Exhibit 10.3


            NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
                  TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT

                      CHANGE OF CONTROL SEVERANCE AGREEMENT

         This Agreement is entered into as of this 4th day of June,  2007 by and
between Carolina National Corporation (the "Company") and William Jack McElveen,
Jr. (the "Employee").

         The principal  purpose of this agreement is to protect Employee against
a Change in Control of the  Company  as  defined in Item 1 below.  Employee  is,
however, an employee at will, and this agreement is not an employment  agreement
and shall not create for Employee any right to continued employment.

         In consideration of (i) services  previously provided to the Company or
a  subsidiary  of the Company by the  Employee  and  Employee's  willingness  to
continue  employment with the Company or a subsidiary of the Company, or (ii) as
an  inducement  to the  Employee  to accept  employment  with the  Company  or a
subsidiary of the Company, the parties hereby agree as follows:

1. In the event  that,  within two years after the date of this  Agreement,  any
Change of Control (as defined  below) of the Company is effected,  then Employee
shall be entitled to the following benefits:

         (a) If, at any time within the six months  following the effective date
of an event listed in the  definition of "Change of Control"  below,  either (i)
Employee is terminated by the Company other than for "cause" as defined below or
(ii) Employee  terminates his employment  with the Company  following a material
reduction  in  Employee's  compensation  or  duties  or a demand  that  Employee
relocate  his  place  of  employment  by more  than 60  miles,  then  upon  such
termination  (x) Employee  shall be entitled to a lump sum payment  equal to the
greater of  Employee's  annual  salary in effect at the date of  termination  or
Employee's  annual  salary  in  effect at the  effective  date of the  Change of
Control plus,  in either case,  the amount of any bonus accrued for the Employee
at the date of  termination  and (y) any  options,  restricted  shares  or other
equity  participation  interests then held by the Employee shall vest and become
immediately exercisable or become unrestricted, as the case may be.

         (b) If, however,  the amount of any lump-sum payment in (a) above, plus
any other  amount  treated as a  parachute  payment  under  Section  280G of the
Internal Revenue Code equals or exceeds three times the base amount described in
Section 280G of the Internal  Revenue Code,  then the amount due hereunder shall
be adjusted to have a value for  purposes of Section  280G which,  when added to
any other amount  treated as a parachute  payment  under  Section 280G, is three
times the base amount less $100.

         (c) Any amount paid pursuant to this Agreement will be deemed severance
pay.  Employee  shall not be under any duty to  mitigate  damages  and no income
received by Employee thereafter shall reduce the amount due Employee hereunder.

         A  "Change  of  Control"  of the  Company  shall be deemed to have been
effected for purposes of this  agreement if (i) voting control of the Company is
acquired, directly or indirectly, by any person or group acting in concert, (ii)
the Company is merged  with or into any other  entity and the Company is not the
surviving  entity of the merger,  (iii) voting  control of any subsidiary of the
Company by which  subsidiary  Employee  is  principally  employed  is  acquired,
directly or  indirectly,  by any person or group acting in concert,  or (iv) any
subsidiary of the Company by which  Employee is  principally  employed is merged
with or into another  entity  which is not also a subsidiary  of the Company and
such subsidiary is not the surviving entity of the merger.


<PAGE>

         For  purposes  of  paragraph  1(a)  above,  "cause"  shall mean (A) the
willful  and  continued  failure by the  Employee to  substantially  perform his
duties  (other  than  the  Employee's  inability  to  perform,  with or  without
reasonable  accommodation,  resulting  from his  incapacity  due to  physical or
mental illness or  impairment),  after a demand for  substantial  performance is
delivered to him by the Company, which demand specifically identifies the manner
in which the Employee is alleged to have not substantially performed his duties;
(B) the willful  engaging by the Employee in  misconduct  (criminal,  immoral or
otherwise) which is or is likely to become materially  injurious to the Company,
its officers, directors,  shareholders,  employees, or customers,  monetarily or
otherwise;  (C) the Employee's conviction of a felony; (D) the commission in the
course of the Employee's employment of an act of fraud,  embezzlement,  theft or
proven dishonesty,  or any other illegal act or practice, which would constitute
a felony,  (whether or not resulting in criminal prosecution or conviction),  or
any act or  practice  which  the  Company  shall,  in good  faith,  deem to have
resulted in the  Employee  becoming  unbondable  under the  Company's  "banker's
blanket  bond;"  (E) the  Employee's  being the  subject of a  proceeding  under
Section 8(e) of the Federal  Deposit  Insurance Act or being  responsible  for a
formal or informal  enforcement  proceeding  against the Bank under Section 8 of
the Federal  Deposit  Insurance  Act; or (F) violation by Employee of any law or
regulation prohibiting employment discrimination.


2. Commencing on the first anniversary after the date of this Agreement,  and on
each  annual   anniversary   thereafter,   the  term  of  this  Agreement  shall
automatically  be extended for an additional  year,  unless 30 days prior to the
anniversary  the Company  gives notice to the Employee that the term will not be
extended.

3. Nothing  herein shall deprive  Employee of any vested  benefits that Employee
has in any  Company  retirement  or other  employee  benefit  plan.  The payment
provided for in Section 1 is in addition to any other amount due to Employee for
services performed through the date of termination.

4. This Agreement shall inure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee should die after the occurrence
of a Change of Control  and while any amount  would still be payable to Employee
hereunder if Employee had continued to live, all such amounts,  unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisee, legatee or designee or, if there be no such devisee, legatee
or designee, to Employee's estate.

5. No provision of this Agreement may be modified,  waived or discharged  unless
such modification, waiver or discharge is agreed to in a writing approved by the
Executive  Committee  of the Board of  Directors  of the  Company  and signed by
Employee  and the  Chairman  of the  Board  of the  Company.  No  agreements  or
representations,  oral or  otherwise,  express or implied,  with  respect to the
subject matter hereof have been made by either party which are not expressly set
forth  in  this  agreement.  The  validity,  interpretation,   construction  and
performance  of this  Agreement  shall be  governed  by the laws of the State of
South Carolina.

6. The invalidity or  unenforceability  of any provision of this Agreement shall
not  affect  the  validity  or  enforceability  of any other  provision  of this
Agreement, which shall remain in full force and effect.

7. Any dispute or controversy arising under or in connection with this Agreement
shall be settled  exclusively  by arbitration in Columbia,  South  Carolina,  by
three  arbitrators  in  accordance  with the rules of the  American  Arbitration
Association then in effect. Judgment may be entered on the arbitrators' award in
any court having  jurisdiction.  The Company  shall bear all costs and expenses,
including Employee's  reasonable attorneys' fees, arising in connection with any
arbitration proceeding pursuant to this Section.

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<PAGE>

8. Should the Company  merge or  consolidate  with another  corporation  and the
Company is not the surviving corporation in such a merger or consolidation,  the
Company  will obtain as a  condition  of merger or  consolidation  assent to and
assumption  of this  Agreement by the  corporation  which will be the  surviving
corporate  entity in such  merger or  consolidation.  Upon  consummation  of the
consolidation  or merger,  the term  "Company"  shall mean the corporate  entity
which is the survivor of the merger or consolidation.

9.  NOTWITHSTANDING ANY PROVISION HEREOF TO THE CONTRARY,  EMPLOYEE  UNDERSTANDS
AND  AGREES  THAT THE  COMPANY  AND  EACH OF ITS  SUBSIDIARIES  IS AN  "AT-WILL"
EMPLOYER  AND,  AS SUCH,  EMPLOYMENT  WITH THE  COMPANY OR A  SUBSIDIARY  OF THE
COMPANY IS NOT FOR A FIXED TERM OR FOR A DEFINITE  PERIOD AND  EMPLOYMENT MAY BE
TERMINATED AT THE WILL OF EITHER  (A)THE  COMPANY OR A SUBSIDIARY OF THE COMPANY
OR (B) THE EMPLOYEE  WITH OR WITHOUT  CAUSE,  AND WITH OR WITHOUT  PRIOR NOTICE.
NOTHING IN THIS  AGREEMENT IN ANY WAY CREATES AN EXPRESS OR IMPLIED  CONTRACT OF
EMPLOYMENT.

         In witness whereof,  the parties hereto have executed this Agreement as
of the date first above written.

EMPLOYEE:                                   COMPANY:
                                            Carolina National Corporation


s/William Jack McElveen, Jr.                By:s/Roger B. Whaley
-----------------------------                  ------------------------------
William Jack McElveen, Jr.                        Roger B. Whaley
                                                  President and Chief Executive
                                                  Officer

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