# Exhibit 10.5

# HCSB FINANCIAL
CORPORATION OMNIBUS STOCK OWNERSHIP AND LONG TERM INCENTIVE PLAN

# RESTRICTED STOCK GRANT
AGREEMENT

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1.     Award of Restricted Stock. HCSB FINANCIAL CORPORATION (the
                    Corporation), hereby awards to James R. Clarkson
                    (Grantee), under its Omnibus Stock Ownership and Long Term Incentive
                    Plan (the Plan), 2,875shares (Restricted Stock)
                    of its Common Stock (Common Stock), par value $0.01per
                    share, to be held as Restricted Stock under the terms of the Plan and this
                    Restricted Stock Grant Agreement (Agreement). The Plan is
                    incorporated herein by reference and made a part of this Agreement.

2.     Definitions. Capitalized terms as used herein shall have the meanings
                    indicated in this Section or in Section 1 above unless the context clearly
                    manifests a different intent. Capitalized terms not defined herein or in Section
                    1 shall have the respective meanings set forth in the Plan. The following words
                    and phrases shall have the following meanings:

| | (a) | Restricted Period means the period of time during which all or part
                    of the Restricted Stock awarded under this Agreement to the Grantee would be
                    forfeited upon the Grantees Termination of Employment. The Restricted
                    Period would end on the date the Grantee becomes 100% vested in the Restricted
                    Stock.
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| | (b) | Termination of Employment means the Grantees discontinuance of
                    employment as an Eligible Employee with the Corporation and/or any Subsidiary
                    for any reason. A transfer between the Corporation and one of its Subsidiaries
                    shall not be deemed a Termination of Employment for purposes of the Plan.
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| | (c) | Vested Portion shall be determined by multiplying the number of
                    shares of Common Stock awarded as Restricted Stock to the Grantee by the
                    applicable vesting percentage contained in Section 4 below.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Average Return on Average Assets means the percentage calculated by
                    dividing the total after tax net income for each year in the measurement period
                    by the monthly average assets for each year in the measurement period, adding
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| |  | together the resulting percentages for each year for the measurement period and
                    dividing by the number of years in the measurement period.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

3.     
          Risk of Forfeiture. If the Grantee incurs a Termination of Employment
          during the Restricted Period for any reason, the Grantee shall forfeit all
          non-vested Restricted Stock as of such Termination of Employment. The Grantee
          will become vested in the Restricted Stock pursuant to the vesting schedule
          contained in Section 4 below. Notwithstanding the preceding sentences, if the
          Grantee incurs a Termination of Employment on account of the Grantees
          Retirement (on or after age 65), Disability or Death, the Committee may, but is
          not required to, increase the Grantees Vested Portion of Restricted Stock.

4.     
          Vesting Schedule.

| | (a) | The Grantee shall become vested in the Restricted Stock pursuant to the
          following schedule:
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|Performance Criteria                       | Percent of Vested Restricted Stock
|------------------------------------------ | ----------------------------------
|
|3 consecutive years with Average Return On |                                   
|Average Assets of 1.15%                    |                                   

| | (b) | In the event of a Change of Control, the Grantee shall become fully vested with
          respect to all Restricted Stock held immediately prior to such Change of
          Control.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.     
          Issuance of Shares. The Corporation shall issue a certificate for the
          shares of Common Stock awarded to the Grantee as Restricted Stock pursuant to
          this Agreement. Each certificate issued for shares awarded to the Grantee under
          this Agreement shall be registered in the name of the Grantee and shall bear a
          legend in substantially the following form:

| | This certificate and the shares of stock represented hereby are subject to the terms and
conditions (including forfeiture and restrictions against transfer) contained in the HCSB
Financial Corporation Omnibus Stock Ownership and Long Term Incentive Plan and a
Restricted Stock Grant Agreement between the registered owner of the shares represented
hereby and HCSB Financial Corporation. Release from such terms and conditions shall be
made only in accordance with the provisions of such Plan and Agreement, copies of which
are on file in the office of HCSB Financial Corporation
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6.     
          Release of Shares. As soon as practicable following the Grantees
          Termination of Employment or, if earlier, the end of the Restricted Period, the
          Grantee will receive a stock certificate without the legend described in Section
          5 representing the Vested Portion of the Grantees Restricted Stock. in
          determining the Vested Portion, partial shares shall be forfeited and the
          Grantee shall not be entitled to any compensation for the cancellation of such
          partial shares. The Vested Portion shall be computed by multiplying the
          Grantees number of shares

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of Common Stock awarded as Restricted
Stock by the applicable vesting percentage contained in Section 4 above. The Restricted
Period shall end on the date the Grantee becomes 100% vested in the Restricted Stock

7.     
          Return of Original Stock Certificate. Notwithstanding Section 6 above,
          the Grantee shall not be entitled to a stock certificate for the Vested Portion
          of his Restricted Stock until the Grantee delivers to the Committee the original
          stock certificate issued as part of the Grantees Restricted Stock award
          pursuant to Section 5.

8.     
          Restrictions on Transfer of Non-Vested Shares. Prior to vesting, the
          Restricted Stock awarded under the Plan, and any right or interest of the
          Grantee therein, including the right to vote such non-vested shares and to
          receive dividends thereon, may not be sold, assigned, transferred, exchanged,
          pledged, hypothecated, or otherwise encumbered during the Restricted Period to
          or in favor of any party other than the Corporation or a Subsidiary, and no such
          sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance,
          whether made or created by voluntary act of the Grantee or of any agent of such
          Grantee or by operation of law, shall be recognized by, or be binding upon, or
          shall in any manner affect the rights of the Corporation during the Restricted
          Period. Any such sale, assignment, transfer, exchange, pledge, hypothecation, or
          encumbrance, whether made or created by voluntary act of the Grantee or of any
          agent of such Grantee or by Operation of law, shall be void and have no effect,
          and the Corporation may take any or all steps set forth in Section 4.2(b) of the
          Plan. These restrictions shall not apply to the Vested Portion of the
          Grantees Restricted Stock

9.     
          Rights of Grantee During Restricted Period. Except as otherwise provided
          in this Agreement, the Plan, or in any applicable shareholder agreement, the
          Grantee shall, during the Restricted Period, have all of the other rights of a
          stockholder with respect to shares awarded to the Grantee including, but not
          limited to, the right to receive such cash dividends, if any, as may be declared
          on such shares from time to time, and the right to vote (in person or by proxy)
          such shares at any meeting of stockholders of the Corporation. Any stock
          dividends declared with respect to Restricted Stock shall be subject to the same
          terms and conditions as the Restricted Stock with respect to which such stock
          dividends are issued.

10.   
          Acceleration Power. Notwithstanding any other provisions of the Plan or
          this Agreement, the Committee shall be authorized in its discretion to
          accelerate the vesting of Restricted Stock and to release Restricted Stock to
          the Grantee upon such terms and conditions as the Committee may deem advisable.

11.   
          Federal Income Tax Matters. The Grantee, upon award of the shares of
          Restricted Stock hereunder, shall be authorized to make an election to be taxed
          upon such award under Section 83(b) of the Code. To effect such election, the
          Grantee may file an appropriate election with the Internal Revenue Service
          within thirty (30) days after award of the Restricted Stock and otherwise in
          accordance with applicable Treasury Regulations.

The
Grantee recognizes that, pursuant to Section 4,1(d) of the Plan, the Committee may make
such provisions and take such steps as it may deem necessary or appropriate for the
withholding of taxes and that the Corporation and its Subsidiaries that are required by
any law

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or regulation or any governmental
authority, whether federal, state or local, domestic or foreign, to make in connection
with the release of the Restricted Stock as provided in Section 6 of this Agreement.

The
Grantee further recognizes that he or she shall be liable for any and all taxes, including
withholding taxes, arising out of this grant or the vesting of the Restricted Stock. The
Grantee may elect to satisfy any such withholding obligation by either: (a) paying such
amounts in cash, directly to the Corporation (b) having the Corporation withhold an amount
equal to the Corporations minimum withholding obligation directly from the
Grantees compensation; or (c) having the Corporation retain and sell Restricted
Stock (which would otherwise be retained by Grantee) having a fair market value equal to
the Corporations minimum withholding obligation.

The
Grantee shall choose the method of withholding by executing and delivering to the
Corporation the election form attached hereto as Exhibit A (the Withholding
Election Form). The failure by the Grantee to provide the Election Withholding Form
to the Corporation, or, assuming option (a) is chosen, the Grantees failure to
tender the appropriate amount to the Corporation within five (5) days of the
Corporations written request for the same, shall result in the Corporations
utilization of option (b) or (c) above, to be chosen at the Corporations discretion.
The Withholding Election Form may be amended by the Grantee at any time, upon reasonable
notice to the Corporation.

12.   
          Stock Power. By election or otherwise, should the Corporation be required
          to sell any of Grantees Restricted Stock to satisfy the Grantees
          withholding tax obligation pursuant to Section 11 of this Agreement, the Grantee
          does hereby irrevocably constitute and appoint the Corporation as Grantees
          Attorney-in-Fact to effectuate such transfer and record the same on the books
          and records of the Corporation.

13.   
          Continued Employment Not Presumed. Neither the Plan, the award of
          Restricted Stock under this Agreement nor this Agreement shall impose any
          obligation on the Corporation and/or any Subsidiary to continue the employment
          of the Grantee.

14.   
          Grantees Covenant. The Grantee hereby agrees to use his or her best
          efforts to provide services to the Corporation in a workmanlike manner and to
          promote the Corporations interests.

15.   
          Restrictions on issuance of Shares. If at any time the Committee shall
          determine, in its discretion, that listing, registration or qualification of the
          shares of Restricted Stock subject to this Agreement upon any securities
          exchange or under any state or federal law, or the consent or approval of any
          governmental regulatory body, is necessary or desirable as a condition to the
          award or the release of Restricted Stock hereunder, such award or release may
          not be made in whole or in part unless and until such listing, registration,
          qualification, consent or approval shall have been effected or obtained free of
          any conditions not acceptable to the Committee.

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16.   
          Plan Controls. In the event of any actual or alleged conflict between the
          provisions of the Plan and the provisions of this Agreement, the provisions of
          the Plan shall be controlling and determinative.

17.   
          Successors. This Agreement shall be binding upon any successor of the
          Corporation, in accordance with the terms of this Agreement and the Plan.

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IN
WITNESS WHEREOF, HCSB Financial Corporation, acting by and through its duly authorized
officers, has caused this Restricted Stock Agreement to be executed, and the Grantee has
executed this Restricted Stock Agreement, all as of the day and year first above written.

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May 19, 2004

This addendum is to clarify for IRS
purposes the grant date of HCSB Financial Corporations Restricted Stock Grant in the
Omnibus Long Term Incentive Plan. The original grant was approved by the HCSB Board of
Directors on February 23, 2004, subsequent to the Plans approval by Shareholders at
the banks annual shareholder meeting held on April 22, 2004. The actual grant of
Restricted Stock is being signed today, May 19, 2004, between each employee and the Board.

Grantee:/s/ James R. Clarkson

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