THIS AGREEMENT CONTAINS A BINDING, IRREVOCABLE AGREEMENT TO ARBITRATE AND IS
   ----------------------------------------------------------------------------
   SUBJECT TO ARBITRATION PURSUANT TO TITLE 15, CHAPTER 48 (UNIFORM ARBITRATION
   ----------------------------------------------------------------------------
                   ACT) OF THE CODE OF LAWS OF SOUTH CAROLINA
                   ------------------------------------------

                           CHANGE IN CONTROL AGREEMENT


     THIS  AGREEMENT  (the  "Agreement")  is  made  as  of January 24, 2006 (the
"Effective  Date")  by and among Carol J. Nelson (the "Employee"), a resident of
the  state  of  South  Carolina;  Islands  Bancorp,  Inc.  (the  "Company"),  a
corporation  organized  under the laws of the State of South Carolina and a bank
holding  company; and Islands Community Bank, N.A. (the "Bank"), a national bank
organized  under the laws of the United Sates and wholly-owned subsidiary of the
Company.

     WHEREAS,  the Employee is currently employed as the Chief Financial Officer
of  the  Company  and  the  Bank;  and

     WHEREAS,  the  Company  and  the  Bank  (sometimes collectively referred to
herein  as  the  "Employer")  desire  to  induce the Employee to continue in the
employ  of  the  Company  and  the  Bank  by  offering  this agreement providing
severance  benefits  to the Employee in certain circumstances following a Change
in  Control  (as  defined  below)  of  the  Company  or  the  Bank.

     NOW,  THEREFORE,  in consideration of the mutual covenants herein contained
and  other good and valuable consideration, the receipt and sufficiency of which
is  hereby  acknowledged,  the  parties  hereto  agree  as  follows:

     1.     DEFINITIONS.  For  purposes  of  this Agreement, the following terms
            -----------
and  conditions  shall  have  the  meanings  set  forth  in  this  Section  1:

          (a)     "Area"  means  the  geographic area within a 25-mile radius of
                   ----
     each  location  where  the Employer (or any subsidiary or parent company of
     Employer) maintains an office or branch at any time during the term of this
     Agreement.

          (b)     "Board  of  Directors"  means  the  Board  of Directors of the
                   --------------------
     Company or the Bank, as the context implies.

          (c)     "Business  of theEmployer" means the business conducted by the
                   ------------------------
     Company  and  the  Bank,  which  is  the business of banking, including the
     solicitation  of  time  and  demand deposits and the making of residential,
     consumer, commercial and corporate loans.

          (d)     "Cause"  shall mean any of (i) the commission by Employee of a
                   -----
     willful  act  (including,  without  limitation,  a dishonest, fraudulent or
     unethical  act,  or  willful  or  recurring  insubordination)  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


<PAGE>
     involving  dishonesty,  moral turpitude or fraud; (iii) the material breach
     by  Employee  of this Agreement; (iv) the material violation by Employee of
     any  federal  or  state  banking  law,  rule  or  regulation,  causing  or
     permitting,  whether  intentionally  or negligently, Employer to materially
     violate  any  federal  or  state  banking  law, rule or regulation; (v) the
     suspension  or  temporary  prohibition  of  Employee's participation in the
     conduct  of the affairs of Employer or any subsidiary of Employer by notice
     served  under Section 8(e) of the Federal Deposit Insurance Act (12 U.S.C.,
     Section  1818  (e));  (vi)  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  of  Directors
     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),  not  including  items
     contained  in  any  regulatory  action  in  place  prior  to the Employee's
     employment;  (vi)  the  exhibition  by  Employee  of a standard of behavior
     within  the  scope  of  her 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  of  Directors'  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; (viii) the
     failure  of  Employee to devote her full business time and attention to her
     employment  that, if susceptible of cure, remains uncured 60 days following
     written  notice  to  Employee  of  such failure; or (ix) the failure by the
     Employee  to  achieve  or  maintain  the  reasonable  performance  goals
     established by Employer's management and approved by the Board of Directors
     from  time  to time for Employee and Employer that, if susceptible of cure,
     remains  uncured  60  days  following  written  notice  to Employee of such
     failure.

          (e)     "Change  in  Control"  means  the  occurrence  of  any  of the
                   -------------------
     following events on or after the Effective Date:

               (i)     within  any  12-month  period  (beginning on or after the
          Effective  Date)  the persons who constitute the Board of Directors of
          the  Company  or the Bank immediately before such 12-month period (the
          "Incumbent  Directors")  cease for any reason to constitute at least a
          majority  of  such  Board  of  Directors;  provided, however, that any
          person  becoming  a director subsequent to the Effective Date shall be
          deemed  to  be  an  Incumbent Director if that director was elected to
          such  Board  of  Directors by, or on the recommendation of or with the
          approval  of,  at  least  two-thirds  (2/3)  of the directors who then
          qualified  as  Incumbent  Directors;  and  provided  further  that  no
          director  whose  initial assumption of office is in connection with an
          actual  or  threatened  election  contest  relating to the election of
          directors shall be deemed an Incumbent Director;


                                      - 2 -
<PAGE>
               (ii)     the  consummation  of  a  reorganization,  merger  or
          consolidation  of  the  Company  or  the  Bank,  with respect to which
          persons  who  were the stockholders of the Company or the Bank, as the
          case  may  be,  immediately  prior  to  such reorganization, merger or
          consolidation  do  not,  immediately  thereafter,  own more than fifty
          percent  (50%)  of  the  combined voting power entitled to vote in the
          election  of  directors  of  the  reorganized,  merged or consolidated
          entity's then outstanding voting securities; or

               (iii)     the  sale,  transfer  or  assignment  of  all  or
          substantially all of the assets of the Company and the Bank to any
          third party.

          (f)     "Confidential Information" means data and information relating
                   ------------------------
     to  the  Business  of  the Employer (which does not rise to the status of a
     Trade  Secret)  which  is or has been disclosed to the Employee or of which
     the  Employee  became aware as a consequence of or through her relationship
     to the Company and the Bank and which has value to the Company and the Bank
     and  is  not  generally  known  to  its  competitors.  Without limiting the
     foregoing, Confidential Information shall include the following:

               (i)     all  items  of  information that could be classified as a
          trade secret pursuant to South Carolina law;

               (ii)     the  names,  addresses  and  banking requirements of the
          customers  of  the  Company  and the Bank and the nature and amount of
          business done with such customers;

               (iii)     the names and addresses of employees and other business
          contacts of the Company and the Bank;

               (iv)     the particular names, methods and procedures utilized by
          the  Company  and  the  Bank  in  the conduct and advertising of their
          business;

               (v)     the  applications,  operating  system,  communication and
          other  computer  software  and derivatives thereof, including, without
          limitation,  sources  and  object  codes,  flow charts, coding sheets,
          routines,  subrouting  and  related  documentation  and manuals of the
          Company and the Bank; and

               (vi)     marketing  techniques,  purchasing  information, pricing
          policies,  loan  policies,  quoting procedures, financial information,
          customer  data  and  other  materials  or  information relating to the
          Company's and the Bank's manner of doing business.

     Confidential  Information  shall  not  include  any  data  or  information
     that  has  been  voluntarily  disclosed to the public by the Company or the
     Bank  (except  where  such  public disclosure has been made by the Employee
     without  authorization)  or  that  has  been  independently  developed  and
     disclosed  by  others,  or  that otherwise enters the public domain through
     lawful  means.


                                      - 3 -
<PAGE>
          (g)     "Good  Reason"  means, with respect to a voluntary resignation
                   ------------
     by  the  Employee,  any one of the following events, but only if such event
     first  arose  within forty-five (45) days of such resignation, the Employee
     first provided the Employer with written notice of the event within fifteen
     (15)  days after the event occurred and an opportunity to cure for at least
     ten (10) business days from its receipt of the notice and the circumstances
     continued,  uncured,  through  the  effective  date  of  the  Employee's
     resignation:

               (i)     the  assignment  of  duties  to the Employee that, in the
          aggregate, are not commensurate with her training and experience;

               (ii)     a reduction in the Employee's base salary rate or annual
          bonus  opportunity  effected  by  the  Employer, unless such reduction
          applies generally to senior executives of the Employer; or

               (iii)     a  requirement  by  the  Employer  that  the Employee's
          services  be  rendered  primarily  at a location more than twenty-five
          (25)  miles  from any business office maintained by the Employer as of
          the Effective Date.

          (h)     "Trade  Secrets"  means  information,  without regard to form,
                   --------------
     including,  but  not  limited to, technical or nontechnical data, formulas,
     patterns,  compilations,  programs, devices, methods, techniques, drawings,
     processes,  financial  data,  financial  plans,  product  plans or lists of
     actual  or  potential  customers  or  suppliers  which (i) derives economic
     value,  actual  or  potential,  from  not being generally known to, and not
     being  readily  ascertainable  by  proper  means  by, other persons who can
     obtain  economic  value from its disclosure or use, and (ii) is the subject
     of  efforts  that  are  reasonable  under the circumstances to maintain its
     secrecy.

     2.     TERM.  The  term  of  this  Agreement  (the  "Term")  shall  become
            ----
effective as of the Effective Date and shall remain in effect until the earliest
of  (a)  the Employee's termination of employment with the Company and the Bank,
regardless of the manner in which it was effected, prior to a Change in Control;
(b)  the  last day of the thirteenth (13th) calendar month immediately following
the  calendar  month  containing  the effective date of a Change in Control (the
period  from  the  effective date of a Change in Control through the last day of
such  thirteenth (13th) calendar month is referred to herein as the "Post-Change
in  Control  Period")  provided  there  has  been  no  Qualifying Termination of
Employment  (as  defined  in  Section 3) prior thereto; or (c) until all amounts
that  may  be payable to the Employee pursuant to Section 3 below have been paid
in connection with a Qualifying Termination of Employment.

     3.     SEVERANCE  BENEFITS  UPON TERMINATION OF EMPLOYMENT.  If, while this
            ---------------------------------------------------
Agreement  is  in  effect, the Employee:  (a) is involuntarily terminated by the
Company and the Bank without Cause during the Post-Change in Control Period; (b)
resigns  her employment with the Company and the Bank for Good Reason during the
Post-Change  in  Control  Period;  or  (c)  resigns  for  any  reason during the
thirteenth  (13th)  month  of  the  Post-Change  in  Control  Period  (each,  a
"Qualifying Termination of Employment"), the Bank shall pay to the Employee in a
lump-sum an amount equal to two times the sum of (a) the Employee's salary as in
effect at the


                                      - 4 -
<PAGE>
effective  time of the termination of employment and (b) the amount of the bonus
earned  by the Employee during the prior calendar year (the "Lump Sum Payment").
The  Lump  Sum  Payment  is  sometimes  referred  to  in  this  Agreement as the
"Severance  Benefit."  If the aggregate present value (determined as of the date
of  the  Change  in Control in accordance with the provisions of Section 280G of
the Internal Revenue Code, as amended, and the rules and regulations promulgated
thereunder  (collectively,  the  "Code"))  of both the Severance Benefit and all
other  payments  to  the  Employee  in  the  nature  of  compensation  which are
contingent  on  a change in ownership or effective control of the Company or the
Bank  or  in the ownership of a substantial portion of the assets of the Company
or  the  Bank (the "Aggregate Severance") would result in a "parachute payment,"
as  defined  under  Section 280G of the Code, then the Aggregate Severance shall
not  be  greater  than  an  amount  equal to 2.99 multiplied by Employee's "base
amount"  for  the  "base period," as those terms are defined under Section 280G.
In  the event the Aggregate Severance is required to be reduced pursuant to this
Section  3,  the  Employee  shall be entitled to determine which portions of the
Aggregate  Severance are to be reduced so that the Aggregate Severance satisfies
the limit set forth in the preceding sentence.

     The  Lump  Sum Payment shall be paid to the Employee as soon as practicable
following  the  effective date of the Qualifying Termination of Employment.  The
Employer  shall be entitled to withhold appropriate employment and income taxes,
if required by applicable law, from any Severance Benefit that becomes payable.

     4.     CONFIDENTIALITY.  In  the  event  of  the  occurrence of a Change in
            ---------------
Control during the Term, the Employee agrees that:

          (a)     except  to the extent necessary to perform the duties assigned
     to her by the Employer, the Employee will hold Confidential Information and
     Trade  Secrets  in  trust  and  strictest  confidence,  and  will  not use,
     reproduce,  distribute,  disclose or otherwise disseminate the Confidential
     Information  and  Trade Secrets or any physical embodiments thereof and may
     in no event take any action causing or fail to take the action necessary to
     prevent,  any  Confidential  Information  and Trade Secrets disclosed to or
     developed  by  the  Employee  to  lose its character or cease to qualify as
     Confidential Information or Trade Secrets; and

          (b)     the  covenants  of confidentiality set forth herein will apply
     only  from  and  after  the  occurrence  of  a Change in Control during the
     remaining term of the Employee's employment but, in such event, will extend
     to any Confidential Information and Trade Secrets disclosed by the Employer
     or  developed  by  the  Employee at any time during her employment with the
     Employer.  The  covenants  restricting  the use of Confidential Information
     will  apply  from  the  effective  date  of  the Change in Control and will
     continue  and  be  maintained  by  the Employee for a period of twelve (12)
     months  following  the  Employee's termination of employment, regardless of
     the  reason.  The covenants restricting the use of Trade Secrets will apply
     from  the  effective date of the Change in Control and will continue and be
     maintained  by the Employee following Employee's termination of employment,
     regardless of the reason, for so long as permitted by applicable law.


                                      - 5 -
<PAGE>
     5.     NOT USED.
            ---------

     6.     NONSOLICITATION.  If  the  Employee  experiences  a  termination  of
            ---------------
employment,  regardless of the reason, during the Post-Change in Control Period,
the  Employee  agrees  that,  for  twelve  (12)  months following the Employee's
termination of employment:

          (a)     the  Employee  will not (except on behalf of or with the prior
     written  consent  of  the Employer), on the Employee's own behalf or in the
     service  or  on behalf of others, solicit, divert or appropriate or attempt
     to  solicit,  divert  or  appropriate, directly or by assisting others, any
     business  from  any of the customers of the Bank, including actively sought
     prospective  customers,  with whom the Employee has or had material contact
     during the last two (2) years of the Employee's employment, for purposes of
     providing  products or services that are competitive with those provided by
     the Employer; and

          (b)     the  Employee  will not on the Employee's own behalf or in the
     service or on behalf of others, solicit, recruit or hire away or attempt to
     solicit,  recruit  or  hire  away,  directly  or  by  assisting others, any
     employee  of  the Company and/or the Bank with whom the Employee has or had
     material  contact  during  the  last  two  (2)  years  of  the  Employee's
     employment,  whether  or  not  such  employee  is a full-time employee or a
     temporary  employee  of the Company and/or the Bank and whether or not such
     employment  is  pursuant  to  a  written  agreement and whether or not such
     employment is for a determined period or is at will.

     7.     REMEDIES.  The  Employee  agrees  that,  in addition to all remedies
            --------
provided  by  law  or  in  equity,  the  Employer  shall be entitled to specific
performance of this Agreement and to both temporary and permanent injunctions to
prevent  a  breach  or  contemplated  breach by the Employee of the covenants in
Sections  4,  5 and 6 hereof.  If the Employee breaches her obligations pursuant
to  Sections 4, 5 or 6 hereof, the Employee will forfeit any amounts owed to the
Employee under Section 3 hereof which have not been paid to the Employee.

     8.     NO  MITIGATION.  No  amounts  or  benefits  payable  to the Employee
            --------------
hereunder  shall be subject to mitigation or reduction by income or benefits the
Employee receives from other sources.

     9.     CONTINUED  EMPLOYMENT.  Nothing  herein  shall  entitle  Employee to
            ---------------------
continued  employment with the Company and/or the Bank or to continued tenure in
any  specific office or position. The Employee's employment with the Company and
the Bank shall be terminable at the will of the Company or the Bank, as the case
may  be,  with  or  without  Cause,  subject  to  the terms of any other written
agreement as may be in effect between the parties.

     10.     ASSIGNMENT.  The  rights and obligations of the Employer under this
             ----------
Agreement  shall  inure to the benefit of the Employer's successors and assigns.
This Agreement may be assigned by the Company or the Bank to any legal successor
or  to  an  entity which purchases all or substantially all of the assets of the
Company or the Bank, as the case may be.  In the event of any assignment of this
Agreement permitted by this Section 10, the terms "Company," "Bank"


                                      - 6 -
<PAGE>
and/or  the  "Employer"  as  defined  herein  will  refer to the assignee(s), as
appropriate,  and  the Employee will not be deemed to have terminated employment
hereunder until the Employee terminates employment from the assignee(s).

     11.     ARBITRATION.  Any  controversy  or claim arising out of or relating
             -----------
to  this  Agreement, or the breach thereof, shall be adjudicated through binding
arbitration  before  a  single  arbitrator  in  accordance  with  the Commercial
Arbitration  Rules of the American Arbitration Association. The Employer and the
Employee agree that they will seek to enforce any arbitration award in the Court
of  Common  Pleas  in  Beaufort  County, South Carolina, the Fourteenth Judicial
Circuit.  The  decision of the arbitration panel shall be final and binding upon
the parties and judgment upon the award rendered by the arbitration panel may be
entered by any court having jurisdiction. The Employer and the Employee agree to
share equally the fees and expenses associated with the arbitration proceedings,
except as otherwise provided by Section 12 below.

                                             EMPLOYEE MUST INITIAL HERE: /S/ CJN
                                                                         -------

     12.     ATTORNEYS'  FEES.  With  respect  to arbitration of disputes and if
             ----------------
litigation  ensues  between  the  parties  concerning  the  enforcement  of  an
arbitration  award  and  the  Employee  prevails  on  all of the material issues
pertinent  to  the  dispute,  the  Employer  will reimburse the Employee for all
costs,  expenses, reasonable attorneys' fees and reasonable expenses incurred by
the  Employee (or the Employee's estate in the event of her death) in connection
with the dispute.

     13.     NOTICE.  All  notices,  consents,  waivers and other communications
             ------
required  or permitted by this Agreement shall be in writing and shall be deemed
given  to  a  party  when (a) delivered to the appropriate address by hand or by
nationally  recognized  overnight  courier  service (costs prepaid); (b) sent by
facsimile  with  confirmation  of transmission by the transmitting equipment; or
(c)  received  or  rejected  by the addressee, if sent by certified mail, return
receipt  requested, in each case to the following addresses or facsimile numbers
and  marked  to  the attention of the person (by name or title) designated below
(or  to  such other address, facsimile number or person as a party may designate
by written notice to the other parties):

     If to the Employer, to the Employer at:       Islands Community Bank
                                                   2348 Boundary Street
                                                   Beaufort, SC 29903
                                                   Attn: Chairman

     If to the Employee, to the Employee at: Ms.   Carol J. Nelson
                                                   70 Shipyard Drive #154
                                                   Hilton Head, SC 29928

     14.     HEADINGS.  Sections  or  other  headings  contained  herein are for
             --------
reference  purposes  only  and  shall  not  affect  in  any  way  the meaning or
interpretation of this Agreement.

     15.     ENTIRE AGREEMENT.  This Agreement contains the entire understanding
             ----------------
of the parties with respect to the subject matter hereof.


                                      - 7 -
<PAGE>
     16.     SEVERABILITY.  In  the  event that one or more of the provisions of
             ------------
this  Agreement  shall  be  or  become  invalid, illegal or unenforceable in any
respect,  the  validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

     17.     APPLICABLE  LAW  AND  CHOICE  OF  FORUM.  This  Agreement  shall be
             ---------------------------------------
construed  and  enforced  under  and in accordance with the laws of the State of
South  Carolina.  The  parties agree that any appropriate state or federal court
located  in  South  Carolina  shall  have  exclusive jurisdiction of any case or
controversy  arising  under  or  in connection with Sections 4 through 7 of this
Agreement  shall  be  a  proper  forum  in  which  to  adjudicate  such  case or
controversy.  The parties consent and waive any objection to the jurisdiction or
venue of such courts.

     18.     AMENDMENT.  This  Agreement  may  not  be  modified,  amended,
             ---------
supplemented  or  terminated  except by a written agreement between the Employer
and the Employee.

     19.     SURVIVAL.  The provisions of Sections 4, 5, 6, 7, 11, 12, 17 and 20
             --------
of  this Agreement shall survive, as necessary and to the extent applicable, the
expiration of the Term or any other termination of this Agreement.

     20.     CONFIDENTIALITY  AND  PROFESSIONALISM.  Employee  represents  and
             -------------------------------------
agrees  that  Employee  will  keep  the  terms,  amount,  value,  and  nature of
consideration  paid  to  Employee,  and  the  fact  of this Agreement completely
confidential,  and  that  Employee  will  not hereafter disclose any information
concerning  this  Agreement to anyone other than Employee's immediate family and
professional  representatives  who  will  be  informed  of  and  bound  by  this
confidentiality clause.


                                      - 8 -
<PAGE>
     IN  WITNESS  WHEREOF, each of the parties has executed this Agreement as of
the date and year first above written.

                                    THE COMPANY:

                                    Islands Bancorp


                                    By: /s/ D. Martin Goodman
                                        ----------------------------------------

                                    Print Name: D. Martin Goodman
                                                --------------------------------

                                    Title: Chairman of the Board of Directors
                                           -------------------------------------


                                    THE BANK:

                                    Community Bank, N.A.

                                    By: /s/ D. Martin Goodman
                                        ----------------------------------------

                                    Print Name: D. Martin Goodman
                                                --------------------------------

                                    Title: Chairman of the Board of Directors
                                           -------------------------------------


                                    EMPLOYEE:


                                    /s/ Carol J. Nelson
                                    --------------------------------------------
                                    Carol J. Nelson


                                      - 9 -