Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as
of February 15, 2006, is made by and between Congaree Bancshares, a South
Carolina corporation (the “Employer” or the “Company”), which is the holding
company for Congaree State Bank (Proposed), a proposed state chartered bank
(the “Bank”), and Franklin H. “Hank” Ray, Jr., an individual resident of South
Carolina (the “Executive”).

 

The Employer is in the process
of organizing the Bank, and the Executive has agreed to serve as President and Chief
Executive Officer of the Bank and the Company. 
Upon completion of the organization of the Bank, the Bank will
automatically become a party to this Agreement, and all references to the term “Employer”
as used herein shall refer to the Company and the Bank.

 

The Employer recognizes that the
Executive’s contribution to the growth and success of the Bank during its
organization and initial years of operations will be a significant factor in
the success of the Bank.  The Employer desires
to provide for the employment of the Executive in a manner which will reinforce
and encourage the dedication of the Executive to the Bank and promote the best
interests of the Bank and its shareholders. 
The Executive is willing to serve the Employer on the terms and
conditions herein provided.  Certain
terms used in this Agreement are defined in Section 17 hereof.

 

This Agreement will be submitted
to the South Carolina Board of Financial Institutions and the FDIC in connection with the regulatory applications
related to the formation of the Bank. 
The parties hereto agree to any amendments to this Agreement as may be
required in connection with obtaining such regulatory approvals.

 

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

 

1.             Employment.  The Employer shall employ the
Executive, and the Executive shall serve the Employer, as the President and
Chief Executive Officer of the Bank and the Company upon the terms and
conditions set forth herein.  The
Executive shall also serve on the Board of Directors of the Company and the
Bank.  The Executive shall have such
authority and responsibilities consistent with his position as are set forth in
the Company’s or the Bank’s Bylaws or assigned by the Company’s or the Bank’s
Board of Directors (collectively, the “Board”) from time to time.  The Executive shall devote his full business
time, attention, skill and efforts to the performance of his duties hereunder,
except during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy.  The
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing
his personal investments, provided that such activities do not
materially interfere with the performance of his duties hereunder and are not
in conflict or competitive with, or adverse to, the interests of the Company or
the Bank.

 

2.             Term.  Unless earlier terminated as provided herein,
the Executive’s employment under this Agreement shall commence on the date hereof
and be for a term of 3 years (the “Initial Term”).  The employment shall be extended for
additional terms of one year each (“Additional Term”) unless a Notice of
Termination, as defined hereinafter, shall be delivered by the Bank and the
Company to Executive not less than six months prior to the end of the Initial
Term or six months prior to the end of the Additional Term, if applicable.  Notwithstanding the foregoing, the term of
employment hereunder will end on the date that the Executive attains the
retirement age, if any, specified in the Company’s or Bank’s Bylaws or by the
Board.  A Notice of Termination shall
mean a written notice of termination from the Company or the Executive which
specifies an effective date of termination, indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.

 

 

3.             Compensation and Benefits.

 

(a)   Starting February 15, 2006, the Employer shall
pay the Executive an initial annual base salary of $110,000.00, plus yearly
medical insurance premiums on the same basis as other employees are paid as
determined by the Board.  Prior to the
date the Bank opens for business to the public (the “Opening Date”), the salary
will be paid monthly.  Following the
Opening Date, the salary will be paid in accordance with the Bank’s standard
payroll procedures.  The Board (or an
appropriate committee of the Board) shall review the Executive’s performance
and salary at least annually and may increase the Executive’s base salary if it
determines in its sole discretion that an additional increase is appropriate.

 

(b)   The Executive shall receive a cash bonus in the
amount of $10,000.00 on the Opening
Date of the Bank.  For each anniversary
of the Opening Date thereafter, the Executive shall be eligible to receive a
cash bonus equaling up to 8% of the net pretax consolidated income of the
Company (determined in accordance with generally accepted accounting
principles) if the Bank achieves certain performance levels established by the
board of directors from time to time (the “Bonus Plan”).

 

(c)   The Executive, along with all other eligible
employees of the Company, shall participate in the Bank’s long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock, and other awards thereunder or under any similar plan as and when such
plan is adopted by the Company.  As soon
as an appropriate stock option plan is adopted by the Board, the Company shall
grant to the Executive an option to purchase a number of shares of Common Stock
equal to 4.5% of the number of shares sold in the offering.  The award agreement for the stock option
shall provide that one-fifth of the shares subject to the option will vest on
each of the first five anniversaries of the Opening Date, but only if the
Executive remains employed by the Company or one of its subsidiaries on such
date, and shall contain other customary terms and conditions.  Nothing herein shall be deemed to preclude
the granting to the Executive of warrants or options under a director option
plan in addition to the options granted hereunder.  The exercise price of the options will be equal
to the fair market value of the stock on the date of grant.

 

(d)   The Executive shall participate in all
retirement, health, welfare and other benefit plans or programs of the Employer
now or hereafter applicable generally to employees of the Employer or to a
class of employees that includes senior executives of the Employer.

 

(e)   The Employer shall provide the Executive with a
term life insurance policy providing for death benefits totaling $500,000
payable to the Executive’s spouse and heirs and $1,000,000 payable to the
Employer, and the Executive shall cooperate with the Employer in the securing
and maintenance of such policy.  If
Executive is taxed by state or federal authorities with respect to Employer’s
payment of the key man life insurance policy, Executive’s compensation payable
hereunder shall be increased, on a tax gross-up basis, so as to reimburse the
Executive for the additional tax payable by the Executive as a result of
Employer’s payment of the key man life insurance premiums taking into account
all taxes payable by the Executive with respect to such tax gross-up payments
hereunder, so that the Executive shall be, after payment of all taxes, in the
same financial position as if no taxes with respect to the key man life
insurance policy had been imposed upon him.

 

(f)    The Employer shall provide the Executive with an
automobile either owned or leased by the Company or the Bank of a make and
model appropriate to the Executive’s status. 
The monthly payment of this automobile shall not exceed $700.00 per
month.  Insurance, taxes and other
related automobile expenses shall also be paid by the Bank.  Until
the Employer provides this automobile, the Employer will reimburse the
Executive for the use of his personal automobile at the IRS legal mileage rate.

 

(g)   In addition, at a time deemed appropriate by the
Board, the Employer shall obtain a membership in and pay the initiation fee for
and the dues pertaining to an area country club and shall designate the
Executive as the authorized user of such membership for so long as the
Executive remains the President and Chief Executive Officer of the Employer and
this Agreement remains in force.

 

(h)   The Employer shall reimburse the Executive for
reasonable travel and other expenses, including cell phone expenses related to
the Executive’s duties which are incurred and accounted for in accordance with
the normal practices of the Employer.

 

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2.             Termination.

 

(a)   The Executive’s employment under this Agreement
may be terminated prior to the end of the Term only as follows, and the effect
of such termination shall be as set forth in Sections 4(b) through 4(j):

 

(i)            upon the death of the Executive;

 

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

 

(iii)          by the Employer for Cause upon delivery of a Notice of Termination to
the Executive;

 

(iv)          by the Executive for Good Reason upon delivery of a Notice of
Termination to the Employer within a 90-day period beginning on the 30th day
after the occurrence of a Change in Control or within a 90-day period beginning
on the one year anniversary of the occurrence of a Change in Control;

 

(v)           by the Employer if its effort to organize the Bank is abandoned, or if
the Company or the Bank receives notice or otherwise has reason to believe that
it will not receive approval of any bank regulatory application in connection
with the formation of the Bank and the Board determines in good faith that the
Executive’s actions, inactions, lack of experience, or background was a
material factor in the failure to obtain such approval;

 

(vi)          by the Employer without Cause upon delivery of a Notice of Termination;
and

 

(vii)         by the Executive effective upon the 30th day after delivery of a Notice
of Termination.

 

(b)   If the Executive’s
employment is terminated because of the Executive’s death, the Executive’s
estate shall receive any sums due him as base salary and reimbursement of
expenses through the end of the month during which death occurred, plus any
bonus earned or accrued under the Bonus Plan through the date of death
(including any amounts awarded for previous years but which were not yet
vested) and a pro  rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of the Executive’s
death.

 

(c)   During the period
of any incapacity leading up to the termination of the Executive’s employment
as a result of disability, the Employer shall continue to pay the Executive his
full base salary at the rate then in effect and all perquisites and other
benefits (other than any bonus) until the Executive becomes eligible for
benefits under any long-term disability plan or insurance program maintained by
the Employer, provided that the amount of any such payments to the Executive
shall be reduced by the sum of the amounts, if any, payable to the Executive
for the same period under any disability benefit or pension plan of the Employer
or any of its subsidiaries. Furthermore, the Executive shall receive any bonus
earned or accrued under the Bonus Plan through the date of incapacity
(including any amounts awarded for previous years but which were not yet
vested) and a pro  rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of the Executive’s
incapacity.

 

(d)   If the Executive’s
employment is terminated for Cause as provided above, or if the Executive
resigns (except for a termination of employment pursuant to Section 4(e)), the
Executive shall receive any sums due him as base salary and reimbursement of
expenses through the date of such termination.

 

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(e)   If the Executive’s
employment is terminated (1) by the Executive pursuant to clause (iv) of
Section 4(a) or (2) by the Employer pursuant to clause (vi) of Section 4(a)
following a Change in Control, then in addition to other rights and remedies
available in law or equity, the Executive shall be entitled to the following:

 

(i)            the
Employer shall pay the Executive in cash within fifteen days of the Termination
Date severance compensation in an amount equal to 100% of his then current
monthly base salary each month for 36 months from the Termination Date, plus
any bonus earned or accrued under the Bonus Plan through the Termination Date
(including any amounts awarded for previous years but which were not yet
vested) and a pro  rata share of any bonus with respect to the
current fiscal year which had been earned as of the Termination Date; and

 

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

 

(f)    If the Executive’s
employment is terminated pursuant to clause (v) of Section 4(a), the Employer
shall pay to the Executive severance compensation in an amount equal to 100% of
his then current monthly base salary each month for 24 months from the date of
termination, but shall not be obligated to pay any portion of any bonus.

 

(g)   If the Employer
terminates the Executive’s employment pursuant to clause (vi) of Section 4(a)
before a Change in Control, the Employer shall pay to the Executive severance
compensation in an amount equal to 100% of his then current monthly base salary
each month for 24 months from the date of termination, plus any bonus earned or
accrued under the Bonus Plan through the date of termination (including any
amounts awarded for previous years but which were not yet vested) and a pro
rata share of any bonus with respect to the current fiscal year which
had been earned as of the date of the Executive’s termination.

 

(h)   With the
exceptions of the provisions of this Section 4, and the express terms of any
benefit plan under which the Executive is a participant, it is agreed that,
upon termination of the Executive’s employment, the Employer shall have no
obligation to the Executive for, and the Executive waives and relinquishes, any
further compensation or benefits (exclusive of COBRA benefits).  At the time of termination of employment, the
Employer and the Executive shall enter into a mutually satisfactory form of
release acknowledging such remaining obligations and discharging both parties,
as well as the Employer’s officers, directors and employees with respect to
their actions for or on behalf of the Employer, from any other claims or
obligations arising out of or in connection with the Executive’s employment by
the Employer, including the circumstances of such termination.

 

(i)    In the event that
the Executive’s employment is terminated for any reason, the Executive shall
(and does hereby) tender his resignation as a director of the Company, the
Bank, and any other subsidiaries, effective as of the date of termination.

 

(j)    The parties
intend that the severance payments and other compensation provided for herein
are reasonable compensation for the Executive’s services to the Employer and
shall not constitute “excess parachute

 

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payments” within the meaning of Section 280G of the Internal Revenue
Code of 1986 and any regulations thereunder. 
To prevent the aggregate payments or benefits to be made or afforded to
the Executive as provided for herein from constituting an excess parachute
payment, the severance payments will be reduced, if necessary, to an amount,
the value of which is one dollar less than an amount equal to three times the
Executive’s “base amount,” as determined in accordance with Section 280G.  The allocation of any reduction required with
respect to the severance payments shall be determined by the Executive.

 

5.             Ownership
of Work Product.  The Employer shall
own all Work Product arising during the course of the Executive’s employment
(prior, present or future).  For purposes
hereof, “Work Product” shall mean all intellectual property rights, including
all Trade Secrets, U.S. and international copyrights, patentable inventions,
and other intellectual property rights in any programming, documentation,
technology or other work product that relates to the Employer, its business or
its customers and that the Executive conceives, develops, or delivers to the
Employer at any time during his employment, during or outside normal working
hours, in or away from the facilities of the Employer, and whether or not
requested by the Employer.  If the Work Product
contains any materials, programming or intellectual property rights that the
Executive conceived or developed prior to, and independent of, the Executive’s
work for the Employer, the Executive agrees to point out the pre-existing items
to the Employer and the Executive grants the Employer a worldwide,
unrestricted, royalty-free right, including the right to sublicense such
items.  The Executive agrees to take such
actions and execute such further acknowledgments and assignments as the
Employer may reasonably request to give effect to this provision.

 

6.             Protection
of Trade Secrets.  The Executive
agrees to maintain in strict confidence and, except as necessary to perform his
duties for the Employer, the Executive agrees not to use or disclose any Trade
Secrets of the Employer during or after his employment.  “Trade Secret” means information, including a
formula, pattern, compilation, program, device, method, technique, process,
drawing, cost data or customer list, that: (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

 

7.             Protection
of Other Confidential Information. 
In addition, the Executive agrees to maintain in strict confidence and,
except as necessary to perform his duties for the Employer, not to use or
disclose any Confidential Business Information of the Employer during his
employment and for a period of 24 months following termination of the Executive’s
employment.  “Confidential Business
Information” shall mean any internal, non-public information (other than Trade
Secrets already addressed above) concerning the Employer’s financial position
and results of operations (including revenues, assets, net income, etc.);
annual and long-range business plans; product or service plans; marketing plans
and methods; training, educational and administrative manuals; customer and
supplier information and purchase histories; and employee lists.  The provisions of Sections 6 and 7 shall also
apply to protect Trade Secrets and Confidential Business Information of third
parties provided to the Employer under an obligation of secrecy.

 

8.             Return
of Materials.  The Executive shall
surrender to the Employer, promptly upon its request and in any event upon
termination of the Executive’s employment, all media, documents, notebooks,
computer programs, handbooks, data files, models, samples, price lists,
drawings, customer lists, prospect data, or other material of any nature
whatsoever (in tangible or electronic form) in the Executive’s possession or
control, including all copies thereof, relating to the Employer, its business,
or its customers.  Upon the request of
the Employer, the Executive shall certify in writing compliance with the
foregoing requirement.

 

9.             Restrictive
Covenants.

 

(a)           No
Solicitation of Customers.  During
the Executive’s employment with the Employer and for a period of 12 months
thereafter, the Executive shall not (except
on behalf of or with the prior written consent of the Employer), either
directly or indirectly, on the Executive’s own behalf or in the service or on
behalf of others, (A) solicit, divert, or appropriate to or for a Competing
Business, or (B) attempt to solicit, divert, or appropriate to or for a
Competing Business, any person or entity that is or was a customer of the
Employer or any of its Affiliates at any time during the 12 months prior to the
date of termination and with whom the Executive has had material contact.

 

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(b)           No
Recruitment of Personnel.  During the
Executive’s employment with the Employer and for a period of 12 months
thereafter, the Executive shall not, either
directly or indirectly, on the Executive’s own behalf or in the service or on
behalf of others, (A) solicit, divert, or hire away, or (B) attempt to solicit,
divert, or hire away, to any Competing Business located in the Territory, any
employee of or consultant to the Employer or any of its Affiliates, regardless
of whether the employee or consultant is full-time or temporary, the employment
or engagement is pursuant to written agreement, or the employment is for a
determined period or is at will.

 

(c)           Non-Competition
Agreement. During the Executive’s employment with the Employer and for a
period of 12 months thereafter, the
Executive shall not (without the prior written consent of the Employer) compete
with the Employer or any of its Affiliates by, directly or indirectly, forming,
serving as an organizer, director or officer of, or consultant to, or acquiring
or maintaining more than a 1% passive investment in, a depository financial
institution or holding company therefor if such depository institution or
holding company has one or more offices or branches located in the
Territory.  Notwithstanding the
foregoing, the Executive may serve as an officer of or consultant to a
depository institution or holding company therefor even though such institution
operates one or more offices or branches in the Territory, if the Executive’s
employment does not directly involve, in whole or in part, the depository
financial institution’s or holding company’s operations in the Territory.

 

10.           Independent
Provisions.  The provisions in each
of the above Sections 9(a), 9(b), and 9(c) are independent, and the
unenforceability of any one provision shall not affect the enforceability of
any other provision.

 

11.           Successors;
Binding Agreement. The rights and
obligations of this Agreement shall bind and inure to the benefit of the
surviving corporation in any merger or consolidation in which the Employer is a
party, or any assignee of all or substantially all of the Employer’s business
and properties.  The Executive’s rights
and obligations under this Agreement may not be assigned by him, except that
his right to receive accrued but unpaid compensation, unreimbursed expenses and
other rights, if any, provided under this Agreement which survive termination
of this Agreement shall pass after death to the personal representatives of his
estate.

 

12.           Notice.  For the purposes of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided, however,
that all notices to the Employer shall be directed to the attention of the
Employer with a copy to the Secretary of the Employer.  All notices and communications shall be
deemed to have been received on the date of delivery thereof.

 

13.           Governing
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of South Carolina without giving effect to the conflict of laws principles
thereof.  Any action brought by any party
to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of South Carolina.

 

14.           Non-Waiver.  Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.

 

15.           Enforcement.  The Executive agrees that in the event of any
breach or threatened breach by the Executive of any covenant contained in
Section 9(a), 9(b), or 9(c) hereof, the resulting injuries to the Employer
would be difficult or impossible to estimate accurately, even though
irreparable injury or damages would certainly result.  Accordingly, an award of legal damages, if
without other relief, would be inadequate to protect the Employer.  The Executive, therefore, agrees that in the
event of any such breach, the Employer shall be entitled to obtain from a court
of competent jurisdiction an injunction to restrain the breach or anticipated
breach of any such covenant, and to obtain any other available legal,
equitable, statutory, or contractual relief. 
Should the Employer have cause to seek such relief, no bond shall be
required from the Employer, and the Executive shall pay all attorney’s fees and
court costs which the Employer may incur to the extent the Employer prevails in
its enforcement action.

 

16.           Saving
Clause.  The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other provisions
hereof.  If any

 

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provision or
clause of this Agreement, or portion thereof, shall be held by any court or
other tribunal of competent jurisdiction to be illegal, void, or unenforceable
in such jurisdiction, the remainder of such provision shall not be thereby
affected and shall be given full effect, without regard to the invalid
portion.  It is the intention of the
parties that, if any court construes any provision or clause of this Agreement,
or any portion thereof, to be illegal, void, or unenforceable because of the
duration of such provision or the area or matter covered thereby, such court
shall reduce the duration, area, or matter of such provision, and, in its
reduced form, such provision shall then be enforceable and shall be enforced. The Executive and the Employer hereby agree that
they will negotiate in good faith to amend this Agreement from time to time to
modify the terms of Sections 9(a), 9(b) or 9(c), the definition of the term “Territory,”
and the definition of the term “Business,” to reflect changes in the Employer’s
business and affairs so that the scope of the limitations placed on the
Executive’s activities by Section 9 accomplishes the parties’ intent in
relation to the then current facts and circumstances.  Any such amendment shall be effective only
when completed in writing and signed by the Executive and the Employer.

 

17.           Certain
Definitions.

 

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

 

(b)           “Business” shall mean the operation of a
depository financial institution, including, without limitation, the
solicitation and acceptance of deposits of money and commercial paper, the
solicitation and funding of loans and the provision of other banking services,
and any other related business engaged in by the Employer or any of its
Affiliates as of the date of termination.

 

(c)           “Cause” shall consist of any of (A) the
commission by the Executive of a willful act (including, without limitation, a
dishonest or fraudulent act) or a grossly negligent act, or the willful or
grossly negligent omission to act by the Executive, which is intended to cause,
causes or is reasonably likely to cause material harm to the Employer (including
harm to its business reputation), (B) the indictment of the Executive for the
commission or perpetration by the Executive of any felony or any crime
involving dishonesty, moral turpitude or fraud, (C) the material breach by
the Executive of this Agreement that, if susceptible of cure, remains uncured
ten days following written notice to the Executive of such breach, (D) the
receipt of any form of notice, written or otherwise, that any regulatory agency
having jurisdiction over the Employer intends to institute any form of formal
or informal (e.g., a memorandum of understanding which relates to the
Executive’s performance) regulatory action against the Executive or the
Employer or the Employer (provided that the Board of Directors
determines in good faith, with the Executive abstaining from participating in
the consideration of and vote on the matter, that the subject matter of such
action involves acts or omissions by or under the supervision of the Executive
or that termination of the Executive would materially advance the Employer’s
compliance with the purpose of the action or would materially assist the
Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action); (E) the exhibition by the Executive
of a standard of behavior within the scope of his employment that is materially
disruptive to the orderly conduct of the Employer’s business operations
(including, without limitation, substance abuse or sexual misconduct) to a
level which, in the Board of Directors’ good faith and reasonable judgment,
with the Executive abstaining from participating in the consideration of and
vote on the matter, is materially detrimental to the Employer’s best interest,
that, if susceptible of cure remains uncured ten days following written notice
to the Executive of such specific inappropriate behavior; or (F) the failure of
the Executive to devote his full business time and attention to his employment
as provided under this Agreement that, if susceptible of cure, remains uncured
30 days following written notice to the Executive of such failure.  In order for the Board of Directors to make a
determination that termination shall be for Cause, the Board must provide the
Executive with an opportunity to meet with the Board in person.

 

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

 

(i)            The individuals who, as of the date of this
Agreement, are members of the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least 50% of the Board of
Directors of the Company; provided, however, that if the
election, or nomination for election by the Company’s shareholders, of any new
director was approved in advance by a vote of at least 50% of the Incumbent
Board, such new director shall, for purposes of this Agreement, be

 

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considered as a member of the
Incumbent Board; provided, further, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened election contest, or other
actual or threatened solicitation of proxies or consents by or on behalf of any
person other than the Board of Directors of the Company, including by reason of
any agreement intended to avoid or settle any election contest or proxy contest.

 

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

 

(iii)          Consummation of:  (i) a merger,
consolidation, or reorganization involving the Company; (ii) a complete
liquidation or dissolution of the Company; or (iii) the sale or other
disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).

 

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

 

(e)           “Competing Business” shall mean any
business that, in whole or in part, is the same or substantially the same as
the Business.

 

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

 

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

 

(ii)           a
reduction in the Executive’s base salary or any failure to pay the Executive
any compensation or benefits to which he is entitled within five days of the
date due;

 

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

 

8

 

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

 

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

 

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

 

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

 

(viii)        the
failure of the Employer to obtain an agreement, satisfactory to the Executive,
from any successor or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof.

 

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

 

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

 

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

 

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

 

(h)           “Territory” shall mean a radius of 15 miles from (i) the main office of the
Employer or (ii) any branch office of the Employer.

 

(i)            “Notice
of Termination” shall mean a written notice of termination from the
Employer or the Executive which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon,
and, in the case of a termination for Good Reason or for Cause, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

9

 

18.           Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

 

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

 

IN WITNESS WHEREOF, the Employer has caused this
Agreement to be executed and its seal to be affixed hereunto by its officers
thereunto duly authorized, and the Executive has signed and sealed this
Agreement, effective as of the date first above written.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CONGAREE
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Steven P. Nivens

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   /s/ E. Danny Scott

  	
   

  
	
  Name:

  	
    Steven
  P. Nivens

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:
  

  	
  E.
  Danny Scott

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:
  

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ F. Harvin Ray, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
    F. Harvin Ray, Jr.

  	
   

  
																

 

10Exhibit 10.2

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as
of February 15, 2006, is made by and between Congaree Bancshares, a South
Carolina corporation (the “Employer” or the “Company”), which is the holding
company for Congaree State Bank (Proposed), a proposed state chartered bank
(the “Bank”), and Stephen P. Nivens, an individual resident of South Carolina
(the “Executive”).

 

The Employer is in the process
of organizing the Bank, and the Executive has agreed to serve as Chief Business
Development Officer of the Bank and the Company.  Upon completion of the organization of the
Bank, the Bank will automatically become a party to this Agreement, and all
references to the term “Employer” as used herein shall refer to the Company and
the Bank.

 

The Employer recognizes that the
Executive’s contribution to the growth and success of the Bank during its
organization and initial years of operations will be a significant factor in
the success of the Bank.  The Employer
desires to provide for the employment of the Executive in a manner which will
reinforce and encourage the dedication of the Executive to the Bank and promote
the best interests of the Bank and its shareholders.  The Executive is willing to serve the
Employer on the terms and conditions herein provided.  Certain terms used in this Agreement are
defined in Section 17 hereof.

 

This Agreement will be submitted
to the South Carolina Board of Financial Institutions and the FDIC in connection with the regulatory
applications related to the formation of the Bank.  The parties hereto agree to any amendments to
this Agreement as may be required in connection with obtaining such regulatory
approvals.

 

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

 

1.             Employment.  The Employer shall employ the
Executive, and the Executive shall serve the Employer, as Chief Business
Development Officer of the Bank and as a Senior Vice President and Chief
Business Development Officer of the Company upon the terms and conditions set
forth herein.  The Executive shall also
serve on the Board of Directors of the Company and the Bank.  The Executive shall have such authority and
responsibilities consistent with his position as are set forth in the Company’s
or the Bank’s Bylaws or assigned by the Company’s or the Bank’s Board of
Directors (collectively, the “Board”) from time to time.  The Executive shall devote his full business
time, attention, skill and efforts to the performance of his duties hereunder,
except during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy.  The
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing
his personal investments, provided that such activities do not
materially interfere with the performance of his duties hereunder and are not
in conflict or competitive with, or adverse to, the interests of the Company or
the Bank.

 

2.             Term.  Unless earlier terminated as provided herein,
the Executive’s employment under this Agreement shall commence on the date hereof
and be for a term of 3 years (the “Initial Term”).  The employment shall be extended for
additional terms of one year each (“Additional Term”) unless a Notice of
Termination, as defined hereinafter, shall be delivered by the Bank and the
Company to Executive not less than six months prior to the end of the Initial
Term or six months prior to the end of the Additional Term, if applicable.  Notwithstanding the foregoing, the term of
employment hereunder will end on the date that the Executive attains the
retirement age, if any, specified in the Company’s or Bank’s Bylaws or by the
Board.  A Notice of Termination shall
mean a written notice of termination from the Company or the Executive which
specifies an effective date of termination, indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.

 

 

3.             Compensation and Benefits.

 

(a)   Starting February 15, 2006, the Employer shall
pay the Executive an initial annual base salary of $106,000.00, plus yearly
medical insurance premiums on the same basis as other employees are paid as
determined by the Board.  Prior to the
date the Bank opens for business to the public (the “Opening Date”), the salary
will be paid monthly.  Following the
Opening Date, the salary will be paid in accordance with the Bank’s standard
payroll procedures.  The Board (or an
appropriate committee of the Board) shall review the Executive’s performance
and salary at least annually and may increase the Executive’s base salary if it
determines in its sole discretion that an additional increase is appropriate.

 

(b)   The Executive shall receive a cash bonus in the
amount of $10,000.00 on the Opening
Date of the Bank.  For each anniversary
of the Opening Date thereafter, the Executive shall be eligible to receive a
cash bonus equaling up to 8% of the net pretax consolidated income of the
Company (determined in accordance with generally accepted accounting
principles) if the Bank achieves certain performance levels established by the
board of directors from time to time (the “Bonus Plan”).

 

(c)   The Executive, along with all other eligible
employees of the Company, shall participate in the Bank’s long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock, and other awards thereunder or under any similar plan as and when such
plan is adopted by the Company.  As soon
as an appropriate stock option plan is adopted by the Board, the Company shall
grant to the Executive an option to purchase a number of shares of Common Stock
equal to 3.5% of the number of shares sold in the offering.  The award agreement for the stock option
shall provide that one-fifth of the shares subject to the option will vest on
each of the first five anniversaries of the Opening Date, but only if the
Executive remains employed by the Company or one of its subsidiaries on such
date, and shall contain other customary terms and conditions.  Nothing herein shall be deemed to preclude
the granting to the Executive of warrants or options under a director option
plan in addition to the options granted hereunder.  The exercise price of the options will be
equal to the fair market value of the stock on the date of grant.

 

(d)   The Executive shall participate in all
retirement, health, welfare and other benefit plans or programs of the Employer
now or hereafter applicable generally to employees of the Employer or to a
class of employees that includes senior executives of the Employer.

 

(e)   The Employer shall provide the Executive with a
term life insurance policy providing for death benefits totaling $500,000
payable to the Executive’s spouse and heirs and $1,000,000 payable to the
Employer, and the Executive shall cooperate with the Employer in the securing
and maintenance of such policy.  If
Executive is taxed by state or federal authorities with respect to Employer’s
payment of the key man life insurance policy, Executive’s compensation payable
hereunder shall be increased, on a tax gross-up basis, so as to reimburse the
Executive for the additional tax payable by the Executive as a result of
Employer’s payment of the key man life insurance premiums taking into account
all taxes payable by the Executive with respect to such tax gross-up payments
hereunder, so that the Executive shall be, after payment of all taxes, in the
same financial position as if no taxes with respect to the key man life
insurance policy had been imposed upon him.

 

(f)    The Employer shall provide the Executive with an
automobile either owned or leased by the Company or the Bank of a make and
model appropriate to the Executive’s status. 
The monthly payment of this automobile shall not exceed $700.00 per
month.  Insurance, taxes and other
related automobile expenses shall also be paid by the Bank.  Until
the Employer provides this automobile, the Employer will reimburse the
Executive for the use of his personal automobile at the IRS legal mileage rate.

 

(g)   In addition, at a time deemed appropriate by the
Board, the Employer shall obtain a membership in and pay the initiation fee for
and the dues pertaining to an area country club and shall designate the
Executive as the authorized user of such membership for so long as the
Executive remains the Chief Business Development Officer of the Employer and
this Agreement remains in force.

 

(h)   The Employer shall reimburse the Executive for
reasonable travel and other expenses, including cell phone expenses related to
the Executive’s duties which are incurred and accounted for in accordance with
the normal practices of the Employer.

 

2

 

2.     Termination.

 

(a)   The Executive’s employment under this Agreement
may be terminated prior to the end of the Term only as follows, and the effect
of such termination shall be as set forth in Sections 4(b) through 4(j):

 

(i)            upon the death of the Executive;

 

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

 

(iii)          by the Employer for Cause upon delivery of a Notice of Termination to
the Executive;

 

(iv)          by the Executive for Good Reason upon delivery of a Notice of
Termination to the Employer within a 90-day period beginning on the 30th day
after the occurrence of a Change in Control or within a 90-day period beginning
on the one year anniversary of the occurrence of a Change in Control;

 

(v)           by the Employer if its effort to organize the Bank is abandoned, or if
the Company or the Bank receives notice or otherwise has reason to believe that
it will not receive approval of any bank regulatory application in connection
with the formation of the Bank and the Board determines in good faith that the
Executive’s actions, inactions, lack of experience, or background was a
material factor in the failure to obtain such approval;

 

(vi)          by the Employer without Cause upon delivery of a Notice of Termination;
and

 

(vii)         by the Executive effective upon the 30th day after delivery of a Notice
of Termination.

 

(b)   If the Executive’s
employment is terminated because of the Executive’s death, the Executive’s estate
shall receive any sums due him as base salary and reimbursement of expenses
through the end of the month during which death occurred, plus any bonus earned
or accrued under the Bonus Plan through the date of death (including any
amounts awarded for previous years but which were not yet vested) and a pro
rata share of any bonus with respect to the current fiscal year which
had been earned as of the date of the Executive’s death.

 

(c)   During the period
of any incapacity leading up to the termination of the Executive’s employment
as a result of disability, the Employer shall continue to pay the Executive his
full base salary at the rate then in effect and all perquisites and other
benefits (other than any bonus) until the Executive becomes eligible for benefits
under any long-term disability plan or insurance program maintained by the
Employer, provided that the amount of any such payments to the Executive shall
be reduced by the sum of the amounts, if any, payable to the Executive for the
same period under any disability benefit or pension plan of the Employer or any
of its subsidiaries. Furthermore, the Executive shall receive any bonus earned
or accrued under the Bonus Plan through the date of incapacity (including any
amounts awarded for previous years but which were not yet vested) and a pro
rata share of any bonus with respect to the current fiscal year which
had been earned as of the date of the Executive’s incapacity.

 

(d)   If the Executive’s
employment is terminated for Cause as provided above, or if the Executive
resigns (except for a termination of employment pursuant to Section 4(e)), the
Executive shall receive any sums due him as base salary and reimbursement of
expenses through the date of such termination.

 

3

 

(e)   If the Executive’s
employment is terminated (1) by the Executive pursuant to clause (iv) of
Section 4(a) or (2) by the Employer pursuant to clause (vi) of Section 4(a)
following a Change in Control, then in addition to other rights and remedies
available in law or equity, the Executive shall be entitled to the following:

 

(i)            the
Employer shall pay the Executive in cash within fifteen days of the Termination
Date severance compensation in an amount equal to 100% of his then current
monthly base salary each month for 36 months from the Termination Date, plus
any bonus earned or accrued under the Bonus Plan through the Termination Date
(including any amounts awarded for previous years but which were not yet
vested) and a pro  rata share of any bonus with respect to the
current fiscal year which had been earned as of the Termination Date; and

 

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

 

(f)    If the Executive’s
employment is terminated pursuant to clause (v) of Section 4(a), the Employer
shall pay to the Executive severance compensation in an amount equal to 100% of
his then current monthly base salary each month for 24 months from the date of
termination, but shall not be obligated to pay any portion of any bonus.

 

(g)   If the Employer
terminates the Executive’s employment pursuant to clause (vi) of Section 4(a)
before a Change in Control, the Employer shall pay to the Executive severance
compensation in an amount equal to 100% of his then current monthly base salary
each month for 24 months from the date of termination, plus any bonus earned or
accrued under the Bonus Plan through the date of termination (including any
amounts awarded for previous years but which were not yet vested) and a pro
rata share of any bonus with respect to the current fiscal year which
had been earned as of the date of the Executive’s termination.

 

(h)   With the
exceptions of the provisions of this Section 4, and the express terms of any
benefit plan under which the Executive is a participant, it is agreed that,
upon termination of the Executive’s employment, the Employer shall have no
obligation to the Executive for, and the Executive waives and relinquishes, any
further compensation or benefits (exclusive of COBRA benefits).  At the time of termination of employment, the
Employer and the Executive shall enter into a mutually satisfactory form of
release acknowledging such remaining obligations and discharging both parties,
as well as the Employer’s officers, directors and employees with respect to
their actions for or on behalf of the Employer, from any other claims or
obligations arising out of or in connection with the Executive’s employment by
the Employer, including the circumstances of such termination.

 

(i)    In the event that
the Executive’s employment is terminated for any reason, the Executive shall
(and does hereby) tender his resignation as a director of the Company, the
Bank, and any other subsidiaries, effective as of the date of termination.

 

(j)    The parties
intend that the severance payments and other compensation provided for herein
are reasonable compensation for the Executive’s services to the Employer and
shall not constitute “excess parachute 

 

4

 

payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder.  To prevent the
aggregate payments or benefits to be made or afforded to the Executive as
provided for herein from constituting an excess parachute payment, the
severance payments will be reduced, if necessary, to an amount, the value of
which is one dollar less than an amount equal to three times the Executive’s “base
amount,” as determined in accordance with Section 280G.  The allocation of any reduction required with
respect to the severance payments shall be determined by the Executive.

 

5.             Ownership
of Work Product.  The Employer shall
own all Work Product arising during the course of the Executive’s employment
(prior, present or future).  For purposes
hereof, “Work Product” shall mean all intellectual property rights, including
all Trade Secrets, U.S. and international copyrights, patentable inventions,
and other intellectual property rights in any programming, documentation,
technology or other work product that relates to the Employer, its business or
its customers and that the Executive conceives, develops, or delivers to the
Employer at any time during his employment, during or outside normal working
hours, in or away from the facilities of the Employer, and whether or not
requested by the Employer.  If the Work
Product contains any materials, programming or intellectual property rights
that the Executive conceived or developed prior to, and independent of, the
Executive’s work for the Employer, the Executive agrees to point out the
pre-existing items to the Employer and the Executive grants the Employer a
worldwide, unrestricted, royalty-free right, including the right to sublicense
such items.  The Executive agrees to take
such actions and execute such further acknowledgments and assignments as the
Employer may reasonably request to give effect to this provision.

 

6.             Protection
of Trade Secrets.  The Executive
agrees to maintain in strict confidence and, except as necessary to perform his
duties for the Employer, the Executive agrees not to use or disclose any Trade
Secrets of the Employer during or after his employment.  “Trade Secret” means information, including a
formula, pattern, compilation, program, device, method, technique, process,
drawing, cost data or customer list, that: (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

 

7.             Protection
of Other Confidential Information. 
In addition, the Executive agrees to maintain in strict confidence and,
except as necessary to perform his duties for the Employer, not to use or
disclose any Confidential Business Information of the Employer during his
employment and for a period of 24 months following termination of the Executive’s
employment.  “Confidential Business
Information” shall mean any internal, non-public information (other than Trade
Secrets already addressed above) concerning the Employer’s financial position
and results of operations (including revenues, assets, net income, etc.);
annual and long-range business plans; product or service plans; marketing plans
and methods; training, educational and administrative manuals; customer and
supplier information and purchase histories; and employee lists.  The provisions of Sections 6 and 7 shall also
apply to protect Trade Secrets and Confidential Business Information of third
parties provided to the Employer under an obligation of secrecy.

 

8.             Return
of Materials.  The Executive shall
surrender to the Employer, promptly upon its request and in any event upon
termination of the Executive’s employment, all media, documents, notebooks,
computer programs, handbooks, data files, models, samples, price lists,
drawings, customer lists, prospect data, or other material of any nature
whatsoever (in tangible or electronic form) in the Executive’s possession or
control, including all copies thereof, relating to the Employer, its business,
or its customers.  Upon the request of
the Employer, the Executive shall certify in writing compliance with the
foregoing requirement.

 

9.             Restrictive
Covenants.

 

(a)           No
Solicitation of Customers.  During
the Executive’s employment with the Employer and for a period of 12 months
thereafter, the Executive shall not (except
on behalf of or with the prior written consent of the Employer), either
directly or indirectly, on the Executive’s own behalf or in the service or on
behalf of others, (A) solicit, divert, or appropriate to or for a Competing
Business, or (B) attempt to solicit, divert, or appropriate to or for a
Competing Business, any person or entity that is or was a customer of the Employer
or any of its Affiliates at any time during the 12 months prior to the date of
termination and with whom the Executive has had material contact.

 

5

 

(b)           No
Recruitment of Personnel.  During the
Executive’s employment with the Employer and for a period of 12 months
thereafter, the Executive shall not, either
directly or indirectly, on the Executive’s own behalf or in the service or on
behalf of others, (A) solicit, divert, or hire away, or (B) attempt to solicit,
divert, or hire away, to any Competing Business located in the Territory, any
employee of or consultant to the Employer or any of its Affiliates, regardless
of whether the employee or consultant is full-time or temporary, the employment
or engagement is pursuant to written agreement, or the employment is for a
determined period or is at will.

 

(c)           Non-Competition
Agreement. During the Executive’s employment with the Employer and for a
period of 12 months thereafter, the
Executive shall not (without the prior written consent of the Employer) compete
with the Employer or any of its Affiliates by, directly or indirectly, forming,
serving as an organizer, director or officer of, or consultant to, or acquiring
or maintaining more than a 1% passive investment in, a depository financial
institution or holding company therefor if such depository institution or
holding company has one or more offices or branches located in the
Territory.  Notwithstanding the
foregoing, the Executive may serve as an officer of or consultant to a
depository institution or holding company therefor even though such institution
operates one or more offices or branches in the Territory, if the Executive’s
employment does not directly involve, in whole or in part, the depository financial
institution’s or holding company’s operations in the Territory.

 

10.           Independent
Provisions.  The provisions in each
of the above Sections 9(a), 9(b), and 9(c) are independent, and the
unenforceability of any one provision shall not affect the enforceability of
any other provision.

 

11.           Successors;
Binding Agreement. The rights and
obligations of this Agreement shall bind and inure to the benefit of the
surviving corporation in any merger or consolidation in which the Employer is a
party, or any assignee of all or substantially all of the Employer’s business
and properties.  The Executive’s rights
and obligations under this Agreement may not be assigned by him, except that
his right to receive accrued but unpaid compensation, unreimbursed expenses and
other rights, if any, provided under this Agreement which survive termination
of this Agreement shall pass after death to the personal representatives of his
estate.

 

12.           Notice.  For the purposes of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or sent
by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided, however,
that all notices to the Employer shall be directed to the attention of the
Employer with a copy to the Secretary of the Employer.  All notices and communications shall be
deemed to have been received on the date of delivery thereof.

 

13.           Governing
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of South Carolina without giving effect to the conflict of laws principles
thereof.  Any action brought by any party
to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of South Carolina.

 

14.           Non-Waiver.  Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.

 

15.           Enforcement.  The Executive agrees that in the event of any
breach or threatened breach by the Executive of any covenant contained in
Section 9(a), 9(b), or 9(c) hereof, the resulting injuries to the Employer
would be difficult or impossible to estimate accurately, even though
irreparable injury or damages would certainly result.  Accordingly, an award of legal damages, if
without other relief, would be inadequate to protect the Employer.  The Executive, therefore, agrees that in the
event of any such breach, the Employer shall be entitled to obtain from a court
of competent jurisdiction an injunction to restrain the breach or anticipated
breach of any such covenant, and to obtain any other available legal,
equitable, statutory, or contractual relief. 
Should the Employer have cause to seek such relief, no bond shall be
required from the Employer, and the Executive shall pay all attorney’s fees and
court costs which the Employer may incur to the extent the Employer prevails in
its enforcement action.

 

16.           Saving
Clause.  The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.  If any 

 

6

 

provision or
clause of this Agreement, or portion thereof, shall be held by any court or
other tribunal of competent jurisdiction to be illegal, void, or unenforceable
in such jurisdiction, the remainder of such provision shall not be thereby
affected and shall be given full effect, without regard to the invalid
portion.  It is the intention of the
parties that, if any court construes any provision or clause of this Agreement,
or any portion thereof, to be illegal, void, or unenforceable because of the
duration of such provision or the area or matter covered thereby, such court
shall reduce the duration, area, or matter of such provision, and, in its
reduced form, such provision shall then be enforceable and shall be enforced. The Executive and the Employer hereby agree that
they will negotiate in good faith to amend this Agreement from time to time to
modify the terms of Sections 9(a), 9(b) or 9(c), the definition of the term “Territory,”
and the definition of the term “Business,” to reflect changes in the Employer’s
business and affairs so that the scope of the limitations placed on the
Executive’s activities by Section 9 accomplishes the parties’ intent in
relation to the then current facts and circumstances.  Any such amendment shall be effective only
when completed in writing and signed by the Executive and the Employer.

 

17.           Certain
Definitions.

 

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

 

(b)           “Business” shall mean the operation of a
depository financial institution, including, without limitation, the
solicitation and acceptance of deposits of money and commercial paper, the
solicitation and funding of loans and the provision of other banking services,
and any other related business engaged in by the Employer or any of its
Affiliates as of the date of termination.

 

(c)           “Cause” shall consist of any of (A) the
commission by the Executive of a willful act (including, without limitation, a
dishonest or fraudulent act) or a grossly negligent act, or the willful or
grossly negligent omission to act by the Executive, which is intended to cause,
causes or is reasonably likely to cause material harm to the Employer
(including harm to its business reputation), (B) the indictment of the
Executive for the commission or perpetration by the Executive of any felony or
any crime involving dishonesty, moral turpitude or fraud, (C) the material
breach by the Executive of this Agreement that, if susceptible of cure, remains
uncured ten days following written notice to the Executive of such breach,
(D) the receipt of any form of notice, written or otherwise, that any
regulatory agency having jurisdiction over the Employer intends to institute
any form of formal or informal (e.g., a memorandum of understanding
which relates to the Executive’s performance) regulatory action against the
Executive or the Employer or the Employer (provided that the Board of
Directors determines in good faith, with the Executive abstaining from
participating in the consideration of and vote on the matter, that the subject
matter of such action involves acts or omissions by or under the supervision of
the Executive or that termination of the Executive would materially advance the
Employer’s compliance with the purpose of the action or would materially assist
the Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action); (E) the exhibition by the Executive
of a standard of behavior within the scope of his employment that is materially
disruptive to the orderly conduct of the Employer’s business operations
(including, without limitation, substance abuse or sexual misconduct) to a
level which, in the Board of Directors’ good faith and reasonable judgment,
with the Executive abstaining from participating in the consideration of and
vote on the matter, is materially detrimental to the Employer’s best interest,
that, if susceptible of cure remains uncured ten days following written notice
to the Executive of such specific inappropriate behavior; or (F) the failure of
the Executive to devote his full business time and attention to his employment
as provided under this Agreement that, if susceptible of cure, remains uncured
30 days following written notice to the Executive of such failure.  In order for the Board of Directors to make a
determination that termination shall be for Cause, the Board must provide the
Executive with an opportunity to meet with the Board in person.

 

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

 

(i)            The individuals who, as of the date of this
Agreement, are members of the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least 50% of the Board of
Directors of the Company; provided, however, that if the
election, or nomination for election by the Company’s shareholders, of any new
director was approved in advance by a vote of at least 50% of the Incumbent
Board, such new director shall, for purposes of this Agreement, be 

 

7

 

considered as a member of the
Incumbent Board; provided, further, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened election contest, or other
actual or threatened solicitation of proxies or consents by or on behalf of any
person other than the Board of Directors of the Company, including by reason of
any agreement intended to avoid or settle any election contest or proxy contest.

 

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

 

(iii)          Consummation of:  (i) a merger,
consolidation, or reorganization involving the Company; (ii) a complete liquidation
or dissolution of the Company; or (iii) the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).

 

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

 

(e)           “Competing Business” shall mean any
business that, in whole or in part, is the same or substantially the same as
the Business.

 

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

 

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

 

(ii)           a
reduction in the Executive’s base salary or any failure to pay the Executive
any compensation or benefits to which he is entitled within five days of the
date due;

 

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

 

8

 

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

 

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

 

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

 

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

 

(viii)        the
failure of the Employer to obtain an agreement, satisfactory to the Executive,
from any successor or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof.

 

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

 

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

 

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

 

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

 

(h)           “Territory” shall mean a radius of 15 miles from (i) the main office of the
Employer or (ii) any branch office of the Employer.

 

(i)            “Notice
of Termination” shall mean a written notice of termination from the
Employer or the Executive which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon,
and, in the case of a termination for Good Reason or for Cause, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

9

 

18.           Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

 

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

 

IN WITNESS WHEREOF, the Employer has caused this
Agreement to be executed and its seal to be affixed hereunto by its officers
thereunto duly authorized, and the Executive has signed and sealed this
Agreement, effective as of the date first above written.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CONGAREE BANCSHARES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ F. Harvin Ray, Jr.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   /s/ E. Danny Scott

  	
   

  
	
  Name:

  	
  F. Harvin Ray, Jr.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: 

  	
  E. Danny Scott

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Steven P. Nivens

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Steven P. Nivens

  	
   

  
														

 

10

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