CHANGE OF CONTROL AGREEMENT

                                                                    Exhibit 10.4

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


                           CHANGE OF CONTROL AGREEMENT

         This Agreement is entered into as of this 8th day of December,   2005 by
and between   Cornerstone   Bancorp (the "Company") and Jennifer M. Champagne (the
"Executive").

         The principal purpose of this agreement is to protect Executive against
a Change in Control of the   Company   as defined in Item 1 below.   Executive   is,
however, an employee at will, and this agreement is not an employment   agreement
and shall not create for Executive any right to continued employment.

          In consideration of services   previously provided to the Company by the
Executive,   and Executive's willingness to continue employment with the Company,
the parties hereby agree as follows:

1. In the event that,   within five years after the date of this   Agreement,   any
Change of Control (as defined below) of the Company is effected,   then Executive
shall be entitled to the following benefits:

         (a) If   Executive   terminates   her   employment   with the   Company or is
         terminated   by the Company at any time within the six months   following
         the effective   date of an event listed in (i),   (ii),   (iii) or (iv) in
         the definition below, upon such termination Executive shall be entitled
         to a lump sum payment equal to one and one-half   times the   Executive's
         annual salary in effect at the date of termination.

         (b) If, however,   the amount of any lump-sum payment in (a) above, plus
         any other amount   treated as a parachute   payment under Section 280G of
         the Internal Revenue Code equals or exceeds three times the base amount
         described in Section 280G of the Internal Revenue Code, then the amount
         due hereunder shall be adjusted to have a value for purposes of Section
          280G of three times the base amount less $100.

         (c) Any amount paid pursuant to this Agreement will be deemed severance
         pay.   Executive shall not be under any duty to mitigate   damages and no
         income   received by   Executive   thereafter   shall reduce the amount due
         Executive hereunder.

         A   "Change   of   Control"   of the   Company   shall be deemed to have been
effected   for   purposes of this   agreement   if either (i) voting   control of the
Company is acquired,   directly or   indirectly,   by any person or group acting in
concert,   (ii) the   Company   is   merged   with or into any other   entity   and the
C