          (b)          reduction of the Executive’s bonus, incentive, and other compensation award opportunities under the Employer’s benefit plans, unless a company-wide reduction of all officers’ award opportunities occurs simultaneously, or termination of the Executive’s participation in any officer or employee benefit plan maintained by the Employer, unless the plan is terminated because of changes in law or loss of tax deductibility to the Employer for contributions to the plan, or unless the plan is terminated as a matter of Employer policy applied equally to all participants in the plan,

          (c)          (x) assignment to the Executive of duties that are materially inconsistent with the Executive’s position as the Employer’s principal executive officer or that represent a reduction of the Executive’s authority, (y) failure to appoint or reappoint the Executive as President and Chief Executive Officer of the Employer, or (z) failure to nominate the Executive as a director of the Corporation or failure to elect or reelect the Executive or cause the Executive to be elected or reelected to the board of directors of the Bank in accordance with section 1.4 of this Agreement,

          (d)          failure to obtain an assumption of the Employer’s obligations under this Agreement by any successor to the Employer, regardless of whether such entity becomes a successor as a result of a merger, consolidation, sale of assets, or other form of reorganization,

          (e)          a material breach of this Agreement by the Employer that is not corrected within a reasonable time, or

          (f)          relocation of the Employer’s principal executive offices or requiring the Executive to change the Executive’s principal work location to any location that is more than 15 miles from the location of the Employer’s principal executive offices on the date of this Agreement.

          3.3          Notice.  Any purported termination by the Employer or by the Executive shall be communicated by written notice of termination to the other.  The notice must state the specific termination provision of this Agreement relied upon.  The notice must also state the date on which termination shall become effective, which shall be a date not earlier than the date of the termination notice.  If termination is for Cause or with Good Reason, the notice must state in reasonable detail the facts and circumstances forming the basis for termination of the Executive’s employment.

ARTICLE 4
 COMPENSATION AND BENEFITS AFTER TERMINATION

          4.1          Cause.  If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and any other benefits to which the Executive may be entitled under the Employer’s benefit plans and policies in effect on the date of termination.

          4.2          Termination by the Executive Other than for Good Reason.  If the Executive terminates employment other than for Good Reason, the Executive shall receive the Base Salary through the date on which termination becomes effective and any other benefits to which the Executive may be entitled under the Employer’s benefit plans and policies.

          4.3          Termination Because of Disability.  If the Executive’s employment terminates because of disability, the Executive shall receive the Base Salary earned through the date on which termination becomes effective, any unpaid bonus or incentive compensation due to the Executive for the calendar year preceding the calendar year in which termination becomes effective, any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, such other benefits to which the Executive may be entitled under the Employer’s benefit plans, policies, and agreements, and any benefits provided for elsewhere in this Agreement.

          4.4          Termination Without Cause and Termination for Good Reason.  (a)  Subject to the possibility that continued Base Salary for the first six months after employment termination might be delayed because of section 4.4(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment for Good Reason, the Executive shall for the unexpired term of this Agreement continue to receive (x) the Base Salary in effect at employment termination and (y) an annual bonus equal to the bonus earned for the calendar year ended immediately before the year in which the employment termination occurs, regardless of when the bonus earned for the preceding calendar year is paid and regardless of whether all or part of the bonus is subject to elective deferral or
vesting.  However, the Executive shall not be entitled to continued participation in the Employer’s or a subsidiary’s retirement plan(s) or any stock-based plans.  The Employer and the Executive acknowledge and agree that the compensation and benefits under this section 4.4 shall not be payable if compensation and benefits are payable or shall have been previously paid to the Executive under Article 5 of this Agreement.

          (b)          If when employment termination occurs the Executive is a specified employee within the meaning of section 409A of the Internal Revenue Code of 1986, and if continued Base Salary under section 4.4(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) is not available, the Executive’s continued Base Salary under section 4.4(a) for the first six months after employment termination shall be paid to the Executive in a single lump sum on the first day of the seventh month after the month in which the Executive’s employment terminates.  References in this Agreement to section 409A of the Internal Revenue Code of 1986 include rules, regulations, and guidance of general application issued by the Department of the Treasury under
Internal Revenue Code section 409A.

          4.5          Post-Termination Insurance Coverage.  (a)  Subject to the Employer’s right to elect to make an alternative cash payment under section 4.5(b), if the Executive’s employment terminates involuntarily but without Cause, voluntarily but with Good Reason, or because of disability, the Employer shall continue or cause to be continued at the Employer’s expense medical insurance benefits, the long-term care insurance benefit under section 2.2(d), and the disability reimbursement and gross-up benefit under section 2.2(e), in each case as in effect during the two years preceding the date of the Executive’s termination.  The medical and disability (including income tax gross up) insurance benefits provided by this section 4.5 shall continue until the first to occur of (w) the Executive’s
return to employment with the Employer or another employer, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z) the end of the term remaining under this Agreement when the Executive’s employment terminates.  The long-term care insurance benefit under section 2.2(d) shall continue until the policy is fully paid.  If continued long-term care insurance benefits under section 2.2(d) constitute taxable income to the Executive, the Employer shall reimburse the Executive for federal and state income taxes imposed on the Executive that are attributable to continued maintenance of the long-term care insurance coverage, and the amount reimbursed by the Employer shall be grossed up to compensate the Executive for federal and state income taxes imposed as a result of the Employer’s reimbursement.

          (b)          Instead of providing continued medical and disability (including income tax gross up) insurance benefits for the Executive under section 4.5(a), the Employer may elect to pay to the Executive in a single lump sum an amount in cash equal to the present value of the Employer’s projected cost to maintain the Executive’s medical and disability insurance benefits (including income tax gross up) had the Executive’s employment not terminated, assuming continued coverage for the lesser of 36 months or the number of months until the Executive attains age 65, (x) if under the terms of the applicable insurance policy or policies it is not possible to continue the Executive’s coverage or (y) if the Employer determines that continued coverage under any or all of the policies would be considered deferred compensation under
section 409A of the Internal Revenue Code of 1986.  The lump-sum payment shall be made 30 days after employment termination or, if section 4.4(b) applies, on the first day of the seventh month after the month in which the Executive’s employment terminates.  Instead of providing the continued long-term care insurance benefit under section 4.5(a) (including income tax gross up), the Employer may elect to pay to the Executive in a single lump sum an amount in cash equal to the present value of the Employer’s projected cost to maintain the long-term care insurance policy (including income tax gross up) until the Executive attains age 65, (x) if under the terms of the policy it is not possible to continue the Executive’s coverage or (y) if the Employer determines that continued coverage would be considered deferred compensation under section 409A of the Internal Revenue Code of 1986.  The lump-sum payment shall be made 30 days after employment termination or, if
section 4.4(b) applies, on the first day of the seventh month after the month in which the Executive’s employment terminates.

ARTICLE 5
 CHANGE IN CONTROL BENEFITS

          5.1          Change in Control Benefits.  (a)  If a Change in Control occurs during the term of this Agreement, the Employer shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to three times the Executive’s annual compensation.  For this purpose, annual compensation means (x) the Executive’s Base Salary when the Change in Control occurs plus (y) any bonus or incentive compensation earned for the calendar year ended immediately before the year in which the Change in Control occurs, regardless of when the bonus or incentive compensation earned for the preceding calendar year is paid and regardless of whether all or part of the bonus or incentive compensation is subject to elective deferral or vesting.  Annual compensation shall be calculated without regard to
any deferrals under qualified or nonqualified plans, but annual compensation shall not include interest or other earnings credited to the Executive under qualified or nonqualified plans.  The amount payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value.  The payment required under this paragraph (a) is payable no later than five business days after the Change in Control occurs.  If the Executive receives payment under section 5.1 the Executive shall not be entitled to any additional severance benefits under section 4.4 of this Agreement.  The Executive shall be entitled to benefits under this paragraph (a) on no more than one occasion.

          (b)          In addition to any benefits to which the Executive may be entitled under the Salary Continuation Agreement referred to in section 2.3 of this Agreement, the Employer shall cause the Executive to become fully vested in any non-qualified plans, programs, or arrangements in which the Executive participated if the plan, program, or arrangement does not address the effect of a change in control.

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

	
  
 
  	
  
               (a)          Change in   ownership: a change in ownership of the Corporation occurs on the   date any one person or group accumulates ownership of the Corporation’s stock   constituting more than 50% of the total fair market value or total voting   power of the Corporation’s stock,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
               (b)          Change in   effective control: (x) any one person or more than one   person acting as a group acquires within a 12-month period ownership of stock   of the Corporation possessing 35% or more of the total voting power of the   Corporation’s stock, or (y) a majority of the Corporation’s board   of directors is replaced during any 12-month period by directors whose   appointment or election is not endorsed in advance by a majority of the   Corporation’s board of directors, or
  
	
   
  	
  
 
  
	
  
 
  	
  
               (c)          Change in   ownership of a substantial portion of assets: a change in the   ownership of a substantial portion of the Corporation’s assets occurs if in a   12-month period any one person or more than one person acting as a group   acquires assets from the Corporation having a total gross fair market value   equal to or exceeding 40% of the total gross fair market value of all of the   assets of the Corporation immediately before the acquisition or   acquisitions.  For this purpose, gross   fair market value means the value of the Corporation’s assets, or the value   of the assets being disposed of, determined without regard to any liabilities   associated with the assets.
  

          5.3          Gross-Up for Taxes.  (a)  Additional payment to account for Excise Taxes.  If the Executive receives the lump sum payment under section 5.1 of this Agreement and acceleration of benefits under any other benefit, compensation, or incentive plan or arrangement with the Employer (collectively, the “Total Benefits”), and if any part of the Total Benefits is subject to the Excise Tax under section 280G and section 4999 of the Internal Revenue Code (the “Excise Tax”), the Employer shall pay or cause to be paid to the Executive the following additional amounts, consisting of (x) a payment equal to the Excise Tax payable by the Executive under section 4999 on the Total Benefits (the “Excise Tax Payment”) and (y) a payment equal to
the amount necessary to provide the Excise Tax Payment net of all income, payroll, and excise taxes.  Together, the additional amounts described in clauses (x) and (y) are referred to in this Agreement as the “Gross-Up Payment Amount.”  Payment of the Gross-Up Payment Amount shall be made in addition to the amount set forth in section 5.1.

          Calculating the Excise Tax.  For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and for purposes of determining the amount of the Excise Tax,

	
  
 
  	
  
          1)          Determination   of “Parachute Payments” subject to the Excise Tax: any other   payments or benefits received or to be received by the Executive as a result   of the Change in Control or the Executive’s employment termination (whether   under the terms of this Agreement or any other agreement or any other benefit   plan or arrangement with the Employer, any person whose actions result in a   Change in Control, or any person affiliated with the Employer or such person)   shall be treated as “parachute payments” within the   meaning of section 280G(b)(2) of the Internal Revenue Code, and all “excess   parachute payments” within the meaning of section 280G(b)(1)   shall be treated as subject to the Excise Tax, unless in the opinion of the   certified public accounting firm that
is retained by the Employer as of the   date immediately before the Change in Control (the “Accounting Firm”)   such other payments or benefits do not constitute (in whole or in part)   parachute payments, or such excess parachute payments represent (in whole or   in part) reasonable compensation for services actually rendered within the   meaning of section 280G(b)(4) of the Internal Revenue Code in excess of the   “base amount” (as defined in section 280G(b)(3) of the Internal Revenue   Code), or are otherwise not subject to the Excise Tax,
  
	
   
  	
  
 
  
	
  
 
  	
  
          2)          Calculation   of benefits subject to the Excise Tax:  the amount of the Total Benefits that shall be treated as   subject to the Excise Tax shall be equal to the lesser of (x)   the total amount of the Total Benefits reduced by the amount of such Total   Benefits that in the opinion of the Accounting Firm are not parachute   payments, or (y) the amount of excess parachute payments within the   meaning of section 280G(b)(1) (after applying clause (1), above), and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          3)          Value of   noncash benefits and deferred payments:  the value of any noncash benefits or any deferred payment or   benefit shall be determined by the Accounting Firm in accordance with the   principles of sections 280G(d)(3) and (4) of the Internal Revenue Code.
  

          Assumed Marginal Income Tax Rate. For purposes of determining the Gross-Up Payment Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar years in which the Gross-Up Payment Amount is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the date of the Change in Control or termination of employment, net of the reduction in federal income taxes that can be obtained from deduction of such state and local taxes (calculated by assuming that any reduction under section 68 of the Internal Revenue Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such state and local income taxes that would otherwise be deductible by the Executive, and applicable federal FICA and Medicare
withholding taxes).

          Return of Reduced Excise Tax Payment or Payment of Additional Excise Tax.  If the Excise Tax is later determined to be less than the amount taken into account hereunder when the Change in Control occurred or when the Executive’s employment terminated, the Executive shall repay to the Employer – when the amount of the reduction in Excise Tax is finally determined – the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment Amount being repaid by the Executive to the extent that the repayment results in a reduction in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local income tax deduction).

          If the Excise Tax is later determined to be more than the amount taken into account hereunder when the Change in Control occurred or when the Executive’s employment terminated (due, for example, to a payment whose existence or amount cannot be determined at the time of the Gross-Up Payment Amount), the Employer shall make an additional payment to the Executive for that excess (plus any interest, penalties or additions payable by the Executive for the excess) when the amount of the excess is finally determined.

          (b)          Responsibilities of the Accounting Firm and the Bank.  Determinations Shall Be Made by the Accounting Firm.  Subject to the provisions of section 5.3(a), all determinations required to be made under this section 5.3(b) – including whether and when a Gross-Up Payment Amount is required, the amount of the Gross-Up Payment Amount and the assumptions to be used to arrive at the determination (collectively, the “Determination”) – shall be made by the Accounting Firm, which shall provide detailed supporting calculations both to the Employer and the Executive within 15 business days after receipt of notice from the Employer or the Executive that there has been a Gross-Up Payment Amount, or such earlier time as is requested by the Employer.

          Fees and Expenses of the Accounting Firm and Agreement with the Accounting Firm.  All fees and expenses of the Accounting Firm shall be borne solely by the Employer.  The Employer shall enter into any agreement requested by the Accounting Firm in connection with the performance of its services hereunder.

          Accounting Firm’s Opinion.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, the Accounting Firm shall furnish the Executive with a written opinion to that effect, and to the effect that failure to report Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty.

          Accounting Firm’s Determination Is Binding; Underpayment and Overpayment.  The Determination by the Accounting Firm shall be binding on the Employer and the Executive.  Because of the uncertainty in determining whether any of the Total Benefits will be subject to the Excise Tax at the time of the Determination, it is possible that a Gross-Up Payment Amount that should have been made will not have been made by the Employer (“Underpayment”), or that a Gross-Up Payment Amount will be made that should not have been made by the Employer (“Overpayment”).  If, after a Determination by the Accounting Firm, the Executive is required to make a payment of additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment.  The Underpayment (together with interest at the rate provided in section 1274(d)(2)(B) of the
Internal Revenue Code) shall be paid promptly by the Employer to or for the benefit of the Executive.  If the Gross-Up Payment Amount exceeds the amount necessary to reimburse the Executive for the Excise Tax according to section 5.3(a), the Accounting Firm shall determine the amount of the Overpayment.  The Overpayment (together with interest at the rate provided in section 1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the Executive to or for the benefit of the Employer.  Provided that the Executive’s expenses are reimbursed by the Employer, the Executive shall cooperate with any reasonable requests by the Employer in any contests or disputes with the Internal Revenue Service relating to the Excise Tax.

          Accounting Firm Conflict of Interest.  If the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control, the Executive may appoint another nationally recognized public accounting firm to make the Determinations required hereunder (in which case the term “Accounting Firm” as used in this Agreement shall be deemed to refer to the accounting firm appointed by the Executive under this paragraph).

ARTICLE 6
 CONFIDENTIALITY AND CREATIVE WORK

          6.1          Non-disclosure.  The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Employer or its business, or anything connected therewith.  As used in this Article 6 the term “confidential information” means all of the Employer’s and the Employer’s affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to –

	
  
 
  	
  
               (a)          the   whole or any portion or phase of any business plans, financial information,   purchasing data, supplier data, accounting data, or other financial information,
  
	
   
  	
  
 
  
	
  
 
  	
  
               (b)          the   whole or any portion or phase of any research and development information,   design procedures, algorithms or processes, or other technical information,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
               (c)          the   whole or any portion or phase of any marketing or sales information, sales   records, customer lists, prices, sales projections, or other sales   information, and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
               (d)          trade   secrets, as defined from time to time by the laws of the State of South Carolina.
  

Notwithstanding the foregoing, confidential information excludes information that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Employer, or (y) otherwise than by or at the direction of the Executive.  This section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

          6.2          Return of Materials.  The Executive agrees to deliver or return to the Employer upon termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Employer or prepared by the Executive in connection with the Executive’s services hereunder.  The Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment.

          6.3          Creative Work.  The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Employer.  The Executive hereby assigns to the Employer all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

          6.4          Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination.  For purposes of this Agreement, the term “affiliate” of the Employer includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Corporation or the Bank.  The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

          6.5          Injunctive Relief.  The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Employer if the Executive fails to observe the obligations imposed by this Article 6.  Accordingly, if the Employer institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Employer, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.  The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Employer’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure,
misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7
 COMPETITION AFTER EMPLOYMENT TERMINATION

          7.1          Covenant Not to Solicit Employees.  The Executive agrees not to solicit the services of any officer or employee of the Bank for one year after the Executive’s employment termination.

          7.2          Covenant Not to Compete.  (a)  The Executive covenants and agrees not to compete directly or indirectly with the Employer for one year after employment termination.  For purposes of this section –

	
  
 
  	
  
1)
  	
  
the term “compete” means
  

	
  
 
  	
  
(a)
  	
  
providing financial products or services on behalf   of any financial institution for any person residing in the territory,
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
assisting (other than through the performance of   ministerial or clerical duties) any financial institution in providing   financial products or services to any person residing in the territory, or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
inducing or attempting to induce any person who was   a customer of the Employer at the date of the Executive’s employment   termination to seek financial products or services from another financial   institution.
  

	
  
 
  	
  
2)
  	
  
the words “directly or indirectly” means –
  

	
  
 
  	
  
(a)
  	
  
acting as a consultant, officer, director,   independent contractor, or employee of any financial institution in   competition with the Employer in the territory, or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
communicating to such financial institution the   names or addresses or any financial information concerning any person who was   a customer of the Employer when the Executive’s employment terminated.
  

	
  
 
  	
  
3)
  	
  
the term “customer” means any person to whom the   Employer is providing financial products or services on the date of the   Executive’s employment termination.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
4)
  	
  
the term “financial institution” means any bank,   savings association, or bank or savings association holding company, or any   other institution, the business of which is engaging in activities that are   financial in nature or incidental to such financial activities as described   in section 4(k) of the Bank Holding Company Act of 1956, other than the   Employer or any of its affiliated corporations.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
5)
  	
  
“financial product or service” means any product or   service that a financial institution or a financial holding company could   offer by engaging in any activity that is financial in nature or incidental   to such a financial activity under section 4(k) of the Bank Holding Company   Act of 1956 and that is offered by the Employer or an affiliate on the date   of the Executive’s employment termination, including but not limited to   banking activities and activities that are closely related and a proper   incident to banking.
  

	
  
 
  	
  
6)
  	
  
the term “person” means any individual or   individuals, corporation, partnership, fiduciary or association.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
7)
  	
  
the term “territory” means the area within a 15-mile   radius of any office of the Employer at the date of the Executive’s   employment termination.
  

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

          7.3          Injunctive and Other Relief.  Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Employer would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7.  Accordingly, the Executive agrees that the Employer’s remedies for a material breach or threatened breach of this Article 7 include but are not limited to (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits due and payable to the Executive, (y) forfeiture of any severance benefits under sections 4.4 and 4.5 of this Employment Agreement, and (z) a suit in equity by the Employer to enjoin the Executive from the breach
or threatened breach of such covenants.  Despite anything to the contrary in the Salary Continuation Agreement referred to in section 2.3 or in the Endorsement Split Dollar Agreement attached thereto as Addendum A, if after termination of the Executive’s employment the Executive competes with the Employer in violation of this Article 7, the Employer shall be entitled to withhold all benefits payable under the Salary Continuation Agreement and the Executive shall be deemed to have forfeited any and all rights to benefits under the Salary Continuation Agreement and under the Endorsement Split Dollar Agreement.  The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.  Nothing herein shall be construed to prohibit the Employer from pursuing any other or additional remedies for the breach or threatened breach.

          7.4          Article 7 Survives Termination But Is Void After a Change in Control.  The rights and obligations set forth in this Article 7 shall survive termination of this Agreement.  However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8
 MISCELLANEOUS

          8.1          Successors and Assigns.  (a)  This Agreement is binding on successors.  This Agreement shall be binding upon the Employer and any successor to the Employer, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Employer by purchase, merger, consolidation, reorganization, or otherwise.  But this Agreement and the Employer’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Employer.  By agreement in form and substance satisfactory to the Executive, the Employer shall require any successor to all or substantially all of the business or assets of the Employer expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Employer would be required to
perform if no such succession had occurred.

          (b)          This Agreement is enforceable by the Executive’s heirs.  This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

          (c)          This Agreement is personal in nature and is not assignable.  This Agreement is personal in nature.  Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein.  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution.  If the Executive attempts an assignment or transfer that is contrary to this section 8.1, the Employer shall have no liability to pay any amount to the assignee or transferee.

          8.2          Governing Law, Jurisdiction and Forum.  This Agreement shall be construed under and governed by the internal laws of the State of South Carolina, without giving effect to any conflict of laws provision or rule (whether of the State of South Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of South Carolina.  By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of South Carolina.  Any actions or proceedings instituted under this Agreement shall be brought and tried solely in courts located in Florence County, South Carolina or in the federal court having jurisdiction in Florence, South Carolina.  The Executive expressly waives the
right to have any such actions or proceedings brought or tried elsewhere.

          8.3          Entire Agreement.  This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Employer.  Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.  This Agreement supersedes and replaces in its entirety the Executive Employment Agreement entered into by the Executive and the Employer in August 2001.

          8.4          Notices.  All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid.  Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board of Directors, First Reliance Bancshares, Inc., 2170 West Palmetto Street, Florence, South Carolina  29501.

          8.5          Severability.  If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law.  If any provision of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

          8.6          Captions and Counterparts.  The captions in this Agreement are solely for convenience.  The captions in no way define, limit, or describe the scope or intent of this Agreement.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

          8.7          No Duty to Mitigate.  The Employer hereby acknowledges that it will be difficult and could be impossible (x) for the Executive to find reasonably comparable employment after employment termination, and (y) to measure the amount of damages the Executive may suffer as a result of termination.  Additionally, the Employer acknowledges that its general severance pay plans do not provide for mitigation, offset, or reduction of any severance payment received thereunder.  The Employer further acknowledges that the payment of severance benefits under this Agreement is reasonable and shall be liquidated damages.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment.  Moreover, the amount of any payment provided for in this
Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

          8.8          Amendment and Waiver.  This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto.  The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision.  No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

          8.9          Payment of Legal Fees.  The Employer is aware that after a Change in Control management could cause or attempt to cause the Employer to refuse to comply with its obligations under this Agreement or the Salary Continuation Agreement referred to in section 2.3, or could institute or cause or attempt to cause the Employer to institute litigation seeking to have this Agreement or the Salary Continuation Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Agreement and the Salary Continuation Agreement.  In these circumstances, the purpose of this Agreement and the Salary Continuation Agreement would be frustrated.  It is the Employer’s intention that the Executive not be required to incur the expenses associated with the enforcement of
rights under this Agreement or the Salary Continuation Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive hereunder.  It is the Employer’s intention that the Executive not be forced to negotiate settlement of rights under this Agreement or the Salary Continuation Agreement under threat of incurring expenses.  Accordingly, if after a Change in Control occurs it appears to the Executive that (x) the Employer has failed to comply with any of its obligations under this Agreement or the Salary Continuation Agreement, or (y) the Employer or any other person has taken any action to declare this Agreement or the Salary Continuation Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder or under the
Salary Continuation Agreement, the Employer irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at the Employer’s expense as provided in this section 8.9, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director, officer, stockholder, or other person affiliated with the Employer, in any jurisdiction.  Notwithstanding any existing or previous attorney-client relationship between the Employer and any counsel chosen by the Executive under this section 8.9, the Employer irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel.  The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by the
Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings.  The Employer’s obligation to pay the Executive’s legal fees under this section 8.9 operates separately from and in addition to any legal fee reimbursement obligation the Employer may have with the Executive under any separate severance or other  agreement.  Despite anything in this section 8.9 to the contrary however, the Employer shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3].

          8.10          Compliance with Internal Revenue Code Section 409A.  The Employer and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of the Internal Revenue Code of 1986.  If when the Executive’s employment terminates the Executive is a specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Agreement, including Articles 4 or 5, will result in additional tax or interest to the Executive because of section 409A, then despite any contrary provision of this Agreement the Executive will not be entitled to the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the
date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A.  As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum.  If any provision of this Agreement does not satisfy the requirements of section 409A, such provision shall nevertheless be applied in a manner consistent with those requirements.  If any provision of this Agreement would subject the Executive to additional tax or interest under section 409A, the Employer shall reform the provision.  However, the Employer shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Employer shall not be required to incur any additional compensation expense as a result of the reformed
provision.

          IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

	
  
EXECUTIVE
  	
  
 
  	
  
FIRST RELIANCE   BANK
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
By:
  	
  
 
  
	
  

  	
   
  	
  
 
  	
  
 
  
	
  
F.R. Saunders Jr.
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Its:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
FIRST RELIANCE   BANCSHARES, INC.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
   
  	
  By:
  	
   
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
   
  	
  Its:Exhibit 10.8

FIRST RELIANCE BANK
 SALARY CONTINUATION AGREEMENT

          This SALARY CONTINUATION AGREEMENT (this “Agreement”) is entered into as of this             day of                                     , 2006, by and between First Reliance Bank, a South Carolina-chartered bank (the “Bank”), and F.R. Saunders Jr., its President and Chief Executive Officer (the “Executive”).

          WHEREAS, the Executive has contributed substantially to the success of the Bank and the Bank desires that the Executive continue in its employ,

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

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

          WHEREAS, the parties hereto intend that this Agreement shall be considered an unfunded arrangement maintained primarily to provide supplemental retirement benefits for the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The Executive is fully advised of the Bank’s financial status.

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

ARTICLE 1
 DEFINITIONS

          The following words and phrases used in this Agreement have the meanings specified.

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

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

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

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

	
  
 
  	
  
          (a)          Change in ownership: a change in   ownership of First Reliance Bancshares, Inc. occurs on the date any one   person or group accumulates ownership of First Reliance Bancshares, Inc.’s   stock constituting more than 50% of the total fair market value or total   voting power of First Reliance Bancshares, Inc.’s stock,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Change in effective control: (x) any one person or more than one   person acting as a group acquires within a 12-month period ownership of stock   of First Reliance Bancshares, Inc. possessing 35% or more of the total voting   power of First Reliance Bancshares, Inc.’s stock, or (y) a majority of First Reliance   Bancshares, Inc.’s board of directors is replaced during any 12-month period   by directors whose appointment or election is not endorsed in advance by a   majority of First Reliance Bancshares, Inc.’s board of directors, or
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Change in ownership of a substantial portion of   assets: a change in the ownership of a substantial portion of   First Reliance Bancshares, Inc.’s assets occurs if in a 12-month period any   one person or more than one person acting as a group acquires assets from   First Reliance Bancshares, Inc. having a total gross fair market value equal   to or exceeding 40% of the total gross fair market value of all of the assets   of First Reliance Bancshares, Inc. immediately before the acquisition or   acquisitions.  For this purpose, gross   fair market value means the value of First Reliance Bancshares, Inc.’s   assets, or the value of the assets being disposed of, determined without   regard to any liabilities associated with the assets.
  

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

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

          1.7          “Early Termination” means Separation from Service before Normal Retirement Age for reasons other than death, Disability, Termination for Cause, or after a Change in Control.

          1.8          “Effective Date” means January 1, 2006.

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

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

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

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

2

          1.13         “Separation from Service” means the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, terminates for any reason, other than because of a leave of absence approved by the Bank or the Executive’s death.  For purposes of this Agreement, if there is a dispute about the employment status of the Executive or the date of the Executive’s Separation from Service, the Bank shall have the sole and absolute right to decide the dispute unless a Change in Control shall have occurred.

          1.14         “Termination for Cause” and “Cause” shall have the same meaning specified in any effective severance or employment agreement existing on the date hereof or hereafter entered into between the Executive and the Bank or between the Executive and First Reliance Bancshares, Inc.  If the Executive is not a party to a severance or employment agreement containing a definition of termination for cause, Termination for Cause means the Bank terminates the Executive’s employment for any of the following reasons –

	
  
 
  	
  
                  (a)          the   Executive’s gross negligence or gross neglect of duties or intentional and   material failure to perform stated duties after written notice thereof, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                (b)          disloyalty   or dishonesty by the Executive in the performance of the Executive’s duties,   or a breach of the Executive’s fiduciary duties for personal profit, in any   case whether in the Executive’s capacity as a director or officer, or
  
	
  
 
  	
  
 
  
	
   
  	
  
                (c)          intentional   wrongful damage by the Executive to the business or property of the Bank or   its affiliates, including without limitation the reputation of the Bank,   which in the judgement of the Bank causes material harm to the Bank or   affiliates, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                (d)          a   willful violation by the Executive of any applicable law or significant   policy of the Bank or an affiliate that, in the Bank’s judgement, results in   an adverse effect on the Bank or the affiliate, regardless of whether the   violation leads to criminal prosecution or conviction.  For purposes of this Agreement applicable   laws include any statute, rule, regulatory order, statement of policy, or   final cease-and-desist order of any governmental agency or body having   regulatory authority over the Bank, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                (e)          the   occurrence of any event that results in the Executive being excluded from   coverage, or having coverage limited for the Executive as compared to other   executives of the  Bank, under the   Bank’s blanket bond or other fidelity or insurance policy covering its   directors, officers, or employees, or
  
	
   
  	
  
 
  
	
  
 
  	
  
                (f)          the   Executive is removed from office or permanently prohibited from participating   in the Bank’s affairs by an order issued under section 8(e)(4) or section   8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1),   or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                (g)          conviction   of the Executive for or plea of no contest to a felony or conviction of or   plea of no contest to a misdemeanor involving moral turpitude, or the actual   incarceration of the Executive for 45 consecutive days or more.
  

ARTICLE 2
 LIFETIME BENEFITS

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

3

	
  
 
  	
  
2.1.1             Amount of benefit.  The annual benefit under this section 2.1   is $321,842.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
2.1.2          Payment of benefit.  The Bank shall pay the annual benefit to   the Executive in 12 equal monthly installments payable on the first day of   each month, beginning with the month immediately after the month in which the   Executive attains the Normal Retirement Age.    The annual benefit shall be paid to the Executive for 15 years.
  

          2.2             Early
Termination Benefit.  Unless a Change in Control shall have previously
occurred, upon Early Termination the Bank shall pay to the Executive the benefit
described in this section 2.2 instead of any other benefit under this
Agreement.

	
  
 
  	
  
2.2.1             Amount of benefit.  The annual benefit under this section 2.2   is calculated as the amount that fully amortizes the Accrual Balance existing   at the end of the month immediately before the month in which Separation from   Service occurs, amortizing that Accrual Balance over 15 years and taking into   account interest at the discount rate or rates established by the Plan   Administrator.
  
	
   
  	
  
 
  
	
  
 
  	
  
2.2.2             Payment of benefit.  The Bank shall pay the annual benefit to   the Executive in 12 equal monthly installments payable on the first day of   each month, beginning with the later of (x)   the seventh month after the Executive’s Separation from Service, or (y) the month immediately after the month   in which the Executive attains the Normal Retirement Age.  The annual benefit shall be paid to the   Executive for 15 years.
  

          2.3             Disability Benefit.  Unless a Change in Control shall have previously occurred, upon Separation from Service because of Disability before Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.3 instead of any other benefit under this Agreement.

	
  
 
  	
  
2.3.1          Amount of benefit.  The annual benefit under this section 2.3   is calculated as the amount that fully amortizes the Accrual Balance existing   at the end of the month immediately before the month in which Separation from   Service occurs, amortizing that Accrual Balance over 15 years and taking into   account interest at the discount rate or rates established by the Plan   Administrator.
  
	
   
  	
  
 
  
	
  
 
  	
  
2.3.2             Payment of benefit.  Beginning with the later of (x) the seventh month after the   Executive’s Separation from Service, or (y)   the month immediately after the month in which the Executive attains the   Normal Retirement Age, the Bank shall pay the Disability benefit to the   Executive in 12 equal monthly installments on the first day of each   month.  The annual benefit shall be   paid to the Executive for 15 years.
  

          2.4             Change-in-Control Benefit.  If a Change in Control occurs after the date of this Agreement but before Normal Retirement Age and before Separation from Service, the Bank shall pay to the Executive the benefit described in this section 2.4 instead of any other benefit under this Agreement.

	
  
 
  	
  
2.4.1             Amount of benefit.  The benefit under this section 2.4 is the   Normal Retirement Age Accrual Balance required by section 2.1, without   discount for the time value of money.
  
	
  
 
  	
  
 
  
	
   
  	
  
2.4.2             Payment of benefit.  The Bank shall pay the Change-in-Control   benefit under section 2.4 of this Agreement to the Executive in one lump sum   within three days after the Change in Control.  If the Executive receives the benefit under this section 2.4   because of the occurrence of a Change in Control, the Executive shall not be   entitled to claim additional benefits under section 2.4 if an additional   Change in Control occurs thereafter.
  

4

          2.5          Lump-sum Payment of Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit Being Paid to the Executive when a Change in Control Occurs.  If a Change in Control occurs at any time during the salary continuation benefit payment period and if when the Change in Control occurs the Executive is receiving or is entitled to receive at Normal Retirement Age the benefit under sections 2.1.2, 2.2.2, or 2.3.2, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum within three days after the Change in Control.  The lump-sum payment due to the Executive as a result of a Change in Control shall be an amount equal to the Accrual Balance amount corresponding to the particular benefit when the Change in Control occurs.

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

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

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

ARTICLE 3
 DEATH BENEFITS

          3.1          Death Before Separation from Service.  Except as provided in section 5.2, if the Executive dies before Separation from Service, the Executive’s Beneficiary shall be entitled to (x) an amount in cash equal to the Accrual Balance existing at the Executive’s death, unless the Change-in-Control benefit shall have previously been paid to the Executive under sections 2.4 or 2.5, and (y) the benefit described in the Endorsement Split Dollar Agreement attached to this Agreement as Addendum A.  No benefit shall be paid under clause (x) if the Change-in-Control benefit shall have previously been paid to the Executive under sections 2.4 or 2.5.  If a benefit is payable to the Executive’s Beneficiary under clause (x), the benefit shall be paid in a single lump sum 90 days after the
Executive’s death.  However, no benefits under this Agreement or under the Endorsement Split Dollar Agreement shall be paid or payable to the Executive or the Executive’s Beneficiary if this Agreement is terminated under Article 5.

5

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

ARTICLE 4
 BENEFICIARIES

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

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

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

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

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

ARTICLE 5
 GENERAL LIMITATIONS

          5.1          Termination for Cause.  Despite any contrary provision of this Agreement, the Bank shall not pay any benefit under this Agreement and this Agreement shall terminate if Separation from Service is the result of Termination for Cause.  Likewise, the Beneficiary shall be entitled to no benefits under the Endorsement Split Dollar Agreement attached to this Agreement as Addendum A and the Endorsement Split Dollar Agreement also shall terminate if Separation from Service is the result of Termination for Cause.

6

          5.2          Suicide or Misstatement.  The Bank shall not pay any benefit under this Agreement and the Beneficiary shall be entitled to no benefits under the Endorsement Split Dollar Agreement attached as Addendum A if the Executive commits suicide within two years after the date of this Agreement or if the Executive makes any material misstatement of fact on any application or resume provided to the Bank or on any application for benefits provided by the Bank.

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

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

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

ARTICLE 6
 CLAIMS  AND REVIEW PROCEDURES

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

	
  
 
  	
  
6.1.1          Initiation – written claim.  The claimant initiates a claim by   submitting to the Administrator a written claim for the benefits.  If the claim relates to the contents of a   notice received by the claimant, the claim must be made within 60 days after   the notice was received by the claimant.    All other claims must be made within 180 days after the date of the   event that caused the claim to arise.    The claim must state with particularity the determination desired by   the claimant.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
6.1.2          Timing of Bank response.  The Bank shall respond to the claimant   within 90 days after receiving the claim.    If the Bank determines that special circumstances require additional   time for processing the claim, the Bank may extend the response period by an   additional 90 days by notifying the claimant in writing before the end of the   initial 90-day period that an additional period is required.  The notice of extension must state the   special circumstances and the date by which the Bank expects to render its   decision.
  
	
   
  	
  
 
  
	
  
 
  	
  
6.1.3          Notice of decision.  If the Bank denies part or all of the   claim, the Bank shall notify the claimant in writing of the denial.  The Bank shall write the notification in a   manner calculated to be understood by the claimant.  The notification shall set forth –
  

	  
	 6.1.3.1
	 the specific   reasons for the denial,

	  
	  
	  

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

7

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

	  
	  
	  

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

	  
	  
	  

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

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

	
  
 
  	
  
6.2.1          Initiation – written request.  To initiate the review, the claimant,   within 60 days after receiving the Bank’s notice of denial, must file with   the Bank a written request for review.
  
	
   
  	
  
 
  
	
  
 
  	
  
6.2.2          Additional submissions – information access.  The claimant shall then have the   opportunity to submit written comments, documents, records, and other   information relating to the claim.    The Bank shall also provide the claimant, upon request and free of   charge, reasonable access to and copies of all documents, records, and other   information relevant (as defined in applicable ERISA regulations) to the   claimant’s claim for benefits.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
6.2.3          Considerations on review.  In considering the review, the Bank shall   take into account all materials and information the claimant submits relating   to the claim, without regard to whether the information was submitted or   considered in the initial benefit determination.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
6.2.4             Timing of Bank response.  The Bank shall respond in writing to the   claimant within 60 days after receiving the request for review.  If the Bank determines that special   circumstances require additional time for processing the claim, the Bank may   extend the response period by an additional 60 days by notifying the claimant   in writing before the end of the initial 60-day period that an additional   period is required.  The notice of   extension must state the special circumstances and the date by which the Bank   expects to render its decision.
  
	
   
  	
  
 
  
	
  
 
  	
  
6.2.5             Notice of decision.  The Bank shall notify the claimant in   writing of its decision on review.    The Bank shall write the notification in a manner calculated to be   understood by the claimant.  The   notification shall set forth –
  

	
  
 
  	
  
6.2.5.1
  	
  
the specific   reason for the denial,
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
6.2.5.2
  	
  
a reference   to the specific provisions of the Agreement on which the denial is based,
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
6.2.5.3
  	
  
a statement   that the claimant is entitled to receive, upon request and free of charge,   reasonable access to and copies of all documents, records, and other   information relevant (as defined in applicable ERISA regulations) to the   claimant’s claim for benefits, and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
6.2.5.4
  	
  
a statement   of the claimant’s right to bring a civil action under ERISA section 502(a).
  

8

ARTICLE 7
 MISCELLANEOUS

          7.1          Amendments and Termination.  Subject to section 7.15 of this Agreement, this Agreement may be amended solely by a written agreement signed by the Bank and by the Executive, and except for termination occurring under Article 5 this Agreement may be terminated solely by a written agreement signed by the Bank and by the Executive.

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

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

          7.4          Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.

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

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

          7.7          Applicable Law.  This Agreement and all rights hereunder shall be governed by the laws of the State of South Carolina, except to the extent preempted by the laws of the United States of America.

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

          7.9          Entire Agreement.  This Agreement and the Endorsement Split Dollar Agreement attached as Addendum A constitute the entire agreement between the Bank and the Executive concerning the subject matter.  No rights are granted to the Executive under this Agreement other than those specifically set forth.

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

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

9

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

          7.13          Payment of Legal Fees.  The Bank is aware that after a Change in Control management of the Bank could cause or attempt to cause the Bank to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Bank to institute litigation seeking to have this Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Agreement.  In these circumstances, the purpose of this Agreement would be frustrated.  It is the intention of the Bank that the Executive not be required to incur the expenses associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be
granted to the Executive hereunder.  It is the intention of the Bank that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses.  Accordingly, if after a Change in Control occurs it appears to the Executive that (x) the Bank has failed to comply with any of its obligations under this Agreement, or (y) the Bank or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at the expense of the Bank as provided in this section 7.13, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Bank or any director, officer,
stockholder, or other person affiliated with the Bank, in any jurisdiction.  Notwithstanding any existing or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this section 7.13, the Bank irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Bank and the Executive agree that a confidential relationship shall exist between the Executive and that counsel.  The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by the Bank on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings.  The Bank’s obligation to pay the
Executive’s legal fees provided by this section 7.13 operates separately from and in addition to any legal fee reimbursement obligation the Bank may have with the Executive under any separate employment, severance, or other agreement between the Executive and the Bank.  Despite any contrary provision within this Agreement however, the Bank shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3].

          7.14          Internal Revenue Code Section 280G Gross Up.  (a)  Additional payment to account for Excise Taxes.  If as the result of a Change in Control the Executive becomes entitled to acceleration of benefits under this Agreement or under any other plan or agreement of or with the Bank or its affiliates (together, the “Total Benefits”), and if any of the Total Benefits will be subject to the Excise Tax as set forth in sections 280G and 4999 of the Internal Revenue Code of 1986 (the “Excise Tax”), the Bank shall pay to the Executive the following additional amounts, consisting of (x) a payment equal to the Excise Tax payable by the Executive on the Total Benefits under section 4999 of the Internal Revenue Code (the “Excise Tax Payment”), and (y) a payment equal to the
amount necessary to provide the Excise Tax Payment net of all income, payroll and excise taxes.  Together, the additional amounts described in clauses (x) and (y) are referred to in this Agreement as the “Gross-Up Payment Amount.”

10

          Calculating the Excise Tax.  For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and for purposes of determining the amount of the Excise Tax,

	
  
 
  	
  
1)
  	
  
Determination of “Parachute Payments” subject to the Excise Tax:   any other payments or benefits received or to be received by the Executive in   connection with a Change in Control or the Executive’s Separation from   Service (whether under the terms of this Agreement or any other agreement or   any other benefit plan or arrangement with the Bank, any person whose actions   result in a Change in Control, or any person affiliated with the Bank or such   person) shall be treated as “parachute payments” within the meaning of   section 280G(b)(2) of the Internal Revenue Code, and all “excess parachute   payments” within the meaning of section 280G(b)(1) shall be treated as   subject to the Excise Tax, unless in the opinion of the certified public   accounting firm that is retained by the Bank as of the date immediately   before the Change in Control (the “Accounting Firm”) such other payments or   benefits do not
constitute (in whole or in part) parachute payments, or such   excess parachute payments represent (in whole or in part) reasonable   compensation for services actually rendered within the meaning of section   280G(b)(4) of the Internal Revenue Code in excess of the base amount (as   defined in section 280G(b)(3) of the Internal Revenue Code), or are otherwise   not subject to the Excise Tax,
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
2)
  	
  
Calculation of benefits subject to the Excise Tax:  the amount of the Total Benefits that   shall be treated as subject to the Excise Tax shall be equal to the lesser of   (x) the total amount of the   Total Benefits reduced by the amount of such Total Benefits that in the   opinion of the Accounting Firm are not parachute payments, or (y) the amount of excess parachute   payments within the meaning of section 280G(b)(1) (after applying clause (1),   above), and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
3)
  	
  
Value of noncash benefits and deferred payments:  the value of any noncash benefits or any   deferred payment or benefit shall be determined by the Accounting Firm in   accordance with the principles of sections 280G(d)(3) and (4) of the Internal   Revenue Code.
  

          Assumed Marginal Income Tax Rate. For purposes of determining the amount of the Gross-Up Payment Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar years in which the Gross-Up Payment Amount is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the date of Separation from Service, net of the reduction in federal income taxes that can be obtained from deduction of such state and local taxes (calculated by assuming that any reduction under section 68 of the Internal Revenue Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such state and local income taxes that would otherwise be deductible by the Executive, and applicable federal FICA and Medicare withholding
taxes).

          Return of Reduced Excise Tax Payment or Payment of Additional Excise Tax.  If the Excise Tax is later determined to be less than the amount taken into account hereunder when the Executive’s employment terminated, the Executive shall repay to the Bank – when the amount of the reduction in Excise Tax is finally determined – the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment Amount being repaid by the Executive to the extent that the repayment results in a reduction in Excise Tax, FICA, and Medicare withholding taxes and/or a federal, state, or local income tax deduction).

          If the Excise Tax is later determined to be more than the amount taken into account hereunder when the Executive’s employment terminated (due, for example, to a payment whose existence or amount cannot be determined at the time of the Gross-Up Payment Amount), the Bank shall make an additional Gross-Up Payment Amount to the Executive for that excess (plus any interest, penalties, or additions payable by the Executive for the excess) when the amount of the excess is finally determined.

11

          (b)          Responsibilities of the Accounting Firm and the Bank.  Determinations Shall Be Made by the Accounting Firm.  Subject to the provisions of section 7.14(a), all determinations required to be made under this section 7.14(b) – including whether and when a Gross-Up Payment Amount is required, the amount of the Gross-Up Payment Amount and the assumptions to be used to arrive at the determination (collectively, the “Determination”) – shall be made by the Accounting Firm, which shall provide detailed supporting calculations both to the Bank and the Executive within 15 business days after receipt of notice from the Bank or the Executive that there has been a Gross-Up Payment Amount, or such earlier time as is requested by the Bank.

          Fees and Expenses of the Accounting Firm and Agreement with the Accounting Firm.  All fees and expenses of the Accounting Firm shall be borne solely by the Bank.  The Bank shall enter into any agreement requested by the Accounting Firm in connection with the performance of its services hereunder.

          Accounting Firm’s Opinion.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, the Accounting Firm shall furnish the Executive with a written opinion to that effect, and to the effect that failure to report Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty.

          Accounting Firm’s Determination Is Binding; Underpayment and Overpayment.  The Determination by the Accounting Firm shall be binding on the Bank and the Executive.  Because of the uncertainty in determining whether any of the Total Benefits will be subject to the Excise Tax at the time of the Determination, it is possible that a Gross-Up Payment Amount that should have been made will not have been made by the Bank (“Underpayment”), or that a Gross-Up Payment Amount will be made that should not have been made by the Bank  (“Overpayment”).  If, after a Determination by the Accounting Firm, the Executive is required to make a payment of additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment.  The Underpayment (together with interest at the rate provided in section 1274(d)(2)(B) of the Internal Revenue Code) shall be
paid promptly by the Bank to or for the benefit of the Executive.  If the Gross-Up Payment Amount exceeds the amount necessary to reimburse the Executive for his Excise Tax according to section 7.14(a), the Accounting Firm shall determine the amount of the Overpayment.  The Overpayment (together with interest at the rate provided in section 1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the Executive to or for the benefit of the Bank.  Provided that the Executive’s expenses are reimbursed by the Bank, the Executive shall cooperate with any reasonable requests by the Bank in any contests or disputes with the Internal Revenue Service relating to the Excise Tax.

          Accounting Firm Conflict of Interest.  If the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control, the Executive may appoint another nationally recognized public accounting firm to make the Determinations required hereunder (in which case the term “Accounting Firm” as used in this Agreement shall be deemed to refer to the accounting firm appointed by the Executive under this paragraph).

          7.15          Termination or Modification of Agreement Because of Changes in Law, Rules or Regulations.  The Bank is entering into this Agreement on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form.  If that assumption materially changes and the change has a material detrimental effect on this Agreement, then the Bank reserves the right to terminate or modify this Agreement accordingly, subject to the written consent of the Executive, which shall not be unreasonably withheld.  This section 7.15 shall become null and void effective immediately upon a Change in Control.

12

ARTICLE 8
 ADMINISTRATION  OF AGREEMENT

          8.1          Plan Administrator Duties.  This Agreement shall be administered by a Plan Administrator consisting of the Bank’s board of directors or such committee or person(s) as the board shall appoint.  The Executive may be a member of the Plan Administrator.  The Plan Administrator shall also have the discretion and authority to (x) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (y) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with the Agreement.

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

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

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

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

13

          IN WITNESS WHEREOF, the Executive and a duly authorized officer of the Bank have executed this Salary Continuation Agreement as of the date first written above.

	
  
EXECUTIVE:
  	
  
 
  	
  
BANK:
  
	
  
 
  	
  
 
  	
  
First   Reliance Bank
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  

  	
   
  	
  
By:
  	
  
 
  
	
  
F.R.   Saunders Jr.
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Its:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
And By:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
Leonard A.   Hoogenboom
  
	
   
  	
  
 
  	
  
Its:
  	
  
Chairman of   the Board
  

14

BENEFICIARY DESIGNATION
 FIRST RELIANCE BANK
 SALARY CONTINUATION AGREEMENT

          I, F.R. Saunders Jr., designate the following as beneficiary of any death benefits under this Salary Continuation Agreement –

	  
	 Primary:
	  

	 
	  

	

    	  .

	  
	  
	  

	  
	 Contingent:
	  

	  
	  

	

    	  .

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

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

	
  
 
  	
  
Signature:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
F.R.   Saunders Jr.
  
	
  
 
  	
  
Date:
  	
  
 
  	
  
______________________,   2006
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Accepted by   the Bank this _________ day of _____________________, 2006.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Print Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
Title:
  	
  
 
  

15

SCHEDULE A
 FIRST RELIANCE BANK
 SALARY CONTINUATION AGREEMENT

F.R. Saunders Jr.

	
  Plan Year
  	
   
 	
  
Plan
   Year
   ending
   December 31,
  	
   
 	
  
age at
   Plan
   Year
   end
  	
   
 	
  
Accrual
   Balance @
   6.25% (1)
  	
   
 	
  
Early
   Termination
   annual benefit
   payable at
   Normal
   Retirement Age
   (2)
  	
   
 	
  
Disability
   annual benefit
   payable at
   Normal
   Retirement Age
   (2)
  	
   
 	
  
Change-in-
   Control benefit
   payable in a
   lump sum
  	
   
 
	
  

  	
   
 	
  

  	
  

  	
   
 	
  

  	
  

  	
   
 	
  

  	
  

  	
   
 	
  

  	
  

  	
   
 	
  

  	
  

  	
   
 	
  

  	
  

  	
   
 
	
  1
  	
  
 
  	
  
 
  	
  
2006
  	
  
 
  	
  
 
  	
  
46
  	
  
 
  	
  
$
  	
  
50,891
  	
  
 
  	
  
$
  	
  
16,505
  	
  
 
  	
  
$
  	
  
16,505
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  2
  	
  
 
  	
  
 
  	
  
2007
  	
  
 
  	
  
 
  	
  
47
  	
  
 
  	
  
$
  	
  
108,328
  	
  
 
  	
  
$
  	
  
33,009
  	
  
 
  	
  
$
  	
  
33,009
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
3
  	
  
 
  	
  
 
  	
  
2008
  	
  
 
  	
  
 
  	
  
48
  	
  
 
  	
  
$
  	
  
172,944
  	
  
 
  	
  
$
  	
  
49,514
  	
  
 
  	
  
$
  	
  
49,514
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  4
  	
  
 
  	
  
 
  	
  
2009
  	
  
 
  	
  
 
  	
  
49
  	
  
 
  	
  
$
  	
  
245,424
  	
  
 
  	
  
$
  	
  
66,019
  	
  
 
  	
  
$
  	
  
66,019
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
5
  	
  
 
  	
  
 
  	
  
2010
  	
  
 
  	
  
 
  	
  
50
  	
  
 
  	
  
$
  	
  
326,513
  	
  
 
  	
  
$
  	
  
82,524
  	
  
 
  	
  
$
  	
  
82,524
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  6
  	
  
 
  	
  
 
  	
  
2011
  	
  
 
  	
  
 
  	
  
51
  	
  
 
  	
  
$
  	
  
417,017
  	
  
 
  	
  
$
  	
  
99,028
  	
  
 
  	
  
$
  	
  
99,028
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
7
  	
  
 
  	
  
 
  	
  
2012
  	
  
 
  	
  
 
  	
  
52
  	
  
 
  	
  
$
  	
  
517,814
  	
  
 
  	
  
$
  	
  
115,533
  	
  
 
  	
  
$
  	
  
115,533
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  8
  	
  
 
  	
  
 
  	
  
2013
  	
  
 
  	
  
 
  	
  
53
  	
  
 
  	
  
$
  	
  
629,852
  	
  
 
  	
  
$
  	
  
132,038
  	
  
 
  	
  
$
  	
  
132,038
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
9
  	
  
 
  	
  
 
  	
  
2014
  	
  
 
  	
  
 
  	
  
54
  	
  
 
  	
  
$
  	
  
754,161
  	
  
 
  	
  
$
  	
  
148,542
  	
  
 
  	
  
$
  	
  
148,542
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  10
  	
  
 
  	
  
 
  	
  
2015
  	
  
 
  	
  
 
  	
  
55
  	
  
 
  	
  
$
  	
  
891,856
  	
  
 
  	
  
$
  	
  
165,047
  	
  
 
  	
  
$
  	
  
165,047
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
11
  	
  
 
  	
  
 
  	
  
2016
  	
  
 
  	
  
 
  	
  
56
  	
  
 
  	
  
$
  	
  
1,044,144
  	
  
 
  	
  
$
  	
  
181,552
  	
  
 
  	
  
$
  	
  
181,552
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  12
  	
  
 
  	
  
 
  	
  
2017
  	
  
 
  	
  
 
  	
  
57
  	
  
 
  	
  
$
  	
  
1,212,333
  	
  
 
  	
  
$
  	
  
198,057
  	
  
 
  	
  
$
  	
  
198,057
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
13
  	
  
 
  	
  
 
  	
  
2018
  	
  
 
  	
  
 
  	
  
58
  	
  
 
  	
  
$
  	
  
1,397,838
  	
  
 
  	
  
$
  	
  
214,561
  	
  
 
  	
  
$
  	
  
214,561
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  14
  	
  
 
  	
  
 
  	
  
2019
  	
  
 
  	
  
 
  	
  
59
  	
  
 
  	
  
$
  	
  
1,602,192
  	
  
 
  	
  
$
  	
  
231,066
  	
  
 
  	
  
$
  	
  
231,066
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
15
  	
  
 
  	
  
 
  	
  
2020
  	
  
 
  	
  
 
  	
  
60
  	
  
 
  	
  
$
  	
  
1,827,052
  	
  
 
  	
  
$
  	
  
247,571
  	
  
 
  	
  
$
  	
  
247,571
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  16
  	
  
 
  	
  
 
  	
  
2021
  	
  
 
  	
  
 
  	
  
61
  	
  
 
  	
  
$
  	
  
2,074,209
  	
  
 
  	
  
$
  	
  
264,075
  	
  
 
  	
  
$
  	
  
264,075
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
17
  	
  
 
  	
  
 
  	
  
2022
  	
  
 
  	
  
 
  	
  
62
  	
  
 
  	
  
$
  	
  
2,345,602
  	
  
 
  	
  
$
  	
  
280,580
  	
  
 
  	
  
$
  	
  
280,580
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  18
  	
  
 
  	
  
 
  	
  
2023
  	
  
 
  	
  
 
  	
  
63
  	
  
 
  	
  
$
  	
  
2,643,327
  	
  
 
  	
  
$
  	
  
297,085
  	
  
 
  	
  
$
  	
  
297,085
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  
19
  	
  
 
  	
  
 
  	
  
2024
  	
  
 
  	
  
 
  	
  
64
  	
  
 
  	
  
$
  	
  
2,969,648
  	
  
 
  	
  
$
  	
  
313,590
  	
  
 
  	
  
$
  	
  
313,590
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  
	
  20
  	
  
 
  	
  
 
  	
  
June
   2025
  	
  
 
  	
  
 
  	
  
65
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  	
  
$
  	
  
321,842
  	
  
 
  	
  
$
  	
  
321,842
  	
  
 
  	
  
$
  	
  
3,144,289
  	
  
 
  

	
  

  
	
            (1)             Calculations are   approximations.  Benefit calculations   are based on prior year-end accrual balances for illustrative purposes.  The accrual balance reflects payment at   the beginning of each month, beginning July 1, 2025.  The Executive attains Normal Retirement   Age on June 14, 2025.
  
	
  
 
  
	
  
          (2)             The Early   Termination and Disability benefits are calculated as the annual amount that   fully amortizes the Accrual Balance existing at the end of the month   immediately before the month in which Separation from Service occurs,   amortizing that Accrual Balance over 15 years and taking into account   interest at the discount rate or rates established by the Plan Administrator.  Using a standard discount rate (6.25%),   Early Termination and Disability benefits are shown for illustrative purposes   only.  The Early Termination and   Disability benefits shown assume the Executive’s Separation from Service occurs   more than six months before the Executive’s Normal Retirement Age and that   the Early Termination benefit and the Disability benefit therefore become   payable beginning in the month after the Executive
attains the Normal   Retirement Age.
  

16

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

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]