Exhibit 10.6

STATE OF SOUTH CAROLINA,
                                                           EMPLOYMENT AGREEMENT
COUNTY OF ORANGEBURG.


         THIS AGREEMENT, dated and effective this 23rd day of October, 2002,
between First National Corporation, a corporation organized and existing under
the laws of the State of South Carolina (the "Company"), and Richard C. Mathis
(the "Employee").
         WHEREAS, the Company and Employee formerly entered into an Agreement
entitled Employment Agreement dated
_________________; and
         WHEREAS, Company and Employee wish to terminate the Employment
Agreement dated __________ and enter into this Agreement under the terms and
conditions set forth herein.
         NOW, THEREFORE, in consideration of mutual covenants contained herein,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties do mutually agree as follows:
         1. Employment. The Company agrees to employ Employee, and Employee
agrees to serve the Company, upon the terms and conditions set forth in this
Agreement.
         2. Term. The term of this employment hereunder shall commence
immediately upon the date hereof and shall continue until the fifth anniversary
of the date hereof, unless terminated earlier as provided herein ( the "Term").
         3. Position and Responsibilities. During the period of employment
hereunder, Employee shall serve as Chief Financial Officer of the Company and
South Carolina Bank and Trust, N.A., a wholly-owned subsidiary of the Company
(the "Bank"), or in such other office and authority as may be designated by the
Board of Directors of the Company and South Carolina Bank and Trust, N.A.
Employee shall have the duties, responsibilities, rights, power and authority
that may be from time to time delegated or assigned to him by the Boards of
Directors of the Company and the Bank.



         4. Duties. During the period of employment hereunder, Employee shall
devote all of his business time, attention, skills and efforts to the business
of the Company and the faithful performance of his duties and responsibilities
hereunder. Employee shall be loyal to the Company and shall refrain from
rendering any business services to any person or entity other than the Company
and its affiliates without the prior written consent of the Company.
         5. Compensation and Benefits.
                  (a) Base Salary. During the period of employment hereunder,
the Company shall pay Employee an annual salary (as increased by the Company
from time to time in its sole discretion, "Base Salary") of $ 146,590 per year,
subject to applicable federal and state income and social security tax
withholding requirements. The Base Salary shall be payable in accordance with
the Company's customary payroll practices.
                  (b) Reimbursement of Expenses. The Company shall pay or
reimburse Employee for all reasonable travel and other business related expenses
incurred by him in performing his duties under this Agreement. Such expenses
shall be appropriately documented and submitted to the Company in accordance
with the Company's policies and procedures as established from time to time.



                  (c) Vacation and Sick Leave. Employee shall be provided with
vacation and sick leave in accordance with the Company's policies and procedures
for senior executives as established from time to time.
                  (d) Employee Benefit Plans. During the period of employment
hereunder, Employee shall be entitled to participate in the employee benefit
plans of the Company or its successors or assigns, as presently in effect or as
they may be modified or added to from time to time, to the extent such benefit
plans are provided to other similarly situated employees.
                  (e) Incentive Bonus Plans. During the period of employment
hereunder, Employee shall be entitled to participate in the Company's
incentive-based bonus plans, applicable to his employment position, in
accordance with both the terms and conditions of such plans and the Company's
policies and procedures as established from time to time.
                  (f) Country Club Membership. Company will pay on behalf of
Employee dues required to maintain membership during his employment in a country
club in Columbia, South Carolina to be determined by Company and Employee.
         6.       Termination of Employment.
                  (a) Termination Upon Death, Disability or For Cause. The
Company shall have the right to terminate Employee's employment hereunder upon
the death or Disability (as defined below) of Employee or for Cause (as defined
below). If Employee's employment is terminated for Cause, the Company shall have
no further obligation to Employee under this Agreement. Termination for
Disability or for Cause shall be effective immediately or upon such notice to
Employee of such termination as may be determined by the Board of Directors. For
the purpose of this Agreement:



         (i) "Disability" means "disability" (as defined under the Company's
         disability insurance policy maintained for Bank executives from time to
         time) suffered by Employee for a continuous period of at least three
         months or any impairment of mind or body that is likely to result in a
         "disability" of Employee for more than six months during any
         twelve-month period.
         (ii) "Cause" means: (A) the repeated failure of Employee to perform his
         responsibilities and duties hereunder; (b) the commission of an act by
         Employee constituting dishonesty or fraud against the Company or the
         Bank; (C) the conviction for or the entering of a guilty or no contest
         plea with respect to a felony; (D) habitual absenteeism, chronic
         alcoholism or any other form of substance abuse; or (E) the commission
         of an act by Employee involving gross negligence or moral turpitude
         that brings the Company or any of its affiliates into public disrepute
         or disgrace or causes material harm to the customer relations,
         operations or business prospects of the Company or any of its
         affiliates.
In the event of termination of Employee's employment for Cause under this
Section 6 (a), Employee shall be entitled only to the Base Salary earned through
the date of termination.
                  (b) Termination Without Cause. The Company shall have the
right to terminate Employee's employment at any time and for any reason subject
to the provisions of this Section 6(b). In the event that the Company shall
terminate Employee's employment for any reason other than as provided in Section
6(a), the Company shall as its sole obligation hereunder pay to Employee the
Base Salary and Employee's health insurance premiums (to the extent paid on the
date of termination), subject to applicable federal and state income and social
security tax withholding requirements and in accordance with the Company's
customary payroll practices, for six month period following termination.



                  (c) Termination by Employee. Employee shall have the right at
any time voluntarily to terminate his employment, upon thirty (30) days written
notice, in which event Employee shall be entitled only to the Base Salary
through the date of termination.
         7.       Change of Control.
                  (a) Change of Control Benefit. If (i) Change of Control (as
defined below) occurs during the Term of this Agreement, (ii) Employee is
employed by the Company or an affiliate thereof, and (iii) the Employee is
terminated during the term hereof by the Company or such affiliate for any
reason other than for death, Disability or Cause, the Company shall pay to
Employee the Employee's then current monthly salary (excluding bonus and
benefits) each month for a period of twenty-four (24) months following the date
of such termination.
                  (b) Definition. For the purpose of this Agreement, "Change of
Control" means the occurrence of one of the following: (i) any "person" (as that
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended), other than (A) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or (B) Employee or a
group of persons including Employee, is or becomes the beneficial owner (as that
term is used in Section 13(d) of the Securities Exchange Act of 1934), directly
or indirectly, of 50% or more of the common voting stock of the Company or its
successors; (ii) there shall be any consolidation or merger of the Company or
the Bank in which such entity is not the continuing or surviving corporation or
as a result of which the holders of the voting capital stock of the Company or
the Bank ( as the case may be) immediately prior to the consummation of the
transaction do not own more than 50% of voting capital stock of the surviving
corporation; or (iii) there occurs the sale of all or substantially all of the
assets of the Company or the Bank.



         8. Confidential Information. Employee acknowledges that during, and as
a result of, Employee's employment with the Company, Employee will acquire, be
exposed to and have access to, material, data and information of the Company
and/or its customers or clients that is confidential or proprietary. At all
time, both during and after the period of employment hereunder, Employee shall
keep and retain in confidence and shall not disclose, except as required in the
course of Employee's employment with the Company, to any person or entity, or
use for his own purposes, any of this proprietary or confidential information.
For purposes of this Section 8, such information shall include, but shall not be
limited to: (i) the Company's standard operating procedures, processes, know-how
and technical and product information, any of which are of value to the Company
and not generally known by the Company's competitors or the public; (ii) all
confidential information obtained from third parties and customers concerning
the business of the Company, including any customer lists or data; and (iii)
confidential business information of the Company, including marketing and
business plans, strategies, projections, business opportunities, client lists,
sales and cost information and financial results and performance. Employee
acknowledges that the obligations pertaining to the confidentiality and
non-disclosure of information shall remain in effect indefinitely, or until the
Company has released any such information into the public domain, in which case
Employee's obligation hereunder shall cease with respect only to such
information so released.



         9.       Noncompetition.
                  (a) Noncompetition. Employee shall not take any of the
following actions during the applicable Noncompetition Period (as defined
below):
         (i) Become employed by (as an officer, director, employee, consultant
         or otherwise), involved or engaged in, or otherwise commercially
         interested in or affiliated with (other than as a less than 5% equity
         owner of any corporation traded on any national, international or
         regional stock exchange or in the over-the-counter market) any person
         or entity that competes with the Company or an affiliate thereof (each,
         a "Company Affiliate") in the business of providing traditional banking
         services (But this restriction shall not be deemed to apply to
         non-traditional banking services such as stock brokerage or insurance
         services);
         (ii) Solicit or attempt to solicit, for competitive purposes, the
         business of any of the clients or customers of any Company Affiliate,
         or otherwise induce such customers or clients or prospective customers
         or clients to reduce, terminate, restrict or alter their business
         relationship with any Company Affiliate in any fashion; or
         (iii) Induce or attempt to induce any employee of any Company Affiliate
         to leave the Company for the purpose of engaging in a business
         operation that is competitive with the Company.
                  (b) Noncompetition Period. For the purpose of Subsection
9(a)(i) of this Section, "Noncompetition Period" shall mean the period of
employment hereunder and the period commencing on the date of termination of
employment and ending twelve (12) months thereafter; and for the purposes of
Subsections 9(a)(ii) and 9(a)(iii) of this Section. "Noncompetition Period"
shall mean the period of employment hereunder and the period commencing on the
date of termination of employment and ending eighteen (18) months thereafter.
The above notwithstanding, in the event Employee is terminated without cause,
the "Noncompetition Period" for purposes of Subsection 9(a)(i) of this section
shall mean the period commencing on the date of termination of employment and
ending six (6) months thereafter.



                  (c) Geographic Scope. The restrictions on competition set
forth in Section 9(a)(i) shall apply to an area within thirty-five (35) miles of
the corporate city limits of Columbia, South Carolina. The restrictions on
solicitation of customers and employees contained in Section 9(a)(ii) and
9(a)(iii) shall apply to any county in the State of South Carolina in which the
Company or Company Affiliate is conducting business operations during the
Noncompetition Period. However, the restrictions are intended to apply only with
respect to personal activities of Employee within any such county and shall not
be deemed to apply if Employee is employed by a corporation that has branch
offices within any such county but Employee does not personally work in or have
any business contacts with persons in such county.
                  (d) Providing Copy of Agreement. Employee shall provide a copy
of this Agreement to any person or entity with whom Employee interviews during
the time limitations set forth in this Section 9(a).
                  (e) Employee's Representation. Employee represents that his
experience and capabilities are such that the provisions of this Section 9 will
not unreasonably limit him in earning a livelihood in the event that Employee's
employment with the Company is terminated.



                  (f) Obligations Survive. Employee's obligations under this
Section 9 shall survive any termination of his employment with the Company.
         10. Company's Right to Obtain an Injunction. Employee acknowledges that
the Company will have no adequate means of protecting its rights under Sections
8 and 9 other than by securing an injunction. Accordingly, Employee agrees that
the Company is entitled to enforce this Agreement by obtaining a preliminary and
permanent injunction and any other appropriate equitable relief in any court of
competent jurisdiction. Employee acknowledges that the Company's recovery of
damages will not be an adequate means to redress a breach of this Agreement.
Nothing contained in this Section 10 shall prohibit the Company from obtaining
any appropriate remedies in addition to injunctive relief, including recovery of
damages.
         11. Waiver of Rights. In consideration of the employment offered
hereunder and the payments made pursuant to Section 5 and the other terms of
this Agreement, Employee acknowledges that the Employment Agreement dated
____________ between Employee and the Company is hereby terminated, and Employee
forever waives, releases and discharges the Company, any Company Affiliate, and
any of their subsidiaries, shareholders or affiliates and any of their
successors and assigns from any claims, right and privileges under such
agreement.
         12.      General Provisions.
                  (a) Entire Agreement. This Agreement contains the entire
understanding between the parties hereto relating to the employment of Employee
by the Company and supersedes any and all prior employment or compensation
agreements between the Company and Employee.



                  (b) Assignability. Neither this Agreement nor any right or
interest hereunder shall be assignable by Employee, his beneficiaries or legal
representatives, without the Company's prior written consent; provided, however,
that nothing shall preclude (i) Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereunto.
                  (c) Binding Agreement. This Agreement shall be binding upon,
and inure to the benefit of, Employee and the Company and their respective
successors and assigns.
                  (d) Amendment of Agreement. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
                  (e) Insurance. The Company, at its discretion, may apply for
and procure in its own name and for its own benefit, life insurance on Employee
in any amount or amounts considered advisable; and Employee shall have no right,
title or interest therein.
Employee shall submit to any medical or other examination and execute and
deliver any applications or other instruments in writing as may be reasonably
necessary to obtain such insurance.
                  (f) Severability. If any provision contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein. If
a court determines that this Agreement or any covenant contained herein is
unreasonable, void or unenforceable, for any reason whatsoever, then in such
event the parties hereto agree that the duration, geographical or other
limitation imposed herein should be such as the court, or jury, as the case may
be, determines to be fair and reasonable, it being the intent of each of the
parties hereto to be subject to an agreement that is necessary for the
protection of the legitimate interest of the Company and its successors or
assigns and that is not unduly harsh in curtailing the legitimate rights of the
Employee.



                  (g) Notices. All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person (with respect to
the Company, to the Company's secretary) or when mailed, if mailed by certified
mail, return receipt requested. Notices mailed shall be addressed, in the case
of Employee, to his last known residential address, and in the case of the
Company, to its corporate headquarters, attention of the Secretary, or to such
other address as Employee or the Company may designate in writing at any time or
from time to time to the other party in accordance with this Section.
                  (h) Waiver. No delay or omission by either party hereto in
exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any right, power
or privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege. The provisions of this Section 12(h) cannot be waived
except in writing signed by both parties.
                  (i) Governing Law. This Agreement has been executed and
delivered in the State of South Carolina, and it validity, interpretation,
performance and enforcement shall be governed by the laws of such state.
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.




                                                     FIRST NATIONAL CORPORATION


                                                     BY: /s/ C. John Hipp, III
                                                         ---------------------
                                                          C. John Hipp, III, CEO



                                                     EMPLOYEE


                                                     /s/ Richard C. Mathis
                                                     ----------------------
                                                     Richard C. Mathis