NONCOMPETE AGREEMENT

THIS NONCOMPETE AGREEMENT (this "Agreement") dated as of September 18, 2009, is
by and among First National Bank of the South, N.A., a national bank (the
"Bank), its bank holding company First National Bancshares, Inc, a South
Carolina corporation (the "Company"), and J. Barry Mason, an individual and
resident of the state of South Carolina (the "Executive").

WHEREAS, Executive is presently employed as the Chief Executive Officer and
President of the Bank and the Company, having been hired to such positions on or
about the date hereof pursuant to the terms of that certain employment agreement
between the Executive, the Bank, and the Company (the "Employment Agreement")
entered into on or about the date hereof.

WHEREAS, during the course of his employment, Executive will develop
relationships with employees and customers of the Bank and the Company, which
the Bank and the Company desire to protect following the termination of the
Executive's employment with the Bank and the Company.

WHEREAS, the Executive is willing to forego his rights to compete with the Bank
for a period of one year following the termination of the Executive's employment
with the Bank and the Company for that certain consideration stated below.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth in this Agreement, and other good and valuable
consideration the receipt, mutuality and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.            Restrictive Covenants.

(a)           No Solicitation of Customers.  For a period of one year following
termination of Executive's employment with the Bank, the Executive shall not
(except on behalf of or with the prior written consent of the Bank), either
directly or indirectly, on the Executive's own behalf or in the service or on
behalf of others, (A) solicit, divert, or appropriate to or for a Competing
Business, or (B) attempt to solicit, divert, or appropriate to or for a
Competing Business, any person or entity that is or was a customer of the Bank
or any of its Affiliates on the date of termination and is located in the
Territory and with whom the Executive has had material contact.

(b)           No Recruitment of Personnel.  For a period of one year following
termination of Executive's employment with the Bank, the Executive shall not,
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or hire away, or (B) attempt to
solicit, divert, or hire away, to any Competing Business located in the
Territory, any employee of or consultant to the Bank or any of its Affiliates
engaged or experienced in the Business, regardless of whether the employee or
consultant is full-time or temporary, the employment or engagement is pursuant
to written agreement, or the employment is for a determined period or is at
will.

(c)           Non-Competition Agreement. During the Executive's employment with
the Bank, the Executive shall not (without the prior written consent of the
Bank) compete with the Bank 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 in the
Territory.  Notwithstanding the foregoing, the Executive may serve as an officer
of or consultant to a depository institution or holding company therefore even
though such institution operates one or more offices or branches in the
Territory, if the Executive's employment does not directly involve, in whole or
in part, the depository financial institution's or holding company's operations
in the Territory.

 

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(d)           Geographic Scope.  The restrictions on competition set forth in
Section 1 shall apply to the Executive's activities within the
Territory.  However, the restrictions are intended to apply only with respect to
personal activities of Executive within the Territory and shall not deemed to
apply if Executive is employed by an entity that has branch offices within the
Territory but Executive does not personally work in or have any business
contacts with persons in the Territory.

(e)           Enforceability of Covenants. Executive acknowledges that the term,
geographic area, and scope of the covenants set forth in this Agreement are
reasonable, and agrees that he will not, in any action, suit or other
proceeding, deny the reasonableness of, or assert the unreasonableness of, the
premises, consideration or scope of the covenants set forth herein.  Executive
agrees that his position as employee of the Bank, involves duties and authority
relating to all aspects of the Business and all of the Territory.  Executive
further acknowledges that complying with the provisions contained in this
Agreement will not preclude him from engaging in a lawful profession, trade or
business, or from becoming gainfully employed.  Executive and Bank agree that
Executive’s obligations under the above covenants are separate and distinct
under this Agreement, and the failure or alleged failure of the Bank to perform
its obligations under any other provisions of this Agreement shall not
constitute a defense to the enforceability of this covenant.  Executive and Bank
agree that if any portion of the foregoing covenants is deemed to be
unenforceable because the geography, time or scope of activities restricted is
deemed to be too broad, the court shall be authorized to substitute for the
overbroad term an enforceable term that will enable the enforcement of the
covenants to the maximum extent possible under applicable law.  Executive
acknowledges and agrees that any breach or threatened breach of this covenant
will result in irreparable damage and injury to the Bank and its Affiliates and
that Bank will be entitled to exercise all rights including, without limitation,
obtaining one or more temporary restraining orders, injunctive relief and other
equitable relief, including specific performance in the event of any breach or
threatened breach of this Agreement, in any federal or state court of competent
jurisdiction in South Carolina without the necessity of posting any bond or
security (all of which are waived by the Executive), and to exercise all other
rights or remedies, at law or in equity, including, without limitation, the
rights to damages.

2.             Extension of Term of Restrictions.  If the Executive violates any
of the restrictions set forth in Section 1 of this Agreement, the duration of
such restriction shall be extended by a number of days equal to the number of
days in which the Executive shall have been determined to be or shall have
admitted to being in violation of such restriction.

3.             Remedies.  The Executive acknowledges and agrees that great loss
and irreparable damage would be suffered by the Bank if the Executive should
breach or violate any of the terms or provisions of the covenants and agreements
set forth in Section 1 of this Agreement.  The Executive further acknowledges
and agrees that each of these covenants and agreements is reasonably necessary
to protect and preserve the interests of the Bank and agrees that money damages
for any breach of such provisions by the Executive are impossible to measure and
that the Executive or any of the Executive's affiliates, as the case may be,
will, to the extent permitted by law, waive in any proceeding initiated to
enforce such sections any claim or defense that an adequate remedy at law
exists.  The existence of any claim, demand, action or cause of action against
the Bank, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Bank of any of the covenants or
agreements in this Agreement; provided, however, that nothing in this Agreement
shall be deemed to deny the Executive the right to defend against this
enforcement on the basis that the Bank has no right to its enforcement under the
terms of this Agreement.  The remedies of a party provided in this Agreement are
cumulative and shall not exclude any other remedies to which any party may be
lawfully entitled under this Agreement or applicable law, and the exercise of a
remedy shall not be deemed an election excluding any other remedy (any such
claim by the other party being hereby waived).

 
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4.            Consideration.  In consideration of the foregoing covenants and
agreements of the Executive herein contained, the Bank hereby agrees to pay the
Executive an amount equal to his then current monthly base salary on the last
business day of each month for the remainder of the Term specified in the
Employment Agreement; provided however, if at any time the Bank is deemed to be
in "troubled condition" (as such term is defined by applicable regulations of
the appropriate federal banking agency), the Bank's obligations to make such
payments shall be limited to a period of twelve months following the termination
of the Executive's employment with the Bank; provided further that the Bank's
obligations to make such payments are also contingent upon the Executive not
being terminated for Cause and shall terminate immediately upon the Executive's
violation of the restrictive covenants of Section 1(a-c) of this Agreement.

5.            Certain Definitions.
 
(a)           “Affiliate” shall mean any business entity controlled by,
controlling or under common control with the Bank.

(b)           “Business” shall mean the operation of a depository financial
institution, including, without limitation, the solicitation and acceptance of
deposits of money and commercial paper, the solicitation and funding of loans
and the provision of other banking services, and any other related business
engaged in by the Bank or any of its Affiliates as of the date of termination.

(c)           “Cause” shall consist of any of (A) the commission by the
Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Company or the Bank (including
harm to its business reputation), (B) the indictment of the Executive for the
commission or perpetration by the Executive of any felony or any crime involving
dishonesty, moral turpitude or fraud, (C) the material breach by the Executive
of this Agreement that, if susceptible of cure, remains uncured ten days
following written notice to the Executive of such breach, (D) the receipt of any
form of notice, written or otherwise, that any regulatory agency having
jurisdiction over the Company or the Bank intends to (i) institute any new
formal or informal (e.g., a memorandum of understanding) regulatory action or
(ii) refuses to terminate any existing formal or informal (e.g., a memorandum of
understanding) regulatory action against the Executive or the Company or the
Bank provided that the Board of Directors determines in good faith, with the
Executive abstaining from participating in the consideration of and vote on the
matter, that the subject matter of such action involves acts or omissions by or
under the supervision of the Executive or that termination of the Executive
would materially advance the Company's or the Bank's compliance with the purpose
of the action or would materially assist the Company or the Bank in avoiding or
reducing the restrictions or adverse effects to the Company or the Bank related
to the regulatory action; (E) the exhibition by the Executive of a standard of
behavior within the scope of his employment that is materially disruptive to the
orderly conduct of the Company's or the Bank's business operations (including,
without limitation, substance abuse or sexual misconduct) to a level which, in
the Board of Directors good faith and reasonable judgment, with the Executive
abstaining from participating in the consideration of and vote on the matter, is
materially detrimental to the Company or the Bank's best interest, that, if
susceptible of cure remains uncured ten days following written notice to the
Executive of such specific inappropriate behavior; or (F) the failure of the
Executive to devote his full business time and attention to his employment as
provided under this Agreement that, if susceptible of cure, remains uncured 30
days following written notice to the Executive of such failure.

 
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(c)           “Competing Business” shall mean any business that, in whole or in
part, is the same or substantially the same as the Business.

(d)           “Territory” shall mean a radius of 40 miles from (i) the main
office of the Bank or (ii) any branch or loan production office of the Bank.

6.            Miscellaneous.

(a)           This Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.

(b)           The rights and obligations of this Agreement shall bind and inure
to the benefit of the surviving corporation in any merger or consolidation in
which the Bank is a party, or any assignee of all or substantially all of the
Bank's business and properties.  The Executive's rights and obligations under
this Agreement may not be assigned by him, except that his right to receive
payments, if any, provided under this Agreement shall pass after death to the
personal representatives of his estate.

(c)           Failure of the Bank to enforce any of the provisions of this
Agreement or any rights with respect thereto shall in no way be considered to be
a waiver of such provisions or rights, or in any way affect the validity of this
Agreement.

(d)           This Agreement may be executed in several counterparts, each of
which shall be deemed an original instrument, but all of which together shall
constitute one and the same instrument.

(e)           This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of South Carolina without giving effect to
the conflict of laws principles thereof.  Any action brought by any party to
this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of South Carolina.

(f)           Notices or other communications required or permitted hereunder
shall be in writing and sufficient if delivered personally, by facsimile
transmission, or by registered or certified mail, postage pre-paid, if to the
Bank, at the addresses set forth below (or at such other address as may be
provided hereunder), and if to the Executive, to the address set forth
underneath the Executive's signature below, and shall be deemed to have been
delivered as of the date so delivered.

The Bank:
First National Bank of the South, N.A.
 
215 N. Pine Street
 
Spartanburg, SC 29304
 
Attention:  Chairman
   
Copy to Counsel:
Nelson Mullins Riley & Scarborough LLP
 
Poinsett Plaza, Suite 9000
 
104 South Main Street
 
Greenville, SC 29601
 
Attention:  Neil E. Grayson

 
[signatures appear on following page]
 
 
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
parties, under seal, as of the date first above written.

        FIRST NATIONAL BANK OF THE SOUTH, N.A.
Attest:
                     
/s/ Kitty B. Payne
 
By:
   
/s/ C. Dan Adams
Secretary
     
Name:
C. Dan Adams
       
Title:
Chairman of the Board of Directors
           
[SEAL]
                              FIRST NATIONAL BANCSHARES, INC.
Attest:
                     
/s/ Kitty B. Payne
 
By:
   
/s/ C. Dan Adams
Secretary
     
Name:
C. Dan Adams
       
Title:
Chairman of the Board of Directors
           
[SEAL]
                     
As to the Executive, signed and sealed in the presence of:
                              /s/ J. Barry Mason           J. Barry
Mason                               [SEAL]                     Address for
Notices:                                        

 
 
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