Document:

HCSB FINANCIAL CORPORATION

2016 EQUITY INCENTIVE PLAN

 

Restricted
Stock Award Grant Notice

 

	Participant Name:	_________
	Company:	HCSB Financial Corporation
	Notice: 	A summary of the terms of your grant of Restricted Shares is set out in this notice (the “Grant Notice”) but subject always to the terms of the HCSB Financial Corporation 2016 Equity Incentive Plan (the “Plan”) and the Restricted Stock Award Agreement (the “Award Agreement”).  In the event of any inconsistency between the terms of this Grant Notice, the terms of the Plan and the Award Agreement, the terms of the Plan and the Award Agreement shall prevail.
	Type of Award: 	Restricted Stock Award
	Stock:	Shares of voting common stock, par value $0.01 per share, of the Company 
	Number of Shares 

of Stock Subject 

to Grant: 	_________ shares
	Grant Date:	_________
	Vesting Schedule:   	Restricted Shares granted will vest (i.e., restrictions shall lapse) in accordance with the following schedule, provided that you have provided continuous employment to the Company or any Participating Employer through each such vesting date:

 

	 	Date	No. of Shares	 
	 	_________	_________	 
	 	_________	_________	 
	 	_________	_________	 
	 	_________	_________	 
	 	_________	_________	 

 

    	 

     

    

 

	 	In the event of a Change of Control, all unvested Restricted Shares will automatically vest in full immediately prior to the consummation of the Change of Control.
	Acceptance: 	You acknowledge receipt of, and understand and agree to, this Grant Notice, the Award Agreement and the Plan. You further acknowledge that as of the Grant Date, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between you and the Company or any Participating Employer regarding the Restricted Shares and supersede all prior oral and written Award Agreements on the subject.

 

[Signatures appear on the following
page.]

 

    	 	2	 

     

    

IN WITNESS WHEREOF, the Company
and the Participant have duly executed and delivered this Grant Notice as of the Grant Date.

HCSB FINANCIAL CORPORATIONPARTICIPANT

	By: ________________________________	_____________________________
	Print Name: _________________________	[Name]
	Title: ______________________________	Address: _____________________
	 	____________________________
	 	____________________________

Attachments:

		1.	Restricted Stock Award Agreement

		2.	2016 Equity Incentive Plan

    	 	3	 

     

    

HCSB
FINANCIAL CORPORATION

Restricted Stock Award Agreement

Pursuant to the
Restricted Stock Grant Notice (the “Grant Notice”) and this Restricted Stock Award Agreement (this “Award
Agreement”), HCSB Financial Corporation (the “Company”) has granted the Participant, as identified
in the Grant Notice, the number of restricted shares of the Company’s Common Stock under the Company’s 2016 Equity
Incentive Plan (the “Plan”) indicated in the Grant Notice (the “Restricted Shares”). Capitalized
terms not defined in this Award Agreement but defined in the Plan or the Grant Notice will have the same definitions as in the
Plan or the Grant Notice, respectively.

1.                 
Restrictions and Vesting Schedule. The Restricted Shares are being awarded to Participant
subject to the transfer and forfeiture conditions set forth in this Award Agreement and the Plan (the “Restrictions”).
Subject to the provisions of Section 2 below, the Restricted Shares will vest, and Restrictions shall lapse, as provided in the
Participant’s Grant Notice. The period from the Date of Grant through the last Vesting Date set forth in the Grant Notice
is referred to as the “Restriction Period.” Except to the extent vesting accelerates pursuant to the terms of
the Grant Notice or Section 2 below, any unvested Restricted Shares shall be automatically forfeited upon Participant’s Termination
from Service. 

2.                 
Acceleration of Vesting upon a Change in Control. In the event of a Change of Control,
all unvested Restricted Shares will automatically vest in full immediately prior to the consummation of the Change of Control.

3.                 
Assignment or Transfer of Shares. Unless otherwise provided by the Board, prior to
the vesting of the Restricted Shares, Participant may not directly or indirectly, by operation of law or otherwise, voluntarily
or involuntarily, sell, assign, pledge, encumber, charge or otherwise transfer any of the Restricted Shares still subject to Restrictions.
The Restricted Shares shall be forfeited if Participant violates or attempts to violate these transfer Restrictions. After any
Stock has been released from the Restrictions, Participant shall not directly or indirectly, by operation of law or otherwise,
voluntarily or involuntarily, sell, assign, pledge, encumber, charge or otherwise transfer any interest in the Stock except in
compliance with the provisions herein and the provisions of applicable securities laws.

4.                 
Delivery of Shares. The Company shall enter such Award of Restricted Stock in book
entry form with appropriate restrictions noted with respect thereto.

5.                 
Rights of Participant. Subject to the provisions of this Award Agreement, Participant
shall exercise all rights and privileges of a shareholder of the Company with respect to the Restricted Shares deposited pursuant
to Section 4. Participant shall be deemed to be the holder for purposes of receiving any dividends that may be paid with respect
to such shares of Stock and for the purpose of exercising any voting rights relating to such shares of Stock, even if some or all
of such shares of Stock have not yet vested and been released from the Restrictions.

6.                 
Restrictive Legends. The Company’s book entry notations representing the Stock
shall have been noted with a legend in substantially the following form:

“THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THE COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH RESTRICTED STOCK AWARD IS VOID WITHOUT THE PRIOR
EXPRESS WRITTEN CONSENT OF THE COMPANY.”

    	 	4	 

     

    

The Company shall
remove or cause the removal of the foregoing legend as and to the extent of the lapse of the applicable Restrictions.

7.                 
Section 83(b) Election. Participant understands that Section 83(a) of the Code taxes
as ordinary income the difference between the amounts paid for the Stock and the fair market value of the Stock as of the date
any Restrictions on the Stock lapse. Participant understands that Participant may elect to be taxed at the time the Restricted
Shares are granted rather than when and as the Restrictions lapse, by filing an election under Section 83(b) (“83(b) Election”)
of the Code with the Internal Revenue Service within 30 days from the Date of Grant. Even if the fair market value of the Restricted
Shares at the time of the Grant equals the amount paid for the Stock, if any, the 83(b) Election must be made to avoid income under
Section 83(a) in the future. Participant understands that failure to file such an 83(b) Election in a timely manner may result
in adverse tax consequences for Participant. Participant further understands that an additional copy of such 83(b) Election is
required to be filed with his or her federal income tax return for the calendar year in which the Grant Date in connection with
this Award Agreement falls. Participant further acknowledges and understands that it is Participant’s decision as to whether
to file such 83(b) Election, and neither the Company nor the Company’s legal or financial advisors shall have any obligation
or responsibility with respect to such filing. Participant acknowledges that the foregoing is only a summary of the effect
of United States federal income taxation with respect to purchase of the Stock hereunder, and does not purport to be complete.
Participant further acknowledges that the Company has directed Participant to seek independent advice regarding the applicable
provisions of the Code, the income tax laws of any municipality, state or foreign country in which Participant may reside, and
the tax consequences of Participant’s death. Participant assumes all responsibility for filing an 83(b) Election and paying
all taxes resulting from such election or the lapse of the Restrictions on the Stock. 

8.                 
Refusal to Transfer. The Company shall not be required to transfer on its books any
shares of Stock of the Company which shall have been transferred in violation of any of the provisions set forth in this Award
Agreement. 

9.                 
No Employment Rights. This Award Agreement is not an employment contract and nothing
in this Award Agreement shall confer upon the Participant any right to continued employment with or service to the Company or any
Subsidiary, as the case may be, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate
the employment or service of the Participant at any time.

10.             
Governing Plan Document. The Restricted Shares granted hereunder are subject to all
the provisions of the Plan, the provisions of which are hereby incorporated by reference herein, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan.
Capitalized terms used herein and not defined shall have the meanings assigned in the Plan. In the event of any conflict between
the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

11.             
Adjustments. The Restricted Shares shall be subject to adjustments as provided in Sections
4, 9, 10, 11 and 14 of the Plan.

    	 	5	 

     

    

12.             
Acknowledgements. No waiver of any breach of any provision of this Award Agreement
by the Company shall be construed to be a waiver of any succeeding breach or as a modification of such provision. 

13.             
Miscellaneous. 

(a)               
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) when personally delivered to the party to be notified; (b) when sent by confirmed facsimile to the
party to be notified; (c) five business days after deposit in the United States Mail postage prepared by certified or registered
mail with return receipt requested at any time other than during a general discontinuance of postal service due to strike, lockout,
or otherwise (in which case notice, request, waiver or other communication shall be effectively given upon receipt) and address
to the party to be notified as set forth above; or (d) two business days after deposit with a national recognized overnight
delivery service, postage prepaid, addressed to the party to be notified as set forth above with next-business-day delivery guaranteed.
A party may change its notice address by giving the other party ten days’ written of the new address in the manner set forth
above. 

(b)              
Successors and Assigns. This Award Agreement shall inure to the benefit of the successors
and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Participant, Participant’s
successors, and assigns. 

(c)               
Governing Law. This Award Agreement shall be governed by and construed in accordance with
the laws of the State of South Carolina, without reference to principles of conflict of laws. 

(d)              
Entire Award Agreement; Amendment. This Award Agreement, along with the Grant Notice and the
Plan constitute the entire Award Agreement between the parties with respect to the subject matter hereof and supersedes and merges
all prior agreements or understandings, whether written or oral. This Award Agreement may only be amended as described in Section
11 of the Plan.

 

    	 	6	 

     

    

ATTACHMENT A

ELECTION UNDER SECTION 83(B)

OF THE INTERNAL REVENUE CODE OF 1986

 

The undersigned taxpayer
hereby elects, pursuant to §83(b) of the Internal Revenue Code, to include in taxpayer’s gross income or alternative
minimum tax income, as applicable, for the current taxable year, the amount of any income that may be taxable to taxpayer in connection
with taxpayer’s receipt of the property described below:

 

	1.	The taxpayer’s name, address and taxpayer identification number are as follows:
	 	 
	 	Name:
	 	Address:
	 	 
	 	SS# 
	 	 
	2.	Description of property with respect to which the election is being made:
	 	 
	 	_________ shares of Common Stock of HCSB Financial Corporation, a South Carolina corporation (the “Company”), granted pursuant to a Restricted Stock Award under the Company’s Equity Incentive Plan. 
	 	 
	3.	The date on which the property was transferred is.
	 	 
	 	The taxable year for which the election is made is calendar year      . 
	 	 
	4.	The property is subject to the following restrictions:
	 	 
	 	The Restricted Shares are subject to a vesting schedule pursuant to which restrictions on transfer will lapse.
	 	 
	5.	The fair market value at time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of such property is $_________.
	 	 
	6.	Furnishing statement to employer:
	 	 
	 	A copy of this statement has been furnished to the Company.

 

 

	Dated:  	 	 	 
	 	 	 	Taxpayer:  

 

    	 	7HCSB FINANCIAL CORPORATION

2016 EQUITY INCENTIVE PLAN

 

Restricted
Stock UNIT Award Grant Notice

 

	Participant Name:	_________
	Company:	HCSB Financial Corporation
	Employer:	_________
	Notice: 	A summary of the terms of your grant of Restricted Stock Unit (RSU) Award is set out in this notice (the “Grant Notice”) but subject always to the terms of the HCSB Financial Corporation 2016 Equity Incentive Plan (the “Plan”) and the Restricted Stock Unit Award Agreement (the “Award Agreement”).  In the event of any inconsistency between the terms of this Grant Notice, the terms of the Plan and the Award Agreement, the terms of the Plan and the Award Agreement shall prevail.
	Type of Award: 	Restricted Stock Unit Award (as defined in the Plan and meaning the right granted to the Participant to receive one share of Stock for each RSU at the end of the specified Vesting Period)
	Stock:	Shares of voting common stock, par value $0.01 per share, of the Company.
	Number of 

RSU Units 

Subject to Grant: 	_________
	Grant Date:	_________
	Vesting Schedule:	Restricted Stock Units (RSUs) granted will vest (i.e., shares will be delivered) in accordance with the following schedule, provided that you have provided continuous employment to the Company or any Participating Employer through each such vesting date, except as otherwise forth below:
	 	          _________
	 	In the event of a Change of Control after the Date of Grant and prior to the end of the Performance Period, all unvested RSUs will automatically vest in full immediately prior to the consummation of the Change of Control.
	 	[Vesting is accelerated to 100% upon the Participant’s death or Permanent and Total Disability while a Participant during the Performance Period.]

 

    

    

    

 

	Performance Goal:	_________
	Delivery of Shares:   	Upon vesting, the applicable shares of Stock, subject to required tax withholding, shall be transferred by the Company to the Participant’s estate within thirty (30) days of the vesting date.
	Withholding:	The Company and the Participant will comply with all federal and state laws and regulations respecting the required withholding, deposit and payment of any income, employment or other taxes relating to the Grant.  A portion of the Stock subject to each RSU may be withheld to cover required taxes, and the net number of shares of Stock will be paid to the Participant.
	Acceptance: 	You acknowledge receipt of, and understand and agree to, this Grant Notice, the Award Agreement and the Plan. You further acknowledge that as of the Grant Date, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between you and the Company or any Participating Employer regarding the RSUs and supersede all prior oral and written Award Agreements on the subject.

 

[Signatures appear on the following
page.]

 

    	 	2	 

     

    

IN WITNESS WHEREOF, the Company
and the Participant have duly executed and delivered this Grant Notice as of the Grant Date.

HCSB FINANCIAL CORPORATIONPARTICIPANT

	By: ________________________________	_____________________________
	Print Name: _________________________	[Name]
	Title: ______________________________	Address: _____________________
	 	____________________________
	 	____________________________

Attachments:

		1.	Restricted Stock Unit Award Agreement

		2.	2016 Equity Incentive Plan

    	 	3	 

     

    

HCSB Financial Corporation

Restricted Stock Unit Award Agreement

Pursuant to the Restricted
Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Award Agreement (this “Award
Agreement”), HCSB Financial Corporation (the “Company”) has granted the Participant, as identified
in the Grant Notice, the number of restricted stock units under the Company’s 2016 Equity Incentive Plan (the “Plan”)
indicated in the Grant Notice (the “RSUs”). Capitalized terms not defined in this Award Agreement but defined
in the Plan or the Grant Notice will have the same definitions as in the Plan or the Grant Notice, respectively.

1.                 
Restrictions and Vesting Schedule. The RSUs are being awarded to Participant subject
to the conditions set forth in this Award Agreement and the Plan (the “Restrictions”). Subject to the provisions
of Section 2 below, the RSUs will vest as provided in the Participant’s Grant Notice. Upon vesting, Participant shall have
the right to a number of shares of Common Stock of the Company equal to the number of vested RSUs. Except to the extent vesting
accelerates pursuant to the terms of the Grant Notice or Section 2 below, any unvested RSUs shall be automatically forfeited upon
Participant’s Termination from Service, or if earlier, at the end of the Performance Period. 

2.                 
Acceleration of Vesting upon a Change in Control. In the event of a Change of Control
prior to _________, all unvested RSUs will automatically vest in full immediately prior to the consummation of the Change of Control.

3.                 
Assignment or Transfer of Shares. Unless otherwise provided by the Board, prior to
the vesting of the RSUs, Participant may not directly or indirectly, by operation of law or otherwise, voluntarily or involuntarily,
sell, assign, pledge, encumber, charge or otherwise transfer any of the RSUs. The RSUs shall be forfeited if Participant violates
or attempts to violate these transfer restrictions. After any Stock has been delivered, Participant shall not directly or indirectly,
by operation of law or otherwise, voluntarily or involuntarily, sell, assign, pledge, encumber, charge or otherwise transfer any
interest in the Stock except in compliance with the provisions herein and the provisions of applicable securities laws.

4.                 
Delivery of Shares. Upon vesting of an RSU, the Participant is entitled to one share
of Company Stock for each vested RSU. Such Stock, subject to applicable withholding, shall be transferred by the Company to the
Participant within thirty (30) days of the vesting date and not later than March 15 of the year following the year in which the
RSU vests.

5.                 
Payment and Tax Withholding. Each payment of the RSUs shall be made in shares of Stock,
determined by the Administrator. The payment of a RSU in the form of a share of Stock shall be based on the Fair Market Value of
a share of Stock on the applicable date of vesting to which such tax withholding relates. Upon receipt of any entitlement to shares
of Stock under this Agreement, the Participant shall make appropriate arrangements with the Company to provide for the amount of
minimum tax withholding required by law, including without limitation Sections 3102 and 3402 or any successor section(s) of the
Code and applicable state and local income and other tax laws. The Company may permit the Participant to satisfy any federal, state
or local tax withholding obligation by any of the following means, or by a combination of such means: (a) tendering a cash payment;
(b) authorizing the Company to withhold shares of Stock from the shares of Stock otherwise issuable or deliverable to the Participant
as a result of the vesting of the RSUs (provided, however, that no shares of Stock shall be withheld with a value exceeding the
minimum amount of tax required to be withheld by law); or (c) delivering to the Company previously owned and unencumbered shares
of Stock. 

    	 	4	 

     

    

6.                 
No Ownership Rights Prior to Issuance of Stock. Neither the Participant nor any other
person shall become the beneficial owner of the Stock underlying the RSU, nor have any rights of a shareholder (including, without
limitation, dividend and voting rights) with respect to any such Stock, unless and until and after such Stock has been actually
issued to the Participant and transferred on the books and records of the Company or its agent in accordance with the terms of
the Plan and this Agreement. 

7.                 
Refusal to Transfer. The Company shall not be required to transfer on its books any
shares of Stock of the Company which shall have been transferred in violation of any of the provisions set forth in this Award
Agreement. 

8.                 
No Employment Rights. This Award Agreement is not an employment contract and nothing
in this Award Agreement shall confer upon the Participant any right to continued employment with or service to the Company or any
Subsidiary, as the case may be, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate
the employment or service of the Participant at any time.

9.                 
Governing Plan Document. The RSUs granted hereunder are subject to all the provisions
of the Plan, the provisions of which are hereby incorporated by reference herein, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Capitalized terms
used herein and not defined shall have the meanings assigned in the Plan. In the event of any conflict between the provisions of
this Award Agreement and those of the Plan, the provisions of the Plan shall control.

10.             
Adjustments. The RSUs shall be subject to adjustments as provided in Sections 4, 7,
9, 10, 11 and 14 of the Plan.

11.             
Acknowledgements. No waiver of any breach of any provision of this Award Agreement
by the Company shall be construed to be a waiver of any succeeding breach or as a modification of such provision. 

12.             
Miscellaneous. 

(a)               
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) when personally delivered to the party to be notified; (b) when sent by confirmed facsimile to the
party to be notified; (c) five business days after deposit in the United States Mail postage prepared by certified or registered
mail with return receipt requested at any time other than during a general discontinuance of postal service due to strike, lockout,
or otherwise (in which case notice, request, waiver or other communication shall be effectively given upon receipt) and address
to the party to be notified as set forth above; or (d) two business days after deposit with a national recognized overnight
delivery service, postage prepaid, addressed to the party to be notified as set forth above with next-business-day delivery guaranteed.
A party may change its notice address by giving the other party ten days’ written of the new address in the manner set forth
above. 

(b)              
Registration of Stock. It is intended that any Stock received in respect of the RSUs shall
have been registered under the Securities Act of 1933 (“Securities Act”). If the Participant is an “affiliate”
of the Company, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not
sell the Stock received except in compliance with Rule 144. Certificates representing Stock issued to an “affiliate”
of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the Stock as the Company deems
appropriate to comply with Federal and state securities laws. If, at any time, the Stock is not registered under the Securities
Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Stock, the Participant shall
execute, prior to the delivery of any Stock to the Participant by the Company pursuant to this Agreement, an agreement (in such
form as the Company may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring
the Stock acquired under this Agreement for the Participant’s own account, for investment only and not with a view to the resale
or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Stock
shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration
statement has become effective and is current with regard to the Stock being offered or sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for
sale of such Stock, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for
or approved by the Company, as to the applicability of such exemption thereto.

    	 	5	 

     

    

(c)               
Data Protection. By accepting this Agreement (whether by electronic means or otherwise), the
Participant hereby consents to the holding and processing of personal data provided by him/her to the Company for all purposes
necessary for the operation of the Plan. These include, but are not limited to, administering and maintaining Participant records,
providing information to any registrars, brokers or their party administrators of the Plan, or providing information to future
purchasers of the Company or the business in which the Participant works.

(d)              
Successors and Assigns. This Award Agreement shall inure to the benefit of the successors
and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Participant, Participant’s
successors, and assigns. 

(e)               
Governing Law. This Award Agreement shall be governed by and construed in accordance with
the laws of the State of South Carolina, without reference to principles of conflict of laws. 

(f)               
Entire Award Agreement; Amendment. This Award Agreement, along with the Grant Notice and the
Plan constitute the entire Award Agreement between the parties with respect to the subject matter hereof and supersedes and merges
all prior agreements or understandings, whether written or oral. This Award Agreement may only be amended as described in Section
11 of the Plan.

    	 	6

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