Document:

exhibit 10.7

 

 

 

 

Exhibit 10.7

 

AMENDED AND
RESTATED EMPLOYMENT AGREEMENT

 

 

            THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”) dated as of the 30th day of September, 2013 (the “Effective Date”) is made by and
between Southern First Bank (the “Employer”), having its principal office
at 100 Verdae Boulevard, Suite 100, Greenville, South Carolina 29607, and Frederick
Gilmer, III (hereinafter called “Employee”), a resident of the State of
South Carolina.  References herein to the “Company” refer to Southern First
Bancshares, Inc., the parent company of the Employer. This Agreement amends and
restates that certain existing employment agreement between the parties dated
December 17, 2008.

 

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

 

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

 

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

 

2.     
Term.  Unless earlier terminated as provided in section 13 below,
Employee’s employment under this Agreement shall commence on the Effective Date
and be for a term ending January 31, 2015 (the “Term”).  At the end of January
2014 and on the last day of January each year thereafter, the Term shall be
extended for an additional one (1) year so that the remaining Term shall
continue to be two (2) years; provided that Employer or Employee may at
any time, by written notice, fix the Term to a finite term of two (2) years
commencing with the year of the notice.  

 

3.     
Base Salary.  For all services rendered by Employee under this
Agreement, Employer shall pay Employee a rate of base salary of $194,000 per
year (the “Base Salary”).  The Base Salary shall be reviewed annually by the
Board, and may be increased by the Board or a duly appointed committee thereof,
in its sole discretion.  The Base Salary shall be paid in accordance with
Employer’s standard payroll procedures, but in any case, no less frequently
than monthly.

 

 

 

            

4.     
Benefits.  

 

(a)        Employee shall be
entitled, to the extent that Employee’s position, title, tenure, salary, age,
health and other qualifications make Employee eligible, to participate in such
pension, profit sharing, bonus, life insurance, hospitalization, major medical,
and other employee benefit plans or programs of Employer currently in existence
on the date hereof or later established that generally are provided to
executive employees of Employer.  Employee’s participation in any such plan or
program shall be subject to the provisions, rules and regulations applicable
thereto.  Any Company stock options or similar awards shall be issued to
Employee at an exercise price per share of not less than the fair market value
per share of the corresponding shares as of the date of grant and the number of
shares subject to such grant shall be fixed on such date.  Any and all bonus
payments made to Employee shall be paid by the earlier of: (i) seventy (70)
days after the end of the year in which the bonus was earned by Employee or
(ii) with the first payroll cycle following the Company’s press release
announcing its previous year’s financial performance. 

 

(b)        Employer shall provide
Employee with a $700 monthly automobile allowance, paid in accordance with
Employer’s standard payroll procedures, but in any case, no less frequently
than monthly.  

 

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

 

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

 

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

 

	
  2

  

 

 

 

 

 

8.     
Ownership of Work Product.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.     
Protection of Trade Secrets and Confidential Information.  

 

	
  3

  

 

 

 

 

 

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

 

(b)                
Employee agrees to maintain in strict confidence and, except as
necessary to perform Employee’s duties for Employer, not to use or disclose any
Confidential Information at any time, either during the Term of Employee’s
employment or for a period of one (1) year after Employee’s last date of
employment, so long as the pertinent data or information remains Confidential
Information.  “Confidential Information” shall mean any non-public information
of a competitively sensitive or personal nature, other than Trade Secrets,
acquired by Employee during Employee’s employment, relating to Employer or any
Affiliate or Employer’s or any Affiliate’s business, operations, customers,
suppliers, products, employees, financial affairs or industrial practices. 
Notwithstanding anything herein to the contrary, no obligation or liability
shall accrue hereunder with respect to any information that is or becomes
publicly available without the fault of Employee.

 

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

 

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

 

	
  4

  

 

 

 

 

 

 

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

 

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

 

13.    Termination
and Severance Payments.

 

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

 

(i)                
upon the death of Employee;

 

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

 

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

 

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

 

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

 

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

 

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

                        

	
  5

  

 

 

 

 

 

 

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

 

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

            

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

 

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

 

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

 

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

 

(e)        If Employee’s
employment is terminated by Employer without Cause, conditioned upon the
effectiveness of the release described in Section 13(i) below and subject to
the possibility of a six-month delay described below in Section 29(a),
beginning on the first day of the month following the date of the Employee’s
termination, and continuing on the first day of the month for the next eleven
(11) months, the Employer shall pay to the Employee monthly severance
compensation in cash in an amount equal to one-twelfth (1/12th) of the
Employee’s annual rate of Base Salary at the date of termination.  Employer
shall also pay Employee any bonus earned or accrued through the date of
termination.  Any bonus for previous years, which was not yet paid, will be
paid as stated in Section 4(a) of this Agreement.  The restrictive covenants
contained in sections 10, 11 and 12 shall not apply to Employee. 

 

	
  6

  

  

 

 

 

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

(i)         Subject
to the possibility of a six-month delay described below in Section 29(a),
beginning on the date following the date of the Employee’s termination, the
Employer shall provide Employee with the same severance compensation and
accrued bonus set forth in Section 13(e).  

 

(ii)        Employee
may continue participation, in accordance with the terms of the applicable
benefits plans, in the Company’s group health plan pursuant to plan
continuation rules under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”).  In accordance with COBRA, assuming Employee is covered under the
Company’s group health plan as of his date of termination, Employee will be
entitled to elect COBRA continuation coverage for the legally required COBRA
period (the “Continuation Period”).  If Employee elects COBRA coverage for
group health coverage, he will be obligated to pay the portion of the full
COBRA cost of the coverage equal to an active employee’s share of premiums for
coverage for the respective plan year and the Company’s share of such premiums shall
be treated as taxable income to Employee.  Notwithstanding the above, the
Employer’s obligations hereunder with respect to the foregoing benefits
provided in this subsection (ii) shall be limited to the extent that if
Employee obtains any coverage pursuant to a subsequent employer’s benefit plans
which duplicates the Employer’s coverage, the duplicative coverage may be
terminated by Employer.  This subsection (ii) shall not be interpreted so as to
limit any benefits to which Employee or his dependents or beneficiaries may be
entitled under any of Employer’s employee benefit plans, programs, or practices
following the Employee’s Termination of Employment, including, without
limitation, retiree medical and life insurance benefits; 

 

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

 

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

 

	
  7

  

  

 

 

 

(h)        With the exceptions of
the provisions of this Section 13, and the express terms of any benefit plan
under which Employee is a participant, it is agreed that, upon termination of
Employee’s employment, Employer shall have no obligation to Employee for, and
Employee waives and relinquishes, any further compensation or benefits
(exclusive of COBRA benefits).  Unless otherwise stated in this Section 13, the
effect of termination on any outstanding incentive awards, stock options, stock
appreciation rights, performance units, or other incentives shall be governed
by the terms of the applicable benefit or incentive plan and/or the agreements
governing such incentives. Within sixty (60) days of termination of Employee’s
employment, and as a condition to the Employer’s obligation to pay any
severance hereunder, the Employee shall execute, and not timely revoke during
any revocation period provided pursuant to such release, a mutually
satisfactory form of release acknowledging such remaining obligations and
discharging both parties, as well as Employer’s officers, directors and
employees with respect to their actions for or on behalf of Employer, from any
other claims or obligations arising out of or in connection with Employee’s
employment by Employer, including the circumstances of such termination.  In most instances, payment will be made, or in
the case of installment payments, will begin as soon as practicable after such
release is effective. However, if the 60-day period spans two calendar years,
such severance payment will be made as soon as possible in the subsequent
taxable year. 

 

(i)         The parties intend
that the severance payments and other compensation provided for herein are
reasonable compensation for Employee’s services to Employer and shall not
constitute “excess parachute payments” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations
thereunder.  If the Employer’s independent accountants acting as auditors for
the Employer determine that any or the aggregate value (as determined pursuant
to Section 280G of the Code) of all payments, distributions, accelerations of
vesting, awards and provisions of benefits by the Employer to or for the
benefit of Employee (whether paid or payable, distributed or distributable,
accelerated, awarded or provided pursuant to the terms of this Agreement or
otherwise), (a “Payment”) would constitute an excess parachute payment and be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), such Payment shall be reduced to the least extent necessary so that no
portion of the Payment shall be subject to the Excise Tax, but only if, by
reason of such reduction, the net after-tax benefit received by the Employee as
a result of such reduction will exceed the net after-tax benefit that would
have been received by the Employee if no such reduction were made.  The Payment
shall be reduced, if applicable, by the Employer in the following order of
priority: (A) reduction of any cash payments otherwise payable to the Employee
pursuant to a supplemental executive retirement plan including, without
limitation, any salary continuation agreement between the Employee and the
Employer; (B) reduction of any cash severance payments otherwise payable to the
Employee that are exempt from Section 409A of the Code; (C) reduction of any
other cash payments or benefits otherwise payable to the Employee that are
exempt from Section 409A of the Code, but excluding any payments attributable
to any acceleration of vesting or payments with respect to any equity award
that are exempt from Section 409A of the Code; (D) reduction of any payments
attributable to any acceleration of vesting or payments with respect to any
equity award that are exempt from Section 409A of the Code, in each case
beginning with payments that would otherwise be made last in time; and (E)
reduction of any other payments or benefits otherwise payable to the Employee
on a pro-rata basis or such other manner that complies with Section 409A of the
Code, but excluding any payments attributable to any acceleration of vesting
and payments with respect to any equity award that are exempt from Section 409A
of the Code.  If, however, such Payment is not reduced as described above, then
such Payment shall be paid in full to the Employee and the Employee shall be
responsible for payment of any Excise Taxes relating to the Payment.

 

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

 

15.    Governing
Law.  This Agreement
and all rights hereunder shall be governed by the laws of the State of South
Carolina, except to the extent governed by the laws of the United States of
America in which case federal laws shall govern. Any action brought by
any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in the State of South Carolina.

 

	
  8

  

  

 

 

 

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

 

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

 

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

 

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

 

20.    Extension
of Periods.  Each of the time periods described in Sections 9-12 of this
Agreement shall be automatically extended by any length of time during which
Employee is in breach of the corresponding covenant contained herein.  Such
provisions of this Agreement shall continue in full force and effect throughout
the duration of the extended periods.

 

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

 

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

 

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

 

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

 

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

 

	
  9

  

  

 

 

 

26.    Certain
Definitions. 

 

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

                        

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

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

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

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

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

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

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

 

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

 

	
  10

  

 

  

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  11

  

  

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

Employee’s right
to terminate Employee’s employment for Good Reason shall not be affected by
Employee’s incapacity due to physical or mental illness.

 

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

 

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

 

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

 

	
  12

  

  

 

 

 

(g)        “Notice
of Termination” shall mean a written notice of termination from one party
to the other which specifies an effective date of termination, indicates the
specific termination provision in this Agreement relied upon, and, in the case
of (i) a termination for Cause, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee’s
employment under the provision so indicated, or (ii) in the case of a
termination for Good Reason, sets forth the Good Reason event which occurred no
more than ninety (90) days prior to the date of the notice and provides the
Employer not less than thirty (30) days to remedy this condition; 

 

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

 

27.  Compliance with Regulatory
Restrictions.  Notwithstanding anything to the contrary herein, and in
addition to any restrictions stated in Section 13 hereof, any compensation or
other benefits paid to the Employee shall be limited to the extent required by
any federal or state regulatory agency having authority over the Company or the
Employer.  The Employee agrees that compliance by the Company or the Employer
with such regulatory restrictions, even to the extent that compensation or
other benefits paid to the Employee are limited, shall not be a breach of this
Agreement by the Company or the Employer.

 

28.  Compliance
with Dodd–Frank Wall Street Reform and Consumer Protection Act. 
Notwithstanding anything to the contrary herein, any incentive payments to the
Employee shall be limited to the extent required under the Dodd–Frank Wall
Street Reform and Consumer Protection Act (the “Act”), including, but not
limited to, clawbacks for such incentive payments as required by the Act.  The
Employee agrees to such amendments, agreements, or waivers that are required by
the Act or requested by the Company to comply with the terms of the Act.  

 

29.  Compliance
with Internal Revenue Code Section 409A.  All payments that may be made and
benefits that may be provided pursuant to this Agreement are intended to
qualify for an exclusion from Section 409A of the Code and any related
regulations or other pronouncements thereunder and, to the extent not excluded,
to meet the requirements of Section 409A of the Code.  Any payments made under
Section 13 of this Agreement which are paid on or before the last day of the
applicable period for the short-term deferral exclusion under Treasury
Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term
deferral exclusion.  Any remaining payments under Section 13 are intended to
qualify for the exclusion for separation pay plans under Treasury Regulation §
1.409A-1(b)(9). Each payment made under Section 13 shall be treated as a
“separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for
purposes of Code Section 409A.  Further, notwithstanding anything to the
contrary, all severance payments payable under the provisions of Section 13
shall be paid to the Employee no later than the last day of the second calendar
year following the calendar year in which occurs the date of Employee’s
termination of employment. None of the payments under this Agreement are
intended to result in the inclusion in Employee’s federal gross income on
account of a failure under Section 409A(a)(1) of the Code.  The parties intend
to administer and interpret this Agreement to carry out such intentions. 
However, Company does not represent, warrant or guarantee that any payments
that may be made pursuant to this Agreement will not result in inclusion in
Employee’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the
Code or any similar state statute or regulation.  Notwithstanding any other
provision of this Agreement, to the extent that the right to any payment
(including the provision of benefits) hereunder provides for the “deferral of
compensation” within the meaning of Section 409A(d)(1) of the Code, the payment
shall be paid (or provided) in accordance with the following:

 

	
  13

  

 

  

 

 

 

(a)        If
the Employee is a “Specified Employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code on the date of the Employee’s termination (the
“Separation Date”), and if an exemption from the six month delay requirement of
Code Section 409A(a)(2)(B)(i) is not available, then no such payment shall be
made or commence during the period beginning on the Separation Date and ending
on the date that is six months following the Separation Date or, if earlier, on
the date of the Employee’s death.  The amount of any payment that would
otherwise be paid to the Employee during this period shall instead be paid to
the Employee on the first day of the first calendar month following the end of
the period.  

 

(b)     
Payments with respect to reimbursements of expenses or benefits or provision of
fringe or other in-kind benefits shall be made on or before the last day of the
calendar year following the calendar year in which the relevant expense or
benefit is incurred.  The amount of expenses or benefits eligible for
reimbursement, payment or provision during a calendar year shall not affect the
expenses or benefits eligible for reimbursement, payment or provision in any
other calendar year.

 

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

 

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

 

[Signatures appear on the following page.]

 

 

 

 

 

	
   14

  

 

  

 

 

 

 

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

 

                                                                                                                                                                                                        EMPLOYER:

 

                                                                                                                                                                                                        SOUTHERN
FIRST BANK

 

 

[CORPORATE
SEAL]                                                                                                                                                                 By:/s/R.
Arthur Seaver, Jr.                           

                                                                                                                                                                                                         Name: R. Arthur Seaver, Jr.

Attest:                                                                                                                                                                                            Title: Chief Executive Officer

 

 

/s/Julie
A. Fairchild                                          

Secretary

 

                                                                        

            

                                                                                                                                                                                                        EMPLOYEE:

 

 

 

                                                                                                                                                                                                         /s/Frederick
Gilmer, III                             

	
		
			
				
					
						
							
								
									
										                                                                  Frederick
Gilmer, III

									

								

							

						

					

				

			

		

	

 

 

 

 

	
  15Exhibit 10.8

 

 

 

 

Exhibit 10.8

 

AMENDED AND RESTATED EMPLOYMENT
AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement“), dated as of the 30th day of September, 2013 (the
“Effective Date“) is made by and between Southern First Bank (the “Bank“) and Southern First
Bancshares, Inc. (the “Company“ and together with the Bank the “Employer“),
having its principal office at 100 Verdae Boulevard, Suite 100, Greenville,
South Carolina 29607, and Michael D. Dowling (hereinafter called
“Employee“), a resident of the State of South Carolina.  This Agreement amends
and restates that certain existing employment agreement between the parties
dated October 2, 2012.

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

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

1.                 
Employment. 

Employer shall continue to employ
Employee, and Employee shall continue to serve Employer, as Executive Vice
President and Chief Financial Officer and in such capacity shall perform such
duties as are consistent with that position, and as Employer from time to time
may direct.  Employee shall have such authority and responsibilities consistent
with Employee’s position as are set forth in Employer’s Bylaws or assigned by
Employer’s Board of Directors (the “Board“), Chief Executive Officer or
President from time to time.  Employee shall devote Employee’s full business
time, attention, skill and efforts to the performance of Employee’s duties
hereunder, except during periods of illness or periods of vacation and leaves
of absence consistent with Employer’s policy.  Such duties shall be performed
at Employer’s principal corporate offices or subsidiary offices as agreed upon
by Employer and Employee.  Employer reserves the right from time to time to
extend, curtail or change the title and duties of Employee.  Employee may
devote reasonable periods to service as a director or advisor to other
organizations, to charitable and community activities, and to managing
Employee’s personal investments; provided that such activities do not
materially interfere with the performance of Employee’s duties hereunder and
are not in conflict or competitive with, or adverse to, the interests of Employer. 
Unless otherwise specified hereafter, any services performed by the Employee
shall be for the benefit of the Bank and therefore any payments or benefits
paid to the Employee pursuant to this Agreement shall be the sole
responsibility of the Bank; provided however, the Bank’s obligation to make any
payments owed to the Employee under this Agreement shall be discharged to the
extent compensation payments are made by the Company.

2.                 
Term. 

 

 

 

 

 

Unless earlier
terminated as provided in section 13 below, Employee’s employment under this
Agreement shall commence on the Effective Date and be for a term ending January
31, 2015 (the “Term”).  At the end of January 2014 and on the last day of
January each year thereafter, the Term shall be extended for an additional one
(1) year so that the remaining Term shall continue to be two (2) years; provided
that Employer or Employee may at any time, by written notice, fix the Term to a
finite term of two (2) years commencing with the year of the notice.  

3.                 
Base Salary. 

For all services rendered by
Employee under this Agreement, Employer shall pay Employee a rate of base
salary of $200,000 per year (the “Base Salary“).  The Base Salary shall be
reviewed annually by the Board, and may be increased by the Board or a duly
appointed committee thereof, in its sole discretion.  The Base Salary shall be
paid in accordance with Employer’s standard payroll procedures, but in any
case, no less frequently than monthly.   

4.                 
Benefits. 

(a)          Employee shall be
entitled, to the extent that Employee’s position, title, tenure, salary, age,
health and other qualifications make Employee eligible, to participate in such
pension, profit sharing, bonus, life insurance, hospitalization, major medical,
and other employee benefit plans or programs of Employer currently in existence
on the date hereof or later established that generally are provided to
executive employees of Employer.  Employee’s participation in any such plan or
program shall be subject to the provisions, rules and regulations applicable thereto. 
Any Company stock options or similar awards shall be issued to Employee at an
exercise price per share of not less than the fair market value per share of
the corresponding shares as of the date of grant and the number of shares
subject to such grant shall be fixed on such date.  Any and all bonus payments
made to Employee shall be paid by the earlier of: (i) seventy (70) days after
the end of the year in which the bonus was earned by Employee or (ii) with the
first payroll cycle following the Company’s press release announcing its
previous year’s financial performance. 

(b)          Employer shall provide
Employee with a $700 monthly automobile allowance, paid in accordance with
Employer’s standard payroll procedures, but in any case, no less frequently than
monthly.   

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

(d)          Notwithstanding
anything in this Agreement to the contrary, payments with respect to
reimbursements of expenses or benefits or provision of fringe or other in-kind
benefits shall be made on or before the last day of the calendar year following
the calendar year in which the relevant expense or benefit is incurred. 
The amount of expenses or benefits eligible for reimbursement, payment or
provision during a calendar year shall not affect the expenses or benefits
eligible for reimbursement, payment or provision in any other calendar year. 
Employee acknowledges that some or all allowances, reimbursements and other
fringe benefits provided under this Agreement may be taxable income to Employee.

						
							2

							

 

 

 

 

 

 

 

5.                 
Working
Facilities. 

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

6.                 
Expenses. 

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

7.                 
Vacations. 

Employee shall be entitled each
fiscal year to twenty (20) paid days off, which shall be granted on a
noncumulative basis from year-to-year, as granted by Employer to employees of
similar tenure and compensation rank, pursuant to Employer’s paid days off
policy.  Employer reserves the right to modify this and any other personnel
policy from time to time.  Any payments made by the Employer to the Employee as
compensation for paid vacation leave shall be paid in accordance with the
Employer’s standard payroll procedures.

8.                 
Ownership of
Work Product.

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

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

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

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

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

	
  3

  

 

 

 

 

 

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

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

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

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

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

9.                 
Protection of
Trade Secrets and Confidential Information. 

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

	
  4

  

 

 

 

 

 

 

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

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

10.             
Non-Solicitation
of Customers. 

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

11.             
Non-Solicitation
of Employees. 

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

12.             
Non-Competition
Agreement. 

 

	
  5

  

 

 

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

13.             
Termination
and Severance Payments. 

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

(i)            upon the death of
Employee;

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

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

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

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

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

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

                                

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

 

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

 

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

 

	
  6

  

 

 

 

 

 

 

 

 

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

 

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

 

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

 

(e)          If
Employee’s employment is terminated by Employer without Cause, conditioned upon
the effectiveness of the release described in Section 13(i) below and subject
to the possibility of a six-month delay described below in Section 29(a),
beginning on the first day of the month following the date of the Employee’s
termination, and continuing on the first day of the month for the next eleven
(11) months, the Employer shall pay to the Employee monthly severance
compensation in cash in an amount equal to one-twelfth (1/12th) of the
Employee’s annual rate of Base Salary at the date of termination.  Employer
shall also pay Employee any bonus earned or accrued through the date of
termination.  Any bonus for previous years, which was not yet paid, will be
paid as stated in Section 4(a) of this Agreement.  The restrictive covenants
contained in sections 10, 11 and 12 shall not apply to Employee.

 

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

 

(i)            Subject to the
possibility of a six-month delay described below in Section 29(a), beginning on
the date following the date of the Employee’s termination, the Employer shall
provide Employee with the same severance compensation and accrued bonus set
forth in Section 13(e).  

 

	
  7

  

 

 

 

 

 

 

(ii)           Employee may continue
participation, in accordance with the terms of the applicable benefits plans,
in the Company’s group health plan pursuant to plan continuation rules under
the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  In accordance
with COBRA, assuming Employee is covered under the Company’s group health plan
as of his date of termination, Employee will be entitled to elect COBRA
continuation coverage for the legally required COBRA period (the “Continuation
Period”).  If Employee elects COBRA coverage for group health coverage, he will
be obligated to pay the portion of the full COBRA cost of the coverage equal to
an active employee’s share of premiums for coverage for the respective plan year
and the Company’s share of such premiums shall be treated as taxable income to
Employee.  Notwithstanding the above, the Employer’s obligations hereunder with
respect to the foregoing benefits provided in this subsection (ii) shall be
limited to the extent that if Employee obtains any coverage pursuant to a
subsequent employer’s benefit plans which duplicates the Employer’s coverage,
the duplicative coverage may be terminated by Employer.  This subsection (ii)
shall not be interpreted so as to limit any benefits to which Employee or his
dependents or beneficiaries may be entitled under any of Employer’s employee
benefit plans, programs, or practices following the Employee’s Termination of
Employment, including, without limitation, retiree medical and life insurance
benefits; 

 

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

 

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

 

                (h)
         With the exceptions of the provisions of this Section 13, and the
express terms of any benefit plan under which Employee is a participant, it is
agreed that, upon termination of Employee’s employment, Employer shall have no
obligation to Employee for, and Employee waives and relinquishes, any further
compensation or benefits (exclusive of COBRA benefits).  Unless otherwise
stated in this Section 13, the effect of termination on any outstanding
incentive awards, stock options, stock appreciation rights, performance units,
or other incentives shall be governed by the terms of the applicable benefit or
incentive plan and/or the agreements governing such incentives. Within sixty
(60) days of termination of Employee’s employment, and as a condition to the
Employer’s obligation to pay any severance hereunder, the Employee shall
execute, and not timely revoke during any revocation period provided pursuant
to such release, a mutually satisfactory form of release acknowledging such
remaining obligations and discharging both parties, as well as Employer’s
officers, directors and employees with respect to their actions for or on
behalf of Employer, from any other claims or obligations arising out of or in
connection with Employee’s employment by Employer, including the circumstances
of such termination.  In most instances,
payment will be made, or in the case of installment payments, will begin as
soon as practicable after such release is effective. However, if the 60-day
period spans two calendar years, such severance payment will be made as soon as
possible in the subsequent taxable year.

 

	
  8

  

 

 

 

 

 

 

                (i)            The
parties intend that the severance payments and other compensation provided for
herein are reasonable compensation for Employee’s services to the Employer and
shall not constitute “excess parachute payments” within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any
regulations thereunder.  If the Employer’s independent accountants acting as
auditors for the Employer determine that any or the aggregate value (as
determined pursuant to Section 280G of the Code) of all payments,
distributions, accelerations of vesting, awards and provisions of benefits by
the Employer to or for the benefit of Employee (whether paid or payable,
distributed or distributable, accelerated, awarded or provided pursuant to the
terms of this Agreement or otherwise), (a “Payment”) would constitute an excess
parachute payment and be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), such Payment shall be reduced to the least extent
necessary so that no portion of the Payment shall be subject to the Excise Tax,
but only if, by reason of such reduction, the net after-tax benefit received by
the Employee as a result of such reduction will exceed the net after-tax
benefit that would have been received by the Employee if no such reduction were
made.  The Payment shall be reduced, if applicable, by the Employer in the
following order of priority: (A) reduction of any cash payments otherwise
payable to the Employee pursuant to a supplemental executive retirement plan
including, without limitation, any salary continuation agreement between the
Employee and the Employer; (B) reduction of any cash severance payments
otherwise payable to the Employee that are exempt from Section 409A of the
Code; (C) reduction of any other cash payments or benefits otherwise payable to
the Employee that are exempt from Section 409A of the Code, but excluding any
payments attributable to any acceleration of vesting or payments with respect
to any equity award that are exempt from Section 409A of the Code; (D)
reduction of any payments attributable to any acceleration of vesting or
payments with respect to any equity award that are exempt from Section 409A of
the Code, in each case beginning with payments that would otherwise be made
last in time; and (E) reduction of any other payments or benefits otherwise
payable to the Employee on a pro-rata basis or such other manner that complies
with Section 409A of the Code, but excluding any payments attributable to any
acceleration of vesting and payments with respect to any equity award that are
exempt from Section 409A of the Code.  If, however, such Payment is not reduced
as described above, then such Payment shall be paid in full to the Employee and
the Employee shall be responsible for payment of any Excise Taxes relating to
the Payment.

 

14.             
Oral
Modification Not Binding.

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

15.             
Governing Law. 

This Agreement and all rights
hereunder shall be governed by the laws of the State of South Carolina, except
to the extent governed by the laws of the United States of America in which
case federal laws shall govern. Any action brought by any party to this
Agreement shall be brought and maintained in a court of competent jurisdiction
in the State of South Carolina.

16.             
Remedies for
Breach; Non-Waiver. 

 

	
  9

  

 

 

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

17.             
Consideration. 

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

18.             
Covenants are
Independent. 

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

19.             
Severability
and Substitution of Valid Provisions. 

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

20.             
Extension of
Periods. 

Each of the time periods described
in Sections 9- 12 of this Agreement shall be automatically extended by any
length of time during which Employee is in breach of the corresponding covenant
contained herein.  Such provisions of this Agreement shall continue in full
force and effect throughout the duration of the extended periods.

21.             
Reasonable
Restraint. 

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

22.             
Withholding
of Taxes. 

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

23.             
Notices. 

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

24.             
Assignment. 

 

	
  10

  

 

 

 

 

 

 

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

25.             
Severability.

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

26.             
Certain Definitions.

 

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

                                

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

 

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

 

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

 

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

 

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

 

	
  11

  

 

 

 

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  12

  

 

 

 

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  13

  

 

 

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

 

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

 

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

 

Employee’s right to terminate Employee’s
employment for Good Reason shall not be affected by Employee’s incapacity due
to physical or mental illness.

 

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

 

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

 

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

 

(g)          “Notice
of Termination” shall mean a written notice of termination from one party
to the other which specifies an effective date of termination, indicates the
specific termination provision in this Agreement relied upon, and, in the case
of (i) a termination for Cause, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee’s
employment under the provision so indicated, or (ii) in the case of a
termination for Good Reason, sets forth the Good Reason event which occurred no
more than ninety (90) days prior to the date of the notice and provides the
Employer not less than thirty (30) days to remedy this condition;

 

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

 

27.             
Compliance
with Regulatory Restrictions. 

Notwithstanding anything to the
contrary herein, and in addition to any restrictions stated in section 13
hereof, any compensation or other benefits paid to the Employee shall be
limited to the extent required by any federal or state regulatory agency having
authority over the Company or the Employer.  The Employee agrees that
compliance by the Company or the Employer with such regulatory restrictions,
even to the extent that compensation or other benefits paid to the Employee are
limited, shall not be a breach of this Agreement by the Company or the
Employer.  

28.             
Compliance
with Dodd–Frank Wall Street Reform and Consumer Protection Act.

 

	
  14

  

 

 

 

 

 

 

Notwithstanding anything to the
contrary herein, any incentive payments to the Employee shall be limited to the
extent required under the Dodd–Frank Wall Street Reform and Consumer Protection
Act (the “Act”), including, but not limited to, clawbacks for such incentive
payments as required by the Act.  The Employee agrees to such amendments,
agreements, or waivers that are required by the Act or requested by the Company
to comply with the terms of the Act.   

29.             
Compliance
with Internal Revenue Code Section 409A. 

All payments that may be made and
benefits that may be provided pursuant to this Agreement are intended to
qualify for an exclusion from Section 409A of the Code and any related regulations
or other pronouncements thereunder and, to the extent not excluded, to meet the
requirements of Section 409A of the Code.  Any payments made under Section 13
of this Agreement which are paid on or before the last day of the applicable
period for the short-term deferral exclusion under Treasury Regulation §
1.409A-1(b)(4) are intended to be excluded under such short-term deferral
exclusion.  Any remaining payments under Section 13 are intended to qualify for
the exclusion for separation pay plans under Treasury Regulation §
1.409A-1(b)(9). Each payment made under Section 13 shall be treated as a
“separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for
purposes of Code Section 409A.  Further, notwithstanding anything to the
contrary, all severance payments payable under the provisions of Section 13
shall be paid to the Employee no later than the last day of the second calendar
year following the calendar year in which occurs the date of Employee’s
termination of employment. None of the payments under this Agreement are
intended to result in the inclusion in Employee’s federal gross income on
account of a failure under Section 409A(a)(1) of the Code.  The parties intend
to administer and interpret this Agreement to carry out such intentions. 
However, Company does not represent, warrant or guarantee that any payments
that may be made pursuant to this Agreement will not result in inclusion in
Employee’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the
Code or any similar state statute or regulation.  Notwithstanding any other
provision of this Agreement, to the extent that the right to any payment
(including the provision of benefits) hereunder provides for the “deferral of
compensation” within the meaning of Section 409A(d)(1) of the Code, the payment
shall be paid (or provided) in accordance with the following:

(a)          If the Employee is a
“Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code
on the date of the Employee’s termination (the “Separation Date”), and if an
exemption from the six month delay requirement of Code Section 409A(a)(2)(B)(i)
is not available, then no such payment shall be made or commence during the
period beginning on the Separation Date and ending on the date that is six months
following the Separation Date or, if earlier, on the date of the Employee’s
death.  The amount of any payment that would otherwise be paid to the Employee
during this period shall instead be paid to the Employee on the first day of
the first calendar month following the end of the period.  

 

(b)      Payments with respect to
reimbursements of expenses or benefits or provision of fringe or other in-kind
benefits shall be made on or before the last day of the calendar year following
the calendar year in which the relevant expense or benefit is incurred.  The
amount of expenses or benefits eligible for reimbursement, payment or provision
during a calendar year shall not affect the expenses or benefits eligible for
reimbursement, payment or provision in any other calendar year.

 

30.             
Entire
Agreement. 

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

31.             
  Counterparts. 

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

[Signatures appear on the following page.]

 

	
  15

  

 

 

 

 

 

 

 

 

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

 

	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  SOUTHERN
  FIRST BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
  By:/s/R.
  Arthur Seaver, Jr.

  
	
   

  	
            Name:
  R. Arthur Seaver, Jr.

  
	
   

  	
            Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  /s/Julie
  A. Fairchild                                          

  	
   

  
	
  Secretary

  	
   

  
	
   	
   
	
  [CORPORATE
  SEAL]

  	
  SOUTHERN
  FIRST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  By:/s/R.
  Arthur Seaver, Jr.                 

  
	
   

  	
            Name:
  R. Arthur Seaver, Jr.

  
	
  /s/Julie
  A. Fairchild                                          

  	
            Title:
  Chief Executive Officer

  
	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

   

  /s/
  Michael D. Dowling                          

  Michael
  D. Dowling

  
	
   

  	
   

  

	
   

	16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}]]