FIRST RELIANCE BANK
DIRECTOR RETIREMENT AGREEMENT

          This DIRECTOR RETIREMENT AGREEMENT (this Agreement) is entered into as of                             ,  2006 by and between First Reliance Bank, a South Carolina-chartered bank (the Bank), and ______________,  a director of the Bank (the Director).

          WHEREAS, to encourage the Director to remain a member of the Banks board of directors, the Bank is willing to provide retirement benefits to the Director, which the Bank will pay from its general assets, and

          WHEREAS, none of the conditions or events included in the definition of the term golden parachute payment that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar as the Bank is concerned.

          NOW THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Director and the Bank hereby agree as follows.

ARTICLE 1
DEFINITIONS

          Whenever used in this Agreement, the following words and phrases shall have the meanings specified.

          1.1      Accrual Balance means the liability that should be accrued by the Bank under generally accepted accounting principles (GAAP) to account for the Banks obligation to the Director under this Agreement, applying Accounting Principles Board Opinion No. 12, as amended by Statement of Financial Accounting Standards No. 106.  The Accrual Balance shall be calculated using a discount rate determined by the Plan Administrator, resulting in an Accrual Balance at the Normal Retirement Age that equals the present value of the normal retirement benefits.  The discount rate means the rate used by the Plan Administrator for determining the Accrual Balance.  In its sole discretion, the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according to GAAP.

          1.2      Beneficiary means each designated person, or the estate of the deceased Director, entitled to benefits, if any, upon the death of the Director, determined according to Article 4.

           1.3     Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Director completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

          1.4      Change in Control shall mean a change in control as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including