Exhibit 10.4

                                FIRST SOUTH BANK
                       2008 SALARY CONTINUATION AGREEMENT

         This 2008 SALARY  CONTINUATION  AGREEMENT (this "Agreement") is entered
into as of this 20th day of February,  2008,  by and between First South Bank, a
South  Carolina-chartered  bank (the "Bank"), and Barry L. Slider, its President
and Chief Executive Officer (the "Executive").

         WHEREAS,  the Executive  has  contributed  substantially  to the Bank's
success and the Bank desires that the Executive continue in its employ,

         WHEREAS, to encourage the Executive to remain an employee,  the Bank is
willing to provide to the Executive  salary  continuation  benefits payable from
the Bank's general assets,

         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, and

         WHEREAS,  the  parties  hereto  intend  that  this  Agreement  shall be
considered an unfunded arrangement  maintained primarily to provide supplemental
retirement  benefits for the  Executive,  and to be  considered a  non-qualified
benefit  plan for  purposes of the Employee  Retirement  Income  Security Act of
1974,  as  amended  ("ERISA").  The  Executive  is fully  advised  of the Bank's
financial status.

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

                                    ARTICLE 1
                                   DEFINITIONS

         1.1 "Accrual Balance" means the liability that should be accrued by the
Bank under  generally  accepted  accounting  principles  ("GAAP") for the Bank's
obligation to the Executive under this Agreement, applying Accounting Principles
Board Opinion No. 12, as amended by Statement of Financial  Accounting Standards
No. 106, and the calculation method and discount rate specified hereinafter. The
Accrual  Balance shall be calculated such that when it is credited with interest
each month the Accrual Balance at Normal Retirement Age 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.


<PAGE>

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

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

         1.4  "Change in  Control"  means 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 -

         (a) Change in ownership:  a change in ownership of First South Bancorp,
Inc.,  a  South  Carolina  corporation  of  which  the  Bank is a  wholly  owned
subsidiary,  occurs on the date any one person or group accumulates ownership of
First South  Bancorp,  Inc. stock  constituting  more than 50% of the total fair
market value or total voting power of First South Bancorp, Inc. stock,

         (b) Change in  effective  control:  (x) any one person or more than one
person acting as a group acquires  within a 12-month  period  ownership of First
South Bancorp,  Inc.  stock  possessing 30% or more of the total voting power of
First South  Bancorp,  Inc.,  or (y) a majority of First South  Bancorp,  Inc.'s
board of directors is replaced  during any  12-month  period by directors  whose
appointment  or election is not endorsed in advance by a majority of First South
Bancorp, Inc.'s board of directors, or

         (c) Change in ownership of a substantial portion of assets: a change in
ownership of a substantial portion of First South Bancorp,  Inc.'s assets occurs
if in a 12-month period any one person or more than one person acting as a group
acquires from First South Bancorp,  Inc. assets having a total gross fair market
value equal to or  exceeding  40% of the total gross fair market value of all of
First  South  Bancorp,  Inc.'s  assets  immediately  before the  acquisition  or
acquisitions. For this purpose, gross fair market value means the value of First
South  Bancorp,  Inc.'s  assets,  or the value of the assets being  disposed of,
determined without regard to any liabilities associated with the assets.

         1.5 "Code" means the Internal  Revenue  Code of 1986,  as amended,  and
rules, regulations, and guidance of general application issued thereunder by the
Department of the Treasury.

         1.6 "Disability" means, because of a medically determinable physical or
mental  impairment  that  can be  expected  to  result  in  death or that can be
expected  to last  for a  continuous  period  of at  least  12  months,  (x) the
Executive is unable to engage in any substantial  gainful  activity,  or (y) the
Executive  is  receiving  income  replacement  benefits for a period of at least
three  months  under  an  accident  and  health  plan of the  employer.  Medical
determination   of  disability  may  be  made  either  by  the  Social  Security
Administration  or by the  provider  of an  accident  or  health  plan  covering
employees of the Bank.  Upon request of the Plan  Administrator,  the  Executive
must  submit   proof  to  the  Plan   Administrator   of  the  Social   Security
Administration's or provider's determination.
<PAGE>

         1.7 "Early  Termination"  means  Separation  from Service before Normal
Retirement Age for reasons other than death,  Disability,  or  Termination  with
Cause.

         1.8 "Effective Date" means January 1, 2008.

         1.9 "Intentional," for purposes of this Agreement, no act or failure to
act on the Executive's  part shall be deemed to have been  intentional if it was
due primarily to an error in judgment or negligence. An act or failure to act on
the Executive's part shall be considered  intentional if it is not in good faith
and if it is without a reasonable belief that the action or failure to act is in
the Bank's best interests.

         1.10 "Normal Retirement Age" means the Executive's 65th birthday.

         1.11   "Plan   Administrator"   or   "Administrator"   means  the  plan
administrator described in Article 8.

         1.12 "Plan Year" means a  twelve-month  period  commencing on January 1
and ending on December 31 of each year.

         1.13  "Separation  from Service"  means the  Executive's  service as an
executive and independent  contractor to the Bank and any member of a controlled
group,  as defined in Code  section  414,  terminates  for any reason other than
because of a leave of absence approved by the Bank or the Executive's death. For
purposes of this Agreement, if there is a dispute about the employment status of
the Executive or the date of the Executive's  Separation from Service,  the Bank
shall have the sole and absolute  right to decide the dispute unless a Change in
Control shall have occurred.

         1.14  "Termination  with Cause" and "Cause" shall have the same meaning
specified in any  effective  severance or employment  agreement  existing on the
date hereof or  hereafter  entered into  between the  Executive  and the Bank or
between the  Executive and First South  Bancorp,  Inc. If the Executive is not a
party  to a  severance  or  employment  agreement  containing  a  definition  of
termination  with  cause,  Termination  with Cause means the Bank or First South
Bancorp, Inc. terminates the Executive's employment because of -

         (a) the  Executive's  gross  negligence  or gross  neglect of duties or
intentional  and material  failure to perform stated duties after written notice
thereof, or

         (b)  disloyalty or dishonesty  by the Executive in the  performance  of
duties, or a breach of the Executive's  fiduciary duties for personal profit, in
any case whether in the Executive's capacity as a director or officer, or

         (c)  intentional  wrongful  damage by the  Executive to the business or
property  of the  Bank  or its  affiliates,  including  without  limitation  the
reputation of the Bank,  which in the judgement of the Bank causes material harm
to the Bank or affiliates, or


<PAGE>

         (d) a willful  violation  by the  Executive  of any  applicable  law or
significant  policy of the Bank or an affiliate  that, in the Bank's  judgement,
results in an adverse effect on the Bank or the affiliate, regardless of whether
the violation leads to criminal prosecution or conviction.  For purposes of this
Agreement applicable laws include any statute, rule, regulatory order, statement
of policy, or final  cease-and-desist  order of any governmental  agency or body
having regulatory authority over the Bank, or

         (e)  an  intentional  act  of  fraud,  embezzlement,  or  theft  by the
Executive in the course of employment, or

         (f) the  occurrence  of any event that results in the  Executive  being
excluded from coverage, or having coverage limited for the Executive as compared
to other executives of the Bank, under the Bank's blanket bond or other fidelity
or insurance policy covering its directors, officers, or employees, or

         (g) removal of the Executive  from office or permanent  prohibition  of
the Executive from  participating in the Bank's affairs by an order issued under
section  8(e)(4) or section  8(g)(1) of the Federal  Deposit  Insurance  Act, 12
U.S.C. 1818(e)(4) or (g)(1), or

         (h)  conviction  of the Executive for or plea of no contest to a felony
or  conviction  of or  plea  of no  contest  to a  misdemeanor  involving  moral
turpitude,  or the actual  incarceration of the Executive for seven  consecutive
days or more.

                                    ARTICLE 2
                                LIFETIME BENEFITS

         2.1 Normal  Retirement.  Unless  Separation from Service or a Change in
Control occurs before Normal  Retirement Age, when the Executive  attains Normal
Retirement Age the Bank shall pay to the Executive the benefit described in this
section  2.1  instead  of  any  other  benefit  under  this  Agreement.  If  the
Executive's Separation from Service thereafter is a Termination with Cause or if
this Agreement terminates under Article 5, no further benefits shall be paid.

          2.1.1 Amount of benefit.  The annual benefit under this section 2.1 is
          $180,000.

          2.1.2 Payment of benefit.  Beginning with the month  immediately after
          the month in which the Executive  attains Normal  Retirement  Age, the
          Bank shall pay the annual  benefit to the  Executive in equal  monthly
          installments on the first day of each month.  The annual benefit shall
          be paid to the Executive for the Executive's lifetime.

         2.2 Early  Termination.  Unless the  Executive  shall have received the
benefit under section 2.4 after a Change in Control,  upon Early Termination the
Bank shall pay to the  Executive  the  benefit  described  in this  section  2.2
instead of any other benefit under this Agreement.

<PAGE>

         2.2.1 Amount of benefit.  The annual  benefit under this section 2.2 is
         calculated  as the amount  that fully  amortizes  the  Accrual  Balance
         existing at the end of the month immediately  before the month in which
         Separation  from Service  occurs,  amortizing that Accrual Balance over
         the period  beginning with the  Executive's  Normal  Retirement Age and
         taking into account interest at the discount rate or rates  established
         by the Plan Administrator.

         2.2.2 Payment of benefit.  Beginning  with the later of (x) the seventh
         month after the month in which the Executive's  Separation from Service
         occurs,  or (y) the  month  immediately  after  the  month in which the
         Executive  attains Normal Retirement Age, the Bank shall pay the annual
         benefit to the Executive in equal monthly installments on the first day
         of each month.  The annual  benefit  shall be paid to the Executive for
         the Executive's lifetime.

         2.3  Disability.  Unless the Executive  shall have received the benefit
under  section  2.4 after a Change in  Control,  upon  Separation  from  Service
because of  Disability  before Normal  Retirement  Age the Bank shall pay to the
Executive the benefit described in this section 2.3 instead of any other benefit
under this Agreement.

         2.3.1 Amount of benefit.  The annual  benefit under this section 2.3 is
         calculated  as the amount  that fully  amortizes  the  Accrual  Balance
         existing at the end of the month immediately  before the month in which
         Separation  from Service  occurs,  amortizing that Accrual Balance over
         the period  beginning with the  Executive's  Normal  Retirement Age and
         taking into account interest at the discount rate or rates  established
         by the Plan Administrator.

         2.3.2 Payment of benefit.  Beginning  with the later of (x) the seventh
         month after the month in which the Executive's  Separation from Service
         occurs,  or (y) the  month  immediately  after  the  month in which the
         Executive  attains Normal Retirement Age, the Bank shall pay the annual
         benefit to the Executive in equal monthly installments on the first day
         of each month.  The annual  benefit  shall be paid to the Executive for
         the Executive's lifetime.

         2.4 Change in  Control.  If a Change in Control  occurs both before the
Executive's  Normal  Retirement Age and before the  Executive's  Separation from
Service,  the Bank shall pay to the  Executive  the  benefit  described  in this
section 2.4 instead of any other benefit under this Agreement.

         2.4.1  Amount of  benefit.  The benefit  under this  section 2.4 is the
         Normal  Retirement Age Accrual Balance required by section 2.1, without
         discount for the time value of money.

         2.4.2  Payment of benefit.  The Bank shall pay the  benefit  under this
         section 2.4 to the  Executive  in a single  lump sum within  three days
         after the Change in  Control.  If the  Executive  receives  the benefit
         under  this  section  2.4  because  of the  occurrence  of a Change  in
         Control,  the  Executive  shall  not be  entitled  to claim  additional
         benefits  under section 2.4 if an additional  Change in Control  occurs
         thereafter.


<PAGE>

         2.5 Lump-sum Payment of Normal  Retirement  Benefit,  Early Termination
Benefit,  or Disability  Benefit  Being Paid to the  Executive  when a Change in
Control  Occurs.  If when a Change in Control  occurs the Executive is receiving
the benefit under section 2.1, the Bank shall pay the remaining  benefits to the
Executive in a single lump sum within three days after the Change in Control. If
when a Change in Control  occurs the  Executive  is  receiving or is entitled at
Normal Retirement Age to receive the benefit under sections 2.2 or 2.3, the Bank
shall pay the  remaining  salary  continuation  benefits to the  Executive  in a
single lump sum within  three days after the later of (x) the date of the Change
in Control or (y) the first day of the  seventh  month  after the month in which
the Executive's  Separation from Service occurs. The lump-sum payment due to the
Executive  as a result of a Change in  Control  shall be an amount  equal to the
Accrual Balance amount  corresponding to the particular  benefit when the Change
in Control occurs.

         2.6  Annual  Benefit  Statement.  Within 120 days after the end of each
Plan Year the Plan  Administrator  shall  provide or cause to be provided to the
Executive an annual benefit  statement  showing  benefits payable or potentially
payable to the Executive  under this  Agreement.  Each annual benefit  statement
shall  supersede the previous  year's annual  benefit  statement.  If there is a
contradiction between this Agreement and the annual benefit statement concerning
the  amount of a  particular  benefit  payable  or  potentially  payable  to the
Executive  under  sections  2.2,  2.3, or 2.4 hereof,  the amount of the benefit
determined under this Agreement shall control.

         2.7 Savings  Clause  Relating to  Compliance  with Code  Section  409A.
Despite  any  contrary  provision  of this  Agreement,  if when the  Executive's
employment  terminates the Executive is a specified employee, as defined in Code
section 409A,  and if any payments under Article 2 of this Agreement will result
in  additional  tax or interest to the Executive  because of section  409A,  the
Executive  shall  not be  entitled  to the  payments  under  Article 2 until the
earliest of (x) the date that is at least six months  after  termination  of the
Executive's  employment for reasons other than the  Executive's  death,  (y) the
date of the  Executive's  death, or (z) any earlier date that does not result in
additional tax or interest to the Executive under section 409A. If any provision
of this  Agreement  would subject the  Executive to  additional  tax or interest
under section 409A, the Bank shall reform the provision. However, the Bank shall
maintain to the maximum extent practicable the original intent of the applicable
provision  without  subjecting the Executive to additional tax or interest,  and
the Bank shall not be required to incur any additional compensation expense as a
result of the reformed provision.

         2.8  One  Benefit  Only.  Despite  anything  to the  contrary  in  this
Agreement,  the Executive and Beneficiary are entitled to one benefit only under
this  Agreement,  which shall be  determined by the first event to occur that is
dealt with by this  Agreement.  Except as  provided in section 2.5 or Article 3,
subsequent  occurrence of events dealt with by this Agreement  shall not entitle
the  Executive  or  Beneficiary  to  other or  additional  benefits  under  this
Agreement.

<PAGE>

                                    ARTICLE 3
                                 DEATH BENEFITS

         3.1 Death Before Separation from Service. Except as provided in Article
5, if the Executive  dies before  Separation  from Service,  at the  Executive's
death the Executive's  Beneficiary  shall be entitled to an amount in cash equal
to  the  Accrual  Balance  existing  at  the  Executive's   death,   unless  the
Change-in-Control  benefit shall have been paid to the  Executive  under section
2.4 or unless a Change-in-Control  payout shall have occurred under section 2.5.
No benefit shall be paid if the  Change-in-Control  benefit shall have been paid
to the Executive under section 2.4 or if a  Change-in-Control  payout shall have
occurred  under  section  2.5.  If a  benefit  is  payable  to  the  Executive's
Beneficiary,  the  benefit  shall be paid in a single lump sum 90 days after the
Executive's  death.  However,  no benefits under this Agreement shall be paid or
payable to the Executive or the  Executive's  Beneficiary  if this  Agreement is
terminated under Article 5.

         3.2 Death after  Separation  from Service.  If the Executive dies after
Separation  from Service and if  Separation  from Service was not a  Termination
with  Cause,  at the  Executive's  death the  Executive's  Beneficiary  shall be
entitled  to an amount in cash equal to the  Accrual  Balance  remaining  at the
Executive's death, unless the Change-in-Control  benefit shall have been paid to
the Executive under section 2.4 or unless a Change-in-Control  payout shall have
occurred  under section 2.5. No benefit  shall be paid if the  Change-in-Control
benefit  shall  have  been  paid  to the  Executive  under  section  2.4 or if a
Change-in-Control  payout shall have occurred under section 2.5. If a benefit is
payable to the  Executive's  Beneficiary,  the benefit shall be paid in a single
lump sum 90 days after the Executive's  death.  However,  no benefits under this
Agreement  shall  be  paid  or  payable  to the  Executive  or  the  Executive's
Beneficiary if this Agreement is terminated under Article 5.

                                    ARTICLE 4
                                  BENEFICIARIES

         4.1 Beneficiary Designations. The Executive shall have the right at any
time to  designate a  Beneficiary  to receive any  benefits  payable  under this
Agreement  at the  Executive's  death.  The  Beneficiary  designated  under this
Agreement may be the same as or different from the beneficiary designation under
any other benefit plan of the Bank in which the Executive participates.

         4.2 Beneficiary  Designation:  Change.  The Executive shall designate a
Beneficiary  by  completing  and signing the  Beneficiary  Designation  Form and
delivering it to the Plan Administrator or its designated agent. The Executive's
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases  the Executive or if the Executive names a spouse as Beneficiary and
the marriage is  subsequently  dissolved.  The Executive shall have the right to
change a Beneficiary by completing,  signing,  and otherwise  complying with the
terms of the Beneficiary Designation Form and the Plan Administrator's rules and
procedures,  as in effect  from time to time.  Upon the  acceptance  by the Plan
Administrator   of  a  new   Beneficiary   Designation   Form,  all  Beneficiary
designations  previously filed shall be cancelled.  The Plan Administrator shall

<PAGE>

be  entitled  to rely on the  last  Beneficiary  Designation  Form  filed by the
Executive and accepted by the Plan Administrator before the Executive's death.

         4.3  Acknowledgment.  No  designation  or  change in  designation  of a
Beneficiary  shall be effective until received,  accepted,  and  acknowledged in
writing by the Plan Administrator or its designated agent.

         4.4 No Beneficiary  Designation.  If the Executive dies without a valid
beneficiary  designation  or if  all  designated  Beneficiaries  predecease  the
Executive,  the Executive's spouse shall be the designated  Beneficiary.  If the
Executive has no surviving  spouse the benefits shall be paid to the Executive's
estate.

         4.5  Facility  of  Payment.  If a benefit is  payable to a minor,  to a
person  declared  incapacitated,  or  to a  person  incapable  of  handling  the
disposition  of his or her  property,  the  Bank  may  pay  the  benefit  to the
guardian,  legal  representative,  or person  having  the care or custody of the
minor,  incapacitated person, or incapable person. The Bank may require proof of
incapacity,  minority,  or  guardianship  as  it  may  deem  appropriate  before
distribution of the benefit.  Distribution  shall completely  discharge the Bank
from all liability for the benefit.

                                    ARTICLE 5
                               GENERAL LIMITATIONS

         5.1  Termination  with Cause.  Despite any  contrary  provision of this
Agreement,  the Bank shall not pay any  benefit  under this  Agreement  and this
Agreement  shall  terminate if  Separation  from Service is a  Termination  with
Cause.

         5.2  Suicide  or  Misstatement.  No  benefits  shall be paid under this
Agreement if the Executive  commits  suicide  within two years after the date of
this Agreement or if the Executive  makes any material  misstatement  of fact on
any  application  or  resume  provided  to the  Bank or on any  application  for
benefits provided by the Bank.

         5.3 Removal.  If the  Executive  is removed from office or  permanently
prohibited  from  participating  in the Bank's  affairs by an order issued under
section  8(e)(4)  or (g)(1) of the  Federal  Deposit  Insurance  Act,  12 U.S.C.
1818(e)(4) or (g)(1),  all  obligations of the Bank under this  Agreement  shall
terminate as of the effective date of the order.

         5.4 Default.  Despite any contrary provision of this Agreement,  if the
Bank is in  "default"  or "in danger of  default," as those terms are defined in
section  3(x) of the  Federal  Deposit  Insurance  Act, 12 U.S.C.  1813(x),  all
obligations under this Agreement shall terminate.

         5.5 FDIC Open-Bank  Assistance.  All  obligations  under this Agreement
shall  terminate,  except to the  extent  determined  that  continuation  of the
contract is necessary for the continued  operation of the Bank, when the Federal
Deposit Insurance  Corporation enters into an agreement to provide assistance to
or on behalf of the Bank  under  the  authority  contained  in  Federal  Deposit
Insurance Act section 13(c). 12 U.S.C. 1823(c).  Rights of the parties that have
already vested shall not be affected by such action, however.


<PAGE>

                                    ARTICLE 6
                          CLAIMS AND REVIEW PROCEDURES

         6.1 Claims Procedure. A person or beneficiary  ("claimant") who has not
received  benefits under this  Agreement that he or she believes  should be paid
shall make a claim for such benefits as follows -

         6.1.1  Initiation - written  claim.  The claimant  initiates a claim by
         submitting to the  Administrator  a written claim for the benefits.  If
         the claim relates to the contents of a notice received by the claimant,
         the claim must be made within 60 days after the notice was  received by
         the  claimant.  All other claims must be made within 180 days after the
         date of the event that caused the claim to arise.  The claim must state
         with particularity the determination desired by the claimant.

         6.1.2 Timing of Bank  response.  The Bank shall respond to the claimant
         within 90 days after  receiving the claim.  If the Bank determines that
         special circumstances require additional time for processing the claim,
         the Bank may extend the  response  period by an  additional  90 days by
         notifying the claimant in writing  before the end of the initial 90-day
         period that an additional  period is required.  The notice of extension
         must  state the  special  circumstances  and the date by which the Bank
         expects to render its decision.

         6.1.3 Notice of decision.  If the Bank denies part or all of the claim,
         the Bank shall notify the  claimant in writing of the denial.  The Bank
         shall write the notification in a manner calculated to be understood by
         the claimant. The notification shall set forth -

                  6.1.3.1  the specific reasons for the denial,
                  6.1.3.2  a  reference  to  the  specific   provisions  of  the
                           Agreement on which the denial is based,
                  6.1.3.3  a  description  of  any  additional   information  or
                           material  necessary  for the  claimant to perfect the
                           claim and an explanation of why it is needed,
                  6.1.3.4  an explanation of the Agreement's  review  procedures
                           and the time limits  applicable  to such  procedures,
                           and
                  6.1.3.5  a statement of the claimant's  right to bring a civil
                           action  under  ERISA  section  502(a)   following  an
                           adverse benefit determination on review.

         6.2 Review Procedure.  If the Bank denies part or all of the claim, the
claimant  shall have the  opportunity  for a full and fair review by the Bank of
the denial, as follows -

         6.2.1  Initiation  - written  request.  To  initiate  the  review,  the
         claimant,  within 60 days after  receiving the Bank's notice of denial,
         must file with the Bank a written request for review.


<PAGE>

         6.2.2 Additional  submissions - information  access. The claimant shall
         then  have the  opportunity  to  submit  written  comments,  documents,
         records,  and other  information  relating to the claim. The Bank shall
         also provide the claimant, upon request and free of charge,  reasonable
         access to and copies of all documents,  records,  and other information
         relevant (as defined in applicable ERISA regulations) to the claimant's
         claim for benefits.

         6.2.3  Considerations  on review.  In considering the review,  the Bank
         shall take into  account all  materials  and  information  the claimant
         submits   relating  to  the  claim,   without  regard  to  whether  the
         information   was  submitted  or  considered  in  the  initial  benefit
         determination.

         6.2.4 Timing of Bank response. The Bank shall respond in writing to the
         claimant within 60 days after receiving the request for review.  If the
         Bank determines that special  circumstances require additional time for
         processing  the claim,  the Bank may extend the  response  period by an
         additional 60 days by notifying the claimant in writing  before the end
         of the initial 60-day period that an additional period is required. The
         notice of extension must state the special  circumstances  and the date
         by which the Bank expects to render its decision.

         6.2.5 Notice of decision. The Bank shall notify the claimant in writing
         of its decision on review.  The Bank shall write the  notification in a
         manner  calculated to be understood by the claimant.  The  notification
         shall set forth -

                  6.2.5.1  the specific reason for the denial,

                  6.2.5.2  a  reference  to  the  specific   provisions  of  the
                           Agreement on which the denial is based,

                  6.2.5.3  a statement that the claimant is entitled to receive,
                           upon request and free of charge, reasonable access to
                           and  copies  of all  documents,  records,  and  other
                           information  relevant (as defined in applicable ERISA
                           regulations)  to the  claimant's  claim for benefits,
                           and

                  6.2.5.4  a statement of the claimant's  right to bring a civil
                           action under ERISA section 502(a).

                                    ARTICLE 7
                                  MISCELLANEOUS

         7.1 Amendments and Termination. Subject to section 7.13, this Agreement
may be  amended  solely  by a  written  agreement  signed by the Bank and by the
Executive,  and except for termination  occurring under Article 5 this Agreement
may be terminated  solely by a written  agreement  signed by the Bank and by the
Executive.

         7.2 Binding Effect. This Agreement shall bind the Executive,  the Bank,
and their beneficiaries,  survivors, executors, successors,  administrators, and
transferees.

         7.3 No Guarantee of  Employment.  This  Agreement is not an  employment
policy  or  contract.  It does not give the  Executive  the  right to  remain an

<PAGE>

employee of the Bank nor does it  interfere  with the Bank's  right to discharge
the  Executive.  It also does not require the Executive to remain an employee or
interfere with the Executive's right to terminate employment at any time.

         7.4 Non-Transferability. Benefits under this Agreement may not be sold,
transferred, assigned, pledged, attached, or encumbered.

         7.5 Successors;  Binding Agreement.  By an assumption agreement in form
and  substance  satisfactory  to the  Executive,  the  Bank  shall  require  any
successor (whether direct or indirect, by purchase,  merger,  consolidation,  or
otherwise) to all or substantially  all of the business or assets of the Bank to
expressly  assume and agree to perform this  Agreement in the same manner and to
the same extent that the Bank would be required to perform this Agreement had no
succession occurred.

         7.6 Tax  Withholding.  The  Bank  shall  withhold  any  taxes  that are
required to be withheld from the benefits provided under this Agreement.

         7.7 Applicable  Law. This Agreement and all rights  hereunder  shall be
governed  by the laws of the  State  of South  Carolina,  except  to the  extent
preempted by the laws of the United States of America.

         7.8 Unfunded  Arrangement.  The Executive and  Beneficiary  are general
unsecured  creditors  of the  Bank  for  the  payment  of  benefits  under  this
Agreement.  The benefits represent the mere promise by the Bank to pay benefits.
Rights to benefits are not subject to anticipation,  alienation, sale, transfer,
assignment,  pledge,  encumbrance,  attachment, or garnishment by creditors. Any
insurance on the  Executive's  life is a general  asset of the Bank to which the
Executive and Beneficiary have no preferred or secured claim.

         7.9 Entire Agreement.  This Agreement  constitutes the entire agreement
between the Bank and the Executive  concerning the subject matter. No rights are
granted to the Executive under this Agreement other than those  specifically set
forth.

         7.10 Severability.  If any provision of this Agreement is held invalid,
such invalidity  shall not affect any other provision of this Agreement not held
invalid,  and each such other  provision shall continue in full force and effect
to the full extent  consistent  with law. If any provision of this  Agreement is
held  invalid in part,  such  invalidity  shall not affect the  remainder of the
provision not held invalid,  and the remainder of such  provision  together with
all other  provisions of this Agreement  shall continue in full force and effect
to the full extent consistent with law.

         7.11 Headings.  Caption  headings and  subheadings  herein are included
solely  for  convenience  of  reference  and shall not  affect  the  meaning  or
interpretation of any provision of this Agreement.

         7.12 Notices. All notices, requests,  demands, and other communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
delivered  by hand or mailed,  certified  or  registered  mail,  return  receipt

<PAGE>

requested,  with postage  prepaid,  to the following  addresses or to such other
address as either party may designate by like notice.  Unless otherwise  changed
by notice,  notice shall be properly  addressed to the Executive if addressed to
the address of the Executive on the books and records of the Bank at the time of
the delivery of such notice,  and properly addressed to the Bank if addressed to
the Board of  Directors,  First  South Bank,  1450 John B. White Sr.  Boulevard,
Spartanburg, South Carolina 29306.

         7.13  Termination or  Modification  of Agreement  Because of Changes in
Law,  Rules,  or  Regulations.  The Bank is entering into this  Agreement on the
assumption that certain existing tax laws,  rules, and regulations will continue
in effect in their current form. If that assumption  materially  changes and the
change has a material  detrimental  effect on this Agreement,  the Bank reserves
the  right to  terminate  or  modify  this  Agreement  accordingly,  subject  to
obtaining the written consent of the Executive,  which shall not be unreasonably
withheld.  This section 7.13 shall  become null and void  effective  immediately
upon a Change in Control.

         7.14 Payment of Legal Fees after a Change in Control  Occurs.  The Bank
is aware  that after a Change in Control  management  could  cause or attempt to
cause the Bank to refuse to comply with the obligations under this Agreement, or
could  institute or cause or attempt to cause the Bank to  institute  litigation
seeking to have this Agreement declared unenforceable,  or could take or attempt
to take other  action to deny the  Executive  the benefits  intended  under this
Agreement.  In  these  circumstances  the  purpose  of this  Agreement  would be
frustrated.  The Bank  desires that the  Executive  not be required to incur the
expenses associated with the enforcement of rights under this Agreement, whether
by litigation or other legal action,  because the cost and expense thereof would
substantially  detract from the benefits intended to be granted to the Executive
hereunder.  The Bank  desires  that the  Executive  not be forced  to  negotiate
settlement of rights under this  Agreement  under threat of incurring  expenses.
Accordingly,  if after a Change in Control  occurs it  appears to the  Executive
that (x) the Bank has failed to comply  with any of its  obligations  under this
Agreement,  or (y) the Bank or any other  person has taken any action to declare
this  Agreement  void or  unenforceable,  or instituted  any litigation or other
legal action  designed to deny,  diminish,  or to recover from the Executive the
benefits  intended  to  be  provided  to  the  Executive  hereunder,   the  Bank
irrevocably  authorizes the Executive from time to time to retain counsel of the
Executive's  choice,  at the Bank's expense as provided in this section 7.14, to
represent the Executive in the  initiation or defense of any litigation or other
legal  action,  whether  by or  against  the  Bank  or  any  director,  officer,
stockholder,  or other person  affiliated  with the Bank,  in any  jurisdiction.
Despite any existing or previous  attorney-client  relationship between the Bank
and any  counsel  chosen by the  Executive  under this  section  7.14,  the Bank
irrevocably   consents  to  the  Executive   entering  into  an  attorney-client
relationship  with that  counsel,  and the Bank and the  Executive  agree that a
confidential  relationship  shall exist  between the Executive and that counsel.
The fees and expenses of counsel  selected from time to time by the Executive as
provided in this section  shall be paid or  reimbursed  to the  Executive by the
Bank on a  regular,  periodic  basis upon  presentation  by the  Executive  of a
statement  or  statements  prepared  by counsel  in  accordance  with  counsel's
customary practices, up to a maximum aggregate amount of $500,000,  whether suit
be brought or not and whether or not incurred in trial, bankruptcy, or appellate
proceedings. The Bank's obligation to pay the Executive's legal fees provided by
this  section  7.14  operates  separately  from and in addition to any legal fee

<PAGE>

reimbursement obligation the Bank may have with the Executive under any separate
severance, employment, salary continuation, or other agreement. Despite anything
in this  Agreement to the contrary,  however,  the Bank shall not be required to
pay or  reimburse  the  Executive's  legal  expenses  if doing so would  violate
section 18(k) of the Federal Deposit Insurance Act [12 U.S.C.  1828(k)] and Rule
359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3].

         7.15  Internal  Revenue  Code  Section  280G Gross Up.  (a)  Additional
payment to account for Excise Taxes. If as the result of a Change in Control the
Executive  becomes  entitled to acceleration of benefits under this Agreement or
under  any  other  plan or  agreement  of or  with  the  Bank or its  affiliates
(together,  the  "Total  Benefits"),  and if any of the Total  Benefits  will be
subject  to the  Excise  Tax as set  forth in Code  sections  280G and 4999 (the
"Excise  Tax"),  the Bank shall pay to the Executive  the  following  additional
amounts,  consisting  of (x) a payment  equal to the Excise  Tax  payable by the
Executive  on the Total  Benefits  under  Code  section  4999 (the  "Excise  Tax
Payment"), and (y) a payment equal to the amount necessary to provide the Excise
Tax  Payment  net of  all  income,  payroll  and  excise  taxes.  Together,  the
additional  amounts  described  in clauses  (x) and (y) are  referred to in this
Agreement as the "Gross-Up Payment Amount."

         Calculating the Excise Tax. For purposes of determining  whether any of
the Total  Benefits  will be  subject  to the  Excise  Tax and for  purposes  of
determining the amount of the Excise Tax,

         1)       Determination  of "parachute  payments"  subject to the Excise
                  Tax: any other payments or benefits received or to be received
                  by the Executive in connection with a Change in Control or the
                  Executive's  Separation from Service  (whether under the terms
                  of this Agreement or any other  agreement or any other benefit
                  plan or arrangement with the Bank, First South Bancorp,  Inc.,
                  any person whose actions result in a Change in Control, or any
                  person affiliated with the Bank, First South Bancorp, Inc., or
                  such person) shall be treated as "parachute  payments"  within
                  the  meaning  of Code  section  280G(b)(2),  and  all  "excess
                  parachute  payments" within the meaning of section  280G(b)(1)
                  shall be treated as subject to the Excise  Tax,  unless in the
                  opinion  of the  certified  public  accounting  firm  that  is
                  retained  by the Bank as of the date  immediately  before  the
                  Change in Control (the "Accounting  Firm") such other payments
                  or benefits do not constitute (in whole or in part)  parachute
                  payments,  or such excess  parachute  payments  represent  (in
                  whole  or  in  part)  reasonable   compensation  for  services
                  actually   rendered   within  the  meaning  of  Code   section
                  280G(b)(4)  in excess of the base  amount (as  defined in Code
                  section  280G(b)(3)),  or are  otherwise  not  subject  to the
                  Excise Tax,

         2)       Calculation of benefits  subject to the Excise Tax: the amount
                  of the Total  Benefits that shall be treated as subject to the
                  Excise  Tax  shall  be equal to the  lesser  of (x) the  total
                  amount of the Total  Benefits  reduced  by the  amount of such
                  Total Benefits that in the opinion of the Accounting  Firm are
                  not parachute payments,  or (y) the amount of excess parachute
                  payments  within  the  meaning of  section  280G(b)(1)  (after
                  applying clause (1), above), and
<PAGE>

         3)       Value of noncash benefits and deferred payments:  the value of
                  any noncash  benefits or any deferred payment or benefit shall
                  be determined by the  Accounting  Firm in accordance  with the
                  principles of Code sections 280G(d)(3) and (4).

         Assumed  Marginal  Income Tax Rate.  For  purposes of  determining  the
amount of the Gross-Up  Payment  Amount,  the  Executive  shall be deemed to pay
federal income taxes at the highest  marginal rate of federal income taxation in
the calendar years in which the Gross-Up  Payment Amount is to be made and state
and local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's  residence on the date of termination of employment,
net of the reduction in federal income taxes that can be obtained from deduction
of state and local taxes  (calculated by assuming that any reduction  under Code
section 68 in the  amount of  itemized  deductions  allowable  to the  Executive
applies  first to reduce the amount of state and local  income  taxes that would
otherwise  be  deductible  by the  Executive,  and  applicable  federal FICA and
Medicare withholding taxes).

         Return of Reduced  Excise Tax Payment or Payment of  Additional  Excise
Tax. If the Excise Tax is later determined to be less than the amount taken into
account  hereunder when the  Executive's  employment  terminated,  the Executive
shall  repay to the Bank - when the  amount of the  reduction  in Excise  Tax is
finally determined - the portion of the Gross-Up Payment Amount  attributable to
the reduction (plus that portion of the Gross-Up Payment Amount  attributable to
the Excise Tax,  federal,  state and local  income  taxes and FICA and  Medicare
withholding  taxes  imposed on the Gross-Up  Payment  Amount being repaid by the
Executive to the extent that the repayment results in a reduction in Excise Tax,
FICA, and Medicare  withholding  taxes and/or a federal,  state, or local income
tax deduction).

         If the Excise Tax is later  determined to be more than the amount taken
into account  hereunder when the  Executive's  employment  terminated  (due, for
example, to a payment whose existence or amount cannot be determined at the time
of the Gross-Up  Payment  Amount),  the Bank shall make an  additional  Gross-Up
Payment  Amount to the Executive for that excess (plus any interest,  penalties,
or  additions  payable by the  Executive  for the excess) when the amount of the
excess is finally determined.

         (b)   Responsibilities   of  the   Accounting   Firm   and  the   Bank.
Determinations  Shall Be Made by the Accounting Firm.  Subject to the provisions
of section 7.15(a),  all  determinations  required to be made under this section
7.15(b) - including whether and when a Gross-Up Payment Amount is required,  the
amount of the Gross-Up  Payment Amount and the  assumptions to be used to arrive
at the determination (collectively,  the "Determination") - shall be made by the
Accounting Firm, which shall provide detailed  supporting  calculations  both to
the Bank and the Executive  within 15 business days after receipt of notice from
the Bank or the Executive that there has been a Gross-Up Payment Amount, or such
earlier time as is requested by the Bank.

         Fees  and  Expenses  of the  Accounting  Firm  and  Agreement  with the
Accounting  Firm.  All fees and expenses of the  Accounting  Firm shall be borne

<PAGE>

solely by the Bank.  The Bank shall enter into any  agreement  requested  by the
Accounting Firm in connection with the performance of its services hereunder.

         Accounting  Firm's  Opinion.  If the Accounting Firm determines that no
Excise Tax is payable by the Executive,  the  Accounting  Firm shall furnish the
Executive  with a written  opinion to that effect and to the effect that failure
to report Excise Tax, if any, on the Executive's  applicable  federal income tax
return will not result in the imposition of a negligence or similar penalty.

         Accounting   Firm's   Determination   Is  Binding;   Underpayment   and
Overpayment.  The  Determination  by the Accounting Firm shall be binding on the
Bank and the Executive.  Because of the uncertainty  when the  Determination  is
made whether any of the Total  Benefits will be subject to the Excise Tax, it is
possible that a Gross-Up Payment Amount that should have been made will not have
been made by the Bank  ("Underpayment"),  or that a Gross-Up Payment Amount will
be made that should not have been made by the Bank  ("Overpayment").  If after a
Determination by the Accounting Firm the Executive is required to make a payment
of additional  Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment.  The Underpayment  (together with interest at the rate provided in
Code  section  1274(d)(2)(B))  shall be paid  promptly by the Bank to or for the
benefit of the  Executive.  If the Gross-Up  Payment  Amount  exceeds the amount
necessary to reimburse  the  Executive  for the Excise Tax  according to section
7.15(a), the Accounting Firm shall determine the amount of the Overpayment.  The
Overpayment  (together  with  interest  at the  rate  provided  in Code  section
1274(d)(2)(B))  shall be paid promptly by the Executive to or for the benefit of
the Bank. Provided that the Executive's expenses are reimbursed by the Bank, the
Executive  shall  cooperate  with  any  reasonable  requests  by the Bank in any
contests or disputes with the Internal  Revenue  Service  relating to the Excise
Tax.

         Accounting Firm Conflict of Interest. If the Accounting Firm is serving
as  accountant or auditor for the  individual,  entity,  or group  effecting the
Change in Control,  the  Executive  may appoint  another  nationally  recognized
public accounting firm to make the  Determinations  required hereunder (in which
case the term  "Accounting  Firm" as used in this  Agreement  shall be deemed to
refer to the accounting firm appointed by the Executive).

                                    ARTICLE 8
                           ADMINISTRATION OF AGREEMENT

         8.1 Plan Administrator  Duties. This Agreement shall be administered by
a Plan  Administrator  consisting of the board or such committee or person(s) as
the  board  shall  appoint.  The  Executive  may  not be a  member  of the  Plan
Administrator. The Plan Administrator shall have the discretion and authority to
(x) make,  amend,  interpret,  and enforce all appropriate rules and regulations
for the  administration  of this Agreement and (y) decide or resolve any and all
questions that may arise, including interpretations of this Agreement.

         8.2  Agents.   In  the   administration  of  this  Agreement  the  Plan
Administrator may employ agents and delegate to them such administrative  duties

<PAGE>

as it sees fit (including  acting through a duly appointed  representative)  and
may from time to time consult with counsel, who may be counsel to the Bank.

         8.3 Binding  Effect of  Decisions.  The  decision or action of the Plan
Administrator  concerning  any  question  arising  out  of  the  administration,
interpretation,  and  application of the Agreement and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any  interest in the  Agreement.  No Executive  or  Beneficiary  shall be
deemed to have any right,  vested or  nonvested,  regarding the continued use of
any previously  adopted  assumptions,  including but not limited to the discount
rate and calculation method described in section 1.1.

         8.4 Indemnity of Plan Administrator.  The Bank shall indemnify and hold
harmless  the  members of the Plan  Administrator  against  any and all  claims,
losses, damages,  expenses, or liabilities arising from any action or failure to
act with respect to this Agreement,  except in the case of willful misconduct by
the Plan Administrator or any of its members.

         8.5 Bank Information.  To enable the Plan  Administrator to perform its
functions,  the Bank  shall  supply  full  and  timely  information  to the Plan
Administrator  on all  matters  relating  to the date and  circumstances  of the
retirement,  Disability,  death, or Separation from Service of the Executive and
such  other  pertinent  information  as the Plan  Administrator  may  reasonably
require.

         IN WITNESS WHEREOF,  the Executive and a duly authorized officer of the
Bank have executed this 2008 Salary Continuation  Agreement as of the date first
written above.

EXECUTIVE:                                            BANK:
                                                      First South Bank

____________________
Barry L. Slider                                       By:  _____________________


                                                      Its:  ____________________


<PAGE>






                            BENEFICIARY DESIGNATION
                                FIRST SOUTH BANK
                       2008 SALARY CONTINUATION AGREEMENT

         I, Barry L. Slider, designate the following as beneficiary of any death
benefits under this 2008 Salary Continuation Agreement -

         Primary:  _____________________________________________________________
         _______________________________________________________________________

         Contingent:   _________________________________________________________
         _______________________________________________________________________

         Note: To name a trust as  beneficiary,  please  provide the name of the
trustee(s) and the exact name and date of the trust agreement.

         I understand that I may change these beneficiary designations by filing
a new  written  designation  with  the  Bank.  I  further  understand  that  the
designations will be automatically revoked if the beneficiary predeceases me, or
if I have  named my spouse  as  beneficiary  and our  marriage  is  subsequently
dissolved.

         Signature:    ________________________
                       Barry L. Slider

         Date: ___________________, 200_


         Accepted by the Bank this ____ day of _______________, 200_.

                  By:     ______________________________


                  Print Name:   ________________________

                  Title:   _____________________________