Exhibit 10.4


                     EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

                               EXECUTIVE AGREEMENT


         THIS  AGREEMENT  is made and entered  into this 11th day of  September,
2001, by and between  GrandSouth  Bank, a bank  organized and existing under the
laws of the State of South Carolina (hereinafter referred to as the "Bank"), and
Ronald K.  Earnest,  an  Executive of the Bank  (hereinafter  referred to as the
"Executive").

         WHEREAS,  the  Executive  is now in the  employ of the Bank and has for
many years  faithfully  served  the Bank.  It is the  consensus  of the Board of
Directors (hereinafter referred to as the "Board") that the Executive's services
have  been of  exceptional  merit,  in excess  of the  compensation  paid and an
invaluable  contribution to the profits and position of the Bank in its field of
activity. The Board further believes that the Executive's experience,  knowledge
of corporate  affairs,  reputation and industry  contacts are of such value, and
the Executive's  continued services so essential to the Bank's future growth and
profits,  that it would  suffer  severe  financial  loss  should  the  Executive
terminate their services;

         ACCORDINGLY,  the Board  has  adopted  the  GrandSouth  Bank  Executive
Supplemental  Retirement Plan (hereinafter  referred to as the "Executive Plan")
and it is the desire of the Bank and the Executive to enter into this  Agreement
under which the Bank will agree to make certain  payments to the Executive  upon
the Executive's  retirement or to the Executive's  beneficiary(ies) in the event
of the Executive's death pursuant to the Executive Plan;

         FURTHERMORE, it is the intent of the parties hereto that this Executive
Plan be  considered  an unfunded  arrangement  maintained  primarily  to provide
supplemental  retirement  benefits  for  the  Executive,  and  be  considered  a
non-qualified  benefit plan for purposes of the Employee Retirement Security Act
of 1974,  as amended  ("ERISA").  The  Executive is fully  advised of the Bank's
financial  status and has had  substantial  input in the design and operation of
this benefit plan; and

         NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed  in the future,  and based upon the mutual
promises and covenants  herein  contained,  the Bank and the Executive  agree as
follows:



<Page>






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

I.   DEFINITIONS

     A.   Effective Date:

          The Effective Date of the Executive Plan shall be September 11, 2001.

     B.   Plan Year:

          Any  reference  to the "Plan  Year"  shall mean a  calendar  year from
          January 1st to December 31st. In the year of implementation,  the term
          "Plan Year" shall mean the period from the Effective  Date to December
          31st of the year of the Effective Date.

     C.   Retirement Date:

          Retirement  Date shall mean retirement from service with the Bank that
          becomes effective on the first day of the calendar month following the
          month in which the Executive reaches age sixty-five (65) or such later
          date as the Executive may actually retire.

     D.   Termination of Service:

          Termination   of  Service   shall  mean  the   Executive's   voluntary
          resignation of service by the Executive or the Bank's discharge of the
          Executive   without  cause,   prior  to  the  Normal   Retirement  Age
          (Subparagraph I [J]).

     E.   Pre-Retirement Account:

          A Pre-Retirement  Account shall be established as a liability  reserve
          account  on the books of the Bank for the  benefit  of the  Executive.
          Prior to the Executive's  Retirement  Date  (Subparagraph I [C]), such
          liability  reserve  account shall be increased or decreased  each Plan
          Year,  until the  aforestated  event occurs,  by the Index  Retirement
          Benefit (Subparagraph I [F]).

     F.   Index Retirement Benefit:

          The Index Retirement  Benefit for each Executive in the Executive Plan
          for each Plan Year  shall be equal to the excess (if any) of the Index
          (Subparagraph  I [G]) for that  Plan Year  over the  Opportunity  Cost
          (Subparagraph I [H]) for that Plan Year.


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<Page>


     G.   Index:

          The Index for any Plan Year shall be the  aggregate  annual  after-tax
          income from the life insurance  contract(s)  described  hereinafter as
          defined by FASB Technical  Bulletin 85-4.  This Index shall be applied
          as if such insurance  contract(s) were purchased on the Effective Date
          of the Executive Plan.


          Insurance Company:
          Policy Form:
          Policy Name:
          Insured's Age and Sex:
          Riders:
          Ratings:
          Option:
          Face Amount:
          Premiums Paid:
          Number of Premium Payments:
          Assumed Purchase Date:


          If such  contracts of life  insurance  are  actually  purchased by the
          Bank,  then the actual  policies  as of the dates  they were  actually
          purchased shall be used in calculations  under this Executive Plan. If
          such contracts of life insurance are not purchased or are subsequently
          surrendered  or lapsed,  then the Bank  shall  receive  annual  policy
          illustrations that assume the above-described  policies were purchased
          or had not subsequently surrendered or lapsed. Said illustration shall
          be received from the respective  insurance companies and will indicate
          the increase in policy values for purposes of  calculating  the amount
          of the Index.

          In either case,  references to the life insurance contracts are merely
          for purposes of  calculating a benefit.  The Bank has no obligation to
          purchase such life insurance and, if purchased,  the Executive and the
          Executive's  beneficiary(ies) shall have no ownership interest in such
          policy and shall always have no greater interest in the benefits under
          this Executive Plan than that of an unsecured creditor of the Bank.

     H.   Opportunity Cost:

          The  Opportunity  Cost for any Plan Year shall be calculated by taking
          the sum of the  amount of  premiums  for the life  insurance  policies
          described  in  the  definition  of  "Index"  plus  the  amount  of any
          after-tax  benefits  paid to the  Executive  pursuant to the Executive
          Plan (Paragraph II hereinafter) plus the amount of all previous years'


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<Page>

          after-tax  Opportunity  Cost, and multiplying  that sum by the Average
          Federal Funds Rate.

     I.   Change of Control:

          A  "Change  of  Control"  of the Bank  shall be  deemed  to have  been
          effected for purposes of this Agreement if either:

          A.   voting  control  of the  Bank's  holding  company  (the  "Holding
               company") is acquired,  directly or indirectly,  by any person or
               group acting in concert,


          B.   the Holding  Company is merged with or into any other  entity and
               the Holding company is not the surviving entity of the merger,


          C.   voting  control of the Bank is acquired,  directly or indirectly,
               by any person or group acting in concert, or


          D.   the Bank is merged with or into another  entity which is not also
               a subsidiary  of the Holding  Company and such  subsidiary is not
               the surviving entity of the merger.

     J.   Normal Retirement Age:

          Normal  Retirement  Age  shall  mean the date on which  the  Executive
          attains age sixty-five (65).

II.      INDEX BENEFITS

     A.   Retirement Benefits:

          Subject to Subparagraph II (D)  hereinafter,  an Executive who remains
          in  the  employ  of  the  Bank  until  the   Normal   Retirement   Age
          (Subparagraph  I [J]) shall be  entitled to receive the balance in the
          Pre-Retirement  Account in  fifteen  (15)  equal  annual  installments
          commencing thirty (30) days following the Executive's  retirement.  In
          addition to these payments and  commencing in  conjunction  therewith,
          the Index Retirement  Benefit  (Subparagraph I [F]) for each Plan Year
          subsequent to the Executive's retirement,  and including the remaining
          portion of the Plan Year following said  retirement,  shall be paid to
          the Executive until the Executive's death.

     B.   Termination of Service:

          Subject  to  Subparagraph  II  (D),  should  an  Executive   suffer  a
          Termination  of Service  the  Executive  shall be  entitled to receive
          twenty-five percent (25%) times the number of full years of employment


                                       4
<Page>

          with the Bank  from the date of first  employment  with the Bank (to a
          maximum  of 100%),  times the  balance in the  Pre-Retirement  Account
          payable to the  Executive in fifteen  (15) equal  annual  installments
          commencing   thirty  (30)  days  following  the   Executive's   Normal
          Retirement Age (Subparagraph I [J]). In addition to these payments and
          commencing in conjunction  therewith,  twenty-five percent (25%) times
          the number of full years of employment  with the Bank from the date of
          first employment with the Bank (to a maximum of 100%), times the Index
          Retirement  Benefit for each Plan Year subsequent to the year in which
          the  Executive  attains  Normal  Retirement  Age,  and  including  the
          remaining  portion  of the Plan  Year in which the  Executive  attains
          Normal  Retirement  Age,  shall  be paid to the  Executive  until  the
          Executive's death.

     C.   Death:

          Should the Executive  die while there is a balance in the  Executive's
          Pre-Retirement  Account  (Subparagraph  I [E]), said unpaid balance of
          the Executive's  Pre-Retirement Account shall be paid in a lump sum to
          the  individual or  individuals  the Executive may have  designated in
          writing  and filed  with the Bank.  In the  absence  of any  effective
          beneficiary designation, the unpaid balance shall be paid as set forth
          herein  to  the  duly  qualified  executor  or  administrator  of  the
          Executive's estate. Said payment due hereunder shall be made the first
          day of the  second  month  following  the  decease  of the  Executive.
          Provided,   however,   that  anything   hereinabove  to  the  contrary
          notwithstanding,  no death benefit  shall be payable  hereunder if the
          Executive dies on or before the 11th day of September, 2003.

     D.   Discharge for Cause:

          Should the Executive be Discharged for Cause at any time, all benefits
          under this  Executive  Plan shall be  forfeited.  The term "for cause"
          shall mean:


          (i)  the  willful  and   continued   failure  by  the   Executive   to
               substantially  perform  his duties  (other  than the  Executive'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  Bank,   which  demand   specifically
               identifies  the manner in which the  Executive is alleged to have
               not substantially performed his duties;


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<Page>

          (ii) the willful  engaging by the Executive in  misconduct  (criminal,
               immoral, or otherwise) which is materially injurious to the Bank,
               its  holding  company,  or either of their  officers,  directors,
               shareholders, employees, or customers, monetarily or otherwise;


          (iii) the Executive's conviction of a felony; or


          (iv) the commission in the course of the Executive'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 Bank shall, in good faith,  deem
               to have resulted in the Executive's becoming unbondable under the
               Bank's or its holding company's "banker's blanket bond".

          If a dispute arises as to discharge "for cause," such dispute shall be
          resolved by arbitration as set forth in this Executive Plan.

          E.   Death Benefit:

               Except as set forth  above,  there is no death  benefit  provided
               under this Agreement.

          F.   Disability Benefit:

               In  the  event  the  Executive  becomes  disabled  prior  to  any
               Termination  of  Service,  and  the  Executive's   employment  is
               terminated because of such disability, he shall immediately begin
               receiving the benefits in Subparagraph II (A) above. Such benefit
               shall begin without regard to the Executive's  Normal  Retirement
               Age and the Executive  shall be one hundred percent (100%) vested
               in the entire  benefit  amount.  If there is a dispute  regarding
               whether the Executive is disabled, such dispute shall be resolved
               by a physician  selected by the Bank and such resolution shall be
               binding upon all parties to this Agreement.

III. RESTRICTIONS UPON FUNDING

     The Bank shall have no obligation to set aside, earmark or entrust any fund
     or money with which to pay its  obligations  under this Executive Plan. The
     Executive,  their  beneficiary(ies),  or any successor in interest shall be
     and remain simply a general  creditor of the Bank in the same manner as any
     other creditor having a general claim for matured and unpaid compensation.

     The Bank reserves the absolute  right,  at its sole  discretion,  to either
     fund the  obligations  undertaken by this Executive Plan or to refrain from


                                       6
<Page>

     funding the same and to  determine  the  extent,  nature and method of such
     funding.  Should the Bank elect to fund this Executive Plan, in whole or in
     part,  through the purchase of life  insurance,  mutual  funds,  disability
     policies or annuities,  the Bank reserves the absolute  right,  in its sole
     discretion,  to terminate such funding at any time, in whole or in part. At
     no time shall any Executive be deemed to have any lien nor right,  title or
     interest in or to any specific  funding  investment or to any assets of the
     Bank.

     If the Bank  elects to invest in a life  insurance,  disability  or annuity
     policy upon the life of the Executive,  then the Executive shall assist the
     Bank by freely  submitting to a physical exam and supplying such additional
     information necessary to obtain such insurance or annuities.

IV.  CHANGE OF CONTROL

     Upon  a  Change  of  Control   (Subparagraph   I  [I]),  if  the  Executive
     subsequently  suffers a Termination of Service  (Subparagraph  I [D]), then
     the Executive  shall receive the benefits  promised in this  Executive Plan
     upon  attaining  Normal  Retirement  Age,  as if  the  Executive  had  been
     continuously  employed by the Bank until the Executive's  Normal Retirement
     Age.  The  Executive  will also  remain  eligible  for all  promised  death
     benefits in this Executive Plan.

V.   MISCELLANEOUS

     A.   Alienability and Assignment Prohibition:

     Neither the Executive,  nor the Executive's surviving spouse, nor any other
     beneficiary(ies) under this Executive Plan shall have any power or right to
     transfer, assign,  anticipate,  hypothecate,  mortgage,  commute, modify or
     otherwise  encumber in advance any of the benefits  payable  hereunder  nor
     shall any of said  benefits  be subject to seizure  for the  payment of any
     debts, judgments,  alimony or separate maintenance owed by the Executive or
     the Executive's  beneficiary(ies),  nor be transferable by operation of law
     in the  event of  bankruptcy,  insolvency  or  otherwise.  In the event the
     Executive   or   any   beneficiary   attempts   assignment,    commutation,
     hypothecation,  transfer or disposal of the benefits hereunder,  the Bank's
     liabilities shall forthwith cease and terminate.

     B.   Binding Obligation of the Bank and any Successor in Interest:

          This  Executive Plan shall be binding upon the parties  hereto,  their
          successors, beneficiaries, heirs and personal representatives.

     C.   Amendment or Revocation:

          It is agreed by and  between  the  parties  hereto  that,  during  the
          lifetime  of the  Executive,  this  Executive  Plan may be  amended or


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<Page>

          revoked  at any time or  times,  in whole  or in part,  by the  mutual
          written consent of the Executive and the Bank.

     D.   Gender:

          Whenever in this  Executive  Plan words are used in the  masculine  or
          neuter  gender,  they shall be read and construed as in the masculine,
          feminine or neuter gender, whenever they should so apply.

     E.   Effect on Other Bank Benefit Plans:

          Nothing contained in this Executive Plan shall affect the right of the
          Executive  to  participate  in or  be  covered  by  any  qualified  or
          non-qualified   pension,   profit-sharing,   group,   bonus  or  other
          supplemental  compensation or fringe benefit plan  constituting a part
          of the Bank's existing or future compensation structure.

     F.   Headings:

          Headings  and  subheadings  in this  Executive  Plan are  inserted for
          reference and convenience  only and shall not be deemed a part of this
          Executive Plan.

     G.   Applicable Law:

          The validity and interpretation of this Agreement shall be governed by
          the laws of the State of South Carolina.

     H.   12 U.S.C.Section 1828(k):

          Any payments made to the Executive pursuant to this Executive Plan, or
          otherwise,  are subject to and conditioned  upon their compliance with
          12 U.S.C. Section 1828(k) or any regulations promulgated thereunder.

     I.   Partial Invalidity:

          If any term, provision,  covenant, or condition of this Executive Plan
          is determined  by an arbitrator or a court,  as the case may be, to be
          invalid,  void, or unenforceable,  such determination shall not render
          any other term, provision,  covenant,  or condition invalid,  void, or
          unenforceable,  and the Executive  Plan shall remain in full force and
          effect notwithstanding such partial invalidity.

     J.   Employment:

          No  provision  of this  Executive  Plan shall be deemed to restrict or
          limit any  existing  employment  agreement by and between the Bank and
          the  Executive,  nor  shall  any  conditions  herein  create  specific
          employment rights to the Executive nor limit the right of the Employer
          to  discharge  the  Executive  with or  without  cause.  In a  similar
          fashion,   no  provision  shall  limit  the   Executive's   rights  to
          voluntarily sever the Executive's employment at any time.

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<Page>

VI.  ERISA PROVISION

     A.   Named Fiduciary and Plan Administrator:

          The "Named  Fiduciary and Plan  Administrator"  of this Executive Plan
          shall be  GrandSouth  Bank  until its  resignation  or  removal by the
          Board.  As Named Fiduciary and Plan  Administrator,  the Bank shall be
          responsible  for the  management,  control and  administration  of the
          Executive  Plan.  The Named  Fiduciary may delegate to others  certain
          aspects  of  the  management  and  operation  responsibilities  of the
          Executive Plan including the employment of advisors and the delegation
          of ministerial duties to qualified individuals.

     B.   Claims Procedure and Arbitration:

          In the event a dispute  arises over benefits under this Executive Plan
          and  benefits  are not paid to the  Executive  (or to the  Executive's
          beneficiary(ies)  in the  case  of the  Executive's  death)  and  such
          claimants  feel they are  entitled to receive  such  benefits,  then a
          written   claim  must  be  made  to  the  Named   Fiduciary  and  Plan
          Administrator  named  above  within  sixty  (60)  days  from  the date
          payments are refused. The Named Fiduciary and Plan Administrator shall
          review the  written  claim and if the claim is denied,  in whole or in
          part,  they shall provide in writing within sixty (60) days of receipt
          of such claim the specific  reasons for such denial,  reference to the
          provisions of this  Executive  Plan upon which the denial is based and
          any additional material or information necessary to perfect the claim.
          Such written notice shall further  indicate the additional steps to be
          taken by claimants if a further review of the claim denial is desired.
          A claim  shall  be  deemed  denied  if the  Named  Fiduciary  and Plan
          Administrator  fail to take any action within the aforesaid  sixty-day
          period.

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          If  claimants  desire a second  review  they  shall  notify  the Named
          Fiduciary and Plan  Administrator in writing within sixty (60) days of
          the first claim denial.  Claimants may review this  Executive  Plan or
          any  documents  relating  thereto  and submit any  written  issues and
          comments it may feel appropriate.  In their sole discretion, the Named
          Fiduciary  and Plan  Administrator  shall then review the second claim
          and provide a written  decision  within  sixty (60) days of receipt of
          such claim.  This decision shall  likewise state the specific  reasons
          for the decision and shall include reference to specific provisions of
          the Plan Agreement upon which the decision is based.

          If  claimants  continue  to  dispute  the  benefit  denial  based upon
          completed performance of this Executive Plan or the meaning and effect
          of the terms and  conditions  thereof,  then  claimants may submit the
          dispute to an arbitrator for final  arbitration  pursuant to the South
          Carolina  Uniform  Arbitration Act. The parties hereto agree that they
          and their  heirs,  personal  representatives,  successors  and assigns
          shall be bound by the decision of such  arbitrator with respect to any
          controversy properly submitted to it for determination.

          Where a dispute  arises as to the Bank's  discharge  of the  Executive
          "for cause," such dispute shall  likewise be submitted to  arbitration
          as above  described  and the parties  hereto  agree to be bound by the
          decision thereunder.


         IN  witness  whereof,  the  parties  hereto  acknowledge  that each has
carefully read this Agreement and executed the original thereof on the first day
set forth hereinabove,  and that, upon execution, each has received a conforming
copy.


                                 GRANDSOUTH BANK
                                 Fountain Inn, South Carolina




                                    By:
--------------------------            ------------------------------------------
Witness                                                                    Title





--------------------------            ------------------------------------------
Witness                                Ronald K. Earnest




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                          BENEFICIARY DESIGNATION FORM
                         FOR THE EXECUTIVE SUPPLEMENTAL
                            RETIREMENT PLAN AGREEMENT


PRIMARY DESIGNATION:

         Name                       Address                    Relationship
         ----                       -------                    ------------


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


SECONDARY (CONTINGENT) DESIGNATION:


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


All sums payable  under the Executive  Supplemental  Retirement  Plan  Executive
Agreement by reason of my death shall be paid to the Primary Beneficiary,  if he
or she survives me, and if no Primary  Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.




---------------------------------                      ---------------------
Ronald K. Earnest                                             Date



                                       11
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                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT


Insurer:

Policy Number:

Bank:                               GrandSouth Bank

Insured:                            Ronald K. Earnest

Relationship of Insured to Bank:    Executive


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

The  respective   rights  and  duties  of  the  Bank  and  the  Insured  in  the
above-referenced policy shall be pursuant to the terms set forth below:

I.   DEFINITIONS

     Refer  to the  policy  contract  for the  definition  of all  terms in this
     Agreement.

II.  POLICY TITLE AND OWNERSHIP

     Title and ownership shall reside in the Bank for its use and for the use of
     the Insured all in accordance with this  Agreement.  The Bank alone may, to
     the extent of its interest, exercise the right to borrow or withdraw on the
     policy cash values.  Where the Bank and the Insured (or assignee,  with the
     consent of the  Insured)  mutually  agree to exercise the right to increase
     the coverage  under the subject Split Dollar  policy,  then, in such event,
     the rights,  duties and benefits of the parties to such increased  coverage
     shall continue to be subject to the terms of this Agreement.

III. BENEFICIARY DESIGNATION RIGHTS

     The Insured  (or  assignee)  shall have the right and power to  designate a
     beneficiary or beneficiaries to receive the Insured's share of the proceeds
     payable  upon the death of the  Insured,  and to elect and change a payment
     option for such beneficiary,  subject to any right or interest the Bank may
     have in such proceeds, as provided in this Agreement.

IV.  PREMIUM PAYMENT METHOD

     The Bank shall pay an amount  equal to the planned  premiums  and any other
     premium payments that might become necessary to keep the policy in force.



                                       12
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V.   TAXABLE BENEFIT

     Annually the Insured will  receive a taxable  benefit  equal to the assumed
     cost of insurance as required by the Internal Revenue Service. The Bank (or
     its administrator)  will report to the Insured the amount of imputed income
     each year on Form W-2 or its equivalent.

VI.  DIVISION OF DEATH PROCEEDS

     Subject to Paragraphs VII and IX herein, the division of the death proceeds
     of the policy is as follows:

     A.   Should the  Insured be  employed  by the Bank and die on or before the
          11th  day  of  September,   2003,   the  Insured's   beneficiary(ies),
          designated in accordance  with  Paragraph III, shall be entitled to an
          amount  equal  to  one  hundred  percent  (100%)  of  the  net-at-risk
          insurance portion of the proceeds.  The net-at-risk  insurance portion
          is the total proceeds less the cash value of the policy.

     B.   Should the Insured be employed by the Bank and die  subsequent  to the
          11th  day  of  September,   2003,   the  Insured's   beneficiary(ies),
          designated in accordance  with  Paragraph III, shall be entitled to an
          amount  equal to eighty  percent  (80%) of the  net-at-risk  insurance
          portion of the  proceeds.  The  net-at-risk  insurance  portion is the
          total proceeds less the cash value of the policy.

     C.   Should the  Insured  not be employed by the Bank at the time of his or
          her death and die on or before the 11th day of  September,  2003,  the
          Insured's  beneficiary(ies),  designated in accordance  with Paragraph
          III, shall be entitled to the  percentage as set forth  hereinbelow of
          the proceeds  described in Subparagraph VI (A) above that  corresponds
          to the number of full years the Insured has been  employed by the Bank
          since the date of first  employment with the Bank.  Should the Insured
          not be  employed  by the Bank at the time of his or her  death and die
          subsequent  to  the  11th  day  of  September,   2003,  the  Insured's
          beneficiary(ies)  shall be entitled to the following percentage of the
          proceeds described in Subparagraph VI (B) hereinabove:

          Total Years
          of Employment
          with the Bank                      Vested (to a maximum of 100%)
          -----------------                  -----------------------------

               1-4                                    25% per year

     D.   The Bank shall be entitled to the remainder of such proceeds.

     E.   The Bank and the Insured (or  assignees)  shall share in any  interest
          due on the death proceeds on a pro rata basis as the proceeds due each
          respectively bears to the total proceeds, excluding any such interest.

VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY

     The Bank shall at all times be entitled to an amount  equal to the policy's
     cash value, as that term is defined in the policy contract, less any policy
     loans and unpaid interest or cash  withdrawals  previously  incurred by the
     Bank  and any  applicable  surrender  charges.  Such  cash  value  shall be
     determined as of the date of surrender or death as the case may be.



                                       13
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VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

     In the event the policy  involves  an  endowment  or annuity  element,  the
     Bank's right and interest in any endowment proceeds or annuity benefits, on
     expiration  of  the  deferment  period,   shall  be  determined  under  the
     provisions of this Agreement by regarding  such  endowment  proceeds or the
     commuted  value of such annuity  benefits as the policy's cash value.  Such
     endowment proceeds or annuity benefits shall be considered to be like death
     proceeds for the purposes of division under this Agreement.

IX.  TERMINATION OF AGREEMENT

     This  Agreement  shall  terminate  upon  the  occurrence  of any one of the
     following:

     A.   The Insured  shall be  discharged  from  employment  with the Bank for
          cause. The term "for cause" shall mean:



          (v)  the willful and continued failure by the Insured to substantially
               perform  his  duties  (other  than  the  Insured'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 Bank,  which  demand  specifically  identifies  the manner in
               which the Insured is alleged to have not substantially  performed
               his duties;


          (vi) the  willful  engaging by the  Insured in  misconduct  (criminal,
               immoral, or otherwise) which is materially injurious to the Bank,
               its  holding  company,  or either of their  officers,  directors,
               shareholders, employees, or customers, monetarily or otherwise;


          (vii) the Insured's conviction of a felony; or

          (viii) the commission in the course of the Insured'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 Bank shall, in good faith,  deem
               to have resulted in the Insured's  becoming  unbondable under the
               Bank's or its holding company's "banker's blanket bond".

     B.   Surrender, lapse, or other termination of the Policy by the Bank.

          Upon  receipt  of notice  from the  Insurer of such  termination,  the
          Insured (or assignee)  shall have a fifteen (15) day option to receive
          from the Bank an absolute assignment of the policy in consideration of
          a cash payment to the Bank,  whereupon this Agreement shall terminate.
          Such cash payment referred to hereinabove shall be the greater of:

     A.   The  Bank's  share of the cash value of the policy on the date of such
          assignment, as defined in this Agreement; or

     B.   The  amount of the  premiums  that have been paid by the Bank prior to
          the date of such assignment.

          If, within said fifteen (15) day period, the Insured fails to exercise
          said option,  fails to procure the entire aforestated cash payment, or
          dies,  then the option shall  terminate  and the Insured (or assignee)


                                       14
<Page>

          agrees that all of the  Insured's  rights,  interest and claims in the
          policy  shall  terminate  as of the  date of the  termination  of this
          Agreement.

          The Insured  expressly  agrees that this  Agreement  shall  constitute
          sufficient  written  notice to the Insured of the Insured's  option to
          receive an absolute assignment of the policy as set forth herein.

          Except  as  provided  above,   this  Agreement  shall  terminate  upon
          distribution  of  the  death  benefit   proceeds  in  accordance  with
          Paragraph VI above.

X.   INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

     The Insured may not, without the written consent of the Bank, assign to any
     individual,  trust or other  organization,  any right, title or interest in
     the subject  policy nor any rights,  options,  privileges or duties created
     under this Agreement.

XI.  AGREEMENT BINDING UPON THE PARTIES

     This  Agreement  shall  bind  the  Insured  and  the  Bank,   their  heirs,
     successors, personal representatives and assigns.

XII. ERISA PROVISIONS

     The  following  provisions  are part of this  Agreement and are intended to
     meet the  requirements  of the Employee  Retirement  Income Security Act of
     1974 ("ERISA"):

     A.   Named Fiduciary and Plan Administrator.

          The  "Named  Fiduciary  and Plan  Administrator"  of this  Endorsement
          Method  Split  Dollar  Agreement  shall be  GrandSouth  Bank until its
          resignation or removal by the Board of Directors.  As Named  Fiduciary
          and  Plan  Administrator,  the  Bank  shall  be  responsible  for  the
          management,  control,  and administration of this Split Dollar Plan as
          established herein. The Named Fiduciary may delegate to others certain
          aspects of the management and operation  responsibilities of the Plan,
          including  the  employment  of  advisors  and  the  delegation  of any
          ministerial duties to qualified individuals.

     B.   Claims Procedure and Arbitration:

          In the event a dispute  arises over  benefits  under this Split Dollar
          Plan and  benefits  are not paid to the Insured  (or to the  Insured's
          beneficiary(ies)  in  the  case  of  the  Insured's  death)  and  such
          claimants  feel they are  entitled to receive  such  benefits,  then a
          written   claim  must  be  made  to  the  Named   Fiduciary  and  Plan
          Administrator  named  above  within  sixty  (60)  days  from  the date
          payments are refused. The Named Fiduciary and Plan Administrator shall
          review the  written  claim and if the claim is denied,  in whole or in
          part,  they shall provide in writing within sixty (60) days of receipt
          of such claim the specific  reasons for such denial,  reference to the
          provisions  of this Split  Dollar  Plan upon which the denial is based
          and any additional  material or  information  necessary to perfect the
          claim. Such written notice shall further indicate the additional steps
          to be taken by  claimants  if a further  review of the claim denial is
          desired.  A claim shall be deemed  denied if the Named  Fiduciary  and
          Plan  Administrator  fail to take  any  action  within  the  aforesaid
          sixty-day period.

          If  claimants  desire a second  review  they  shall  notify  the Named
          Fiduciary and Plan  Administrator in writing within sixty (60) days of
          the first claim denial. Claimants may review this Split Dollar Plan or


                                       15
<Page>

          any  documents  relating  thereto  and submit any  written  issues and
          comments it may feel appropriate.  In their sole discretion, the Named
          Fiduciary  and Plan  Administrator  shall then review the second claim
          and provide a written  decision  within  sixty (60) days of receipt of
          such claim.  This decision shall  likewise state the specific  reasons
          for the decision and shall include reference to specific provisions of
          the Plan Agreement upon which the decision is based.

          If  claimants  continue  to  dispute  the  benefit  denial  based upon
          completed  performance  of this Split  Dollar  Plan or the meaning and
          effect of the terms and conditions thereof,  then claimants may submit
          the dispute to an arbitrator for final arbitration. The parties hereto
          agree that they and their heirs, personal representatives,  successors
          and assigns  shall be bound by the  decision of such  arbitrator  with
          respect to any controversy properly submitted to it for determination.

          Where a dispute arises as to the Bank's  discharge of the Insured "for
          cause," such dispute  shall  likewise be submitted to  arbitration  as
          above  described  and the  parties  hereto  agree  to be  bound by the
          decision thereunder.

     C.   Funding Policy.

          The funding policy for this Split Dollar Plan shall be to maintain the
          subject policy in force by paying, when due, all premiums required.

     D.   Basis of Payment of Benefits.

          Direct  payment by the  Insurer  is the basis of  payment of  benefits
          under this  Agreement,  with those benefits in turn being based on the
          payment of premiums as provided in this Agreement.

     E.   Claim Procedures.

          Claim  forms or claim  information  as to the  subject  policy  can be
          obtained by contacting Benmark,  Inc.  (800-544-6079).  When the Named
          Fiduciary  has a claim  which  may be  covered  under  the  provisions
          described  in the  insurance  policy,  they should  contact the office
          named above, and they will either complete a claim form and forward it
          to an  authorized  representative  of the  Insurer or advise the named
          Fiduciary what further  requirements  are necessary.  The Insurer will
          evaluate and make a decision as to payment. If the claim is payable, a
          benefit  check  will be  issued in  accordance  with the terms of this
          Agreement.

          In the  event  that a claim is not  eligible  under  the  policy,  the
          Insurer will notify the Named  Fiduciary of the denial pursuant to the
          requirements  under the terms of the policy. If the Named Fiduciary is
          dissatisfied  with the denial of the claim and wishes to contest  such
          claim denial, they should contact the office named above and they will
          assist in making an  inquiry to the  Insurer.  All  objections  to the
          Insurer's  actions  should be in writing and  submitted  to the office
          named above for transmittal to the Insurer.

XIII. GENDER

     Whenever  in this  Agreement  words  are used in the  masculine  or  neuter
     gender,  they shall be read and construed as in the masculine,  feminine or
     neuter gender, whenever they should so apply.



                                       16
<Page>

XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

     The Insurer shall not be deemed a party to this Agreement, but will respect
     the rights of the parties as herein  developed  upon  receiving an executed
     copy of this Agreement. Payment or other performance in accordance with the
     policy  provisions  shall  fully  discharge  the  Insurer  from any and all
     liability.

XV.  CHANGE OF CONTROL

     A "Change of Control" of the Bank shall be deemed to have been effected for
     purposes of this Agreement if either:

          a.   voting  control  of the  Bank's  holding  company  (the  "Holding
               Company") is acquired,  directly or indirectly,  by any person or
               group acting in concert,

          b.   The Holding  Company is merged with or into any other  entity and
               the Holding Company is not the surviving entity of the merger,

          c.   voting  control of the Bank is acquired,  directly or indirectly,
               by any person or group acting in concert, or

     D.   The Bank is merged  with or into  another  entity  which is not also a
          subsidiary  of the  Holding  Company  and such  subsidiary  is not the
          surviving entiry of the merger.

          Upon a Change of Control, if the Insured's  employment is subsequently
          terminated,  except for cause,  then the Insured  shall be one hundred
          percent (100%) vested in the benefits  promised in this Agreement and,
          therefore,   upon   the   death   of  the   Insured,   the   Insured's
          beneficiary(ies)  (designated in accordance  with Paragraph III) shall
          receive the death benefit  provided  herein as if the Insured had died
          while employed by the Bank (see Subparagraphs VI [A] & [B]).

XVI. AMENDMENT OR REVOCATION

     It is agreed by and between the parties hereto that, during the lifetime of
     the Insured, this Agreement may be amended or revoked at any time or times,
     in whole or in part, by the mutual  written  consent of the Insured and the
     Bank.

XVII. EFFECTIVE DATE

     The Effective Date of this Agreement shall be September 11, 2003.

XVIII. SEVERABILITY AND INTERPRETATION

     If a provision of this  Agreement  is held to be invalid or  unenforceable,
     the remaining  provisions  shall  nonetheless be  enforceable  according to
     their  terms.  Further,  in the  event  that  any  provision  is held to be
     overbroad as written,  such provision shall be deemed amended to narrow its
     application  to the  extent  necessary  to make the  provision  enforceable
     according to law and enforced as amended.



                                       17
<Page>

XIX. APPLICABLE LAW

     The validity and  interpretation of this Agreement shall be governed by the
     laws of the State of South Carolina.

     Executed at Fountain Inn, South Carolina this 11th day of September, 2003.


                                                GRAND SOUTH BANK
                                                Fountain Inn, South Carolina


                                            By:
-----------------------------------            ---------------------------------
Witness                                                                  Title


-----------------------------------             --------------------------------
Witness                                          Ronald K. Earnest



                                       18
<Page>



                          BENEFICIARY DESIGNATION FORM
                      FOR LIFE INSURANCE ENDORSEMENT METHOD
                           SPLIT DOLLAR PLAN AGREEMENT


PRIMARY DESIGNATION:

         Name                        Address                    Relationship



--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------



SECONDARY (CONTINGENT) DESIGNATION:


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


--------------------------------------------------------------------------------


All sums payable under the Life Insurance  Endorsement  Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary,  if he
or she survives me, and if no Primary  Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.




--------------------------------                       ---------------------
Ronald K. Earnest                                             Date



                                       19
<Page>


                                    AMENDMENT
                          TO THE EXECUTIVE SUPPLEMENTAL
                        RETIREMENT PLAN AGREEMENT AND THE
          LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT




This Amendment, made and entered into this ______ day of _____________, 2001, by
and between GrandSouth Bank, a Bank organized and existing under the laws of the
State of South Carolina,  hereinafter  referred to as the, "Bank", and Ronald K.
Earnest,  a Key Employee and Executive of the Bank,  hereinafter  referred to as
the, "Executive",  shall effectively amend the Executive Supplemental Retirement
Plan  Agreement  and the Life  Insurance  Endorsement  Method  Split Dollar Plan
Agreement as specifically set forth herein pursuant to said Agreements.


I.   EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT

     1.   The date of September 11, 2001 in  Subparagraph I (A) shall be changed
          to September 13, 2001.

     2.   The following language shall be added to the end of Subparagraph I (F)
          of said  Agreement,  "...  divided by a factor equal to 1.05 minus the
          marginal tax rate."

     3.   The following  life  insurance  policy  information  shall be added to
          Subparagraph I (G):

          Insurance Company:                    Massachusetts Mutual Life
                                                   Insurance Company
          Policy Form:                          Flexible Premium Adjustable Life
          Policy Name:                          Strategic Life Executive
          Insured's Age and Sex:                47, Male
          Riders:                               None
          Ratings:                              None
          Option:                               Level
          Face Amount:                          $1,081,920
          Premiums Paid:                        $368,000
          Number of Premium Payments:           Single
          Assumed Purchase Date:                September 13,2001




          Insurance Company:                     Union Central Life
                                                    Insurance Company
          Policy Form:                           Universal Life Insurance
          Policy Name:                          COLI UL
          Insured's Age and Sex:                47, Male
          Riders:                               None
          Ratings:                              None
          Option:                               Level
          Face Amount:                          $1,060,447
          Premiums Paid:                        $368,000
          Number of Premium Payments:           Single
          Assumed Purchase Date:                September 13,2001




                                       20
<Page>

     4.   The date of September 11, 2003 in Subparagraph II (C) shall be changed
          to September 13, 2003.


II.  Life Insurance Endorsement Method Split Dollar Plan Agreement

1.   The following life insurance policy  information shall be added to page one
     (1):

         Insurer:          Massachusetts Mutual Life Insurance Company
                           Union Central Life Insurance Company

         Policy Number:    0044375
                           U200001333

2.   The date of September 11, 2003 in  Subparagraphs  VI (A), (B) and (C) shall
     be changed to September 13, 2003.

3.   The date of  September  11,  2003 in  Paragraph  XVII  shall be  changed to
     September 13, 2001.

4.   The date of September  11, 2003 in the final  execution  sentence  shall be
     changed to September 13, 2001.


     This Amendment  shall be effective the 13th day of September,  2001. To the
     extent that any  paragraph,  term,  or provision  of said  agreement is not
     specifically  amended  herein,  or in any  other  amendment  thereto,  said
     paragraph,  term, or provision shall remain in full force and effect as set
     forth in said September 11, 2001 Agreements.


                       (SIGNATURES ON THE FOLLOWING PAGE)




     IN WITNESS WHEREOF,  the parties hereto acknowledge that each has carefully
read this Amendment and executed the original thereof on the first day set forth
herein, and that, upon execution, each has received a conforming copy.


                                     GRANDSOUTH BANK
                                     Fountain Inn, South Carolina




                                    By:
------------------------------          ----------------------------------------
Witness                                                                    Title






------------------------------           ---------------------------------------
Witness                                     Ronald K. Earnest


                                       21