**Exhibit 10.4**

**DIRECTORDEFERRED COMPENSATION AGREEMENT**

**THISAGREEMENT**is made this                    day of      ,         by and between Horry County State Bank of Loris, South Carolina (the “Company”),and                              (the “Director”).

# **INTRODUCTION**

In considerationof the services performed and to be performed by the Director and to encouragethe Director to remain a director of the Company, the Company is willing toprovide to the Director a deferred fee opportunity, under the terms andconditions herein set forth, and agree to provide the Director and hisbeneficiary with certain benefits described herein.

# **AGREEMENT**

The Director andthe Company agree as follows:

# **Article 1**

**Definitions**

1.1   Definitions.  Whenever used in this Agreement, thefollowing words and phrases shall have the meanings specified:

1.1.1        “Change of Control” meansthe transfer of 51% or more of the Company’s outstanding voting common stockfollowed within twelve (12) months by termination of the Director’s status as amember of the Company’s Board of Directors.

1.1.2        “Code” means the InternalRevenue Code of 1986, as amended. References to a Code section shall be deemed to be that section as itnow exists and to any successor provision.

1.1.3        “Deferred Fee Account” shallmean an account established on the books of the Company for the Director asprovided in section 3 hereof.

1.1.4        “Disability” means theDirector’s permanent inability to perform substantially all normal duties ofthe Director’s position, as determined by the Company’s Board of Directors inits sole discretion.  As a condition toany benefits, the Company may require the Director to submit to such physicalor mental evaluations and test as the Board of Directors deems appropriate.

1.1.5        “Election Form” means theForm attached as Exhibit 1.

1.1.6        “Fees” means the totalfees payable to the Director.

1.1.7        “Normal Retirement Date”means the date on which the Director attains age 70.

1.1.8        “Prime Rate” shall meanthe highest base interest rate on corporate loans as declared in the WallStreet Journal as of January 2 of each year, adjusted annually.

1.1.9        “Termination of Service”means the Director’s ceasing to be a member of the Company’s Board of Directorsfor any reason whatsoever.

**Article 2**

**DeferralElection**

2.1   *Initial Election*.  TheDirector shall make an initial deferral election under this Agreement by filingwith the Company a signed Election Form within 30 days after the date of thisagreement.  The Election Form shall setforth the amount of Fees to be deferred and the form of benefit payment.  The Election Form shall be effective to deferonly Fees earned after the date the Election Form is received by the Company.

2.2   *Election Changes.*

2.2.1        *Generally*.  TheDirector may modify the amount of Fees to be deferred by filing a subsequentsigned Election Form with the Company. The modified deferral

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is subject to the approval of the Company and shallnot be effective until the calendar year following the year in which thesubsequent Election Form is received by the Company.  The Director may not change the form ofbenefit payment initially elected under Section 2.1.

2.2.2        *Hardship*.  If anunforeseeable financial emergency arising from the death of a family member,divorce, sickness, injury, catastrophic of similar event outside the control ofthe Director occurs, the Director, by written instructions to the Company mayreduce or cease future deferral amounts under the Agreement.

## **Article 3**

**DeferralAccount**

3.1   *Establishing and Crediting*. The Company shall establish a Deferred Fee Account on its books for theDirector, and shall continue to credit to the Deferred Fee Account thefollowing amounts:

3.1.1        *Deferrals*.  The Feesdeferred by the Director as of the time the Fees would have otherwise been paidto the Director.

3.1.2        *Interest*.  On thefirst day of each monthly anniversary of the date of this Agreement, andimmediately prior to the payment of any benefits, interest on the accountbalance shall accrue at an annual rate, compounded monthly, equal to Horry CountyState Bank’s Prime Rate.  Beginning inJanuary 1998 and each year forward, on the first day of each monthlyanniversary of the date of this agreement, and immediately prior to the paymentof any benefits, interest on the account balance since the preceding creditunder this Section 3.1.2 shall accrue at an annual rate, compounded monthly,equal to the Prime Rate.  The Board ofDirectors retains the right to adjust the interest crediting rate at itsdiscretion.

3.2   *Statement of Accounts*. The Company shall provide to the Director, within one hundred twenty(120) days after each anniversary of this Agreement, a statement setting forththe Deferral Account balance.

3.3   *Accounting Device Only.* The Deferral Account is solely a device for measuring amounts to be paidunder this Agreement.  The DeferralAccount is not a trust fund of any kind. The Director is a general unsecured creditor of the Company for thepayment of benefits.  The benefitsrepresent the Company’s promise to pay such benefits.  The Director’s rights are not subject in anymanner to anticipation, alienation, sale, transfer, assignment, pledge,encumbrance, attachment, or garnishment by the Director’s creditors.

**Article 4**

**LifetimeBenefits**

4.1   *Normal Retirement Benefit*. If the Director terminates employment on or after the Normal RetirementDate for reasons other than death, the Company shall pay to the Director thebenefit described in this Section 4.1.

4.1.1        *Amount of Benefit*. The benefit under this Section 4.1 is the Deferred Fee Account balanceat the Director’s Termination of Service.

4.1.2        *Payment of Benefit*. The Company shall pay the benefit to the Director in the form elected bythe Director on the Election Form.  TheCompany shall continue to credit interest in the manner provided in Section3.3.1 in the remaining account balance during any applicable installmentperiod.

4.2   *Early Retirement Benefit*. If the Director terminated employment prior to the Normal RetirementDate, and for reasons other than death or Disability, the Company shall pay tothe Director the benefit described in this Section 4.2.

4.2.1        *Amount of Benefit*. The benefit under this Section 4.2 is calculated by recomputing theDeferred Fee Account balance from its inception up to the date of the Director’sTermination of Service, with the following modification:

4.2.2        *Payment of Benefit*. The Company shall pay the benefit to the Director in the form elected bythe Director on the Election Form.  TheCompany shall continue

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to credit interest in the manner provided in Section3.1 on the remaining account balance during any applicable installment period.

4.3   *Disability Benefit.* If the Director terminates employment for Disability prior to the NormalRetirement Date, the Company shall pay to the Director the benefit described inthis Section 4.3.

4.3.1        *Amount of Benefit*. The benefit under this Section 4.3 is the Deferred Fee Account balanceat the date of the Director’s Termination of Service.

4.3.2        *Payment of Benefit*. The Company shall pay the benefit to the Director, at the Company’sdiscretion, either in a lump sum within 90 days, or in the form elected by theDirector on the Election Form.  TheCompany shall continue to credit interest in the manner provided in section3.1.2 on the remaining account balance during any applicable installmentperiod.

4.4   *Change of Control Benefit*. Upon a Change of Control while the Director is in the active service ofthe Company, the Company shall pay to the Director the benefit described inthis Section 4.4 in lieu of any other benefit under this Agreement.

4.4.1        *Amount of Benefit. *Thebenefit under this Section 4.4 is the Deferred Fee Account balance at the dateof the Director’s Termination of Service.

4.4.2        *Payment of Benefit. *TheCompany shall pay the benefit to the Director in a lump sum within 90 daysafter the Director’s Termination of Service.

4.5   *Hardship Distribution. *Uponthe Company’s determination (following petition by the Director) that theDirector has suffered an unforeseeable financial emergency as described in Section2.2.2, the Company shall distribute to the Director all or a portion of theDeferred Fee Account balance as determined by the Company, but in no eventshall the distribution be greater than is necessary in the opinion of the Boardof Directors to relieve the financial hardship.

**Article 5**

**DeathBenefits**

5.1   *Death During Active Service.* If the Director dies while in the active service of the Company, theCompany shall pay to the Director’s beneficiary the benefit described in thisSection 5.1.

5.1.1        *Amount of Benefit*. The benefit under Section 5.1 is the higher of $                   or the Director’s Deferred Fee Account balance as of the date of death.

5.1.2        *Payment of Benefit*. The Company shall pay the benefit to the beneficiary as a lump sum within90 days following the Director’s Death. The Company shall continue to credit interest under Section 3.1.2.

5.2   *Death During Benefit Period*. If the Director dies after benefit payments have commenced under thisAgreement but before receiving all such payments, the Company shall pay theremaining benefits to the Director’s beneficiary at the same time and in thesame amounts they would have been paid to the Director had the Directorsurvived.

**Article 6**

**Beneficiaries**

6.1   *Beneficiary Designations*. The Director shall designate a Primary and Contingent beneficiary byfiling a written designation with the Company. The Director may revoke or modify the designation at any time by filinga new designation.  However, designationswill only be effective if signed by the Director and accepted by the Companyduring the Director’s lifetime.  TheDirector’s beneficiary designation shall be deemed automatically revoked if thebeneficiary predeceases the Director, or if the Director names a spouse asbeneficiary and the marriage is subsequently dissolved.  If the Director dies without a validbeneficiary designation, all payments shall be made to the Director’s survivingspouse, if any, and if none, to the Director’s surviving children and thedescendants of any deceased child by right of representation, and if nochildren or descendants survive, to the Director’s estate.

6.2   *Facility of Payment.* If a benefit is payable to a beneficiary who is minor, to a persondeclared incompetent, or to a person incapable of handling the disposition ofhis or her

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property, the Company may pay such benefit to theguardian, legal representative or person having the care or custody of suchminor, incompetent person or incapable person. The Company may require proof of incompetence, minority or guardianshipas it may deem appropriate prior to distribution of the benefit.  Such distribution shall completely dischargethe Company from all liability with respect to such benefit.

**Article 7**

**GeneralLimitations**

Notwithstanding anyprovision of this Agreement to the contrary, the Company shall not pay anybenefit under this Agreement that is attributable to the interest earned on thedeferred Fees:

7.1   *Excess Parachute Payment*. To the extent any benefit permitted hereunder would be excessive underSection 280G of the Code, the excess parachute payment will not be paid to theDirector.

7.2   *Termination for Cause.* If the Company terminates the Director’s service as a director for:

7.2.1        Gross negligence or grossneglect of duties;

7.2.2        Commission of a felony orof a gross misdemeanor involving moral turpitude; or

7.2.3        Fraud, dishonesty orwillful violation of any law or significant Company policy committed inconnection with the Director’s service and resulting in an adverse financialeffect on the Company

7.3   *Suicide*.  If theDirector commits suicide within two years after the date of this Agreement, orif the Director has made any material misstatement of fact on any applicationfor life insurance purchased by the Company, then this Agreement shallterminate and the Director shall automatically forfeit all amounts duehereunder, except to the extent that he is vested.

**Article 8**

**Claimsand Review Procedures**

8.1   *Claims Procedure*.  TheCompany shall notify the Director’s beneficiary in writing, within ninety (90)days of his or her written application for benefits, of his or her eligibilityor noneligibility for benefits under the Agreement.  If the Company determines that thebeneficiary is not eligible for benefits or full benefits, the notice shall setforth (1) the specific reasons for such denial, (2) a specific reference to theprovisions of the Agreement on which the denial is based, (3) a description ofany additional information or material necessary for the claimant to perfecthis or her claim, and a description of why it is needed, and (4) an explanationof the Agreement’s claims review procedure and other appropriate information asto the steps to be taken if the beneficiary wishes to have the claimreviewed.  If the Company determines thatthere are special circumstances requiring additional time to make a decision,the Company shall notify the beneficiary of the special circumstances and thedate by which a decision is expected to be made, and may extend the time for upto an addition ninety-day period.

8.2   *Review Procedure*.  Ifthe beneficiary is determined by the Company not to be eligible for benefits,or if the beneficiary believes that he or she is entitled to greater ordifferent benefits, the beneficiary shall have the opportunity to have suchclaim reviewed by the Company by filing a petition for review with the Companywithin sixty (60) days after receipt of the notice issued by the Company.  Said petition shall state the specificreasons which the beneficiary believes entitle him or her to benefits or togreater or different benefits.  Withinsixty (60) days after receipt by the Company of the petition, the Company shallafford the beneficiary (and counsel, if any) an opportunity to present his orher position to the Company orally or in writing, and the beneficiary (orcounsel) shall have the right to review the pertinent documents.  The Company shall notify the beneficiary ofits decision in writing within the sixty-day period, stating specifically thebasis of its decision, written in a manner calculated to be understood by thebeneficiary and the specific provisions of the Agreement on which the decisionis based.  If, because of the need for ahearing, the sixty-day period is not sufficient,

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the decision may be deferred for up to anothersixty-day period at the election of the Company, but notice of this deferralshall be given to the beneficiary.

**Article 9**

**Amendmentsand Termination**

The Company reserves theright to amend or terminate this Agreement at any time prior to the Director’sTermination of Service by written notice to the Director.  In no event shall this Agreement beterminated without payment to the Director of the Deferred Fee Account balanceattributable to the Director’s deferrals and interest credited.

**Article10**

**Miscellaneous**

10.1   *Binding Effect.*  ThisAgreement shall bind the Director and the Company, and their beneficiaries,survivors, executors, administrators and transferees.

10.2   *No Guaranty of Employment.* This Agreement is not a contract for services.  It does not give the Director the right toremain an executive of the Company, nor does it interfere with the shareholder’srights to replace the Director.  It alsodoes not require the Director to remain a director nor interfere with theDirector’s right to terminate services at any time.

10.3   *Non-Transferability. *Benefitsunder this Agreement cannot be sold, transferred, assigned, pledged, attachedor encumbered in any manner.

10.4   *Tax Withholding.*  TheCompany shall withhold any federal income, state, employment, or other taxesthat are required to be withheld from the benefits provided under thisAgreement.

10.5   *Applicable Law.*  TheAgreement and all rights hereunder shall be governed by the laws of SouthCarolina, except to the extent preempted by the laws of the United State ofAmerica.

10.6   *Unfunded Arrangement.* The Director and beneficiary are general unsecured creditors of theCompany for the payment of benefits under this Agreement.  The benefits represent the mere promise bythe Company to pay such benefits.  Therights to benefits are not subject in any manner to anticipation, alienation,sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment bycreditors.  Any insurance on the Director’slife is a general asset of the Company to which the Director and beneficiaryhave no preferred or secured claim.

10.7   *Prior Agreements. *ThisAgreement sets forth the entire understanding of the parties hereto withrespect to the transactions contemplated hereby, and any previous agreements orunderstandings between the parties hereto regarding the subject matter hereofare merged into and superseded by this Agreement.

IN WITNESS WHEREOF, the Director and a duly authorized Company officerhave signed this Agreement.
| DIRECTOR | Horry County State Bank |
|----------|-------------------------|
|     |                    |
|     |                    |
|     |                    | By |   |   |
|     |                    |
|     | Title:                  |   |   |
|     |                    | Cashier |
|          |                         |  |  |  |  |

 

I understand that I may not change the form of benefit elected, even ifI later change the amount of my deferrals under the Agreement.

### **BeneficiaryDesignation**

I designate the followingas beneficiary of benefits under the Deferred Compensation Agreement payablefollowing my death:

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Primary:                                                                          

Contingent:                                                                     

**Note: To name a trust as beneficiary, please provide the name of the trusteeand the exact date of the trust agreement.**

I understand that I may change these beneficiary designations by filinga new written designation with the Company. I further understand that the designations will be automatically revokedif the beneficiary predeceases me, or, if I have named my spouse asbeneficiary, in the event of the dissolution of our marriage.

| Signature |   |   |
|-----------|--------|--------|
|      |
| Date      |   |   |
|           |        |        |  |

 

Accepted by theCompany this                  dayof                  ,               .
| By     |   |   |
|--------|--------|--------|
|   |
| Title  |   |   |
|        |        |        |  |

 

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