HCSB FINANCIAL CORPORATION (OTCMKTS:HCFB) Files An 8-K Termination of a Material Definitive Agreement

Item1.02. Termination of a Material Definitive Agreement

On March 23, 2017, HCSB Financial Corporation (the Company),
received notification from the Federal Reserve Bank of Richmond
(the Federal Reserve) that the Written Agreement it has been
operating under since May 9, 2011 was terminated effective March
21, 2017.

to the Written Agreement, the Company agreed, among other things,
to seek the prior written approval of the Federal Reserve Bank of
Richmond before declaring or paying any dividends, directly or
indirectly taking dividends or any other form of payment
representing a reduction in capital from Horry County State Bank,
making any distributions of interest, principal or other sums on
subordinated debentures or trust preferred securities, directly
or indirectly, incurring, increasing or guarantying any debt, and
directly or indirectly, purchasing or redeeming any shares of its
stock.

Although the Written Agreement has been terminated, certain
regulatory requirements and restrictions remain, including
prohibitions on (i) increasing or guarantying any debt, (ii)
directly or indirectly or purchasing or redeeming any shares of
its stock, and (iii) making dividend payments, each without prior
approval from the Federal Reserve..

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

On March 21, 2017, HCSB Financial Corporation (the Company) and
its wholly-owned subsidiary bank, Horry County State Bank (the
Bank) (together, the Employer) entered into amended and restated
employment agreements with Jan H. Hollar, Chief Executive Officer
of the Employer; J. Rick Patterson, Chief Operating Officer of
the Employer; W. Jack McElveen, Chief Credit Officer of the
Employer; and Jennifer W. Harris, Chief Financial Officer of the
Employer. These agreements were amended to provide the Employer
with noncompete protection in exchange for severance payments in
the event of termination of these executives without cause or
following a change in control. Also, in the case of Ms. Hollar,
the changes consolidate her existing Employment and Noncompete
agreements into the Amended and Restated Employment Agreement.
The board of directors approved the agreements on October 20,
2016 subject to the removal of both the Banks Consent Order dated
February 10, 2011 by the Federal Deposit Insurance Corporation
and the Companys Written Agreement dated May 9, 2011 by the
Federal Reserve. The Consent Order was removed on October 26,
2016.

The amended agreements for Messrs. Patterson and McElveen and Ms.
Harris provide that during the term of employment and for a
period of 12 months following termination, the executives may not
(a) compete with the Company or any of its affiliates by,
directly or indirectly, forming, serving as an organizer,
director or officer of, or consultant to, or acquiring or
maintaining more than a 1% passive investment in, a depository
financial institution or holding company therefor if such
depository institution or holding company has one or more offices
or branches located within 30 miles from the main office of the
Bank or any branch or loan production office of the Bank, subject
to certain exclusions contained in the employment agreement, (b)
solicit the Banks customers with which the executive had material
contact in connection with products and services provided by the
Bank for the purpose of providing financial services, or (c)
solicit the Banks employees or consultants. These provisions are
identical to the restrictive covenants applicable to Ms. Hollar
and currently included in her amended agreement.

The amended agreements for Messrs. Patterson and McElveen and Ms.
Harris also provide that the executives employment is terminated
by the Employer without cause prior to a change in control or
more than 12 months following a change in control, the executive
will be entitled to severance compensation of his or her then
current monthly salary for a period of 12 months, plus any bonus
earned or accrued through the date of termination. This provision
is identical to the applicable provision for Ms. Hollar included
in her amended agreement. In addition, the amended agreements for
all four executives provide that if the executives employment is
terminated by the Employer without cause within 12 months
following a change in control or by the executive for good reason
within 12 months following a change in control, the executive
will be entitled to (i) severance compensation equal to his or
her then current annual base salary multiplied by 2.99, plus any
bonus earned or accrued through the date of termination (ii)
continued participation, in accordance with the terms of the
applicable benefits plans, in the Employers group health plan to
plan continuation rules under COBRA, and (3) termination of the
restrictions on any outstanding incentive awards (including
restricted stock) granted to the executive such that the awards
will become 100% vested.

The amended agreements for all four executives include a best net
after tax compliance provision that will apply if any severance
payments are deemed to constitute excess parachute payments
within the meaning of Section 280G of the Code. The best net
after tax provision will cause the executives severance payment
to either be (i) reduced to an amount which does not trigger the
Section 280G tax or (ii) paid in full, depending on which payment
would result in the executive receiving the greatest after tax
payment. In such case, the executive would be liable for any
excise tax owed on the parachute payments, including any portion
attributable to the equity grants.

Ms. Hollars agreement has been amended to provide that she now
also serves as president in addition to chief executive officer
of the Bank and Company.

The above are summaries of the amended and restated employment
agreements and are qualified by reference in their entirety to
these agreements, which are attached hereto as Exhibits 10.1,
10.2, 10.3, and 10.4, respectively, and incorporated herein by
reference.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits.

About HCSB FINANCIAL CORPORATION (OTCMKTS:HCFB)

HCSB Financial Corporation is a holding company for Horry County State Bank (the Bank). The Bank is a state chartered bank. Its primary market includes Horry County in South Carolina and Columbus and Brunswick Counties in North Carolina. The Company’s segments include Commercial, Commercial Real Estate, Consumer and Residential. From its over eight branch locations, it offers a range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and individual retirement account (IRAs), as well as a range of non-deposit investment services. In addition, it offers a range of loan products designed for consumers, businesses and farmers. The Bank also offers other services, such as cash management services, sweep accounts, repurchase agreements, mobile banking, remote deposit capture, safe deposit boxes, travelers checks, direct deposit of payroll and social security checks, online banking and automatic drafts for various accounts.

HCSB FINANCIAL CORPORATION (OTCMKTS:HCFB) Recent Trading Information

HCSB FINANCIAL CORPORATION (OTCMKTS:HCFB) closed its last trading session 00.000 at 0.338 with 41,500 shares trading hands.