UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934

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        Date of Report (Date of earliest event reported): January 4, 2005

                               CORNERSTONE BANCORP

Incorporated under the     Commission File No. 333-79543        I.R.S. Employer
laws of South Carolina                                        Identification No.
                                                                  57-1077978

                              1670 East Main Street

                          Easley, South Carolina 29640

                                 (864) 306-1444

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)
[ ]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)
[ ]  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))
[ ]  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))




Section 1 - Registrant's Business and Operations

Item 1.01 Entry Into a Material Definitive Agreement

On January 4, 2005, the Board of Directors  increased monthly directors' fees to
$500.00 per meeting,  and increased the monthly  meeting fee for the Chairman of
the Board to  $550.00.  Committee  fees were  increased  to $100.00  per meeting
attended in person, and decreased to $25.00 per meeting attended by telephone.

On  January 4, 2005,  the Board of  Directors  also  increased  the annual  base
compensation for J. Rodger Anthony, its Chief Executive Officer, to $142,000.00,
and increased the annual base compensation for Ben L. Garvin, its President,  to
$119,250.00.




                                   SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, hereunto duly authorized.

                                    CORNERSTONE BANCORP
                                    (Registrant)

Date: February 16, 2005              By: s/J. Rodger Anthony
                                        ----------------------------------------
                                        J. Rodger Anthony
                                        Chief Executive Officer