Attached files
| file | filename |
|---|---|
| 10-K - FIRST RELIANCE BANCSHARES INC | v178823_10k.htm |
| EX-3.4 - FIRST RELIANCE BANCSHARES INC | v178823_ex3-4.htm |
| EX-99.1 - FIRST RELIANCE BANCSHARES INC | v178823_ex99-1.htm |
| EX-31.2 - FIRST RELIANCE BANCSHARES INC | v178823_ex31-2.htm |
| EX-99.2 - FIRST RELIANCE BANCSHARES INC | v178823_ex99-2.htm |
| EX-32.1 - FIRST RELIANCE BANCSHARES INC | v178823_ex32-1.htm |
| EX-31.1 - FIRST RELIANCE BANCSHARES INC | v178823_ex31-1.htm |
| EX-10.25 - FIRST RELIANCE BANCSHARES INC | v178823_ex10-25.htm |
Exhibit
10.24
EMPLOYMENT
AGREEMENT
This Employment
Agreement (the “Agreement”) is effective on June 2, 2008 (the “Effective
Date”), by and between First Reliance Bank, a South Carolina-chartered bank and
wholly owned subsidiary of First Reliance Bancshares, Inc. (the “Bank”),
and Craig S. Evans an officer of the Bank (the “Executive”).
WHEREAS,
the Executive is being employed as an officer of the Bank, possessing unique
skills, knowledge, and experience relating to the Bank’s business, and the
Executive is expected to make major contributions to the profitability, growth,
and financial strength of the Bank and affiliates,
WHEREAS,
none of the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or,
to the best knowledge of the Bank, is contemplated insofar as the Bank or any
affiliates are concerned.
NOW
THEREFORE, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
ARTICLE
1
EMPLOYMENT
1.1 Employment. Effective
on the date above and continuing for the term as specified in section 1.3 of the
Agreement, the Bank hereby employs the Executive to serve as Chief Operating
Officer of the Bank according to the terms and conditions of this Employment
Agreement. The Executive hereby accepts employment according to the
terms and conditions of this Agreement.
1.2 Duties. As Chief
Operating Officer of the Bank, the Executive shall serve in accordance with the
Bank’s Articles of Incorporation and Bylaws, as each may be amended or restated
from time to time, and under the direction of the Bank’s President and Chief
Executive Officer. The Executive shall serve the Bank faithfully,
diligently, competently, and to the best of the Executive’s
ability. The Executive shall exclusively devote full working time,
energy, and attention to the business of the Bank and to the promotion of the
Bank’s interests throughout the term of this Agreement. Without the
written consent of the Bank’s Chief Executive Officer, during the term of this
Agreement the Executive shall not render services to or for any person, firm,
corporation, or other entity or organization in exchange for compensation,
regardless of the form in which the compensation is paid and regardless of
whether it is paid directly or indirectly to the Executive. Nothing
in this Article 1 shall prevent the Executive from managing personal investments
and affairs, provided that doing so does not interfere with the proper
performance of the Executive’s duties and responsibilities under this
Agreement.
1.3 Term of
Agreement. The initial term of employment under this Agreement
shall be for the period commencing upon the effective date of this Agreement and
ending three calendar years from the effective date of this Agreement, unless
terminated as provided in Article 3 of this Agreement. Thereafter,
upon each anniversary date of the effective date, this Agreement shall
automatically be extended for an additional year unless terminated as provided
in Article 3 of this Agreement.
ARTICLE
2
COMPENSATION AND
OTHER BENEFITS
2.1 Base Salary. In
consideration of the Executive’s performance of the obligations under this
Agreement, the Bank shall pay or cause to be paid to the Executive a salary at
the annual rate of not less than $200,000.00. The Executive’s salary
shall be reviewed annually by the Bank’s Chief Executive Officer or by the board
of directors or the board committee having jurisdiction over executive
compensation. The Executive’s salary, as the same may be increased or
decreased from time to time, is referred to in this Agreement as the “Base
Salary”.
2.2 Benefit Plans.
(a) The
Executive shall be eligible throughout the term of this Agreement to participate
in any and all officer or employee compensation, bonus, incentive, and benefit
plans in effect from time to time, including without limitation plans providing
pension, retirement, medical, dental, disability, and group life benefits, and
to receive any and all other fringe benefits provided from time to time,
provided that the Executive satisfies the eligibility requirements for the plans
or benefits.
2.3 Allowances
and Reimbursement.
(a) The
Executive will receive a monthly cell phone allowance of $75.00 and the Bank
will pay the monthly dues for the Executive’s membership in a local Country
Club.
(b) Upon
submission of appropriate documentation by the Executive and approval by the
Bank’s President and Chief Executive Officer or by board of directors or board
committee appointed for such purpose, the Bank agrees to reimburse the Executive
for all out-of-pocket expenses incurred performing the obligations under this
Agreement, including but not limited to all reasonable business travel and
entertainment expenses incurred while acting at the request of or in the service
of the Bank and reasonable expenses for attendance at annual and other periodic
meetings of trade associations. To be reimbursable each expense must
be of a nature qualifying it as a proper deduction on the Bank’s income tax
returns as a business expense rather than deductible compensation to the
Executive. The records and other documentary evidence submitted by
the Executive to the Bank with each request for reimbursement shall be in the
form required by applicable statutes and regulations issued by appropriate
taxing authorities for the substantiation of expenditures as deductible business
expenses of the Bank rather than deductible compensation to the
Executive.
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2.4 Vacation. The
Executive shall be entitled to paid annual vacation and sick leave in accordance
with policies established from time to time by the Bank. The
Executive shall not be entitled to any additional compensation for failure to
use allotted vacation, nor shall the Executive be allowed to carry over unused
vacation allowance from one calendar year to the next. The Executive
shall be entitled to carry over sick leave in accordance with policies
established from time to time by the Bank.
2.5 Stock Ownership. The
Executive is expected to assist in showing confidence and support of the Bank by
annual purchases of Bank stock as determined appropriate for senior level
officers.
2.6 Stock
Compensation. In addition to Executive’s Base Salary, Bank
shall provide Executive with $50,000.00 of restricted stock in Bank, subject to
Executive meeting the “Employment Requirement” (as hereinafter
defined). The terms and conditions to Executive’s restricted stock
shall be those applicable to all shares of the same class. The
restricted stock will be valued as of the date purchased (within two (2) months
of this Agreement) based upon the most recently published price on the OTC
Bulletin Board as of the purchase date. For purposes of this section
2.5, “Employment Requirement” shall mean Executive’s continuous employment by
Bank for a period of five (5) years from the date of this
Agreement. Said restricted shares will be distributed within
forty-five (45) days of Executive meeting the Employment
Requirement. Should the Executive not meet the Employment
Requirement, the restricted stock shall revert back to the Bank and be
cancelled.
2.7 Taxes. All
compensation of the Executive shall be subject to withholding and other
employment taxes imposed by federal, state, and local law.
ARTICLE
3
TERMINATION
OF EMPLOYMENT
3.1 Termination. The
Executive is employed for an initial three (3) year term, followed by automatic
one year terms, unless notice of termination of this Agreement is made by a
Party as provided in this Article. All notices of termination shall
be in writing, and provide thirty (30) days notice. Should the
Executive give less than thirty (30) days written notice, the Bank may terminate
this Agreement immediately without further compensation as may be provided in
subsections of this section 3.1. Should Executive give thirty (30) or
more days written notice of termination of this Agreement, the Bank may elect to
immediately remove all job duties from Executive and pay Executive through the
effective date of the Termination, followed by any applicable additional
compensation as provided in the subsections of this section
3.1. Should Bank elect to give thirty (30) days notice of
termination, it may elect to immediately remove all job duties from Executive
and pay Executive through the effective date of the Termination, followed by any
applicable additional compensation as provided in the subsections of this
section 3.1. All payments of Base Salary under this Article shall be
made in the normal course of the Bank’s payroll schedule and not by way of lump
sum.
(a) Termination Within Initial
Term. Should the Executive terminate this Agreement within the
initial 3 year term, no further compensation shall be due. Should the
Bank terminate this Agreement within the initial 3 year term, the Bank shall pay
Executive the remaining Base Salary due through the initial term of this
Agreement or one calendar year of Base Salary, whichever is
greater. All covenants agreed upon within this Agreement, including
but not limited to those covenants contained in Articles 4 and 5 shall survive
any termination of this Agreement pursuant to this subsection
3.1(a).
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(b) Termination by Executive Following
Initial Term. Should Executive terminate this Agreement
following the initial 3 year term no further compensation shall be
due.
(c) Termination by Bank Following
Initial Term but Before Eligibility Under Salary Continuation
Agreement. Should the Bank terminate this Agreement following
the initial 3 year term, but before Executive is eligible for benefits under the
Salary Continuation Agreement, Executive shall be paid 12 months (1 year) Base
Salary. Should Executive obtain other employment during the 12 months
of continued Base Salary, all payments under this subsection 3.1(c) shall cease
at the time Executive begins other employment. Executive
affirmatively agrees to immediately notify Bank of any other employment under
this subsection 3.1(c).
(e) Termination by Bank For
Cause. The Bank may terminate the Executive’s employment
immediately without the thirty (30) days notice in section 3.1 for any of the
following –
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1)
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an
intentional act of fraud, embezzlement, or theft by the Executive in the
course of employment. For purposes of this Agreement no act or
failure to act on the part of the Executive shall be deemed to have been
intentional if it was due primarily to an error in judgment or
negligence. An act or failure to act on the Executive’s part
shall be considered intentional if it is not in good faith and if it is
without a reasonable belief that the action or failure to act is in the
best interests of the Bank,
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2)
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intentional
violation of any law or significant policy of the Bank committed in
connection with the Executive’s employment, which in the Bank’s judgment
has a material adverse effect on the
Bank,
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3)
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the
Executive’s gross negligence in the performance of the Executive’s duties
to the Bank,
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4)
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intentional
wrongful damage by the Executive to the business or property of the Bank,
including without limitation the reputation of the Bank, which in the
Bank’s sole judgment causes material harm to the
Bank,
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5)
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a
breach by the Executive of fiduciary duties or misconduct involving
dishonesty, in either case whether in the Executive’s capacity as an
officer or as a director of the
Bank,
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6)
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a
breach by the Executive of this Agreement that in the sole judgment of the
Bank is a material breach, which breach is not corrected by the Executive
within 30 days after receiving written notice of the breach from the
Bank,
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7)
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removal
of the Executive from office or permanent prohibition of the Executive
from participating in the Bank’s affairs by an order issued under section
8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
1818(e)(4) or (g)(1),
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8)
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conviction
of the Executive for or plea of no contest to a felony or conviction of or
plea of no contest to a misdemeanor involving moral turpitude, or the
actual incarceration of the Executive,
or
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9)
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the
occurrence of any event that results in the Executive being excluded from
coverage, or having coverage limited for the Executive as compared to
other executives of the Bank, under the Bank’s blanket bond or
other fidelity or insurance policy covering its directors, officers, or
employees.
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10)
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The
death of Executive.
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Should
termination occur under this subsection 3.1(e), no further Base Salary or other
compensation shall be paid effective immediately upon
termination. All covenants agreed upon within this Agreement,
including but not limited to those covenants contained in Articles 4 and 5 shall
survive any termination of this Agreement pursuant to this subsection
3.1(e).
(f) Voluntary Termination with Good
Reason. Voluntary Termination with Good Reason shall mean a
termination by Executive with 24 months after a Change of Control, as defined in
Article 6 of this Agreement, if the following conditions (x) and (y) are satisfied: (x) a voluntary termination
will be considered a Voluntary Termination with Good Reason if any of the
following occur without the Executive’s advance written consent –
(1) a
material diminution of the Executive’s Base Salary,
(2) a
material diminution of the Executive’s authority, duties, or
responsibilities,
(3) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report,
(4) a
material diminution in the budget over which the Executive retains
authority,
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(5) a
material change in the geographic location at which the Executive must perform
services for the Bank, or
(6) any
other action or inaction that constitutes a material breach by the Bank of this
Agreement.
(y) the
Executive must give notice to the Bank of the existence of one or more of the
conditions described in clause (x) within 90 days after the
initial existence of the condition, and the Bank shall have 30 days thereafter
to remedy the condition. In addition, the Executive’s voluntary
termination because of the existence of one or more of the conditions described
in clause (x) must
occur within 24 months of the date of the Change of Control, as defined in
Article 6 of this Agreement. Should Voluntary Termination with Good
Reason occur under this subsection 3.1(f), compensation shall be as provided in
Article 6 of this Agreement. All covenants agreed upon within this
Agreement, including but not limited to those covenants contained in Articles 4
and 5 shall survive any termination of this Agreement pursuant to this
subsection 3.1(f).
ARTICLE
4
CONFIDENTIALITY
AND CREATIVE WORK
4.1 Non-disclosure. The
Executive covenants and agrees not to reveal to any person, firm, or corporation
any confidential information of any nature concerning the Bank or its business,
or anything connected therewith. As used in this Article 4 the term
“confidential
information” means all of the Bank’s and its affiliates’ confidential and
proprietary information and trade secrets in existence on the date hereof or
existing at any time during the term of this Agreement, including but not
limited to –
(a) the
whole or any portion or phase of any business plans, financial information,
purchasing data, supplier data, accounting data, or other financial
information,
(b) the
whole or any portion or phase of any research and development information,
design procedures, algorithms or processes, or other technical
information,
(c) the
whole or any portion or phase of any marketing or sales information, sales
records, customer lists, prices, sales projections, or other sales information,
and
(d) trade
secrets, as defined from time to time by the laws of the State of South
Carolina.
This
section 4.1 does not prohibit disclosure required by an order of a court having
jurisdiction or a subpoena from an appropriate governmental agency or disclosure
made by the Executive in the ordinary course of business and within the scope of
the Executive’s authority.
4.2 Return of
Materials. The Executive agrees to deliver or return to the
Bank upon termination of Executive’s employment, or as soon thereafter as
possible, all written information and any other similar items furnished by the
Bank or prepared by the Executive in connection with the Executive’s services
hereunder. The Executive will retain no copies thereof after
termination of the Executive’s employment.
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4.3 Creative Work. The
Executive agrees that all creative work and work product, including but not
limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term
of this Agreement and in the course and scope of the Executive’s duties
hereunder, regardless of when or where such work or work product was produced,
constitutes work made for hire, all rights of which are owned by the
Bank. The Executive hereby assigns to the Bank all rights, title, and
interest, whether by way of copyrights, trade secret, trademark, patent, or
otherwise, in all such work or work product, regardless of whether the same is
subject to protection by patent, trademark, or copyright laws.
4.4 Injunctive
Relief. The Executive acknowledges that it is impossible to
measure in money the damages that will be suffered by the Bank if the Executive
fails to observe the obligations imposed by this Article
4. Accordingly, if the Bank institutes an action to enforce the
provisions hereof, the Executive hereby waives the claim or defense that an
adequate remedy at law is available to the Bank and the Executive agrees not to
urge in any such action the claim or defense that an adequate remedy at law
exists.
4.5 Affiliates’ Confidential Information
is Covered; Confidentiality Obligation Survives
Termination. For purposes of this Agreement, the term “affiliate”
includes First Reliance Bancshares, Inc., the Bank, and any entity that directly
or indirectly through one or more intermediaries controls, is controlled by, or
is under common control with First Reliance Bancshares, Inc. or the
Bank. The rights and obligations set forth in this Article 4 shall
survive termination of this Agreement.
ARTICLE
5
COMPETITION
AFTER EMPLOYMENT TERMINATION
5.1 Covenant Not to Solicit
Employees. Should this Agreement be terminated by either
Executive or Bank during the initial 3 year term, the Executive agrees not to
solicit the services of any officer or employee of the Bank for two (2) years
after the Executive’s employment is terminated.
5.2 Covenant Not to
Compete.
(a) Should
this Agreement be terminated by either Executive or Bank during the initial 3
year term, the Executive covenants and agrees not to compete directly or
indirectly with the Bank without advance written consent of the Bank for two
years after employment is terminated, plus any period during which the Executive
is in violation of this covenant not to compete and any period during which the
Bank seeks by litigation to enforce this covenant not to compete. For
purposes of this section –
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1)
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the
term “compete” means
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(a) providing
financial products or services on behalf of any financial institution for any
person residing in the territory,
(b) assisting
(other than through the performance of ministerial or clerical duties) any
financial institution in providing financial products or services to any person
residing in the territory, or
(c) inducing
or attempting to induce any person who was a customer of the Bank at the date of
the Executive’s employment termination to seek financial products or services
from another financial institution.
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2)
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the
words “directly or indirectly” means
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(a) acting
as a consultant, officer, director, independent contractor, or employee of any
financial institution in competition with the Bank in the territory,
or
(b) communicating
to such financial institution the names or addresses or any financial
information concerning any person who was a customer of the Bank at the
Executive’s employment termination.
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3)
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the
term “customer” means any person to whom the Bank is providing financial
products or services on the date of the Executive’s employment
termination.
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4)
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the
term “financial institution” means any bank, savings association, or bank
or savings association holding company, or any other institution, the
business of which is engaging in activities that are financial in nature
or incidental to such financial activities as described in section 4(k) of
the Bank Holding Company Act of 1956, other than the Bank or any of its
affiliated corporations.
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5)
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“financial
product or service” means any product or service that a financial
institution or a financial holding company could offer by engaging in any
activity that is financial in nature or incidental to such a financial
activity under section 4(k) of the Bank Holding Company Act of 1956 and
that is offered by the Bank or an affiliate on the date of the Executive’s
employment termination, including but not limited to banking activities
and activities that are closely related and a proper incident to
banking.
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6)
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the
term “person” means any individual or individuals, corporation,
partnership, fiduciary or
association.
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7)
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the
term “territory” means the State of South Carolina. Executive
agrees to this territory since he is a senior officer with
responsibilities over all offices and is involved in plans and decisions
for future expansion of the Bank.
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(b) If
any provision of this section or any word, phrase, clause, sentence or other
portion thereof (including, without limitation, the geographical and temporal
restrictions contained therein) is held to be unenforceable or invalid for any
reason, the unenforceable or invalid provision or portion shall be modified or
deleted so that the provisions hereof, as modified, are legal and enforceable to
the fullest extent permitted under applicable law.
5.3 Remedies. Because
of the unique character of the services to be rendered by the Executive
hereunder, the Executive understands that the Bank would not have an adequate
remedy at law for the material breach or threatened breach by the Executive of
any one or more of the Executive’s covenants in this Article
5. Accordingly, the Executive agrees that the Bank’s remedies for a
material breach or threatened breach of this Article 5 include but are not
limited to forfeiture of any money representing accrued salary, contingent
payments, or other fringe benefits due and payable to the Executive, and a suit
in equity by the Bank to enjoin the Executive from the breach or threatened
breach of such covenants. The Executive hereby waives the claim or
defense that an adequate remedy at law is available to the Bank and the
Executive agrees not to urge in any such action the claim or defense that an
adequate remedy at law exists. Nothing herein shall be construed to
prohibit the Bank from pursuing any other remedies for the breach or threatened
breach.
5.4 Article 5 Survives
Termination. The rights and obligations set forth in this
Article 5 shall survive termination of this Employment Agreement during the
initial 3 year term, unless otherwise provided in Section 3.1.
ARTICLE
6
CHANGE
IN CONTROL
6.1 Change in Control
Defined. For
purposes of this Agreement the term “Change in
Control” means a change in control as defined in Internal Revenue Code
section 409A and rules, regulations, and guidance of general application
thereunder issued by the Department of the Treasury, including –
(a) Change in ownership: a change
in ownership of First Reliance Bancshares, Inc., a South Carolina corporation of
which the Bank is a wholly owned subsidiary, occurs on the date any one person
or group accumulates ownership of First Reliance Bancshares, Inc. stock
constituting more than 50% of the total fair market value or total voting power
of First Reliance Bancshares, Inc. stock, or
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(b) Change in effective control:
(x) any one person or
more than one person acting as a group acquires within a 12-month period
ownership of First Reliance Bancshares, Inc. stock possessing 30% or more of the
total voting power of First Reliance Bancshares, Inc., or (y) a majority of First
Reliance Bancshares, Inc.’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed in advance by
a majority of First Reliance Bancshares, Inc.’s board of directors,
or
(c) Change in ownership of a substantial
portion of assets: a change in ownership of a substantial portion of
First Reliance Bancshares, Inc.’s assets occurs if in a 12-month period any one
person or more than one person acting as a group acquires from First Reliance
Bancshares, Inc. assets having a total gross fair market value equal to or
exceeding 40% of the total gross fair market value of all of First Reliance
Bancshares, Inc.’s assets immediately before the acquisition or
acquisitions. For this purpose, gross fair market value means the
value of First Reliance Bancshares, Inc.’s assets, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
the assets.
6.2 Change in
Control.
(a) If a Change in Control
occurs during the term of this Agreement and if within 24 months thereafter the
Bank terminates this Agreement other than a Termination for Cause, as defined in
subsection 3.1(e), or Executive terminates this Agreement as a Voluntarily
Termination with Good Reason, as defined in subsection 3.1(f), the Bank shall
make or cause to be made a lump-sum payment to the Executive in an amount in
cash equal to two times the Executive’s annual compensation. For this
purpose annual compensation means (x) the Executive’s Base
Salary on the date of the Change in Control or on the date of the Executive’s
employment termination (at whichever date the Executive’s Base Salary is
greater, but excluding any compensation earned in the Executive’s capacity as a
director), plus (y) any
bonus awarded for the most recent whole calendar year before the year in which
the Change in Control occurred or for the most recent whole calendar year before
the year in which employment termination occurred (whichever is greater),
regardless of whether the bonus is paid in the year earned or in a later
calendar year and regardless of whether the bonus is subject to elective
deferral or vesting. Annual compensation shall be calculated without
regard to any deferrals under qualified or nonqualified plans, but annual
compensation shall not include interest or other earnings credited to the
Executive under qualified or nonqualified plans. The amount payable
to the Executive hereunder shall not be reduced to account for the time value of
money or discounted to present value. The payment required under this
paragraph (a) is payable no later than five business days after employment
termination, but if the Bank determines that payment must be delayed to comply
with Internal Revenue Code section 409A the payment required by this paragraph
(a) shall be made on the first day of the seventh month after the month in which
employment termination occurs. The Bank and the Executive acknowledge
and agree that all other payments following termination, under section 3.1 shall
not be payable if the Executive’s employment termination occurs within 24 months
after a Change in Control or if compensation and benefits are payable or shall
have been paid previously to the Executive under this section 6.2.
(b) If
a Change in Control occurs and within 24 months thereafter the Bank terminates
the Executive’s employment other than for Cause or the Executive terminates
employment Voluntarily with Good Reason, the Bank shall cause the Executive to
become fully vested in awards under any stock option, stock incentive, or other
non-qualified plans, programs, or arrangements in which the Executive
participated if (x) the
plan, program, or arrangement does not address the effect of a change in control
or termination after a change in control and (y) award vesting occurs
automatically with the passage of time or years of service. Provided
the Executive is at the time a covered employee within the meaning of Internal
Revenue Code section 162(m), accelerated vesting in or entitlement to awards
shall not occur under this section 6.2(b) in the case of any award for which
vesting or entitlement is based on achievement of performance conditions,
whether the conditions have to do with individual performance or corporate
performance measures, including but not limited to stock price or financial
statement or other financial measures.
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ARTICLE
7
MISCELLANEOUS
7.1 Successors and
Assigns.
(a) This Agreement is binding on the
Bank’s successors. This Agreement shall be binding upon the
Bank and any successor to the Bank, including any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Bank by
purchase, merger, consolidation, reorganization, or otherwise. But
this Agreement and the Bank’s obligations under this Agreement are not otherwise
assignable, transferable, or delegable by the Bank. By agreement in
form and substance satisfactory to the Executive, the Bank shall require any
successor to all or substantially all of the business or assets of the Bank to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent the Bank would be required to perform if no such succession had
occurred.
(b) This Agreement is personal in nature
and is not assignable. This Agreement is personal in
nature. Without written consent of the other parties, no party shall
assign, transfer, or delegate this Agreement or any rights or obligations under
this Agreement except as expressly provided herein. Without limiting
the generality or effect of the foregoing, the Executive’s right to receive
payments hereunder is not assignable or transferable, whether by pledge,
creation of a security interest, or otherwise, except for a transfer by the
Executive’s will or by the laws of descent and distribution. If the
Executive attempts an assignment or transfer that is contrary to this section
6.1, the Bank shall have no liability to pay any amount to the assignee or
transferee.
7.2 Governing Law, Jurisdiction, and
Forum. This Agreement shall be construed under and governed by
the laws of the State of South Carolina, without giving effect to any conflict
of laws provision or rule (whether of the State of South Carolina or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of South Carolina. By entering into this
Agreement, the Executive acknowledges that he is subject to the jurisdiction of
both the federal and state courts in the State of South Carolina. Any
actions or proceedings instituted under this Employment Agreement shall be
brought and tried solely in courts located in Florence County, South Carolina or
in the federal court having jurisdiction in Florence, South
Carolina. The Executive expressly waives the right to have any such
actions or proceedings brought or tried elsewhere.
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7.3 Entire
Agreement. This Agreement sets forth the entire agreement of
the parties concerning the employment of the Executive. Any oral or
written statements, representations, agreements, or understandings made or
entered into prior to or contemporaneously with the execution of this Agreement
are hereby rescinded, revoked, and rendered null and void by the
parties.
7.4 Notices. All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid. Unless otherwise changed by notice, notice shall be properly
addressed to the Executive if addressed to the address of the Executive on the
books and records of the Bank at the time of the delivery of notice, and
properly addressed to the Bank if addressed to the Board of Directors, First
Reliance Bancshares, Inc., 2170 West Palmetto Street, Florence, South Carolina
29501.
7.5 Severability. If
there is a conflict between any provision of this Agreement and any statute,
regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent
necessary to bring them within the requirements of law. If any
provision of this Agreement is held by a court of competent jurisdiction to be
indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder
of this Agreement shall continue in full force and effect unless that would
clearly be contrary to the intentions of the parties or would result in an
injustice.
7.6 Captions and
Counterparts. The captions in this Agreement are solely for
convenience. The captions in no way define, limit, or describe the
scope or intent of this Agreement. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
7.7 Amendment and
Waiver. This Agreement may not be amended, released,
discharged, abandoned, changed, or modified in any manner, except by an
instrument in writing signed by each of the parties hereto. The
failure of any party hereto to enforce at any time any of the provisions of this
Agreement shall not be construed to be a waiver of any such provision, nor
affect the validity of this Agreement or any part thereof or the right of any
party thereafter to enforce each and every such provision. No waiver
or any breach of this Agreement shall be held to be a waiver of any other or
subsequent breach.
7.8 Payment of Legal
Fees. The Bank is aware that after a Change in Control
management could cause or attempt to cause the Bank to refuse to comply with its
obligations under this Agreement, or could institute or cause or attempt to
cause the Bank to institute litigation seeking to have this Agreement declared
unenforceable, or could take or attempt to take other action to deny Executive
the benefits intended under this Agreement. In these circumstances
the purpose of this Agreement would be frustrated. The Bank desires
that the Executive not be required to incur the expenses associated with the
enforcement of rights under this Agreement, whether by litigation or other legal
action, because the cost and expense thereof would substantially detract from
the benefits intended to be granted to the Executive hereunder. The
Bank desires that the Executive not be forced to negotiate settlement of rights
under this Agreement under threat of incurring expenses. Accordingly,
if after a Change in Control occurs it appears to the Executive that (x) the Bank has failed to
comply with any of its obligations under this Agreement, or (y) the Bank or any other
person has taken any action to declare this Agreement void or unenforceable, or
instituted any litigation or other legal action designed to deny, diminish, or
to recover from the Executive the benefits intended to be provided to the
Executive hereunder, the Bank irrevocably authorizes the Executive from time to
time to retain counsel of the Executive’s choice, at the Bank’s expense as
provided in this section 7.8, to represent the Executive in the initiation or
defense of any litigation or other legal action, whether by or against the Bank
or any director, officer, stockholder, or other person affiliated with the Bank,
in any jurisdiction. Despite any existing or previous attorney-client
relationship between the Bank and any counsel chosen by the Executive under this
section 7.8, the Bank irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel and the Bank and the Executive
agree that a confidential relationship shall exist between the Executive and
that counsel. The fees and expenses of counsel selected from time to
time by the Executive as provided in this section shall be paid or reimbursed to
the Executive by the Bank on a regular, periodic basis upon presentation by the
Executive of a statement or statements prepared by counsel in accordance with
counsel’s customary practices, up to a maximum aggregate amount of $100,000,
whether suit be brought or not, and whether or not incurred in trial,
bankruptcy, or appellate proceedings. The Bank’s obligation to pay
the Executive’s legal fees provided by this section 7.8 operates separately from
and in addition to any legal fee reimbursement obligation the Bank may have with
the Executive under any separate severance or other
agreement. Despite anything in this Agreement to the contrary
however, the Bank shall not be required to pay or reimburse Executive’s legal
expenses if doing so would violate section 18(k) of the Federal Deposit
Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit
Insurance Corporation [12 CFR 359.3].
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7.9 Consultation with Counsel and
Interpretation of this Agreement. The Executive acknowledges
and agrees that the Executive has had the assistance of counsel of the
Executive’s choosing in the negotiation of this Agreement, or the Executive has
chosen not to have the assistance of the Executive’s own
counsel. Both the Bank and the Executive have participated in the
negotiation and drafting of this Agreement, and they hereby agree that there
shall not be strict interpretation against either party in connection with any
review of this Agreement in which interpretation thereof is an
issue.
7.10 Compliance with Internal Revenue Code
Section 409A. The Bank and the Executive intend that their
exercise of authority or discretion under this Agreement shall comply with
section 409A of the Internal Revenue Code of 1986. If when the
Executive’s employment terminates the Executive is a specified employee, as
defined in section 409A of the Internal Revenue Code of 1986, and if any
payments under this Agreement, including Articles 4 or 5, will result in
additional tax or interest to the Executive because of section 409A, then
despite any provision of this Agreement to the contrary the Executive shall not
be entitled to the payments until the earliest of (x) the date that is at least
six months after termination of the Executive’s employment for reasons other
than the Executive’s death, (y) the date of the
Executive’s death, or (z) any earlier date that does
not result in additional tax or interest to the Executive under section
409A. As promptly as possible after the end of the period during
which payments are delayed under this provision, the entire amount of the
delayed payments shall be paid to the Executive in a single lump
sum. If any provision of this Agreement does not satisfy the
requirements of section 409A, the provision shall nevertheless be applied in a
manner consistent with those requirements. If any provision of this
Agreement would subject the Executive to additional tax or interest under
section 409A, the Bank shall reform the provision. However, the Bank
shall maintain to the maximum extent practicable the original intent of the
applicable provision without subjecting the Executive to additional tax or
interest, and the Bank shall not be required to incur any additional
compensation expense as a result of the reformed provision.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
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EXECUTIVE
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/s/ Craig S.
Evans
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FIRST
RELIANCE BANK
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By:
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/s/ F. R. Saunders Jr.
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F.
R. Saunders Jr.
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Its:
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President
and Chief Executive Officer
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FIRST
RELIANCE BANCSHARES, INC.
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||
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By:
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/s/ F. R. Saunders Jr.
|
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F.
R. Saunders Jr.
|
||
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Its:
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President
and Chief Executive Officer
|
|
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