FIRST COMMUNITY CORPORATION 


ANNUAL INCENTIVE PLAN


SECTION 1: Establishment
& Purpose.


1.1        Establishment
of Plan. The Company hereby establishes this First Community Corporation Annual Incentive Plan for its corporate and Subsidiary
employees.


1.2
       Purpose of Plan. The purpose of this Plan is to advance the interests of the Company
and its Subsidiaries by attracting and retaining employees and by stimulating the efforts of such employees to contribute to the
continued success and growth of the business of the Company and its Subsidiaries. This Plan is further intended to provide flexibility
to the Company and its Subsidiaries in structuring incentive compensation to appropriately balance risk and reward, ensure compatibility
with effective controls and risk-management, and to align Awards with the interests of its shareholders. 


SECTION
2: Definitions.


The
following words have the following meanings unless a different meaning plainly is required by the context:


2.1
       “Act” means the Securities Exchange Act of 1934, as amended.


2.2
       “Award” means a right granted to a Participant to receive
an incentive payment, in cash or other property, upon the achievement of certain Performance Measures designated as provided in
this Plan.


2.3       “Award
Agreement” means any written or electronic agreement entered into between the Company and a Participant setting forth
the terms and conditions of an Award made to such Participant under this Plan, such Award Agreement to be in such form as shall
be prescribed by the Committee from time to time.


2.4
       “Base Salary” means, unless otherwise specified by the
Committee with respect to an Award, a Participant’s annualized base salary as of the last day of the applicable Performance
Period or, if later, the date that the Participant is hired by the Company or a Subsidiary or promoted to a position in which he
or she is eligible to be a Participant.


2.5
       “Board” means the Board of Directors of the Company.


2.6       “Code”
means the Internal Revenue Code of 1986, as amended. Each reference in this Plan to a section or sections of the Code, unless otherwise
noted, shall be deemed to include a reference to the rules and regulations issue under such section or sections of the Code.


2.7
       “Committee” means the Human Resources and Compensation
Committee of the Board or such other committee as the Board may designate from time to time. The Committee shall consist of at
least three members of the Board and all of its members shall be independent under applicable Nasdaq Stock Market rules.


2.8       “Company”
means First Community Corporation, a South Carolina corporation, and its successors and assigns.


2.9        “Disability”
means an inability of a Participant to perform his or her employment duties as defined in 409a(3)(i)(4).


2.10       “Employee”
means an employee of the Company or one of its Subsidiaries.


2.11
       “Maximum Award” means a dollar amount or a percentage
of Base Salary, as determined by the Committee for each Performance Period, which represents the payment that the Participant
will earn if the maximum level of the Performance Measures is achieved, subject to Section 4(a).






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2.12
       “Participants” means any Employee who is designated by the Committee
as a Participant in this Plan. Members of the Board who are not also Employees are not eligible to participate in this Plan. A
person who is hired by the Company or any of its Subsidiaries, or promoted to a position in which he or she is eligible to be a
Participant, during a Performance Period may also be designated by the Committee at the time of hire or promotion as a Participant,
in which event the Performance Period for such Participant shall be the portion of the Performance Period remaining after the person
is designated a Participant. 


2.13
       “Performance Measures” means the performance goals selected
for each Participant with respect to each Performance Period, the achievement of which shall determine the amount of the Participant’s
Award for the Performance Period. The Performance Measures may include any of the criteria listed below:


 


		a)	Asset quality;



		b)	Cash flow (before or after dividends);



		c)	Cash flow per share (before or after dividends);



		d)	Cash flow return on investment;



		e)	Cash generation;



		f)	Combined ratio;



		g)	Core non-interest income or change in working
capital; 



		h)	Cost control;



		i)	Cost saving levels;



		j)	Deposit portfolio growth;



		k)	Dividends; 



		l)	Earnings (including earnings before taxes,
earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization);



		m)	Economic value added;



		n)	Efficiency ratio;



		o)	Embedded value added;



		p)	Gross margin;



		q)	Gross profit;



		r)	Level of classified assets;



		s)	Liquidity;



		t)	Loan portfolio growth;



		u)	Market share;



		v)	Market-spending efficiency;



		w)	Net income or net core income;



		x)	Net interest margin;



		y)	Net interest income



		z)	Non-performing assets as a percentage of
assets;



		aa)	Objective customer service measures or indices;



		bb)	Operating or reported earnings per share;



		cc)	Operating or reporting return on assets;



		dd)	Operating profit;



		ee)	Pre- or after-tax income;



		ff)	Prescribed rating;



		gg)	Pure deposits; 



		hh)	Return on average assets;



		ii)	Return on capital (including return on total
capital or return on invested capital);



		jj)	Return on equity or return on average equity;



		kk)	Revenue growth;



		ll)	Revenues;



		mm)	Risk-based capital;



		nn)	Safety and soundness rating;



		oo)	Sales;



		pp)	Shareholder value added;



		qq)	Stock price;



		rr)	Total shareholder return or stock price return;



		ss)	Unit volume; and



		tt)	Such other business criteria as the Committee
may determine to be appropriate, which may include financial and nonfinancial performance goals.







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One
or more Performance Measures may, in the Committee’s sole discretion and provided that the Committee determines that it does
not encourage the applicable Participant to expose the Company or its Subsidiaries to imprudent risks that may pose a threat to
the safety and soundness of the Company or its Subsidiaries: (i) be linked to the Participant’s business unit, division,
business segment, a Subsidiary or the Company as a whole, or any combination of the foregoing, or to such Participant’s areas
of responsibility; (ii) be compared to pre-determined levels, as the Committee may deem appropriate, or compared to the performance
of a pre-established peer group, or published or special index that the Committee, in its sole discretion, deems appropriate; or
(iii) include subjective determinations by the Committee or the Participant’s superiors. The conditions for grant or vesting
and the other provisions of Awards (including, without limitation, any applicable Performance Measures) need not be the same with
respect to each Participant.


The
Committee may adjust any Performance Measure to the extent necessary to prevent dilution or enlargement of an Award as a result
of extraordinary events or circumstances, as determined by the Committee in its sole discretion, or to exclude the effects of extraordinary,
unusual, or non-recurring items, such as (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) changes in
tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in Financial Accounting Standards Board Accounting Standards Codification
Topic 225-20 and/or in management’s discussion and analysis of financial condition and results of operations appearing in
the Company’s annual report to shareholders for the applicable fiscal year, (f) acquisitions, mergers, or divestitures (including
non-recurring transaction-related expenses); (g) securities offerings; (h) accounting changes, (i) amortization of goodwill or
other intangible assets, (j) discontinued operations, (k) life insurance benefits and (l) other special charges or extraordinary
items as approved by the Committee, in its sole discretion. 


2.14
       “Performance Period” means each consecutive twelve (12)-month
period commencing on the first day of each calendar or fiscal year during the term of this Plan, or a portion of such twelve (12)-month
period with respect to an Employee who becomes a Participant during such period, or such other period as determined by the Committee.


2.15
       “Plan” means this First Community Corporation Annual Incentive
Plan.


2.16
       “Subsidiary” means any corporation, partnership, joint venture,
limited liability company or other entity during any period in which at least a fifty percent (50%) voting or profits interest
is owned, directly or indirectly, by the Company or any successor to the Company.


2.17
       “Target Award” means a dollar amount or a percentage of Base Salary
determined by the Committee for each Performance Period, which represents the payment that the Participant will earn if the target
level of the Performance Measures is achieved, subject to Section 4(a).


2.18
       “Threshold Award” means a dollar amount or a percentage of Base
Salary, as determined by the Committee for each Performance Period, which represents the payment that the Participant will earn
if the threshold level of the Performance Measures is achieved, subject to Section 4(a).


SECTION 3: Administration.


3.1       Power
and Authority of Committee. The Plan shall be administered by the Committee. The Committee shall have full power and authority,
subject to all applicable provisions of this Plan and applicable law, to 


		(a)	establish, amend, suspend or waive such rules and regulations
and appoint such agents as it deems necessary or advisable for the proper administration of this Plan, 



		(b)	construe, interpret and administer this Plan and any instrument
or agreement relating to this Plan, including correcting any defect, supplying any omission, interpreting any ambiguity or reconciling
any inconsistency in the manner and to the extent it shall deem desirable to carry this Plan into effect,



		(c)	waive, prospectively or retroactively, any conditions of or
rights of the Company under any Award, 



		(d)	increase or decrease the payout due under any Award, and



 



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		(e)	make all other determinations and take all other actions necessary
or advisable for the administration of this Plan. 



Unless
otherwise expressly provided in this Plan, each determination made and each action taken by the Committee pursuant to this Plan
or any instrument or agreement relating to this Plan shall be within the sole discretion of the Committee, may be made at any time
and shall be final, binding and conclusive for all purposes on all persons, including, but not limited to, Participants of the
Company or its Subsidiaries, and their legal representatives and beneficiaries. The Committee may take actions or otherwise make
determinations that are subject to ratification by the Board. Subject to the applicable rules of the Nasdaq Stock Market, if the
Committee does not exist, or for any other reason determined by the Board in its sole discretion, the Board may make any determination
or take any other action under the Plan that would otherwise be the responsibility of the Committee (and, to the extent the Board
makes any determination or take any other action under the Plan, the Board shall be deemed to be the Committee for purposes of
the Plan with respect to such determination or other action by the Board). An Award Agreement shall not be required for Awards.
However, an Award Agreement may be utilized in connection with any Awards if and to the extent deemed appropriate by the Committee.
Any Award Agreement or Award Document shall be deemed to be part of (and subject to the terms and conditions of) the Plan and,
accordingly, shall be administered by the Committee as set forth in this Section 3. An Award must be evidenced by an Award Agreement
or other written instrument (and “Award Document”) approved by the Committee. 


3.2
       Delegation. The Committee may delegate its powers and duties under this Plan, to
designate Employees who will be eligible for Awards and the Performance Measures and other terms of such Awards, and/or to approve
achievement of the applicable Performance Measures, to a sub-committee of the Committee.


3.3
       Determinations at the Outset of Each Performance Period. Prior to the start of or
during each Performance Period, the Committee shall:


		(a)	designate Employees who will become Participants for such
Performance Period;



		(b)	establish a Threshold Award, Target Award and Maximum Award
for each Participant; and



		(c)	with respect to each Participant, establish one or more Performance
Measures and a formula to determine the amount of the Award that will be earned at different levels of achievement of the Performance
Measures. 



3.4
       Approval. Following the close of each Performance Period and prior to payment of
any amount to any Participant under this Plan, the Committee must determine which of the applicable Performance Measures for that
Performance Period have been achieved and the attainment of all other factors upon which any payments to a Participant for that
Performance Period are to be based and the corresponding Award amounts. Such approval shall be made in time to permit payments
to be made not later than the fifteenth (15th) day of the third (3rd) calendar month following the end of the Performance Period.


SECTION
4: Incentive Payment.


Subject
to the provisions of this Plan, each Participant shall receive an incentive payment for each Performance Period in the amount determined
by the extent to which his or her Performance Measures have been achieved under the terms of his or her Award, subject to the limitations
set forth below:


(a)
       Discretionary Increase or Reduction. The Committee shall retain sole and absolute
discretion to increase or reduce the amount of any incentive payment otherwise payable to any Participant under this Plan. 


(b)
       Continued Employment. Except as otherwise approved by the Committee or specifically
set forth in a written employment agreement between the Employee and the Company or its Subsidiaries in effect on the date of such
payment, no incentive payment under this Plan with respect to a Performance Period shall be paid or owed to a Participant who is
not employed in good standing, as determined by the Committee, on the date payment is made for a Performance Period under Section
5.1; provided that the Committee may, in its sole discretion, approve pro-rated payments in the event of retirement, death, disability,
layoff, etc.


(c)       Regulatory
Action. Awards will not be earned or paid, regardless of achievement of Performance Measures, (i) to the extent that any regulatory
agency issues a formal, written enforcement action, memorandum of understanding or other directive action that, or a regulation
that, prohibits or limits the eligibility of the Employee for or pay out of the Award to the Employee under the Plan, or (ii) if,
after a review of the Company’s or its Subsidiaries’ credit quality measures, the Committee considers it imprudent
to provide or pay out the Award under the Plan. 






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(d)       Ethical
Obligations.  The Company and its Subsidiaries are committed to doing business in an honest and ethical manner and to complying
with all applicable laws and regulations. Participant actions are expected to comply with the policies established by the Company
and its Subsidiaries, including their Codes of Ethics and Insider Trading Policies. The Committee may determine, on a case-by-case
basis, any reductions or eliminations of incentive payments under this Plan due to violations of policies or noncompliance.


(e)       Clawback.
By accepting any compensation paid or otherwise made available to a Participant under this Plan, the Participant agrees to the
terms and conditions of this Plan (including, without limitation, this Section 4(e)). The Participant agrees to repay any compensation
previously or hereafter paid by the Company or its Subsidiaries, or otherwise made available to the Participant under this Plan,
that is subject to recovery under any applicable law or regulation (including any rule of any exchange or service through which
the securities of the Company are then traded), or any compensation “clawback” or recoupment policy of the Company
or its Subsidiaries applicable to similarly-situated Employees of the Company or such Subsidiary or required to comply with applicable
law or regulation (as may be amended from time to time and as may hereafter be adopted). Any Participant whose Award payout becomes
subject to forfeiture or clawback shall promptly return any payment received under this Plan that is identified by the Company
by written notice to the Participant. If the Participant fails to return such payment promptly, the Company or its Subsidiaries
may, among other things, deduct such amount from other compensation owed to the Participant by the Company or its Subsidiaries
as an advancement of wages, and the Participant’s acceptance of the applicable Award represents his or her acknowledgment
and agreement to such deduction. The Participant acknowledges the rights of the Company and its Subsidiaries to engage in any legal
or equitable action or proceeding in order to enforce the provisions of this Section. 


SECTION
5: Benefit Payments.


5.1
       Time and Form of Payments. All payments of Awards pursuant to this Plan unless otherwise
specified by the Committee shall be paid in a cash lump sum payment or equity award and shall be made not later than the fifteenth
(15th) day of the third (3rd) month following the end of the Performance Period; provided that the Committee may permit Participants
to elect to defer payment of their Awards pursuant to a timely election made pursuant to any deferred compensation plan that has
been or may be established by the Company that satisfies the requirements of Section 409A of the Code. 


5.2
       Nontransferability. Except as otherwise determined by the Committee, no right to
any incentive payment under this Plan, whether payable in cash or property, shall be transferable by a Participant other than by
will or by the laws of descent and distribution; provided, however, that if so determined by the Committee, a Participant may,
in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant
and receive any cash or property due under the Participant’s Award upon the death of the Participant. No right to any incentive
payment under this Plan may be pledged, attached or otherwise encumbered, and any purported pledge, attachment or encumbrance thereof
shall be void and unenforceable against the Company.


5.3       Other
Restrictions. The Committee may impose other restrictions on any Award, or any cash or property acquired in connection with
an Award, as the Committee deems advisable, including, without limitation, holding periods or further transfer restrictions, forfeiture
provisions, and restrictions under applicable federal or state laws. 


5.4
       Tax Withholding. The Company or its Subsidiaries shall be entitled to withhold and
deduct from payment of the Award, future wages of a Participant (or from other amounts that may be due and owing to a Participant
from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state, local and foreign withholding and employment-related tax requirements attributable to an Award.
The Company may also require a Participant promptly to remit the amount of such withholding to the Company or its Subsidiaries
before taking any action with respect to an Award. The Company may establish such rules and procedures concerning timing of any
withholding election as it deems appropriate. Notwithstanding any action taken or not taken by the Company or its Subsidiaries,
the Participant shall remain solely liable for all taxes due with respect to his or her Award.






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SECTION
6: Amendment and Termination.


Except
to the extent prohibited by applicable law and unless otherwise expressly provided in this Plan, the Board may amend, alter, suspend,
discontinue or terminate this Plan, and the Committee may amend or cancel any Award, except that no such amendment, alteration,
suspension, discontinuation or termination shall be made that would violate the rules or regulations of the NASDAQ Stock Market
or any other laws, rules and regulations that are applicable to the Company. 


This
Plan will continue in effect until terminated by the Board (although any Awards outstanding at such time shall remain outstanding
and subject to this Plan until they are paid out or otherwise cancelled as provided in this Plan). The Committee is not required
to grant any Awards under this Plan. 


SECTION
7: General Provisions.


7.1        Effective
Date. This Plan was approved by the Board to be effective as of January 1, 2020.


7.2        Term
of this Plan. This Plan shall continue indefinitely until otherwise terminated pursuant to Section 6. No right to receive an
incentive payment shall be granted after the termination of this Plan. However, unless otherwise expressly provided in this Plan,
any right to receive an incentive payment theretofore granted may extend beyond the termination of this Plan, and the authority
of the Board and the Committee and its delegates to amend or otherwise administer this Plan shall extend beyond the termination
of this Plan.


7.3        Headings.
Headings are given to the Sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.


7.4        Applicability
to Successors. This Plan shall be binding upon and inure to the benefit of the Company and each Participant, and the successors
and assigns of the Company, and the beneficiaries, personal representatives and heirs of each Participant. If the Company becomes
a party to any merger, consolidation or reorganization, this Plan shall remain in full force and effect as an obligation of the
Company or its successors in interest.


7.5        Employment
Rights and Other Benefit Programs. The provisions of this Plan shall not give any Participant any right to be retained in the
employment of the Company or its Subsidiaries. In the absence of any specific agreement to the contrary, this Plan shall not affect
any right of the Company, or of any Subsidiary, to terminate, with or without cause, any Participant’s employment or service
at any time. This Plan shall not replace any contract of employment, whether oral or written, between the Company or its Subsidiaries
and any Participant, but shall be considered a supplement thereto. This Plan is in addition to, and not in lieu of, any other employee
benefit plan or program in which any Participant may be or become eligible to participate by reason of employment with the Company
or its Subsidiaries. No compensation or benefit awarded to or realized by any Participant under this Plan shall be included for
the purpose of computing such Participant’s compensation under any compensation-based retirement, disability, or similar
plan of the Company or any Subsidiary unless required by law or otherwise provided by such other plan.


7.6       No
Trust or Fund Created. This Plan shall not create or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any other person. To the extent that any person acquires
a right to receive payments from the Company or any Subsidiary pursuant to this Plan, such right shall be no greater than the right
of any unsecured general creditor of the Company or of any Subsidiary.


7.7       Governing
Law. The validity, construction and effect of this Plan or any incentive payment payable under this Plan shall be determined
in accordance with the laws of the State of South Carolina.


7.8       Severability.
If any provision of this Plan is, becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction, such provision
shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without,
in the determination of the Committee, materially altering the purpose or intent of this Plan, such provision shall be stricken
as to such jurisdiction, and the remainder of this Plan shall remain in full force and effect.






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7.9       Certain
Tax Matters. No payments are intended to constitute deferred compensation subject to Section 409A of the Code, unless a Participant
elects to defer a payment pursuant to a deferred compensation plan that is intended to comply with such Code Section. The Plan
is, and all Awards are, intended to be exempt from (or, in the alternative, to comply with) Section 409A of the Code, and each
shall be construed, interpreted and administered accordingly. The Company and its Subsidiaries do not guarantee that any benefits
that may be provided under the Plan will satisfy all applicable provisions of Section 409A of the Code. Each payment under any
Award shall be treated as a separate payment for purposes of Section 409A of the Code. In no event may a Participant, directly
or indirectly, designate the calendar year of any payment to be made under any Award. Notwithstanding any provision of this Plan
or any Award Agreement or Award Document to the contrary, in the event that a Participant is a “specified employee”
within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company), amounts
that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that would otherwise
be payable during the six-month period immediately following a Participant’s “separation from service” within
the meaning of Section 409A of the Code shall instead be paid or provided on the first business day following the date that is
six months following the Participant’s separation from service or any earlier date permitted by Section 409A of the Code.
If the Participant dies following the separation from service and prior to the payment of any amounts delayed on account of Section
409A of the Code, such amounts shall be paid to the personal representative of the Participant’s estate within 30 days following
the date of the Participant’s death.


If any Award
would be considered “deferred compensation” under Section 409A of the Code, the Committee reserves the absolute right
(including the right to delegate such right) to unilaterally amend the Plan or the applicable Award Agreement or Award Document,
without the consent of the Participant, to avoid the application of, or to maintain compliance with, Section 409A of the Code.
Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section 7.9 shall seek to maintain, to the extent
practicable, the original intent of the applicable provision without violating Section 409A of the Code. A Participant’s
acceptance of any Award shall be deemed to constitute the Participant’s acknowledgment of, and consent to, the rights of
the Committee under this Section 7.9, without further consideration or action. Any discretionary authority retained by the Committee
pursuant to the terms of the Plan or pursuant to an Award Agreement or Award Document shall not be applicable to an Award that
is determined to constitute deferred compensation, if such discretionary authority would contravene Section 409A of the Code. In
no event will the Company or any Subsidiary of the Company be required to reimburse a Participant for any taxes imposed or other
costs incurred as a result of Section 409A of the Code.


This Plan is
being executed, on behalf of the Board, by the undersigned duly-authorized officer of the Company.


 






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