# Exhibit 10.3

# HCSB FINANCIAL
CORPORATION

# OMNIBUS STOCK
OWNERSHIP AND LONG TERM INCENTIVE PLAN

# INCENTIVE STOCK OPTION
GRANT AGREEMENT

The Compensation Committee of the
Board of Directors of HCSB Financial Corporation (the Corporation), acting under authority
of the 2004 Omnibus Stock Ownership and Long Term Incentive Plan (the Plan), subject to
approval of the Plan by the shareholders of the Corporation, hereby grants to 
(the Optionee) on , 2004 the right to purchase, as an Incentive Stock Option,
 shares of the Corporations common stock, at the now current market price of $25.00, during
the next ten years ending , 2014, subject to the terms and conditions described
below. The rights described herein are not valid unless signed below by both a duly
authorized officer of the Corporation and the Optionee.

# ARTICLE I DEFINITIONS

The following terms shall have the
meanings set forth below. Additional terms defined in this Agreement shall have the
meanings ascribed to them when first used herein.

Board:  The Board of Directors of HCSB Financial Corporation.

Change in Control
Transaction.  The dissolution or liquidation of the Corporation; a
reorganization, merger or consolidation of the Corporation as a result of which the
outstanding securities of the class then subject to Rights hereunder are changed into or
exchanged for cash or property or securities not of the Corporations issue; or a
sale of all or substantially all of the assets of the Corporation to, or the acquisition
of stock representing more than twenty-five percent (25%) of the voting power of the
capital stock of the Corporation then outstanding by, another corporation, bank, other
entity or person.

Code.  
          The Internal Revenue Code of 1986, as amended.

Committee.  
          The Compensation Committee of the Board.

Common Stock.  The Common Stock, $           par value per share, of the Corporation.

Death.  
          The date of death of an Eligible Employee who has received Rights as established
          by the relevant death certificate.

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Disability.  
          The date on which an Eligible Employee who has received Rights becomes
          permanently and totally disabled within the meaning of Section 22 (e) (3) of the
          Code, without regard to the principles of conflicts of laws, the laws of the
          State of South Carolina shall govern and control the validity, interpretation,
          performance and enforcement of this Agreement which shall be determined by the
          Committee on the basis of such medical or other evidence as it may reasonably
          require or deem appropriate.

Effective Date.  
The date as of which this Agreement is effective, which shall be the date it is signed by
all parties.

Eligible
Employees.  Those individuals who meet the following eligibility
requirements:

(i)   
          Such individual is a full time employee of the Corporation or a Subsidiary and
          there exists between the Corporation or a Subsidiary and the individual the
          legal and bona fide relationship of employer and employee. In determining
          whether such relationship exists, the regulations of the United States Treasury
          Department relating to the determination of such relationship for the purpose of
          collection of income tax at the source on wages has been applied.

(ii)   
          Such individual falls within the job grade classifications set forth by the
          Committee as those covered under the Omnibus Stock Ownership and Long Term
          Incentive Plan. Such job grade classification may be amended, expanded,
          restricted or otherwise modified by the Committee, subject to ratification of
          such action by the Board.

(iii)   
          If the Registration shall not have occurred, such individual must have such
          knowledge and experience in financial and business matters that he or she is
          capable of evaluating the merits and risks of the investment involved in the
          receipt and/or exercise of a Right.

(iv)   
          Such individual, being otherwise an Eligible Employee under the foregoing items,
          shall have been selected by the Committee as a person to whom a Right or Rights
          shall be granted under the Plan.

Fair Market
Value.  With respect to the Corporations Common Stock, the market
price per share of such Common Stock determined by the Committee, consistent with the
requirements of Section 422 of the Code and to the extent consistent therewith, as
follows, as of the date specified in the context within which such term is used:

(i)   
          if the Common Stock was traded on a stock exchange on the date in question, then
          the Fair Market Value will be equal to the closing price reported by the
          applicable composite-transactions report for such date;

(ii)   
          if the Common Stock was traded over-the-counter on the date in question and was
          classified as a national market issue, then the Fair Market Value will be equal
          to the last transaction price quoted by the National Association of Securities
          Dealers Automated Quotation System (NASDAQ), National Market System
          (NMS1);

(iii)   
          if the Common Stock was traded over-the-counter on the date in question but was
          not classified as a national market issue, then the Fair Market Value will be
          equal to the average of

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the last reported representative bid
and asked prices quoted by the NASDAQ for such date; and

(iv)   
          if none of the foregoing provisions is applicable, then the Fair Market Value
          will be determined by the Committee in good faith on such basis as it deems
          appropriate. In such case, the Committee shall maintain a written record of its
          method of determining Fair Market Value.

ISO.  
          An incentive stock option as defined in Section 422 of the Code.

Just Cause
Termination.  A termination by the Corporation or a Subsidiary of an
Eligible Employees employment by the Corporation or the Subsidiary in connection
with the good faith determination of the Board or the Board of Directors of the
Subsidiary, as applicable, that the Eligible Employee is incompetent or otherwise has
engaged in any acts involving dishonesty or moral turpitude or in any acts that materially
and adversely affect the business, affairs or reputation of the Corporation or the
Subsidiary.

Non-Qualified
Option.  Any Option granted herein whether designated by the Committee as a
Non-Qualified Option or otherwise, other than an Option designated by the Committee as an
ISO, or any Option so designated but which, for any reason, fails to qualify as an ISO
pursuant to Section 422 of the Code and the rules and regulations thereunder.

Option
Agreement.  The agreement between the Corporation and an Optionee with
respect to Options granted to such Optionee, including such terms and provisions as are
necessary or appropriate under III.

Options.  
          ISOs and Non-Qualified Options are collectively referred to herein as
          Options; provided, however, whenever reference is specifically made
          only to ISOs or Non-Qualified Options, such reference shall be deemed to be made
          to the exclusion of the other.

Plan Pool.  A
total of Two Hundred Thousand (200,000) shares of authorized, but unissued, Common Stock,
as adjusted pursuant to Section 2.3(b), which shall be available as Stock under the Plan.

Registration.  
          The registration by the Corporation under the 1933 Act and applicable state
          Blue Sky and securities laws of this Plan, the offering of Rights
          under the Plan, the offering of Stock under the Plan, and/or the Stock
          acquirable under the Plan.

Retirement.  
          Retirement shall mean

(i)   
          the termination of an Eligible Employees employment under conditions which
          would constitute normal retirement or early retirement
          under any tax qualified retirement plan maintained by the Corporation or a
          Subsidiary, or

(ii)   
          termination of employment after attaining age 65 (except in the case of a Just
          Cause Termination).

Rights.  
          The rights to exercise, purchase or receive the Options described herein.

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Rights Agreement.  An
Option Agreement.

SEC.  
          The Securities and Exchange Commission.

Stock.  
          The shares of Common Stock in the Plan Pool available for issuance pursuant to
          the valid exercise of a Right or on which the cash value of a Right is to be
          based.

Tax Withholding
Liability.  All federal and state income taxes, social security tax, and any
other taxes applicable to the compensation income arising from the transaction required by
applicable law to be withheld by the Corporation.

Transfer.  
          The sale, assignment, transfer, conveyance, pledge, hypothecation, encumbrance,
          loan, gift, attachment, levy upon, assignment for the benefit of creditors, by
          operation of law (by will or descent and distribution), transfer by a qualified
          domestic relations order, a property settlement or maintenance agreement,
          transfer by result of the bankruptcy laws or otherwise of a share of Stock or of
          a Right.

1933 Act.  The
Securities Act of 1933, as amended.

1934 Act. The Securities
Exchange Act of 1934, as amended.

# ARTICLE II TERMS AND CONDITIONS
OF THIS INCENTIVE STOCK OPTION

# Section 2.1.  Qualification as an ISO.

(a)   
          The Committee has designated this Option at the time the grant was authorized as
          an ISO. In accordance with Section 422 (d) of the Code, the aggregate Fair
          Market Value (determined as of the date the ISO was granted) of the shares of
          Stock as to which the ISO may first become exercisable by the Optionee in a
          particular calendar year (pursuant to Article III of the 2004 Omnibus Stock
          Ownership and Long Term Incentive Plan and all other plans of the Corporation
          and/or its Subsidiaries) may not exceed $100,000 (the $100,000
          Limitation). If an Optionee is granted Options in excess of the $100,000
          Limitation, or if such Options otherwise become exercisable with respect to a
          number of shares of Stock which would exceed the $100,000 Limitation, such
          excess Options shall be Non-Qualified Options.

Section 2.2.  Exercise
Price.

(a)   
          The initial exercise price of this Option granted under the Plan (the
          Exercise Price) was determined by the Committee in its discretion;
          provided. however, that in order for this Option to qualify under the Code as
          an ISO, the Exercise Price of this ISO is not less than (i) the Fair Market
          Value of the Common Stock on the date of grant of the Option, in the case of any
          Eligible Employee who does not own stock possessing more than ten percent (10%)
          of the total combined voting power of all classes of the capital stock of the
          Corporation (within the meaning of Section 422 (b) (6) of the Code), or (ii) one
          hundred ten percent (110%) of such

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Fair Market Value in the case of
any Eligible Employee who owns stock in excess of such amount.

Section 2.3.  Other Terms and
Conditions of This Option.

(a)   
          At the discretion of the Committee, an Optionee, as a condition to the granting
          of an Option, must execute and deliver to the Corporation a confidential
          information agreement approved by the Committee. Such confidential information
          agreement is not (is/is not) required by the Committee as a condition to the
          granting of this Option.

(b)   
          Nothing contained in this Option Agreement or in any other agreement executed in
          connection with the granting of an Option under the Plan will confer upon any
          Optionee any right with respect to the continuation of his or her status as an
          employee of the Corporation or any of its Subsidiaries.

(c)   
          Rights to exercise the Option for, and purchase, twenty percent (20%) of the
          total number of shares of Stock acquirable hereunder shall vest and first become
          exercisable on                  
                      
                         
                      
        February 23, 2005, and on                 
                      
                         
                      
             February 23, 2006,                  
                      
                         
                      
             February 23, 2007,                  
                      
                         
                      
          February 23, 2008 and                  
                      
                         
                      
             February 23, 2009,
rights to exercise the Option for, and purchase, another twenty percent (20%) of the total number
of shares of Stock acquirable hereunder shall vest and first become exercisable. Such
Vesting Periods may be accelerated or shortened by the Committee in its discretion;
provided, however, that the Vesting Period for any portion of each ISO shall be at least
one year (1) from the date such Option was granted. The Optionee understands that sale of
the Stock acquired under an ISO agreement prior to two years following the date the Option
was granted will constitute a disqualifying event, thereby rendering the Option as a
Non-Qualified Option and any gain on the Stock on the exercise date is taxable as ordinary
income for Federal and State tax purposes. See 2.3(f) below.

(d)   
          Not less than one hundred (100) shares of Stock may be purchased at any one time
          through the exercise of an Option unless the number purchased is the total
          number at that time purchasable under all Options granted to the Optionee.

(e)   
          An Optionee shall have no rights as a shareholder of the Corporation with
          respect to any shares of Stock covered by Options granted to the Optionee until
          payment is made in full of the Exercise Price by such Optionee for the shares
          being purchased. No adjustment shall be made for dividends (ordinary or
          extraordinary, whether in cash, securities or other property) or distributions
          or other rights for which the record date is prior to the date such Stock is
          fully paid for, except as provided in Sections 2.3(f) and 3.2(b) of the Plan.

(f)   
          All shares of Stock obtained pursuant to this Option, which qualifies as an ISO,
          shall be held in escrow for a period which ends on the later of (i) two (2)
          years from the date of the granting of the ISO or (ii) one (1) year after the
          issuance of such shares pursuant to the

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exercise of the ISO. Such shares of
Stock shall be held by the Corporation or its designee. The Optionee who has exercised the
ISO shall have all rights of a shareholder, including, but not limited to, the rights to
vote, receive dividends and sell such shares. The sole purpose of the escrow is to inform
the Corporation of a disqualifying disposition of the shares of Stock acquired within the
meaning of Section 422 of the Code, and it shall be administered solely for this purpose.

(g)   
          Additionally and notwithstanding any other provisions of this Article II, no
          shares of Stock obtained pursuant to this Option may be Transferred until at
          least six (6) months and one (1) day shall have elapsed since the date such
          Option was granted.

Section 2.4.  Exercise of
Options.

(a)   
          The Optionee must be an Eligible Employee at all times from the date of grant
          until the exercise of the Options granted, except as provided in Section 2.5(b).

(b)   
          This Option may be exercised to the extent exercisable (i) by giving written
          notice of exercise to the Corporation, specifyiing the number of full shares of
          Stock to be purchased and, if applicable, accompanied by full payment of the
          Exercise Price thereof and the amount of the Tax Withholding Liability pursuant
          to Section 2.4(c) below; and (ii) by giving assurances satisfactory to the
          Corporation that the shares of Stock to be purchased upon such exercise are
          being purchased for investment and not with a view to resale in connection with
          any distribution of such shares in violation of the 1933 Act; provided, however,
          that in the event the prior occurrence of the Registration or in the event
          resale of such Stock without such Registration would otherwise be permissible,
          this second condition will be inoperative if, in the opinion of counsel for the
          Corporation, such condition is not required under the 1933 Act or any other
          applicable law, regulation or rule of any governmental agency.

(c)   
          As a condition to the issuance of the shares of Stock upon full or partial
          exercise of a Non-Qualified Option, the Optionee will pay to the Corporation in
          cash, or in such other form as the Committee may determine in its discretion,
          the amount of the Corporations Tax Withholding Liability required in
          connection with such exercise.

(d)   
          The Exercise Price of an Option shall be payable to the Corporation either (i)
          in United States dollars, in cash or by check, Corporation draft or money order
          payable to the order of the Corporation, or (ii) at the discretion of the
          Committee, through the delivery of shares of the Stock owned by the Optionee
          (including, if the Committee so permits, a portion of the shares of stock as to
          which the Option is then being exercised) with a Fair Market Value as of the
          date of delivery equal to the Exercise Price, or (iii) at the discretion of the
          Committee by a combination of (i) and (ii) above. No shares of Stock shall be
          delivered until full payment has been made.

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Section 2.5.  Term and
Termination of Option.

(a)   
          The Committee has determined that this Option Will expire, and the rights
          hereunder to purchase Stock will terminate, ten years following the grant date
          (the Option Period). The expiration date of this Option shall be
          February 23, 2014.

(b)   
          To the extent not previously exercised, this Option will terminate upon the
          expiration of the Option Period specified in 2.5(a); provided, however, that,
          subject to the provisions of Section 2.5(a), this ISO will terminate upon the
          earlier of (i) ninety (90) days after the date that the Optionee ceases to be an
          Eligible Employee for any reason, other than by reason of Death., Disability, or
          a Just Cause Termination (ii) twelve (12) months after the date that the
          Optionee ceases to be an Eligible Employee by reason of Death or Disability; or
          (iii) immediately as of the date that the Optionee ceases to be an Eligible
          Employee by reason of a Just Cause Termination.

Section 2.6.  Change in Control
Transaction.

At any time prior to the date of
consummation of a Change in Control Transaction, the Committee may, in its absolute
discretion, determine that all or any part of the Options granted under this Article II
shall become immediately exercisable in full and may thereafter be exercised at any time
before the date of consummation of the Change in Control Transaction (except as otherwise
provided in Article II hereof, and except to the extent that such acceleration of
exercisability would result in an excess parachute payment within the meaning
of Section 280G of the Code). To the extent this Option has not been fully exercised
before the date of consummation of the Change in Control Transaction, it shall terminate
on such date, unless a provision has been made in writing in connection with such
transaction for the assumption of this Option, or the substitution for this Option of
options to acquire the voting stock of a successor employer corporation, or a parent or a
subsidiary thereof, with appropriate adjustments as to the number and kind of shares and
prices, in which event this Option shall continue in the manner and under the terms so
provided.

Section 2.7.  Restrictions On
Transfer.

This Option may not be Transferred except
by will or the laws of descent and distribution and, during the lifetime of the Optionee,
may be exercised only by such Optionee.

Section 2.8.  Stock
Certificates.

Certificates representing the Stock
issued pursuant to the exercise of this Option, or any portion of this Option, will bear
all legends required by law and necessary to effectuate the provisions hereof. The
Corporation may place a stop transfer order against such shares of Stock until
all restrictions and conditions set forth in this Article II, and in the legends referred
to in this Section 2.8 have been complied with.

Section 2.9.  Amendment and
Discontinuance.

The Board may amend, suspend or
discontinue the provisions of this Article II at any time or from time to time; provided
that no action of the Board will cause this ISO not to comply with

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Section 422 of the Code unless the
Board specifically declares such action to be made for that purpose; and, provided,
further, that no such action may, without the approval of the shareholders of the
Corporation, materially increase (other than by reason of an adjustment pursuant to
Section 2.3(b) of the Plan) the maximum aggregate number of shares of Stock in the Plan
Pool, or materially increase the benefits accruing to the Optionee. Moreover, no such
action may alter or impair this Option without the consent of the applicable Optionee.

Section 2.10.  Compliance with
Rule 16b-3.

With respect to persons subject to
Section 16 of the 1934 Act, transactions under this Article II are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the 1934 Act, To the
extent any provision of this Article U or action by the Board or the Committee fails so to
comply, it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.

# ARTICLE III MISCELLANEOUS

Section 3.1.  No Obligation to
Exercise Right.

The granting of the Rights in this
Agreement shall impose no obligation upon the recipient to exercise such Right.

Section 3.2.  Captions and
Headings; Gender and Number.

Captions and paragraph headings used
herein are for convenience only, do not modify or affect the meaning of any provision
herein, are not a part of, and shall not serve as a basis far, interpretation or
construction of this Agreement. As used herein, the masculine gender shall include the
feminine and neuter, and the singular number shall include the plural, and vice versa,
whenever such meanings are appropriate.

Section 3.3.  Governing
Law.

Without regard to the principles of
conflicts of laws, the laws of the State of South Carolina shall govern and control the
validity, interpretation, performance and enforcement of this Agreement.

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This Agreement entered into this 23rd
Day of February, 2004 as witnessed by the following signatures.

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_____________________The Optionee

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