Exhibit 10.4

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


                           CHANGE OF CONTROL AGREEMENT

         This Agreement is entered into as of this 8th day of December,  2005 by
and between  Cornerstone  Bancorp (the "Company") and Jennifer M. Champagne (the
"Executive").

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

         In consideration of services  previously provided to the Company by the
Executive,  and Executive's willingness to continue employment with the Company,
the parties hereby agree as follows:

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

         (a) If  Executive  terminates  her  employment  with the  Company or is
         terminated  by the Company at any time within the six months  following
         the effective  date of an event listed in (i),  (ii),  (iii) or (iv) in
         the definition below, upon such termination Executive shall be entitled
         to a lump sum payment equal to one and one-half  times the  Executive's
         annual salary in effect at the date of termination.

         (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 of three times the base amount less $100.

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

         A  "Change  of  Control"  of the  Company  shall be deemed to have been
effected  for  purposes of this  agreement  if either (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  Executive 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 Executive 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.

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 Executive that the term will not be
extended.

<PAGE>

3. Nothing herein shall deprive  Executive of any vested benefits that Executive
has in any Company  retirement  or other  Executive  benefit  plan.  The payment
provided for in Section 1 is in addition to any other amount due to Executive.

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

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.

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

                              [SIGNATURES OMITTED]







                                       2