Document:

Unassociated Document

     

    Exhibit
10.2

     

    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW

    Washington,
D.C. 20220

    

    March 6,
2009

    

    Ladies
and Gentlemen:

    

    Reference is made to that certain
Letter Agreement incorporating the Securities Purchase Agreement – Standard
Terms dated of as of the date of this letter agreement (the “Securities Purchase
Agreement”) between United States Department of Treasury (“Investor”) and the company
named on the signature page hereto (the “Company”).  Capitalized
terms used but not defined herein shall have the meanings assigned to them in
the Securities Purchase Agreement.

     

    The
American Recovery and Reinvestment Act of 2009, as it may be amended from time
to time (the “Act”),
includes provisions relating to executive compensation and other matters that
may be inconsistent with the Securities Purchase Agreement, the Warrant and the
Certificate[s] of Designation (the “Transaction
Documents”).  Accordingly, Investor and the Company desire to
confirm their understanding as follows:

    

    
      	
              1.

            	
              Notwithstanding
      anything in the Transaction Documents to the contrary, in the event that
      the Act or any rules or regulations promulgated thereunder are
      inconsistent with any of the terms of the Transaction Documents, the Act
      and such rules and regulations shall
control.

            

    

    

    2.            For
the avoidance of doubt (and without limiting the generality of Paragraph
1):

    (a)           the
provisions of Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended by the Act or otherwise from time to time (“EESA”), shall apply to the
Company;

    (b)           the
waiver to be delivered by each of the Company’s Senior Executive Officers
pursuant to Section 1.2(d)(v) of the Securities Purchase Agreement shall, in
addition, be delivered by any additional highly compensated employees required
by applicable rules or regulations under EESA;

    (c)           the
Company’s chief executive officer and chief financial officer shall provide the
written certification of compliance by the Company with the requirements of
Section 111 of EESA in the manner specified by Section 111(b)(4) thereunder or
in any rules or regulations under EESA; and

    (d)         
the Company shall be permitted to repay preferred shares, and when such
preferred shares are repaid, the Investor shall liquidate warrants associated
with such preferred shares, all in accordance with the Act and any rules and
regulations thereunder.

     

    From and after the date hereof, each
reference in the Securities Purchase Agreement to “this Agreement” or “this
Securities Purchase Agreement” or words of like import shall mean and be a
reference to the Agreement (as defined in the Securities Purchase Agreement) as
amended by this letter agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    This
letter agreement will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

    

    This
letter agreement, the Securities Purchase Agreement, the Warrant, the
Certificate[s] of Designation and any other documents executed by the parties at
the Closing constitute the entire agreement of the parties with respect to the
subject matter hereof.

    

    Nothing
in this letter agreement shall be deemed an admission by Investor as to the
necessity of obtaining the consent of the Company in order to effect the changes
to the Transaction Documents contemplated by this letter agreement, nor shall
anything in this letter agreement be deemed to require Investor to obtain the
consent of any other TARP recipient (as defined in the Act) participating in the
Capital Purchase Program (the “CPP”) in order to effect
changes to their documentation under the CPP.

    

    This
letter agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement.  Executed
signature pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed sufficient as if actual signature pages had been
delivered.

    [Remainder
of this page intentionally left blank]

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    In
witness whereof, the parties have duly executed this letter agreement as of the
date first written above.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  UNITED
      STATES DEPARTMENT OF

                                
	
                                  THE
      TREASURY

                                
	 
      	 
      
	
                                  By:

                                	
                                  /s/ Neel Kashkari

                                
	 
      	
                                  Name:
      Neel Kashkari

                                
	 
      	
                                  Title:
      Interim Assistant Secretary for Financial Stability

                                
	 
      	 
      
	COMPANY:
      FIRST
      RELIANCE BANCSHARES, INC.
	 
      	 
      
	 
      	
                                  By:

                                	
                                  /s/ F.R. Saunders, Jr.

                                
	 
      	
                                  Name:

                                	
                                  F.R.
      Saunders, Jr.

                                
	 
      	
                                  Title:

                                	
                                  President
      and Chief Executive
OfficerUnassociated Document

    Exhibit
10.3

    

    FORM OF
WAIVER

    

    In
consideration for the benefits I will receive as a result of my employer’s
participation in the United States Department of the Treasury’s TARP Capital
Purchase Program, I hereby voluntarily waive any claim against the United States
or any state or territory thereof or my employer or any of its directors,
officers, employees and agents for any changes to my compensation or benefits
that are required in order to comply with Section 111(b) of the Emergency
Economic Stabilization Act of 2008, as amended (“EESA”), and rules,
regulations, guidance or other requirements issued thereunder (collectively, the
“EESA
Restrictions”).

    

    I
acknowledge that the EESA Restrictions may require modification of the
employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
“golden parachute” agreements), whether or not in writing, that I have with my
employer or in which I participate as they relate to the period the United
States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program and I hereby consent to all such
modifications.  I further acknowledge and agree that if my employer
notifies me in writing that I have received payments in violation of the EESA
Restrictions, I shall repay the aggregate amount of such payments to my employer
no later than fifteen business days following my receipt of such
notice.

    

    This
waiver includes all claims I may have under the laws of the United States or any
other jurisdiction related to the requirements imposed by the EESA Restrictions
(including without limitation, any claim for any compensation or other payments
or benefits I would otherwise receive absent the EESA Restrictions, any
challenge to the process by which the EESA Restrictions were adopted and any
tort or constitutional claim about the effect of the foregoing on my employment
relationship) and I hereby agree that I will not at any time initiate, or cause
or permit to be initiated on my behalf, any such claim against the United
States, my employer or its directors, officers, employees or agents in or before
any local, state, federal or other agency, court or body.

    

    In
witness whereof, I execute this waiver on my own behalf, thereby communicating
my acceptance and acknowledgement to the provisions herein.

    

    
      
        	 
      	
                Respectfully,

              
	 
      	 
      
	 
      	
                  

              
	 
      	
                Name:

              	 
      
	 
      	
                Title:

              	
                 

              
	 
      	
                Date:

              	
                March
      6, 2009Exhibit
10.4

    [First
Reliance Bancshares Letterhead]

    

    FORM
OF SENIOR EXECUTIVE OFFICER LETTER AGREEMENT

    

    March __,
2009

    

    Via Hand
Delivery

    [Name of
Senior Executive Officer]

     [Title
of Senior Executive Officer]

     2170
West Palmetto Street

    Florence,
SC  29501

    

    Dear
______________________,

    

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

    

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

    

    
      	
              1.

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

            

    

    

    
      	
              2.

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

            

    

    

    
      	
              3.

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

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              4.

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

            

    

    

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

    

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

    

    
      	
               
      

            	
              a.

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

            

    

    

    
      	
               
      

            	
              b.

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

            

    

    

    
      	
               
      

            	
              c.

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

            

    

    

    
      	
               
      

            	
              d.

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

            

    

    

    
      	
               
      

            	
              e.

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

            

    

    

    
      	
               
      

            	
              f.

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

            

    

    

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

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

    

    
      
        
          	
                  Yours
      sincerely,

                
	 
      
	
                  FIRST
      RELIANCE BANCSHARES, INC.

                
	 
      
	
                  By:

                	
                    

                

        

      

    

    

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

    

    
      
        
          	 
      
	
                  [Name]

                

        

      

    

    

    
      
        
          	 
      
	
                  Date

                

        

      

    

    
      
         

      

      
        3

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