Document:

Exhibit 10.3

THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH
                       CAROLINA UNIFORM ARBITRATION ACT.

                 AMENDED EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
                               EXECUTIVE AGREEMENT

         THIS AMENDED  AGREEMENT is made and entered into as of this 17th day of
October,  2007, by and between  GrandSouth  Bank, a bank  organized and existing
under the laws of the State of South  Carolina  (hereinafter  referred to as the
"Bank"),  and Ronald K. Earnest, an Executive of the Bank (hereinafter  referred
to as the "Executive").

         WHEREAS, the Bank and the Executive initially entered into an Executive
Supplemental  Retirement Plan Executive  Agreement on September 11, 2001,  which
was subsequently amended on September 11, 2001 (the "Original Agreement"); and

         WHEREAS, the Original Agreement contained the following premises, which
are hereby reaffirmed;

                  WHEREAS,  the  Executive  is now in the employ of the Bank and
         has for many years  faithfully  served the Bank. It is the consensus of
         the Board of Directors  (hereinafter  referred to as the "Board")  that
         the Executive's  services have been of exceptional  merit, in excess of
         the compensation paid and an invaluable contribution to the profits and
         position  of the  Bank in its  field of  activity.  The  Board  further
         believes  that  the  Executive's  experience,  knowledge  of  corporate
         affairs,  reputation and industry  contacts are of such value,  and the
         Executive's continued services so essential to the Bank's future growth
         and profits,  that it would  suffer  severe  financial  loss should the
         Executive terminate their services; and

                  WHEREAS,  the Board has adopted the GrandSouth  Bank Executive
         Supplemental Retirement Plan (hereinafter referred to as the "Executive
         Plan") and it is the desire of the Bank and the Executive to enter into
         this Amended  Agreement under which the Bank will agree to make certain
         payments to the  Executive  upon the  Executive's  retirement or to the
         Executive's  beneficiary(ies)  in the  event of the  Executive's  death
         pursuant to the Executive Plan; and

                  WHEREAS,  it is the  intent of the  parties  hereto  that this
         Executive  Plan  be  considered  an  unfunded  arrangement   maintained
         primarily  to  provide   supplemental   retirement   benefits  for  the
         Executive,  and be considered a non-qualified benefit plan for purposes
         of the Employee  Retirement Security Act of 1974, as amended ("ERISA").
         The Executive is fully advised of the Bank's  financial  status and has
         had substantial input in the design and operation of this benefit plan;
         and

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         WHEREAS, the Bank and the Executive now desire to amend and restate the
Original Agreement in compliance with the recently enacted Internal Revenue Code
Section 409A and associated federal regulations.

         NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed  in the future,  and based upon the mutual
promises and covenants  herein  contained,  the Bank and the Executive  agree to
amend and restate the Original Agreement as follows:

I.       DEFINITIONS

          A.   Effective Date:

               The Effective  Date of the Executive  Plan shall be September 13,
               2001.

          B.   Plan Year:

               Any  reference to the "Plan Year" shall mean a calendar year from
               January 1st to December 31st. In the year of implementation,  the
               term "Plan Year" shall mean the period from the Effective Date to
               December 31st of the year of the Effective Date.

          C.   Retirement Date:

               Retirement Date shall mean the date upon which Executive  attains
               the Normal Retirement Age (Subparagraph I (J))

          D.   Termination of Service:

               Termination  of  Service  shall  mean the  Executive's  voluntary
               termination  for  Good  Reason  or the  Bank's  discharge  of the
               Executive  without  cause,  prior to the  Normal  Retirement  Age
               (Subparagraph I (J)).

               A voluntary  termination by the Executive  shall be considered an
               involuntary   termination  with  "Good  Reason"  if  any  of  the
               following occurs without the Executive's advance written consent:
               (a) a material  diminution of the Executive's base  compensation;
               (b) a material diminution of the Executive's  authority,  duties,
               or responsibilities;  (c) a material diminution in the authority,
               duties,  or  responsibilities  of  the  supervisor  to  whom  the
               Executive is required to report; (d) a material diminution in the
               budget over which the Executive retains authority; (e) a material
               change in the  geographic  location at which the  Executive  must
               perform  services  for the  Bank;  or (f)  any  other  action  or
               inaction that  constitutes a material  breach by the Bank of this
               Agreement.  In order to qualify as a  voluntary  termination  for
               Good Reason,  the  Executive  must give notice to the Bank of the
               existence of one or more of the conditions described in (a) - (f)

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               above  within  90  days  after  the  initial   existence  of  the
               condition,  and the Bank shall have 30 days  thereafter to remedy
               the condition ("Cure Period").

          E.   Pre-Retirement Account:

               A  Pre-Retirement  Account  shall be  established  as a liability
               reserve  account on the books of the Bank for the  benefit of the
               Executive. Prior to the Executive's Retirement Date (Subparagraph
               I (C)),  such  liability  reserve  account  shall be increased or
               decreased each Plan Year, until the aforestated  event occurs, by
               the Index Retirement Benefit (Subparagraph I (F)).

          F.   Index Retirement Benefit:

               The Index Retirement  Benefit for each Executive in the Executive
               Plan for each Plan Year  shall be equal to the excess (if any) of
               the  Index  (Subparagraph  I (G)) for  that  Plan  Year  over the
               Opportunity Cost  (Subparagraph I (H)) for that Plan Year divided
               by a factor equal to 1.05 minus the marginal tax rate.

          G.   Index:

               The  Index  for any  Plan  Year  shall  be the  aggregate  annual
               after-tax  income from the life insurance  contract(s)  described
               hereinafter  as defined by FASB  Technical  Bulletin  85-4.  This
               Index  shall be applied  as if such  insurance  contract(s)  were
               purchased on the Effective Date of the Executive Plan.

               Insurance Company:                   Massachusetts Mutual Life
                                                     Insurance Company
               Policy Form:                         Flexible Premium Adjustable
                                                     Life
               Policy Name:                         Strategic Life Executive
               Insured's Age and Sex:               47, Male
               Riders:                              None
               Ratings:                             None
               Option:                              Level
               Face Amount:                         $1,081,920
               Premiums Paid:                       $368,000
               Number of Premium Payments:          Single
               Assumed Purchase Date:               September 13, 2001

               Insurance Company:                   Union Central Life Insurance
                                                     Company
               Policy Form:                         Universal Life Insurance
               Policy Name:                         COLI UL
               Insured's Age and Sex:               47, Male
               Riders:                              None
               Ratings:                             None
               Option:                              Level
               Face Amount:                         $1,060,447
               Premiums Paid:                       $368,000
               Number of Premium Payments:          Single
               Assumed Purchase Date:               September 13, 2001

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<PAGE>

               If such contracts of life insurance are actually purchased by the
               Bank, then the actual policies as of the dates they were actually
               purchased  shall be used in  calculations  under  this  Executive
               Plan.  If such  contracts of life  insurance are not purchased or
               are  subsequently  surrendered  or  lapsed,  then the Bank  shall
               receive   annual   policy    illustrations    that   assume   the
               above-described  policies were purchased or had not  subsequently
               surrendered or lapsed.  Said illustration  shall be received from
               the respective insurance companies and will indicate the increase
               in policy  values for purposes of  calculating  the amount of the
               Index.

               In either case,  references to the life  insurance  contracts are
               merely for  purposes of  calculating  a benefit.  The Bank has no
               obligation to purchase such life insurance and, if purchased, the
               Executive  and the  Executive's  beneficiary(ies)  shall  have no
               ownership  interest  in such  policy  and  shall  always  have no
               greater  interest in the benefits  under this Executive Plan than
               that of an unsecured creditor of the Bank.

          H.   Opportunity Cost:

               The  Opportunity  Cost for any Plan Year shall be  calculated  by
               taking the sum of the amount of premiums  for the life  insurance
               policies  described in the  definition of "Index" plus the amount
               of any after-tax  benefits paid to the Executive  pursuant to the
               Executive Plan (Paragraph II hereinafter)  plus the amount of all
               previous years' after-tax  Opportunity Cost, and multiplying that
               sum by the Average Federal Funds Rate.

          I.   Change of Control:

               A "Change  of  Control"  of the Bank shall be deemed to have been
               effected for purposes of this Agreement:

               A.   on the date voting  control  over more than 50% of the stock
                    of the Bank's  holding  company (the  "Holding  Company") is
                    acquired,  directly  or  indirectly,  by any person or group
                    acting in concert;

               B.   if the  Holding  Company  is  merged  with or into any other
                    entity  and  the   shareholders   of  the  Holding   Company
                    immediately  before  such  merger  own less  than 50% of the
                    combined  voting control of the  corporation  resulting from
                    such merger; or

               C.   if more than 50% of the assets of the  Holding  Company  are
                    acquired,  directly  or  indirectly,  by any person or group
                    acting in concert during any consecutive 12 month period.

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          J.   Normal Retirement Age:

               Normal  Retirement Age shall mean the date on which the Executive
               attains age sixty-five (65).

II.      INDEX BENEFITS

          A.   Retirement Benefits:

               Subject to  Subparagraph  II (D)  hereinafter,  an Executive  who
               remains in the employ of the Bank until the Normal Retirement Age
               (Subparagraph  I (J)) shall be entitled to receive the balance in
               the   Pre-Retirement   Account  in  fifteen   (15)  equal  annual
               installments commencing thirty (30) days following the Retirement
               Date. In addition to these payments and commencing in conjunction
               therewith,  the Index Retirement Benefit (Subparagraph I (F)) for
               each Plan Year  subsequent to the Retirement  Date, and including
               the remaining  portion of the Plan Year  following the Retirement
               Date, shall be paid to the Executive until the Executive's death.

          B.   Termination of Service:

               Subject to  Subparagraph  II (D),  should an  Executive  suffer a
               Termination of Service the Executive shall be entitled to receive
               twenty-five  percent  (25%)  times the  number  of full  years of
               employment  with the Bank from the date of first  employment with
               the Bank  (to a  maximum  of  100%),  times  the  balance  in the
               Pre-Retirement  Account  payable to the Executive in fifteen (15)
               equal annual  installments  commencing thirty (30) days following
               the Executive's  Normal  Retirement Age  (Subparagraph I (J)). In
               addition  to  these   payments  and   commencing  in  conjunction
               therewith,  twenty-five  percent  (25%)  times the number of full
               years  of  employment  with  the  Bank  from  the  date of  first
               employment with the Bank (to a maximum of 100%),  times the Index
               Retirement  Benefit for each Plan Year  subsequent to the year in
               which the Executive  attains Normal Retirement Age, and including
               the  remaining  portion  of the Plan Year in which the  Executive
               attains  Normal  Retirement  Age,  shall be paid to the Executive
               until the Executive's death.

          C.   Death:

               Should  the  Executive  die  while  there  is a  balance  in  the
               Executive's  Pre-Retirement  Account  (Subparagraph  I (E)), said
               unpaid balance of the Executive's Pre-Retirement Account shall be
               paid in a lump sum to the individual or individuals the Executive
               may have  designated  in writing and filed with the Bank.  In the
               absence  of any  effective  beneficiary  designation,  the unpaid
               balance  shall be paid as set forth herein to the duly  qualified
               executor or administrator of the Executive's estate. Said payment
               due  hereunder  shall be made the first day of the  second  month
               following the decease of the Executive.  Provided,  however, that

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               anything  hereinabove to the contrary  notwithstanding,  no death
               benefit shall be payable  hereunder if the  Executive  dies on or
               before the 13th day of September, 2003.

          D.   Discharge for Cause:

               Should the  Executive be  Discharged  for Cause at any time,  all
               benefits under this  Executive Plan shall be forfeited.  The term
               "for cause" shall mean:

               (i)  the  willful  and  continued  failure  by the  Executive  to
                    substantially perform his duties (other than the Executive's
                    inability   to   perform,   with   or   without   reasonable
                    accommodation, resulting from his incapacity due to physical
                    or  mental  illness  or  impairment),  after  a  demand  for
                    substantial  performance  is  delivered  to him by the Bank,
                    which demand specifically identifies the manner in which the
                    Executive is alleged to have not substantially performed his
                    duties;

               (ii) the  willful   engaging  by  the   Executive  in  misconduct
                    (criminal,   immoral,  or  otherwise)  which  is  materially
                    injurious  to the Bank,  its holding  company,  or either of
                    their  officers,  directors,  shareholders,   employees,  or
                    customers, monetarily or otherwise;

               (iii) the Executive's conviction of a felony; or

               (iv) the commission in the course of the  Executive's  employment
                    of  an  act  of   fraud,   embezzlement,   theft  or  proven
                    dishonesty,  or any other  illegal  act or  practice,  which
                    would  constitute  a felony,  (whether or not  resulting  in
                    criminal prosecution or conviction),  or any act or practice
                    which the Bank shall,  in good faith,  deem to have resulted
                    in the Executive's  becoming  unbondable under the Bank's or
                    its holding company's "banker's blanket bond".

               If a dispute  arises as to  discharge  "for  cause," such dispute
               shall be resolved by  arbitration  as set forth in this Executive
               Plan.

          E.   Death Benefit:

               Except as set forth  above,  there is no death  benefit  provided
               under this Agreement.

          F.   Disability Benefit:

               In  the  event  the  Executive  becomes  disabled  prior  to  any
               Termination  of  Service,  and  the  Executive's   employment  is
               terminated because of such disability, he shall immediately begin
               receiving the benefits in Subparagraph II (A) above. Such benefit

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               shall begin without regard to the Executive's  Normal  Retirement
               Age and the Executive  shall be one hundred percent (100%) vested
               in the entire benefit amount.

               "Disability" or "Disabled" shall mean (a) the Executive is unable
               to engage in any  substantial  gainful  activity by reason of any
               medically  determinable physical or mental impairment that can be
               expected  to  result  in death or can be  expected  to last for a
               continuous  period  of not  less  than  12  months;  or  (b)  the
               Executive is, by reason of any medically determinable physical or
               mental  impairment that can be expected to result in death or can
               be expected to last for a  continuous  period of not less than 12
               months, receiving income replacement benefits for a period of not
               less than three months under an accident and health plan covering
               employees of the Bank; or (c) the  Executive has been  determined
               to be totally disabled by the Social Security  Administration  or
               Railroad   Retirement  Board;  or  (d)  the  Executive  has  been
               determined  to  be  disabled  in  accordance  with  a  disability
               insurance  program  provided  by the Bank and in which  Executive
               participates,  provided that the definition of disability applied
               under  such  disability   insurance  program  complies  with  the
               requirements of (a) or (b) listed above.

III.     RESTRICTIONS UPON FUNDING

         The Bank shall have no obligation to set aside,  earmark or entrust any
         fund or money with which to pay its  obligations  under this  Executive
         Plan. The Executive, his beneficiary(ies), or any successor in interest
         shall be and remain  simply a general  creditor of the Bank in the same
         manner as any other  creditor  having a general  claim for  matured and
         unpaid compensation.

         The Bank reserves the absolute right, at its sole discretion, to either
         fund the  obligations  undertaken by this  Executive Plan or to refrain
         from funding the same and to determine the extent, nature and method of
         such  funding.  Should the Bank elect to fund this  Executive  Plan, in
         whole or in part, through the purchase of life insurance, mutual funds,
         disability policies or annuities, the Bank reserves the absolute right,
         in its sole discretion, to terminate such funding at any time, in whole
         or in part.  At no time shall any  Executive be deemed to have any lien
         nor right,  title or interest in or to any specific funding  investment
         or to any assets of the Bank.

         If the Bank elects to invest in a life insurance, disability or annuity
         policy upon the life of the Executive,  then the Executive shall assist
         the Bank by freely  submitting to a physical  exam and  supplying  such
         additional information necessary to obtain such insurance or annuities.

IV.      CHANGE OF CONTROL

         If the Executive suffers a Termination of Service  (Subparagraph I (D))
         within 24 months after a Change of Control  (Subparagraph  I(D)),  then

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         the  Executive  shall receive the benefits  promised in this  Executive
         Plan upon attaining Normal Retirement Age, as if the Executive had been
         continuously   employed  by  the  Bank  until  the  Executive's  Normal
         Retirement  Age.  The  Executive  will  also  remain  eligible  for all
         promised death benefits in this Executive Plan.

V.       MISCELLANEOUS

          A.   Alienability and Assignment Prohibition:

               Neither the Executive,  nor the Executive's surviving spouse, nor
               any other  beneficiary(ies)  under this Executive Plan shall have
               any power or right to transfer, assign, anticipate,  hypothecate,
               mortgage, commute, modify or otherwise encumber in advance any of
               the benefits payable  hereunder nor shall any of said benefits be
               subject to  seizure  for the  payment  of any  debts,  judgments,
               alimony or  separate  maintenance  owed by the  Executive  or the
               Executive's beneficiary(ies), nor be transferable by operation of
               law in the event of bankruptcy,  insolvency or otherwise.  In the
               event  the  Executive  or any  beneficiary  attempts  assignment,
               commutation,  hypothecation, transfer or disposal of the benefits
               hereunder,  the  Bank's  liabilities  shall  forthwith  cease and
               terminate.

          B.   Binding Obligation of the Bank and any Successor in Interest:

               This  Executive  Plan shall be binding  upon the parties  hereto,
               their    successors,    beneficiaries,    heirs   and    personal
               representatives.

          C.   Amendment or Revocation:

               It is agreed by and between the parties  hereto that,  during the
               lifetime of the Executive,  this Executive Plan may be amended or
               revoked at any time or times,  in whole or in part, by the mutual
               written consent of the Executive and the Bank.

          D.   Gender:

               Whenever in this  Executive  Plan words are used in the masculine
               or neuter  gender,  they  shall be read and  construed  as in the
               masculine,  feminine or neuter  gender,  whenever  they should so
               apply.

          E.   Effect on Other Bank Benefit Plans:

               Nothing  contained in this  Executive Plan shall affect the right
               of the Executive to participate in or be covered by any qualified
               or non-qualified pension,  profit-sharing,  group, bonus or other
               supplemental  compensation or fringe benefit plan  constituting a
               part of the Bank's existing or future compensation structure.

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          F.   Headings:

               Headings and  subheadings in this Executive Plan are inserted for
               reference and convenience  only and shall not be deemed a part of
               this Executive Plan.

          G.   Applicable Law:

               The  validity  and  interpretation  of this  Agreement  shall  be
               governed by the laws of the State of South Carolina.

          H.   12 U.S.C. Section 1828(k):

               Any payments  made to the  Executive  pursuant to this  Executive
               Plan, or  otherwise,  are subject to and  conditioned  upon their
               compliance  with 12 U.S.C.  Section  1828(k)  or any  regulations
               promulgated thereunder.

          I.   Partial Invalidity:

               If any term, provision,  covenant, or condition of this Executive
               Plan is determined  by an arbitrator or a court,  as the case may
               be, to be invalid,  void, or  unenforceable,  such  determination
               shall  not  render  any  other  term,  provision,   covenant,  or
               condition invalid, void, or unenforceable, and the Executive Plan
               shall  remain  in full  force  and  effect  notwithstanding  such
               partial invalidity.

          J.   Employment:

               No provision of this  Executive  Plan shall be deemed to restrict
               or limit any  existing  employment  agreement  by and between the
               Bank and the Executive,  nor shall any  conditions  herein create
               specific  employment  rights to the Executive nor limit the right
               of the Employer to discharge the Executive with or without cause.
               In a similar  fashion,  no provision  shall limit the Executive's
               rights to  voluntarily  sever the  Executive's  employment at any
               time.

          K.   Section 409A Savings Clause:

               Despite any contrary provision of this Amended Agreement, if when
               the  Executive's   employment   terminates  the  Executive  is  a
               "specified  employee," as defined in section 409A of the Internal
               Revenue  Code,  and  if  any  payments  or  benefits  under  this
               Agreement  will  result  in  additional  tax or  interest  to the
               Executive  because of section 409A,  the  Executive  shall not be
               entitled to the  payments or benefits  until the  earliest of (a)
               the date that is at least six  months  after  termination  of the
               Executive's  employment  for reasons  other than the  Executive's
               death, (b) the date of the Executive's  death, or (c) any earlier
               date that does not result in  additional  tax or  interest to the
               Executive  under section 409A. As promptly as possible  after the
               end of the period  during which  payments or benefits are delayed
               under this provision, the entire amount of delayed payments shall

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               be paid to  Executive  in a single lump sum.  References  in this
               Agreement to Section  409A of the  Internal  Revenue Code of 1986
               include rules,  regulations  and guidance of general  application
               issued by the Department of the Treasury under such Section 409A.

VI.      ERISA PROVISION

          A.   Named Fiduciary and Plan Administrator:

               The "Named  Fiduciary and Plan  Administrator"  of this Executive
               Plan shall be GrandSouth Bank until its resignation or removal by
               the Board.  As Named Fiduciary and Plan  Administrator,  the Bank
               shall   be   responsible   for  the   management,   control   and
               administration  of the Executive  Plan.  The Named  Fiduciary may
               delegate  to  others  certain   aspects  of  the  management  and
               operation  responsibilities  of the Executive  Plan including the
               employment of advisors and the delegation of  ministerial  duties
               to qualified individuals.

          B.   Claims Procedure and Arbitration:

               In the event a dispute  arises over benefits under this Executive
               Plan  and  benefits  are  not  paid to the  Executive  (or to the
               Executive's  beneficiary(ies)  in the  case  of  the  Executive's
               death) and such  claimants feel they are entitled to receive such
               benefits,  then a  written  claim  must  be  made  to  the  Named
               Fiduciary  and Plan  Administrator  named above within sixty (60)
               days from the date payments are refused.  The Named Fiduciary and
               Plan  Administrator  shall  review the  written  claim and if the
               claim is  denied,  in whole or in part,  they  shall  provide  in
               writing  within  sixty  (60) days of  receipt  of such  claim the
               specific reasons for such denial,  reference to the provisions of
               this  Executive  Plan  upon  which  the  denial  is based and any
               additional  material  or  information  necessary  to perfect  the
               claim.  Such written notice shall further indicate the additional
               steps to be taken by claimants  if a further  review of the claim
               denial is desired.  A claim  shall be deemed  denied if the Named
               Fiduciary and Plan  Administrator  fail to take any action within
               the aforesaid sixty-day period.

               If claimants  desire a second  review they shall notify the Named
               Fiduciary  and Plan  Administrator  in writing  within sixty (60)
               days  of the  first  claim  denial.  Claimants  may  review  this
               Executive Plan or any documents  relating  thereto and submit any
               written  issues and  comments it may feel  appropriate.  In their
               sole discretion, the Named Fiduciary and Plan Administrator shall
               then  review  the  second  claim and  provide a written  decision
               within  sixty (60) days of receipt of such claim.  This  decision
               shall  likewise  state the specific  reasons for the decision and
               shall  include  reference  to  specific  provisions  of the  Plan
               Agreement upon which the decision is based.

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               If  claimants  continue to dispute the benefit  denial based upon
               completed  performance  of this Executive Plan or the meaning and
               effect of the terms and  conditions  thereof,  then claimants may
               submit  the  dispute  to  an  arbitrator  for  final  arbitration
               pursuant  to the South  Carolina  Uniform  Arbitration  Act.  The
               parties  hereto  agree  that  they  and  their  heirs,   personal
               representatives,  successors  and  assigns  shall be bound by the
               decision  of such  arbitrator  with  respect  to any  controversy
               properly submitted to it for determination.

               Where  a  dispute  arises  as to  the  Bank's  discharge  of  the
               Executive  "for cause," such dispute shall  likewise be submitted
               to arbitration as above described and the parties hereto agree to
               be bound by the decision thereunder.

         IN  WITNESS  WHEREOF,  the  parties  hereto  acknowledge  that each has
carefully read this Amended  Agreement and executed the original  thereof on the
first day set forth hereinabove,  and that, upon execution,  each has received a
conforming copy.

                              [Signatures Omitted]

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                          BENEFICIARY DESIGNATION FORM
                         FOR THE EXECUTIVE SUPPLEMENTAL
                            RETIREMENT PLAN AGREEMENT

PRIMARY DESIGNATION:

         Name                        Address                    Relationship

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SECONDARY (CONTINGENT) DESIGNATION:

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All sums payable  under the Executive  Supplemental  Retirement  Plan  Executive
Agreement by reason of my death shall be paid to the Primary Beneficiary,  if he
or she survives me, and if no Primary  Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.

----------------------------                            ------------------------
Ronald K. Earnest                                       Date

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          THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH
                       CAROLINA UNIFORM ARBITRATION ACT.

                               AMENDED & RESTATED

                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT

Insurer:                            Massachusetts Mutual Life Insurance Company
                                    Union Central Life Insurance Company

Policy Number:                      0044375
                                    U200001333

Bank:                               GrandSouth Bank

Insured:                            Ronald K. Earnest

Relationship of Insured to Bank:    Executive

         THIS  AMENDED  AGREEMENT  is made and  entered  into  this  __th day of
_________, 2007, by and between the Bank, and Ronald K. Earnest, an Executive of
the Bank (hereinafter referred to as the "Executive").

         WHEREAS,  the  Bank and the  Executive  initially  entered  into a Life
Insurance  Endorsement Method Split Dollar Plan Agreement on September 11, 2001,
which was subsequently amended on September 13, 2007 (the "Original Agreement");

         WHEREAS, the Bank and the Executive now desire to amend and restate the
Original Agreement in compliance with the recently enacted Internal Revenue Code
Section 409A and associated federal regulations.

         NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed  in the future,  and based upon the mutual
promises and covenants  herein  contained,  the Bank and the Executive  agree to
amend and restate the Original Agreement as follows:

The  respective   rights  and  duties  of  the  Bank  and  the  Insured  in  the
above-referenced policy shall be pursuant to the terms set forth below:

I.       DEFINITIONS

         Refer to the policy  contract for the  definition  of all terms in this
Agreement.

                                       13
<PAGE>

II.      POLICY TITLE AND OWNERSHIP

         Title and  ownership  shall  reside in the Bank for its use and for the
         use of the  Insured all in  accordance  with this  Agreement.  The Bank
         alone may, to the extent of its interest,  exercise the right to borrow
         or withdraw on the policy cash  values.  Where the Bank and the Insured
         (or  assignee,  with the  consent  of the  Insured)  mutually  agree to
         exercise  the right to increase the  coverage  under the subject  Split
         Dollar policy, then, in such event, the rights,  duties and benefits of
         the parties to such increased  coverage shall continue to be subject to
         the terms of this Agreement.

III.     BENEFICIARY DESIGNATION RIGHTS

         The Insured (or assignee) shall have the right and power to designate a
         beneficiary  or  beneficiaries  to receive the  Insured's  share of the
         proceeds payable upon the death of the Insured, and to elect and change
         a payment option for such beneficiary, subject to any right or interest
         the Bank may have in such proceeds, as provided in this Agreement.

IV.      PREMIUM PAYMENT METHOD

         The Bank  shall pay an amount  equal to the  planned  premiums  and any
         other premium  payments that might become  necessary to keep the policy
         in force.

V.       TAXABLE BENEFIT

         Annually  the  Insured  will  receive  a taxable  benefit  equal to the
         assumed cost of insurance as required by the Internal  Revenue Service.
         The Bank (or its  administrator)  will report to the Insured the amount
         of imputed income each year on Form W-2 or its equivalent.

VI.      DIVISION OF DEATH PROCEEDS

         Subject to  Paragraphs  VII and IX herein,  the  division  of the death
proceeds of the policy is as follows:

         A.       Should  the  Insured  be  employed  by the  Bank and die on or
                  before  the  13th  day  of  September,   2003,  the  Insured's
                  beneficiary(ies), designated in accordance with Paragraph III,
                  shall be  entitled to an amount  equal to one hundred  percent
                  (100%) of the net-at-risk  insurance  portion of the proceeds.
                  The net-at-risk  insurance  portion is the total proceeds less
                  the cash value of the policy.

         B.       Should the Insured be employed by the Bank and die  subsequent
                  to  the   13th  day  of   September,   2003,   the   Insured's
                  beneficiary(ies), designated in accordance with Paragraph III,
                  shall be entitled to an amount equal to eighty  percent  (80%)
                  of the  net-at-risk  insurance  portion of the  proceeds.  The
                  net-at-risk  insurance  portion is the total proceeds less the
                  cash value of the policy.

         C.       Should the  Insured not be employed by the Bank at the time of
                  his  or her  death  and  die  on or  before  the  13th  day of
                  September, 2003, the Insured's beneficiary(ies), designated in
                  accordance  with  Paragraph  III,  shall  be  entitled  to the
                  percentage as set forth hereinbelow of the proceeds  described
                  in Subparagraph VI (A) above that corresponds to the number of
                  full years the Insured has been employed by the Bank since the
                  date of first employment with the Bank. Should the Insured not
                  be  employed  by the Bank at the time of his or her  death and
                  die  subsequent  to the  13th  day  of  September,  2003,  the
                  Insured's  beneficiary(ies) shall be entitled to the following
                  percentage of the proceeds  described in  Subparagraph  VI (B)
                  hereinabove:

                        Total Years
                        of Employment
                        with the Bank              Vested (to a maximum of 100%)
                        -----------------          -----------------------------

                              1-4                        25% per year

                                       14
<PAGE>

         D.       The Bank shall be entitled to the remainder of such proceeds.

         E.       The Bank and the  Insured  (or  assignees)  shall share in any
                  interest due on the death  proceeds on a pro rata basis as the
                  proceeds due each  respectively  bears to the total  proceeds,
                  excluding any such interest.

VII.     DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY

         The Bank  shall at all  times be  entitled  to an  amount  equal to the
         policy's  cash value,  as that term is defined in the policy  contract,
         less  any  policy  loans  and  unpaid  interest  or  cash   withdrawals
         previously  incurred by the Bank and any applicable  surrender charges.
         Such cash value  shall be  determined  as of the date of  surrender  or
         death as the case may be.

VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

         In the event the policy involves an endowment or annuity  element,  the
         Bank's  right  and  interest  in  any  endowment  proceeds  or  annuity
         benefits,  on expiration of the deferment  period,  shall be determined
         under the  provisions  of this  Agreement by regarding  such  endowment
         proceeds or the commuted value of such annuity benefits as the policy's
         cash  value.  Such  endowment  proceeds  or annuity  benefits  shall be
         considered to be like death proceeds for the purposes of division under
         this Agreement.

IX.      TERMINATION OF AGREEMENT

         This  Agreement  shall  terminate upon the occurrence of any one of the
following:

          A.   The Insured shall be discharged from employment with the Bank for
               cause. The term "for cause" shall mean:

               (v)  the  willful  and  continued   failure  by  the  Insured  to
                    substantially  perform his duties  (other than the Insured's
                    inability   to   perform,   with   or   without   reasonable
                    accommodation, resulting from his incapacity due to physical
                    or  mental  illness  or  impairment),  after  a  demand  for
                    substantial  performance  is  delivered  to him by the Bank,
                    which demand specifically identifies the manner in which the
                    Insured is alleged to have not  substantially  performed his
                    duties;

               (vi) the willful engaging by the Insured in misconduct (criminal,
                    immoral, or otherwise) which is materially  injurious to the
                    Bank,  its  holding  company,  or either of their  officers,
                    directors, shareholders, employees, or customers, monetarily
                    or otherwise;

               (vii) the Insured's conviction of a felony; or

               (viii) the  commission in the course of the Insured's  employment
                    of  an  act  of   fraud,   embezzlement,   theft  or  proven
                    dishonesty,  or any other  illegal  act or  practice,  which
                    would  constitute  a felony,  (whether or not  resulting  in
                    criminal prosecution or conviction),  or any act or practice
                    which the Bank shall,  in good faith,  deem to have resulted
                    in the Insured's becoming unbondable under the Bank's or its
                    holding company's "banker's blanket bond".

          B.   Surrender, lapse, or other termination of the Policy by the Bank.

                                       15
<PAGE>

          Upon  receipt  of notice  from the  Insurer of such  termination,  the
          Insured (or assignee)  shall have a fifteen (15) day option to receive
          from the Bank an absolute assignment of the policy in consideration of
          a cash payment to the Bank,  whereupon this Agreement shall terminate.
          Such cash payment referred to hereinabove shall be the greater of:

          A.   The  Bank's  share of the cash value of the policy on the date of
               such assignment, as defined in this Agreement; or

          B.   The amount of the premiums  that have been paid by the Bank prior
               to the date of such assignment.

         If, within said fifteen (15) day period,  the Insured fails to exercise
         said option,  fails to procure the entire aforestated cash payment,  or
         dies,  then the option shall  terminate  and the Insured (or  assignee)
         agrees that all of the  Insured's  rights,  interest  and claims in the
         policy  shall  terminate  as of the  date  of the  termination  of this
         Agreement.

         The Insured  expressly  agrees  that this  Agreement  shall  constitute
         sufficient  written  notice to the Insured of the  Insured's  option to
         receive an absolute assignment of the policy as set forth herein.

         Except  as  provided   above,   this  Agreement  shall  terminate  upon
         distribution of the death benefit proceeds in accordance with Paragraph
         VI above.

X.       INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

         The Insured may not, without the written consent of the Bank, assign to
         any  individual,  trust  or other  organization,  any  right,  title or
         interest in the subject policy nor any rights,  options,  privileges or
         duties created under this Agreement.

XI.      AGREEMENT BINDING UPON THE PARTIES

         This  Agreement  shall  bind the  Insured  and the Bank,  their  heirs,
         successors, personal representatives and assigns.

XII.     ERISA PROVISIONS

         The following provisions are part of this Agreement and are intended to
         meet the requirements of the Employee Retirement Income Security Act of
         1974 ("ERISA"):

          A.   Named Fiduciary and Plan Administrator.

               The "Named Fiduciary and Plan  Administrator" of this Endorsement
               Method Split Dollar  Agreement shall be GrandSouth Bank until its
               resignation  or  removal  by the  Board  of  Directors.  As Named
               Fiduciary and Plan  Administrator,  the Bank shall be responsible
               for the management,  control,  and  administration  of this Split
               Dollar  Plan as  established  herein.  The  Named  Fiduciary  may
               delegate  to  others  certain   aspects  of  the  management  and
               operation  responsibilities of the Plan, including the employment
               of  advisors  and the  delegation  of any  ministerial  duties to
               qualified individuals.

          B.   Claims Procedure and Arbitration:

               In the event a dispute  arises  over  benefits  under  this Split
               Dollar Plan and  benefits  are not paid to the Insured (or to the
               Insured's  beneficiary(ies)  in the case of the Insured's  death)
               and  such  claimants  feel  they are  entitled  to  receive  such
               benefits,  then a  written  claim  must  be  made  to  the  Named
               Fiduciary  and Plan  Administrator  named above within sixty (60)
               days from the date payments are refused.  The Named Fiduciary and

                                       16
<PAGE>

               Plan  Administrator  shall  review the  written  claim and if the
               claim is  denied,  in whole or in part,  they  shall  provide  in
               writing  within  sixty  (60) days of  receipt  of such  claim the
               specific reasons for such denial,  reference to the provisions of
               this  Split  Dollar  Plan upon  which the denial is based and any
               additional  material  or  information  necessary  to perfect  the
               claim.  Such written notice shall further indicate the additional
               steps to be taken by claimants  if a further  review of the claim
               denial is desired.  A claim  shall be deemed  denied if the Named
               Fiduciary and Plan  Administrator  fail to take any action within
               the aforesaid sixty-day period.

               If claimants  desire a second  review they shall notify the Named
               Fiduciary  and Plan  Administrator  in writing  within sixty (60)
               days of the first claim  denial.  Claimants may review this Split
               Dollar  Plan or any  documents  relating  thereto  and submit any
               written  issues and  comments it may feel  appropriate.  In their
               sole discretion, the Named Fiduciary and Plan Administrator shall
               then  review  the  second  claim and  provide a written  decision
               within  sixty (60) days of receipt of such claim.  This  decision
               shall  likewise  state the specific  reasons for the decision and
               shall  include  reference  to  specific  provisions  of the  Plan
               Agreement upon which the decision is based.

               If  claimants  continue to dispute the benefit  denial based upon
               completed  performance  of this Split  Dollar Plan or the meaning
               and effect of the terms and  conditions  thereof,  then claimants
               may submit the dispute to an  arbitrator  for final  arbitration.
               The  parties  hereto  agree that they and their  heirs,  personal
               representatives,  successors  and  assigns  shall be bound by the
               decision  of such  arbitrator  with  respect  to any  controversy
               properly submitted to it for determination.

               Where a dispute arises as to the Bank's  discharge of the Insured
               "for  cause,"  such  dispute  shall   likewise  be  submitted  to
               arbitration as above described and the parties hereto agree to be
               bound by the decision thereunder.

          C.   Funding Policy.

               The  funding  policy  for  this  Split  Dollar  Plan  shall be to
               maintain  the subject  policy in force by paying,  when due,  all
               premiums required.

          D.   Basis of Payment of Benefits.

               Direct payment by the Insurer is the basis of payment of benefits
               under this Agreement,  with those benefits in turn being based on
               the payment of premiums as provided in this Agreement.

          E.   Claim Procedures.

               Claim forms or claim  information as to the subject policy can be
               obtained by contacting  Benmark,  Inc.  (800-544-6079).  When the
               Named  Fiduciary  has a claim  which  may be  covered  under  the
               provisions described in the insurance policy, they should contact
               the office  named  above,  and they will either  complete a claim
               form  and  forward  it to an  authorized  representative  of  the
               Insurer or advise the named  Fiduciary what further  requirements
               are  necessary.  The Insurer will evaluate and make a decision as
               to  payment.  If the claim is  payable,  a benefit  check will be
               issued in accordance with the terms of this Agreement.

               In the event that a claim is not eligible  under the policy,  the
               Insurer will notify the Named Fiduciary of the denial pursuant to
               the  requirements  under  the terms of the  policy.  If the Named
               Fiduciary is dissatisfied with the denial of the claim and wishes
               to contest  such claim  denial,  they  should  contact the office
               named  above and they will  assist  in making an  inquiry  to the
               Insurer.  All  objections to the Insurer's  actions  should be in
               writing and  submitted to the office named above for  transmittal
               to the Insurer.

                                       17
<PAGE>

XIII.    GENDER

         Whenever in this  Agreement  words are used in the  masculine or neuter
         gender, they shall be read and construed as in the masculine,  feminine
         or neuter gender, whenever they should so apply.

XIV.     INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

         The  Insurer  shall not be deemed a party to this  Agreement,  but will
         respect the rights of the parties as herein developed upon receiving an
         executed  copy of this  Agreement.  Payment  or  other  performance  in
         accordance with the policy provisions shall fully discharge the Insurer
         from any and all liability.

XV.      CHANGE OF CONTROL

         A  "Change  of  Control"  of the Bank  shall be  deemed  to  have  been
         effected for purposes of this Agreement if either:

               a.   voting control over more than 50% of the stock of the Bank's
                    holding   company  (the  "Holding   Company")  is  acquired,
                    directly  or  indirectly,  by any person or group  acting in
                    concert,

               b.   The Holding  Company is merged with or into any other entity
                    and the  shareholders  of the  Holding  Company  immediately
                    before such merger own less than 50% of the combined  voting
                    control of the corporation resulting from such merger, or

               c.   voting  control  over more than 50% of the stock of the Bank
                    is acquired,  directly or indirectly, by any person or group
                    acting in concert.

         If within two years following a Change of Control,  the Bank terminates
         the Insured for any reason except for Cause or the Insured  voluntarily
         terminates  his employment for "Good Reason," then the Insured shall be
         one hundred  percent  (100%)  vested in the  benefits  promised in this
         Agreement and, therefore,  upon the death of the Insured, the Insured's
         beneficiary(ies)  (designated  in accordance  with Paragraph III) shall
         receive the death  benefit  provided  herein as if the Insured had died
         while employed by the Bank (see Subparagraphs VI (A) & (B)).

         For purposes of this Agreement,  a voluntary termination by the Insured
         shall be considered an  involuntary  termination  with "Good Reason" if
         any of the  following  occurs  without the  Insured's  advance  written
         consent:  (i) a material diminution of the Insured's base compensation;
         (ii) a material  diminution  of the  Insured's  authority,  duties,  or
         responsibilities; (iii) a material diminution in the authority, duties,
         or  responsibilities  of the supervisor to whom the Insured is required
         to report;  (iv) a  material  diminution  in the budget  over which the
         Insured  retains  authority;  (v) a material  change in the  geographic
         location at which the Insured  must perform  services for the Bank;  or
         (vi) any other action or inaction that constitutes a material breach by
         the Bank of this  Agreement.  Furthermore,  in order  to  qualify  as a
         voluntary  termination for Good Reason, the Insured must give notice to
         the Bank of the existence of one or more of the conditions described in
         (a) - (f) above  within  90 days  after the  initial  existence  of the
         condition,  and the Bank  shall have 30 days  thereafter  to remedy the
         condition.

XVI.     AMENDMENT OR REVOCATION

         It is agreed  by and  between  the  parties  hereto  that,  during  the
         lifetime of the Insured,  this  Agreement  may be amended or revoked at
         any time or times,  in whole or in part, by the mutual written  consent
         of the Insured and the Bank.

                                       18
<PAGE>

XVII.    EFFECTIVE DATE

         The Effective Date of this Agreement shall be September 13, 2001.

XVIII.   SEVERABILITY AND INTERPRETATION

         If  a  provision   of  this   Agreement   is  held  to  be  invalid  or
         unenforceable,   the  remaining   provisions   shall   nonetheless   be
         enforceable  according to their terms.  Further,  in the event that any
         provision is held to be overbroad as written,  such provision  shall be
         deemed  amended to narrow its  application  to the extent  necessary to
         make  the  provision  enforceable  according  to law  and  enforced  as
         amended.

XIX. I.R.C. SECTION 409A SAVINGS CLAUSE

         Notwithstanding any provision to the contrary contained herein, if when
         the  Insured's  employment  terminates  the  Insured  is  a  "specified
         employee," as defined in section 409A of the Internal Revenue Code, and
         if any  payments  or  benefits  under  this  Agreement  will  result in
         additional tax or interest to the Insured  because of section 409A, the
         Insured  shall not be  entitled to the  payments or benefits  until the
         earliest of (a) the date that is at least six months after  termination
         of the Insured's employment for reasons other than the Insured's death,
         (b) the date of the Insured's  death, or (c) any earlier date that does
         not result in  additional  tax or interest to the Insured under section
         409A. As promptly as possible  after the end of the period during which
         payments  or  benefits  are delayed  under this  provision,  the entire
         amount of delayed  payments shall be paid to Executive in a single lump
         sum.  References  in this  Agreement  to Section  409A of the  Internal
         Revenue Code of 1986 include rules, regulations and guidance of general
         application issued by the Department of the Treasury under such Section
         409A.

XX.      APPLICABLE LAW

         The validity and interpretation of this Agreement shall be  governed by
         the laws of the State of South Carolina.

Executed at Fountain Inn, South Carolina this 13th day of September, 2001.

                              [SIGNATURES OMITTED]

                                       19
<PAGE>

                          BENEFICIARY DESIGNATION FORM
                      FOR LIFE INSURANCE ENDORSEMENT METHOD
                           SPLIT DOLLAR PLAN AGREEMENT

PRIMARY DESIGNATION:

         Name                         Address                    Relationship

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECONDARY (CONTINGENT) DESIGNATION:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

All sums payable under the Life Insurance  Endorsement  Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary,  if he
or she survives me, and if no Primary  Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.

---------------------------------                       ------------------------
Ronald K. Earnest                                       Date

                                       20
<PAGE>

                                    AMENDMENT
                          TO THE EXECUTIVE SUPPLEMENTAL
                        RETIREMENT PLAN AGREEMENT AND THE
          LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT

This Amendment, made and entered into this ______ day of _____________, 2001, by
and between GrandSouth Bank, a Bank organized and existing under the laws of the
State of South Carolina,  hereinafter  referred to as the, "Bank", and Ronald K.
Earnest,  a Key Employee and Executive of the Bank,  hereinafter  referred to as
the, "Executive",  shall effectively amend the Executive Supplemental Retirement
Plan  Agreement  and the Life  Insurance  Endorsement  Method  Split Dollar Plan
Agreement as specifically set forth herein pursuant to said Agreements.

I.       EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT

          1.   The date of  September  11, 2001 in  Subparagraph  I (A) shall be
               changed to September 13, 2001.

          2.   The following  language shall be added to the end of Subparagraph
               I (F) of said Agreement,  "...  divided by a factor equal to 1.05
               minus the marginal tax rate."

          3.   The following life insurance policy information shall be added to
               Subparagraph I (G):

               Insurance Company:                    Massachusetts Mutual Life
                                                      Insurance Company
               Policy Form:                         Flexible Premium Adjustable
                                                      Life
               Policy Name:                         Strategic Life Executive
               Insured's Age and Sex:               47, Male
               Riders:                              None
               Ratings:                             None
               Option:                              Level
               Face Amount:                         $1,081,920
               Premiums Paid:                       $368,000
               Number of Premium Payments:          Single
               Assumed Purchase Date:               September 13,2001

               Insurance Company:                   Union Central Life Insurance
                                                      Company
               Policy Form:                         Universal Life Insurance
               Policy Name:                         COLI UL
               Insured's Age and Sex:               47, Male
               Riders:                              None
               Ratings:                             None
               Option:                              Level
               Face Amount:                         $1,060,447
               Premiums Paid:                       $368,000
               Number of Premium Payments:          Single
               Assumed Purchase Date:               September 13,2001

                                       21
<PAGE>

          4.   The date of September  11, 2003 in  Subparagraph  II (C) shall be
               changed to September 13, 2003.

II. LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT

          1.   The following life insurance policy information shall be added to
               page one (1):

         Insurer:          Massachusetts Mutual Life Insurance Company
                                    Union Central Life Insurance Company

         Policy Number:    0044375
                                    U200001333

          2.   The date of September 11, 2003 in  Subparagraphs  VI (A), (B) and
               (C) shall be changed to September 13, 2003.

          3.   The date of September 11, 2003 in Paragraph XVII shall be changed
               to September 13, 2001.

          4.   The date of September  11, 2003 in the final  execution  sentence
               shall be changed to September 13, 2001.

This Amendment shall be effective the 13th day of September, 2001. To the extent
that any  paragraph,  term, or provision of said  agreement is not  specifically
amended herein,  or in any other  amendment  thereto,  said paragraph,  term, or
provision  shall remain in full force and effect as set forth in said  September
11, 2001 Agreements.

                       (SIGNATURES OMITTED)

                                       22Exhibit 10.4

            NOTICE: THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT
                  TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT

           AMENDED NONCOMPETITION, SEVERANCE AND EMPLOYMENT AGREEMENT

         THIS AMENDED  NONCOMPETITION,  SEVERANCE AND EMPLOYMENT  AGREEMENT (the
"Agreement")  is made and entered into as of this 17th day of October,  2007, by
and  among  Ronald K.  Earnest,  an  individual  (the  "Executive"),  GrandSouth
Bancorporation,  a South Carolina corporation (the "Company"), and the Company's
wholly-owned  subsidiary,  GrandSouth  Bank, a South Carolina  corporation  (the
"Bank").

         WHEREAS,  the  Company,  the  Bank  and the  Executive  entered  into a
Noncompetition,  Severance and Employment Agreement dated as of January 18, 2006
(the "Original Agreement"); and

         WHEREAS,  the Company,  the Bank and the Executive  desire to amend the
Original Agreement in compliance with the recently enacted Internal Revenue Code
Section 409A and associated federal regulations; and

         WHEREAS,  the Boards of Directors of the Company and the Bank  continue
to  believe  that the  Executive  has been  instrumental  in the  success of the
Company and the Bank since his employment in 1998; and

         WHEREAS,  the Company  desires to continue to employ the  Executive  as
President and Chief  Operating  Officer of the Company,  and the Bank desires to
continue to employ the Executive as President and Chief Executive Officer of the
Bank; and

         WHEREAS,  the Executive is willing to continue to accept the employment
contemplated herein under the terms and conditions set forth herein.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  and  agreements   contained   herein  and  other  good  and  valuable
consideration,  the receipt of which is hereby acknowledged,  the parties hereto
agree to amend and restate the Original Agreement as follows:

         1. Employment.  Subject to the terms and conditions hereof, the Company
hereby employs the Executive and the Executive hereby accepts such employment as
the President and Chief  Operating  Officer of the Company,  and the Bank hereby
employs the Executive and the Executive  hereby  accepts such  employment as the
President  and Chief  Executive  Officer  of the Bank,  having  such  duties and
responsibilities as are set forth in Section 3 below.

         2.  Definitions.  For purposes of this  Agreement,  the following terms
shall have the meanings specified below.

                                    1 of 13
<PAGE>

                  2.1 "Change of Control" shall mean the  occurrence  during the
Term of any of the following events:

                  (a) An  acquisition  (other than directly from the Company) of
         any voting  securities of the Company (the "Voting  Securities") by any
         one  Person,  or more than one  Person  acting as a group,  immediately
         after which such Person or group has  ownership of more than 50% of the
         combined  voting  power  of  the  Company's  then  outstanding   Voting
         Securities;  provided, however, that in determining whether a Change of
         Control  has  occurred,  Voting  Securities  which  are  acquired  in a
         "Non-Control Acquisition" (as hereinafter defined) shall not constitute
         an  acquisition  which would cause a Change of Control.  A "Non-Control
         Acquisition"  shall mean an acquisition by (i) an employee benefit plan
         (or a trust  forming a part  thereof)  maintained by (x) the Company or
         (y) any corporation or other Person or group of which a majority of its
         voting  power or its  equity  securities  or equity  interest  is owned
         directly  or  indirectly  by the  Company  (a  "Subsidiary"),  (ii) the
         Company or any  Subsidiary,  or (iii) any Person or group in connection
         with a "Non-Control Transaction" (as hereinafter defined); or

                  (b) The date a majority of the individuals who, as of the date
         of this Agreement, are members of the Board of Directors of the Company
         (the  "Incumbent  Board") are replaced for any reason during any twelve
         month period;  provided,  however,  that if the election, or nomination
         for  election by the  Company's  stockholders,  of any new director was
         approved by a vote of at least a majority of the Incumbent Board,  such
         new director shall, for purposes of this Agreement,  be considered as a
         member of the Incumbent Board; or

                  (c) A merger,  consolidation or  reorganization  involving the
         Company, unless

                  (i) the stockholders of the Company,  immediately  before such
                  merger,  consolidation  or  reorganization,  own,  directly or
                  indirectly,  immediately following such merger,  consolidation
                  or reorganization,  at least a majority of the combined voting
                  power of the outstanding  voting securities of the corporation
                  resulting from such merger or consolidation or  reorganization
                  (the "Surviving Corporation"), and

                  (ii) the  individuals  who were members of the Incumbent Board
                  immediately prior to the execution of the agreement  providing
                  for such merger, consolidation or reorganization constitute at
                  least a majority of the members of the board of  directors  of
                  the Surviving Corporation.

                  (A  transaction  described  in  clauses  (c)(i) and (ii) shall
                  herein be referred to as a "Non-Control Transaction"); or

                                    2 of 13
<PAGE>

                  (d) The sale or other  disposition of all or substantially all
         of the assets of the Company to any Person  (other than a transfer to a
         related person as set forth in 26 C.F.R. 1.409A-3(i)(5)(vii)(B)) over a
         consecutive 12-month period.

                  2.2      "Cause" shall mean:

                  (a)  any  act  that  (i)  constitutes,  on  the  part  of  the
         Executive, fraud, dishonesty,  willful failure to follow the directives
         or  implement  the policies of the Board of Directors of the Company or
         the Bank,  willful  violation of any state or federal law or regulation
         applicable  to the  Company  or the Bank,  gross  malfeasance  of duty,
         conduct grossly  inappropriate to the Executive's office, or a material
         willful violation of this Agreement, and (ii) is demonstrably likely to
         lead to  material  injury to the Company or the Bank or resulted or was
         intended to result in direct or indirect gain to or personal enrichment
         of the Executive at the expense,  direct or indirect, of the Company or
         the Bank; or

                  (b) the  conviction  (from which no appeal may be or is timely
         taken) of the Executive of a felony; or

                  (c) the  suspension  or removal of the Executive by federal or
         state  banking  regulatory  authorities  acting under lawful  authority
         pursuant to provisions of federal or state law or regulation  which may
         be in effect from time to time;

         provided,  however,  that in the case of clause (a) above, such conduct
         shall not constitute Cause:

                  (i)  unless  (x)  there  shall  have  been  delivered  to  the
                  Executive a written notice setting forth with  specificity the
                  reasons that the Board of the Company or the Bank believes the
                  Executive's  conduct  meets the  criteria  set forth in clause
                  (a);  (y)  the   Executive   shall  have  been   provided  the
                  opportunity  to be heard in person by the Board of the Company
                  or the Bank, as applicable (with assistance of the Executive's
                  counsel  if the  Executive  so  desires);  and (z) after  such
                  opportunity  to be heard,  the  termination  is evidenced by a
                  resolution  adopted in good faith by two-thirds of the members
                  of the Board of the Company or the Bank, as applicable  (other
                  than the Executive); or

                  (ii) if such conduct (x) was believed by the Executive in good
                  faith to have been in, or not opposed to, the interests of the
                  Company  and the Bank,  and (y) was not  intended  to, and did
                  not,  result in the  direct or  indirect  gain to or  personal
                  enrichment of the Executive.

                  2.3  "Confidential  Information"  shall mean all  business and
other information relating to the business of the Company or the Bank, including
without  limitation,   technical  or  non-technical  data,  programs,   methods,
techniques, processes, financial data, financial plans, product plans, and lists

                                    3 of 13
<PAGE>

of actual or potential  customers,  which (a) derives economic value,  actual or
potential,   from  not  being   generally   known  to,  and  not  being  readily
ascertainable  by proper  means by,  other  Persons,  and (b) is the  subject of
efforts that are reasonable  under the  circumstances to maintain its secrecy or
confidentiality.  Such  information  and  compilations  of information  shall be
contractually  subject to protection  under this  Agreement  whether or not such
information  constitutes a trade secret and is separately  protectable at law or
in equity as a trade secret.

                  2.4 "Disability" or "Disabled" shall mean (a) the Executive is
unable to engage in any substantial  gainful activity by reason of any medically
determinable  physical  or mental  impairment  that can be expected to result in
death or can be  expected  to last for a  continuous  period of not less than 12
months;  or (b) the  Executive  is,  by  reason  of any  medically  determinable
physical or mental  impairment that can be expected to result in death or can be
expected to last for a continuous  period of not less than 12 months,  receiving
income replacement  benefits for a period of not less than three months under an
accident and health plan  covering  employees of the Company or the Bank; or (c)
the Executive has been determined to be totally  disabled by the Social Security
Administration  or Railroad  Retirement  Board;  or (d) the  Executive  has been
determined  to be disabled in  accordance  with a disability  insurance  program
provided  by the  Company  or the  Bank  and in  which  Executive  participates,
provided  that the  definition  of  disability  applied  under  such  disability
insurance program complies with the requirements of (a) or (b) listed above.

                  2.5  A  voluntary   termination  by  the  Executive  shall  be
considered an involuntary termination with "Good Reason" if any of the following
occurs,  following a Change of Control,  without the Executive's advance written
consent,  and the term "Good  Reason"  shall mean the  occurrence,  following  a
Change of  Control,  of any of the  following  without the  Executive's  advance
written consent: (a) a material diminution of the Executive's base compensation;
(b)  a  material   diminution  of  the   Executive's   authority,   duties,   or
responsibilities;  (c) a  material  diminution  in  the  authority,  duties,  or
responsibilities  of the supervisor to whom the Executive is required to report;
(d) a  material  diminution  in the  budget  over  which the  Executive  retains
authority;  (e) a  material  change  in the  geographic  location  at which  the
Executive  must perform  services for the Company or the Bank;  or (f) any other
action or inaction that constitutes a material breach by the Company or the Bank
of this  Agreement.  In order to qualify  as a  voluntary  termination  for Good
Reason,  (x) the  Executive  must give  notice to the  Company  or the Bank,  as
applicable, of the existence of one or more of the conditions described in (a) -
(f) above within 90 days after the initial  existence of the condition,  and the
Company or the Bank, as applicable,  shall have 30 days thereafter to remedy the
condition,  and (y) the  termination  of employment  must occur within 24 months
following a Change of Control.

                  2.6 "Person"  shall mean any  individual,  corporation,  bank,
partnership,   joint   venture,   association,   joint-stock   company,   trust,
unincorporated organization or other entity.

                                    4 of 13
<PAGE>

         3. Duties. During the Term hereof, the Executive shall have such duties
and  authority  as are typical of a  President  and Chief  Operating  Officer of
companies such as the Company and the Bank, including, without limitation, those
specified in the Company's and the Bank's Bylaws.  Executive  agrees that during
the Term  hereof,  he will devote his full time,  attention  and energies to the
diligent  performance of his duties.  Executive shall not, without prior written
consent of the  Company  and the Bank,  at any time  during the Term  hereof (a)
accept  employment  with,  or render  services  of a business,  professional  or
commercial nature to, any Person other than the Company and the Bank, (b) engage
in any  venture  or  activity  which the  Company  or the Bank may in good faith
consider to be competitive  with or adverse to the business of the Company,  the
Bank or of any other affiliate of the Company,  whether alone, as a partner,  or
as an officer, director,  employee or shareholder or otherwise,  except that the
ownership  of not more  than 5% of the  stock or other  equity  interest  of any
publicly  traded  corporation or other entity shall not be deemed a violation of
this  Section,  or (c)  engage in any  venture  or  activity  which the Board of
Directors  of the Company or the Bank may in good faith  consider  to  interfere
with Executive's performance of his duties hereunder.

         4. Term. Unless earlier  terminated as provided herein, the Executive's
employment  hereunder  shall be for a rolling term of three years (the  "Term"),
which commenced on the date of the Original  Agreement,  with compensation to be
effective as of the date of this  Agreement.  This Agreement  shall be deemed to
extend each day for an additional  day  automatically  and without any action on
behalf of any party hereto; provided,  however, that any party may, by notice to
the others, cause this Agreement to cease to extend automatically and, upon such
notice, the "Term" of this Agreement shall be the three years following the date
of such notice,  and this Agreement  shall terminate upon the expiration of such
Term. If no such notice is given and this  Agreement is  terminated  pursuant to
Section 5 hereof,  for the purposes of  calculating  any amounts  payable to the
Executive as a result of such termination,  the remaining Term of this Agreement
shall be deemed to be three years from the date of such termination.

         5. Termination. This Agreement may be terminated as follows:

            5.1 By the  Company or the Bank.  The Company or the Bank shall have
the right to terminate the Executive's  employment  hereunder at any time during
the Term hereof for any reason or for no reason, including,  without limitation,
(a)  for  Cause,  (b)  if the  Executive  becomes  Disabled,  or  (c)  upon  the
Executive's death.

                  5.1.1  If the  Company  or  the  Bank  terminates  Executive's
employment  under  this  Agreement  for  Cause  or as a  result  of  Executive's
Disability or death,  the Company's and the Bank's  obligations  hereunder shall
cease as of the date of  termination  without  prejudice to any vested rights to
benefits provided hereunder.

                  5.1.2  If the  Company  or  the  Bank  terminates  Executive's
employment  other  than for  Cause and  other  than as a result  of  Executive's
Disability or death,  and such termination is within 24 months after a Change of
Control, Executive shall be entitled to receive, as severance,  immediately upon

                                    5 of 13
<PAGE>

such  termination,  the compensation  and benefits  provided in Section 6 hereof
that  would  otherwise  be  payable  over the  three  years  subsequent  to such
termination.

                  5.1.3  If  the  Company  or the  Bank  terminates  Executive's
employment  other  than for  Cause and  other  than as a result  of  Executive's
Disability or death, and in the absence of a Change of Control,  Executive shall
be entitled to receive,  as severance,  immediately upon such  termination,  the
compensation  and benefits  provided in Section 6 hereof that would otherwise be
payable for the remaining Term of this Agreement.

                  5.1.4  If the  Company  or  the  Bank  terminates  Executive's
employment  other  than for  Cause and  other  than as a result  of  Executive's
Disability  or death,  (a) all rights of  Executive  pursuant to awards of share
grants or  options  granted  by the  Company or the Bank shall be deemed to have
vested and shall be released from all  conditions and  restrictions,  except for
restrictions on transfer pursuant to the Securities Act of 1933, as amended, and
(b) the  Executive  shall be deemed to be credited with service with the Company
and the Bank for such  remaining  Term for the purposes of the Company's and the
Bank's benefit  plans,  including,  without  limitation,  any  restricted  stock
agreements hereafter entered into with Executive.

                  5.1.5 For purposes of determining  severance payments pursuant
to Sections  5.1.2,  5.1.3 and 5.2.2,  (a) the amount of annual  salary shall be
deemed  to be  the  annualized  salary  being  paid  immediately  prior  to  the
termination,  (b) the annual  amount of unfixed  compensation  (such as a bonus)
shall be deemed to be equal to the average of such  compensation  over the three
year period  immediately prior to the termination,  and (c) the annual amount of
benefits  shall be deemed to be the sum of the costs to the Company and the Bank
of providing  the benefits to the  Executive  for the twelve month period ending
immediately prior to the termination.

            5.2 By  Executive.  Executive  shall have the right to terminate his
employment hereunder at any time during the Term hereof for any reason or for no
reason, including,  without limitation,  (a) voluntarily for Good Reason, or (b)
in the event of a material  breach of this Agreement by the Company or the Bank;
provided,  however,  in the event of a material  breach of this Agreement by the
Company or the Bank,  the Executive  shall have given the Bank written notice of
the breach  within 90 days thereof and the Company or the Bank shall have failed
to cure the  breach  within 30 days  after  such  notice  is given (a  "Material
Breach").

                  5.2.1 If Executive  terminates his employment  hereunder other
than for Good  Reason  and other  than as a result  of a  Material  Breach,  the
Company's and the Bank's  obligations under this Agreement shall cease as of the
date of such  termination  and, unless there shall have been a Change of Control
within the prior 24 months,  Executive  shall be subject to the  non-competition
provisions set forth in section 10 hereof.

                                    6 of 13
<PAGE>

                  5.2.2 If Executive  terminates  his  employment  hereunder for
Good Reason or as a result of a Material Breach,  Executive shall be entitled to
receive, as severance,  immediately upon such termination,  the compensation and
benefits  provided in Section 6 hereof that would  otherwise be payable over the
three years subsequent to such termination.

                  5.2.3 In addition,  in the event of such  termination for Good
Reason or as a result of a Material Breach, (a) all rights of Executive pursuant
to awards of share grants or options granted by the Company or the Bank shall be
deemed  to  have  vested  and  shall  be  released  from  all   conditions   and
restrictions, except for restrictions on transfer pursuant to the Securities Act
of 1933, as amended,  and (b) the Executive  shall be deemed to be credited with
service with the Company and the Bank for the remaining Term for the purposes of
the Company's and the Bank's benefit plans.

            5.3 Timing of Payments.  Any payments required to be made under this
Section 5 shall be made within five days after termination of employment, except
to the extent Section 21 of this Agreement applies.

            5.4   Termination   in   Anticipation   of  a  Change  of   Control.
Notwithstanding  anything  contained in this  Agreement to the contrary,  if the
Executive's  employment  is  terminated by the Company or the Bank without Cause
prior to a Change of Control and the Executive reasonably demonstrates that such
termination  (a) was at the  request  of a third  party  who  has  indicated  an
intention or taken steps reasonably calculated to effect a Change of Control and
who  effectuates a Change of Control,  or (b)  otherwise  occurred in connection
with, or in anticipation of, a Change of Control which actually occurs, then for
all  purposes  of this  Agreement,  such  termination  shall be  deemed  to be a
termination  within 24 months after a Change of Control and the date of a Change
of Control with respect to the Executive shall mean the date  immediately  prior
to the date of such termination of the Executive's employment.

         6. Compensation. In consideration of Executive's services and covenants
hereunder,  the Company or the Bank shall pay to Executive the  compensation and
benefits  described below (which  compensation  shall be paid in accordance with
the  normal  compensation  practices  of the  Company  or the Bank and  shall be
subject to such  deductions and  withholdings as are required by law or policies
of the  Company  and the Bank in  effect  from time to time,  provided  that his
salary  pursuant  to  section  6.1 shall be  payable  not less  frequently  than
monthly):

            6.1 Annual Salary.  During the Term  hereof, the Company or the Bank
shall pay to  Executive  a salary at a rate of $265,000  per annum.  Executive's
salary will be reviewed by the Board of  Directors of the Company or the Bank at
the  beginning  of each of its fiscal years and, in the sole  discretion  of the
Board of Directors of the Company or the Bank, may be increased for such year.

                                    7 of 13
<PAGE>

            6.2 Annual Incentive Bonus. During the Term hereof,  Executive shall
also be eligible for additional  performance based compensation as determined by
the Board of Directors of the Company or the Bank.

            6.3 Stock Options. During the Term hereof, the Board of Directors of
the Company may grant  Executive  options to purchase  Company  common  stock in
accordance with the terms of the Company's stock option plan.

            6.4 Other  Benefits.  Executive  shall be  entitled  to share in any
other employee benefits  generally provided by the Company and the Bank to their
most highly  ranking  executives for so long as the Company or the Bank provides
such  benefits.  The  Company or the Bank shall also  provide  Executive  with a
Company-paid automobile and reasonable club dues for one country club. Executive
shall also be entitled to participate in all other benefits  accorded  generally
to Company and Bank employees.

            6.5  Executive's  Right  To  Benefits  Absolute.  The  right  of the
Executive to receive the benefits set forth in this Agreement  shall be absolute
and not subject to any right of set-off or counterclaim  the Company or the Bank
may have against Executive.

            6.6 Discharge of Payment  Obligation.  The  Company's  obligation to
make any payments owed to the Executive under this Agreement shall be discharged
to the extent such payments are made by the Bank,  and the Bank's  obligation to
make any payments owed to the Executive under this Agreement shall be discharged
to the extent such payments are made by the Company.

         7.  Accelerated  Vesting of  Executive's  Stock  Options . Anything set
forth herein to the contrary  notwithstanding,  Executive's  stock options shall
vest  immediately  upon the  occurrence  of a  Change  of  Control,  even if the
Executive  remains  employed  with the  Company  or the Bank  after a Change  of
Control.  However,  to the extent that this Agreement is  inconsistent  with the
Company's  Stock Option Plan,  the terms of the Stock Option Plan shall control.
Moreover,  anything set forth herein to the contrary notwithstanding,  Executive
shall have a minimum of one (1) year from the date of vesting to  exercise  such
stock option rights.

         8.  Parachute  Payments.  Notwithstanding  any other  provision of this
Agreement,  if any  payment  provided  for in this  Agreement  would,  if  paid,
constitute a "golden parachute payment" as defined in 12 C.F.R. Section 359.1(f)
as in effect on the date of this Agreement, the obligation of the Company or the
Bank to make such payment shall be subject to an additional  condition  that the
circumstances  which cause the payment to be a "golden parachute  payment" shall
have ceased to exist but such payment  will become  payable in full at such time
as the  condition is met together  with  interest at the prime rate,  compounded
annually,  from the date  such  payment  would  have  been due had it not been a
"golden parachute payment" until paid.

                                    8 of 13
<PAGE>

         9. Confidentiality.

            9.1   Company   and   Bank   Confidential   Information.   Executive
acknowledges  that, prior to and during the term of this Agreement,  the Company
and the Bank have  furnished  and will furnish to  Executive,  and the Executive
will  develop  for  the  benefit  of the  Company  and  the  Bank,  Confidential
Information  which could be used by Executive  on behalf of a competitor  of the
Company  or the  Bank to the  Company's  or the  Bank's  substantial  detriment.
Executive acknowledges that Confidential Information is the sole property of the
Company  and the Bank.  In view of the  foregoing,  Executive  acknowledges  and
agrees that the restrictive covenants contained in this Agreement are reasonably
necessary to protect the Company's and the Bank's legitimate  business interests
and  goodwill.  Executive  agrees that he shall  protect the  Company's  and the
Bank's  Confidential  Information  and  shall not  disclose  to any  Person,  or
otherwise use, except in connection with his duties performed in accordance with
this Agreement, any Confidential Information;  provided, however, that Executive
may make disclosures  required by a valid order or subpoena issued by a court or
administrative agency of competent jurisdiction,  in which event Executive will,
if permitted to do so under applicable law,  promptly notify the Company and the
Bank of  such  order  or  subpoena  to  provide  the  Company  and  the  Bank an
opportunity to protect its interests.  Upon the termination or expiration of his
employment  hereunder,  the Executive  agrees to deliver promptly to the Company
and the Bank all of their respective files, customer lists,  management reports,
memoranda,  research,  forms,  financial  data and reports  and other  documents
supplied  to or  created  by him in  connection  with his  employment  hereunder
(including  all copies of the foregoing) in his possession or control and all of
the Company's  and Bank's  equipment  and other  materials in his  possession or
control.  This  provision  shall  survive  for 24  months  after  the  later  of
termination of employment of Executive with the Bank or the Company.

            9.2 Third Party Confidential Information.  Executive shall also hold
in the strictest confidence all confidential or proprietary information that the
Company  or the  Bank  has  received  from  any  third  party to which it is the
Company's  or the Bank's  obligation  to maintain  the  confidentiality  of such
information and to use it only for certain limited purposes, and Executive shall
not disclose  such  information  to any person,  firm or  corporation  or use it
except as necessary in carrying out Executive's work for the Company or the Bank
consistent with the Company's or the Bank's agreement with such third party.

         10.  Noncompetition.  In the event that Executive's employment with the
Company or the Bank is terminated before a Change of Control  voluntarily by the
Executive or by the Board of Directors for Cause,  then Executive shall not, for
a period of one (1) year following such termination of employment:

         (i)      become employed by any insured depository institution that has
                  customers or does business as follows:

                                    9 of 13
<PAGE>

                  (a)      has an  office  situated  in or an  agent  or  agents
                           regularly  working  in any city in which the Bank has
                           an  office  in which an agent or  agents  of the Bank
                           regularly work, or

                  (b)      has a significant  number of offices situated in or a
                           significant number of agents regularly working in any
                           city in which  the Bank has a  significant  number of
                           offices or in which a significant number of agents of
                           the Bank regularly work, or

                  (c)      has a significant  number of customers located in any
                           county  of  South  Carolina  where  the  Bank  has  a
                           significant number of customers, or

                  (d)      shares a  significant  number of  customers  with the
                           Bank.

         (ii)     interfere   or  attempt  to   interfere   with  any   business
                  relationship  of the Company or the Bank,  including,  without
                  limitation,  employee and customer  relationships,  whether by
                  lawful competition or otherwise; or

         (iii)    engage,  directly or  indirectly,  in any business or activity
                  which requires  Executive,  or any person or party employed by
                  him or whom he represents, to provide Confidential Information
                  or  other  data  obtained  by  Executive  as a  result  of his
                  employment with the Company or the Bank to any other person or
                  party who is then  engaged in  providing  similar  services to
                  those of the Company or the Bank for use in competing with the
                  Company or the Bank; or

         (iv)     solicit from any  customer of the Bank any business  that such
                  customer has customarily  done or contemplates  doing with the
                  Bank; or

         (v)      solicit any business  that could be done by the Company or the
                  Bank from any customer of the Bank with whom the Executive had
                  contact while employed by the Bank; or

         (vi)     solicit  any  business  on the  basis of,  or  advertise,  the
                  Executive's  former  affiliation with the Company or the Bank;
                  or

         (vii)    solicit,  encourage  or assist any other  person to solicit or
                  encourage any employee of the Company or the Bank to terminate
                  such employment; or

                                    10 of 13
<PAGE>

         (viii)   otherwise compete against the Company or the Bank, directly or
                  indirectly, whether as principal, agent, employee, or owner of
                  any entity (if the percentage or ownership  exceeds 10% of the
                  entity).

         The  parties  hereto  intend  the   geographic   areas  and  all  other
restrictions set forth herein to be completely severable and independent; if any
of the restrictions  set forth above are determined to be either  unenforceable,
or  unenforceable  in any of the geographic  areas set forth above,  the parties
intend that the  restrictions  set forth  above  shall  continue to apply to the
remaining  geographic areas set forth above and that the other  restrictions set
forth above shall continue to apply.

         In the event that  Executive's  employment is terminated for any reason
following a Change of Control (whether by the Company or the Bank or Executive),
it  is  expressly  acknowledged  that  there  shall  be  no  limitation  on  any
competitive activity of Executive, including direct competition with the Company
or the Bank or their  successors,  and neither the Company nor the Bank shall be
entitled to injunctive relief with respect to any such competitive activities of
Executive.

         11. Trust. The Company shall establish an irrevocable trust to fund the
obligations  hereunder  (which  may  be a  "rabbi  trust"  if  so  requested  by
Executive),  which trust (a) shall have as trustee an  individual  acceptable to
Executive,  (b) shall be funded  upon the  earlier of a Change of Control or the
approval of any  regulatory  application  filed by a  potential  acquiror of the
Company seeking to acquire control of the Company, (c) shall comply with Section
409A of the Internal  Revenue  Code,  and (d) shall contain such other terms and
conditions as are reasonably  necessary in Executive's  determination  to ensure
the Company's and the Bank's compliance with its obligations hereunder.

         12.  Assignment.  The parties  acknowledge that this Agreement has been
entered into due to, among other things,  the special  skills of Executive,  and
agree that this Agreement may not be assigned or  transferred  by Executive,  in
whole or in part, without the prior written consent of the Company and the Bank.

         13. Notices. All notices,  requests,  demands, and other communications
required or permitted  hereunder shall be in writing and shall be deemed to have
been duly given if delivered or seven days after mailing if mailed, first class,
certified mail postage prepaid:

To the Bank:               GrandSouth Bank
                           P.O. Box 6548
                           Greenville, S.C. 29606
                           Attn:    Chairman of the Board

To the Company:            GrandSouth Bancorporation
                           P.O. Box 6548
                           Greenville, S.C. 29606
                           Attn:    Chairman of the Board

                                    11 of 13
<PAGE>

To Executive:              Ronald K. Earnest
                           105 Kenton Court
                           Simpsonville, S.C. 29681

Any party may change the address to which notices, requests,  demands, and other
communications  shall be  delivered  or mailed by giving  notice  thereof to the
other party in the same manner provided herein.

         14.  Provisions  Severable.  If any provision or covenant,  or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable,  either  in whole  or in part,  such  invalidity,  illegality  or
unenforceability  shall not affect the validity,  legality or  enforceability of
the remaining  provisions or covenants,  or any part thereof, of this Agreement,
all of which shall remain in full force and effect.

         15.  Remedies.  (a) The Executive  acknowledges  that if he breaches or
threatens to breach his  covenants  and  agreements in Sections 9 and 10 of this
Agreement,  such actions may cause irreparable harm and damage to the Company or
the Bank which could not be compensated by monetary damages alone.  Accordingly,
if Executive  breaches or  threatens  to breach  Section 9 or Section 10 of this
Agreement,  the Company and the Bank shall be entitled to injunctive  relief, in
addition to any other rights or remedies of the Company or the Bank.

                  (b) In the event that  Executive  is  reasonably  required  to
engage  legal  counsel to defend or enforce  his rights  hereunder  against  the
Company or the Bank, Executive shall be entitled to receive from the Company his
reasonable attorney's fees and costs.

         16.  Arbitration.  Any dispute or  controversy,  other than a claim for
injunctive  relief  pursuant  to  Section  15(a)  hereof,  arising  under  or in
connection  with this Agreement  shall be settled  exclusively by arbitration in
Greenville, South Carolina, by three arbitrators in accordance with the rules of
the American Arbitration  Association then in effect. Judgment may be entered on
the arbitrators' award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of the right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this  Agreement.  The Company shall bear all
costs  and  expenses  arising  in  connection  with any  arbitration  proceeding
pursuant to this Section.

                                    12 of 13
<PAGE>

         17.  Waiver.  Failure  of  either  party  to  insist,  in one  or  more
instances,  on performance by the other in strict  accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or  relinquishment  of
any right  granted in this  Agreement or of the future  performance  of any such
term or condition or of any other term or  condition of this  Agreement,  unless
such waiver is contained in a writing signed by the party making the waiver.

         18.  Amendments  and  Modifications.  This  Agreement may be amended or
modified only by a writing signed by the parties hereto.

         19.  Governing Law. The validity and effect of this Agreement  shall be
governed  by and  construed  in  accordance  with the laws of the State of South
Carolina.

         20.  Integration.  This Agreement  represents the entire  agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral.

         21. Section 409A Savings Clause. Despite any contrary provision of this
Agreement,  if when the  Executive's  employment  terminates  the Executive is a
"specified  employee," as defined in section 409A of the Internal  Revenue Code,
and if any payments or benefits  under this  Agreement will result in additional
tax or interest to the Executive  because of section 409A,  the Executive  shall
not be entitled to the  payments or benefits  until the earliest of (a) the date
that is at least six months after termination of the Executive's  employment for
reasons other than the Executive's death, (b) the date of the Executive's death,
or (c) any earlier  date that does not result in  additional  tax or interest to
the Executive  under section 409A. As promptly as possible  after the end of the
period during which payments or benefits are delayed under this  provision,  the
entire  amount of delayed  payments  shall be paid to Executive in a single lump
sum.  References in this Agreement to Section 409A of the Internal  Revenue Code
of 1986 include rules, regulations and guidance of general application issued by
the Department of the Treasury under such Section 409A.

         IN WITNESS WHEREOF, the parties have executed this Amended Agreement as
of the day and year first above written.

                              [Signatures Omitted]

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