Exhibit 10.1


STATE OF SOUTH CAROLINA    )
                           ) SETTLEMENT AGREEMENT
COUNTY OF HORRY            )


         This Settlement Agreement entered into this 28th day of December, 2006,
by and among the Estate of Willis J. Duncan,  the Estate of Harriette B. Duncan,
W. Jennings Duncan,  H. Buck Cutts ("Cutts"),  Paul R. Dusenbury  ("Dusenbury"),
Robert P. Hucks  ("Hucks"),  Richard M. Lovelace,  Jr.  ("Lovelace"),  Howard B.
Smith,  III  ("Smith"),  CNB  Corporation  ("CNB"),  The  Conway  National  Bank
("Bank"),  and The Conway  National  Bank  Profit-Sharing  and Savings Plan (the
"401(k) Plan").

         WHEREAS, on or about September 6, 2005, Willis J. Duncan,  Harriette B.
Duncan, and W. Jennings Duncan initiated  litigation  against Cutts,  Dusenbury,
Hucks,  Lovelace and Smith, also naming CNB and the Bank as nominal  Defendants,
which case is presently  pending in the Court of Common Pleas for Horry  County,
Case Number 2005-CP-26-4667 (the "Director's Litigation"); and

         WHEREAS,   Cutts,   Dusenbury,   Hucks,  Lovelace  and  Smith  filed  a
counterclaim  in the  Director's  Litigation  against  Willis J.  Duncan  and W.
Jennings Duncan; and

         WHEREAS,  subsequent  to filing the  Director's  Litigation,  Willis J.
Duncan and  Harriette B. Duncan died and W.  Jennings  Duncan was  appointed the
Personal Representative of their estates; and

         WHEREAS,  Richard M.  Lovelace  initiated  litigation  against James M.
Vaught,  which case is presently  pending in the Court of Common Pleas for Horry
County, Case Number 2006-CP-26-2500 (the "Defamation Litigation"); and

         WHEREAS,  the  parties  to this  Settlement  Agreement  have  reached a
compromise  resolution and  settlement of all issues and disputes  existing with
and among all other parties to this Agreement; and

         WHEREAS,  the parties to this Settlement  Agreement wish to memorialize
the terms of the  settlement  reached  with and among all other  parties to this
Agreement;

         NOW, THEREFORE, for and in consideration of the foregoing premises, and
in consideration of the mutual promises and undertakings  contained herein,  the
parties hereto agree as follows:

I.       Dismissal of Current Litigation

         A. The Estate of Willis J.  Duncan,  the Estate of  Harriette B. Duncan
and  W.   Jennings   Duncan   agree  to  dismiss   the  lawsuit   (Case   Number
2005-CP-26-4667) filed against Cutts,  Dusenbury,  Hucks, Lovelace and Smith, et
al. (the "Director's Litigation").  Cutts, Dusenbury,  Hucks, Lovelace and Smith

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agree to dismiss their counterclaim  filed in the Director's  Litigation against
Willis J. Duncan and W. Jennings Duncan, with prejudice.

         B. Richard M. Lovelace agrees to dismiss the Defamation Litigation with
prejudice.

II.      Resignation of Cutts, Hucks and Smith from Board of Directors

         H. Buck Cutts,  Howard B. Smith,  III,  and Robert P. Hucks resign from
the Board of Directors of both CNB and The Conway  National Bank, as applicable,
effective December 31, 2006.

III. Resignation of Dusenbury and Hucks from Employment

         A. Paul R. Dusenbury  agrees that he resigned his  employment  with CNB
and/or the Bank effective October 31, 2006, and that as of October 31, 2006, CNB
and/or  the Bank has paid him all  amounts  due  pursuant  to his June 14,  2005
Employment  Agreement,  a copy of which is  attached  hereto as Exhibit "A" (the
"Dusenbury Employment Agreement"). Dusenbury further agrees that neither CNB nor
the Bank has any  further  obligation  to him  under  the  Dusenbury  Employment
Agreement or any other agreement,  written or oral relating to his employment by
either CNB or the Bank other than rights under (i) any existing  401(k) program;
(ii) any ESI Agreement (as  hereinafter  defined);  (iii) the Dusenbury  Phantom
Stock  Agreement (as hereinafter  defined);  and (iv) this Agreement such as the
health  insurance  benefits  described  below.  Dusenbury  agrees that he is not
entitled to any further salary, bonuses,  liquidated or other damages, attorneys
fees or any  other  compensation  or  benefits  under the  Dusenbury  Employment
Agreement or any other agreement,  written or oral relating to his employment by
either CNB or the Bank . CNB and/or the Bank agree to continue health  insurance
coverage for  Dusenbury  through  December 31, 2006,  after which CNB and/or the
Bank will  provide  Dusenbury  with all COBRA and other  notices/paperwork  on a
timely basis just as with any other departing employee.

         B. Robert P. Hucks agrees to resign his employment  with CNB and/or the
Bank  effective  December  31,  2006.  The Bank  agrees to pay Hucks his  salary
through December 31, 2006 as provided in his June 14, 2005 Employment Agreement,
a copy of which is  attached  hereto  as  Exhibit  "B"  (the  "Hucks  Employment
Agreement").  Hucks further agrees that as of December 31, 2006, neither CNB nor
the Bank  will have any  further  obligation  to him under the Hucks  Employment
Agreement and he will not be entitled to any further salary, bonuses, liquidated
or other damages, attorneys fees or any other compensation or benefits under the
Hucks Employment  Agreement or any other agreement,  written or oral relating to
his  employment  by either CNB or the Bank other  than (i) any  existing  401(k)
program;  (ii) any ESI  Agreement  (as  hereinafter  defined);  (iii)  the Hucks
Phantom Stock Agreement (as hereinafter  defined);  and (iv) this Agreement such
as the health insurance  benefits  described below. CNB and/or the Bank agree to
continue health  insurance  coverage for Hucks through  December 31, 2006, after


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which  CNB  and/or  the Bank  will  provide  Hucks  with  all  COBRA  and  other
notices/paperwork on a timely basis just as with any other departing employee.

IV.      Post Resignation Restrictions Regarding Dusenbury and Hucks

         A Hucks and Dusenbury agree that the Confidential Information provision
found in  Paragraph  9.1 of the  Dusenbury  Employment  Agreement  and the Hucks
Employment Agreement  respectively are terminated.  However, Hucks and Dusenbury
agree  to be  bound  by the  terms  of a  confidentiality  and  non-solicitation
agreement attached hereto and incorporated  herein by reference as Exhibit " and
Exhibit " (the "Hucks  Confidentiality and  Non-Solicitation  Agreement" and the
"Dusenbury Confidentiality and Non-Solicitation Agreement" respectively).

         B. CNB and/or the Bank agree that,  subsequent to the execution of this
Settlement   Agreement  and  the  mutual  releases   referred  to  herein,   the
Non-Competition  provisions  (collectively,  the  "Non-Competition  Provisions")
contained in (i)  Paragraph 9.2 of Dusenbury  and Hucks  Employment  Agreements;
(ii) any Executive Supplemental Income Agreement executed by CNB and/or the Bank
with Hucks, Dusenbury or Smith (collectively,  the "ESI Agreements");  and (iii)
Paragraph 7.2 of the Phantom Stock Agreement  entered into between Dusenbury and
the Bank dated  December 1, 1999, a copy of which is attached  hereto as Exhibit
"I" (the "Dusenbury Phantom Stock  Agreement"),  and the Phantom Stock Agreement
entered into between Hucks and the Bank dated  December 1, 1999, a copy of which
is attached  hereto as Exhibit  "J"(the  "Hucks Phantom Stock  Agreement")  (the
Dusenbury  Phantom Stock  Agreement and the Hucks Phantom Stock  Agreement being
collectively  referred to as the "Phantom Stock  Agreements)" will be considered
null and void CNB  and/or  the Bank  agree  that  neither  of them  will seek to
enforce any of such Non-Competition Provisions.

         C. CNB and/or the Bank agree that,  subsequent to the execution of this
Settlement   Agreement  and  the  mutual  releases   referred  to  herein,   the
Solicitation  After Termination of Employment  provision found in Section 7.3 of
the Dusenbury and Hucks Phantom Stock  Agreements,  will be considered  null and
void and CNB and/or  the Bank  agree  that  neither of them will seek to enforce
this  provision.  In return,  Dusenbury and Hucks each agree to enter into a new
Confidentiality and Non-Solicitation  Agreement,  as set forth more fully in the
Confidentiality and Non-Solicitation  Agreements attached hereto as Exhibits "K"
and "L." (collectively, the "Confidentiality and Non-Solicitation Agreements").

V.       Mutual Releases

         A. The Estate of Willis J.  Duncan,  the Estate of Harriette B. Duncan,
W. Jennings Duncan,  CNB, the Bank, the 401(k) Plan and H. Buck Cutts will enter
into a mutual release of all claims,  by and among these  parties,  as set forth
more fully in the Release attached hereto as Exhibit "C" (the "Cutts Release").



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         B. The Estate of Willis J.  Duncan,  the Estate of Harriette B. Duncan,
W. Jennings  Duncan,  CNB, the Bank,  the 401(k) Plan and Paul R. Dusenbury will
enter into a mutual release of all claims,  by and among these  parties,  as set
forth more fully in the Release  attached  hereto as Exhibit "D" (the "Dusenbury
Release").

         C. The Estate of Willis J.  Duncan,  the Estate of Harriette B. Duncan,
W.  Jennings  Duncan,  CNB,  the Bank,  the 401(k) Plan and Robert P. Hucks will
enter into a mutual release of all claims,  by and among these  parties,  as set
forth more fully in the  Release  attached  hereto as  Exhibit  "E" (the  "Hucks
Release").

         D. The Estate of Willis J.  Duncan,  the Estate of Harriette B. Duncan,
W. Jennings Duncan,  CNB, the Bank, the 401(k) Plan, James M. Vaught and Richard
M. Lovelace will enter into a mutual  release of all claims,  by and among these
parties,  as set forth more fully in the Release  attached hereto as Exhibit "F"
(the "Lovelace Release").

         E. The Estate of Willis J.  Duncan,  the Estate of Harriette B. Duncan,
W. Jennings Duncan, CNB, the Bank, the 401(k) Plan and Howard B. Smith, III will
enter into a mutual release of all claims,  by and among these  parties,  as set
forth more fully in the  Release  attached  hereto as  Exhibit  "G" (the  "Smith
Release").

         F. Lovelace  will enter into a mutual  release of all claims with James
M.  Vaught for all  claims  made in the case  currently  pending in the Court of
Common Pleas for Horry County,  Case Number  2006-CP-26-2500,  as set forth more
fully in the Release attached hereto as Exhibit "H" the "Vaught Release").

VI.      Cash Payments

         CNB  and/or  the Bank will pay an  aggregate  payment  in the amount of
$637,500 under the provisions of this Agreement with the following amounts being
allocated to the following  parties to this Agreement on or before  December 31,
2006:

         A. Payment shall be made to Dusenbury in the amount of  $95,861.17,  in
consideration of settlement and release of all claims described in the Dusenbury
Release  including,  without  limitation,  any claims for the costs and  expense
incurred in the Director's Litigation,  but excluding any claims relating to the
Dusenbury  Employment Agreement or other employment related claims. This payment
shall be subject to reporting on Form  1099-Misc and shall not be subject to any
tax  withholding.  Further  payment  shall be made to Dusenbury in the amount of
$71,187.37,  in  consideration  of  cancellation  of  the  Dusenbury  Employment
Agreement and release of any employment  related  claims.  This payment shall be
treated as wages  subject to  reporting  on Form W-2 and shall be subject to all
applicable withholdings.

         B.  Payment  shall be made to Hucks in the  amount  of  $95,861.17,  in
consideration  of  settlement  and release of all claims  described in the Hucks
Release  including,  without  limitation,  any claims for the costs and  expense
incurred in the Director's Litigation,  but excluding any claims relating to the
Hucks  Employment  Agreement or other  employment  related claims.  This payment
shall be treated as taxable  income  subject to reporting on Form  1099-Misc and


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shall not be subject to any tax  withholding.  Further  payment shall be made to
Hucks in the amount of $87,006.78, in consideration of cancellation of the Hucks
Employment  Agreement and release of any employment related claims. This payment
shall be treated as wages  subject to reporting on Form W-2 and shall be subject
to all applicable withholdings.

         C. Payment  shall be made to Lovelace in the amount of  $95,861.17,  in
consideration  of settlement and release of all claims described in the Lovelace
Release including,  including,  without limitation, any claims for the costs and
expense incurred in the Director's Litigation.  This payment shall be treated as
taxable  income  subject to reporting on Form 1099-Misc and shall not be subject
to any tax withholding.

         D.  Payment  shall be made to Cutts in the  amount  of  $95,861.17,  in
consideration  of  settlement  and release of all claims  described in the Cutts
Release including,  including,  without limitation, any claims for the costs and
expense incurred in the Director's Litigation.  This payment shall be treated as
taxable  income  subject to reporting on Form 1099-Misc and shall not be subject
to any tax withholding.

         E.  Payment  shall be made to Smith in the  amount  of  $95,861.17,  in
consideration  of  settlement  and release of all claims  described in the Smith
Release including,  including,  without limitation, any claims for the costs and
expense incurred in the Director's Litigation.  This payment shall be treated as
taxable  income  subject to reporting on Form 1099-Misc and shall not be subject
to any tax withholding.

         F.  Payment  shall be in the form of funds  delivered  to  counsel  for
Hucks, Dusenbury, Smith, Lovelace and Cutts.

         G. The  parties  acknowledge  and  agree  that this  Agreement  was not
intended or written by counsel to be used,  and cannot be used,  for the purpose
of avoiding  penalties under the Internal  Revenue Code that may be imposed upon
any  party.  Each party  shall  consult  with his or her own tax  adviser on the
proper treatment of any payments herein.

VII. Phantom Stock Plan. Hucks, Dusenbury,  Smith, CNB, and Bank acknowledge and
agree that this  settlement  and the releases  herein do not alter or affect the
rights of Hucks,  Dusenbury,  or Smith under the terms of the Phantom Stock Plan
and Hucks Phantom Stock Agreement, the Dusenbury Phantom Stock Agreement and the
Phantom  Stock   Agreement  dated  December  5,  2000  between  Smith  and  Bank
(collectively, the "Phantom Stock Agreements"),  except as specifically modified
herein. Hucks,  Dusenbury,  and Smith shall each retain his rights in any vested
benefits  in their  respective  Phantom  Stock  Agreement  as of the date of his


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termination and cease further  vesting of additional  benefits as of the date of
his  termination  according  to the  terms of that  Phantom  Stock  Plan and the
Phantom Stock  Agreements.  Such vested benefits shall accrue interest and shall
be paid in  accordance  with the terms of the Phantom Stock Plan and the Phantom
Stock Agreements. Smith, CNB and the Bank acknowledge that Smith is fully vested
in the Phantom Stock Plan. Hucks, CNB and the Bank acknowledge that Hucks is 90%
vested in the Phantom  Stock Plan as of the date of this  Agreement.  Dusenbury,
CNB and the Bank  acknowledge  that Dusenbury is 80% vested in the Phantom Stock
Plan as of the date of this Agreement.
Dusenbury,  Hucks,  Smith,  CNB and the Bank  also  acknowledge  that Sun  Trust
performed a valuation of the CNB stock for the  purposes of the Conway  National
Bank  Profit-Sharing  and Savings  Plan and that as of  September  30, 2006 such
valuation was $162.00 per share and that such  valuation  shall be used to value
the CNB stock for the purposes of this Agreement, the Phantom Stock Plan and the
Phantom Stock Agreements.

VIII.    Letter to Shareholders

         Upon  execution of this  Settlement  Agreement and the mutual  releases
referred to herein, CNB and/or the Bank will issue a mutually agreed upon letter
to be sent to CNB  shareholders,  as set forth more fully in the letter attached
hereto as Exhibit "M."

IX.      Other Agreements

         A. The undersigned parties understand,  represent, and warrant that all
claims  released herein are disputed  claims,  that in executing this Settlement
Agreement, such undersigned are compromising such disputed claims, and that this
Agreement is not an admission of, but is instead a denial of, liability by or on
the part of, the persons hereby released for all claims released herein.

         B. The parties agree that this Settlement  Agreement and the compromise
and settlement evidenced thereby may never be admissible as evidence against the
persons  herein  released in any present or future suit,  claim or proceeding of
any nature,  but may be asserted by and  introduced  as evidence for the persons
hereby  released as an absolute and final defense and bar to any claim  released
herein in any present or future suit or proceeding.

         C. The undersigned parties agree that this written Settlement Agreement
and Exhibits are a complete integration of all terms and provisions to which the
Parties have agreed,  and that no agreement may be effective to change,  modify,
or terminate this  Agreement,  in whole or in part,  unless such agreement is in
writing and duly signed  after the date of  execution  of this  Agreement by the
person against whom enforcement of such change, modification,  or termination is
sought.

         D. The parties agree and acknowledge  that each relies upon his/her/its
own knowledge and  information  and upon the advice of his/her/its  attorneys to
the extent of the claims  released  herein,  of  his/her/its  legal  rights with
respect to such claims, and of the liability of the persons hereby released, and
that   he/she/it   has  neither   been   influenced   by  nor  relied  upon  any
representations, if any made, by or on behalf of the persons hereby released.



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         E. Each party warrants that this Settlement Agreement has been executed
by duly  authorized  representative(s)  and  agent(s)  of the party and that the
party is bound by, and intends to be bound by, the terms and  conditions of this
Agreement.

         F. This  Agreement  may be executed in multiple  counterparts,  each of
which  shall  serve  as an  original  for all  purposes,  but all  copies  shall
constitute  but one and the  same  Agreement,  binding  on all  parties  hereto,
whether or not each  counterpart is executed by all parties  hereto,  so long as
each party hereto has executed one or more counterparts hereof.

         G. The rights contained under this Agreement may not be assigned.

         H. All the terms and provisions of this Agreement  shall be binding and
adhere  to the  benefit  of  and be  enforceable  by the  successors,  permitted
assigns, heirs, executors and administrators of the parties hereto.

         I. This Agreement shall be construed and enforced according to the laws
of the State of South  Carolina.  If any  covenant,  condition,  representation,
warranty  or  provision  of this  Agreement  shall  be  adjudged  by a court  of
competent  jurisdiction  to be invalid or  unenforceable,  the remainder of this
Agreement shall not be affected  thereby,  but shall be valid and enforceable to
the fullest extent permitted by law.

         J.  All  terms,  conditions,   covenants,  and  warranties  under  this
Agreement shall survive the date of closing of this agreement.

         K. This Agreement  shall be binding upon and inurned to the benefits of
the Parties and their respective  heirs,  executors,  personal  representatives,
successors, and assigns and to the benefit of no other Party.

         L. The Parties agree to execute such further assurances,  documents, or
instruments  and to take such  further  actions as may be  necessary  to confirm
their  understanding  with respect to the terms and provisions set forth in this
Agreement so as to be in a position to implement the same.

         M. This Agreement and the attached Exhibits shall constitute the entire
understanding and agreement of the Parties and may be altered or amended only by
a document in writing signed by the Parties.

         N. The captions and headings used in this Agreement are for convenience
only and do not in any way limit, amplify, or otherwise modify the provisions of
this Agreement.

         O. If any provision of this Agreement is held to be illegal, invalid or
unenforceable  under  present  or future  laws,  such  provision  shall be fully
severable;  this  Agreement  shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this agreement,
and the remaining  provisions of this  Agreement  shall remain in full force and


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effect and shall not be  affected by such  illegal,  invalid,  or  unenforceable
provision or by its severance from this Agreement.

         P. The parties  represent  and warrant to one another that each has, by
counsel  or  otherwise,  actively  participated  in  the  finalization  of  this
Agreement,  and in the event of a dispute  concerning the interpretation of this
Agreement,  each party hereby  waives the doctrine  that an ambiguity  should be
interpreted against the party which has drafted the document.

                    (Signatures continued on following pages)



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         IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Settlement Agreement as of the 28th day of December 2006.

                              [SIGNATURES OMITTED]




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