PERSONNEL COMMITTEE CHARTER

OF THE PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS OF

COOPERATIVE BANKSHARES, INC.

AS APPROVED BY THE AUDIT COMMITTEE ON DECEMBER 19, 2007

I PURPOSE

A. Primary purpose of the Committee is to discharge the Board’s responsibilities relating to compensation and benefits of the Company’s executive officers and director level and to oversee and approve the Company’s compensation policies and practices.

B. Committee is responsible for overseeing the development and implementation of management development plans and succession plans - to support its continued growth and the talent needed to execute long term strategies.

C. Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s proxy statement.

II ORGANIZATION AND MEMBERSHIP REQUIREMENTS

A. Committee shall be comprised of at least three independent directors

B. Members shall be appointed by the Board and shall serve until their successors are duly elected and qualified or their earlier resignation or removal

C. Majority of the members shall represent a quorum of the Committee and can act on behalf of Committee

III OPERATING PRINCIPLES

A. Communication – Committee must have regular and meaningful contact with senior management, other committee chairpersons, and other key Committee advisors.

B. Expectations and Information Needs – Committee should communicate to the CEO the expectations of the Committee.

C. Resources - Committee is authorized to access internal and external resources, retain legal, financial or other advisors. Committee shall have authority to engage compensation consultants to assist the Committee in designing, reviewing and evaluating the Company’s compensation policies and plans

D. Meeting Agendas – responsibility of the Committee Chairperson with input from Committee members and other members of the Board, senior management and outside advisors

E. Report to the Board of Directors –Committee chairperson shall report all material activities of the Committee to the Board periodically or whenever requested by the Board.

IV MEETINGS

A. Committee shall meet not less frequently than four times each year to review the performance and compensation of the executive officers and other employees of the Company

B. Committee shall maintain written minutes of its meetings, to be filed with the minutes of the meetings of the Board.

V          COMMITTEE AUTHORITY AND RESPONSIBILITIES

Committee should establish the Bank’s overall compensation strategy, philosophy and policies.

Review and approve total compensation and other terms of employment of the Company’s CEO and evaluate the CEO’s performance based on corporate performance goals and objectives. Committee should report to the Board the material components of the compensation of the CEO

Develop annual performance objectives and goals relevant to compensation for the Chief Executive Officer and evaluate the performance of the CEO based on these goals and objectives.

Develop a schedule of formal meetings with CEO, no less that four (4) times a year, to periodically evaluate performance

Committee shall review and approve, but only upon recommendation of the CEO, the total compensation and other terms of employment of all other executive officers of the Company, if not delegated to the CEO.

Review and approve all proposed incentive-based or equity-based compensation plans prior to submission to the Board for approval.

Review and approve all option grants made to the Company’s executive officers in consultation with the CEO and review and approve all guidelines for option grants made to the Company’s employees that are authorized by management.

Approve all employment, severance, or change-in-control agreements, special or supplemental benefits, or provisions including the same, applicable to executive officers.

Annually review and advise the Board concerning both regional and industry-wide compensation practices and trends to guide Bank practices.

Review and propose to the Board from time to time changes in director compensation.

Prepare an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.

Annually review the performance of the Company’s executive officers and the management development, succession plans and strategies for each officer.