PEOPLES BANCORPORATION INC /SC/
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit10-6.txt
<TEXT>
                                  Exhibit 10-6


                               FIRST AMENDMENT TO
                            THE PEOPLES NATIONAL BANK
                          SALARY CONTINUATION AGREEMENT
                               DATED JULY 7, 1998
                                FOR ROBERT E. DYE

     THIS AMENDMENT executed on this 13th day of February,  2003, by and between
THE PEOPLES  NATIONAL BANK, a national banking  association,  located in Easley,
South Carolina (the "Company") and ROBERT E. DYE (the "Executive").

     On July 7,  1998,  the  Company  and the  Executive  executed  THE  PEOPLES
NATIONAL BANK SALARY CONTINUATION AGREEMENT (the "Agreement").

     The undersigned hereby amends, in part, said Agreement for the purpose of:

              1) increasing the Normal Retirement Benefit;

              2) adding the following definitions:

                    (i) a second Simulated Coast of Funds Investment,

                    (ii) a second Simulated Investment;

                    (iii)  a  second  Retirement  Account;  and

                    (iv) a second Simulated Investment Rate;

              3) increasing the additional Disability benefit;

              4) adding an Effective Date for the First Amendment; and

              5) updating the Claims Procedure.  Therefore,

     Section  2.1.1  of the  Agreement  shall be  deleted  in its  entirety  and
replaced with a new Section 2.1.1 as follows:

     2.1.1  "Amount of Benefit"  The annual  benefit  under this  Section 2.1 is
     $70,094  increased  by four  percent  (4%) each Plan Year between the First
     Amendment Effective Date and the Executive's Normal Retirement Date.

     A new Section 1.1.19 shall be added to the Agreement as follows:

        1.1.19  "Simulated  Cost of Funds  Investment  II" means the value of an
investment  comprised of principal and accumulated  after-tax interest earnings.
The initial  investment  of  principal is assumed to be $200,000 on December 31,
2002. In determining the value of the Simulated Cost of Funds Investment II, the
following assumptions are to be used:

               (1) the interest shall accrue monthly;

               (2) the interest shall compound annually on the Anniversary Date;
          and

               (3)  the  after-tax  interest  rate  shall  equal  the  Company's
          after-tax  average cost of funds from the Company's third quarter Call
          Report ending within the Plan Year as filed with the Federal Reserve.

     A new Section 1.1.20 shall be added to the Agreement as follows:

     1.1.20  "Simulated  Investment  II"  means  the  following  life  insurance
contract:


<PAGE>

        Insurance Company:                  Southland Life Insurance Co.
        Policy Type:                        Flexible Premium Universal Life
        Insured's Age and Sex:              61, male
        Riders:                             None
        Ratings:                            Tobacco, Table H
        Option:                             A
        Single Premium:                     $ 500,000
        Net Life Insurance:                 $ 200,000
        Total Death Benefits:               $ 700,000
        Assumed Purchase Date:              December 31, 2002

The investment specified above is for use in measuring the Disability Benefit in
Section 2.3.4 of this Agreement. The Company can change the Simulated Investment
II only with the Executive's prior written agreement.

     A new Section 1.1.21 shall be added to the Agreement as follows:

     1.1.21 "Retirement  Account II" means the hypothetical  account established
on the Company's  books for the Executive.  The Retirement  Account II as of any
date shall be determined by subtracting the value of the Simulated Cost of Funds
Investment  II from the value of the  Simulated  Investment  II and dividing the
difference  by the  "adjustment  rate."  For  purposes  of this  paragraph,  the
adjustment  rate shall mean the figure equal to one minus the Company's  highest
marginal federal and state income tax rate for the previous calendar year.

     A new Section 1.1.22 shall be added to the Agreement as follows:

     1.1.22 "Simulated Investment Rate II" means the after-tax rate of return on
the Simulated  Investment II. The Simulated Investment Rate II shall not include
receipt of the policy's death benefits.

     A new Section 1.1.23 shall be added to the Agreement as follows:

     1.1.23 "First Amendment Effective Date" means February 1, 2003.



                                       2
<PAGE>



     A new Section 2.3.4 shall be added to the Agreement as follows:

     2.3.4  Payment  of  Additional   Disability  Amount.  In  addition  to  the
Disability  payments  described in Section 2.3.2 and 2.3.3,  the Executive shall
receive an annual  benefit  beginning at  Termination  of Employment  under this
Section 2.3.4 provided that the Executive  incurs  Disability prior to attaining
his Normal Retirement Age. If the Executive incurs Disability prior to attaining
his Normal  Retirement Age (i.e.,  no benefits under this Section 2.3.4 are paid
if the Executive  becomes  disabled on or after his Normal  Retirement Age), the
Company shall pay the Executive an annual benefit which is calculated at the end
of each Plan Year equal to the  increase  in the  Retirement  Account II for the
Plan Year.  The benefit  payments will be paid  annually  within sixty (60) days
after the end of the Plan Year for which the  payment  is  calculated.  Benefits
under this  Section  2.3.4  shall  commence at the end of the Plan Year in which
Termination of Employment for Disability  occurs and continue until the death of
the  Executive.  Total  annual  Disability  benefit  amounts  subsequent  to the
commencement  of benefit  payments  under Section 2.3.2 are not to exceed Normal
Retirement  Benefit  amounts  in  Section  2.1 and shall be reduced so as not to
exceed the Normal  Retirement  Benefit  amounts in Section 2.1 by  reducing  the
annual benefit provided for in this Section 2.3.4.

     Article 6 of the  Agreement  shall be deleted in its  entirety and replaced
with a new Article 6 as follows:

                                    Article 6
                          Claims and Review Procedures

     6.1 For all claims other than disability benefits:

          6.1.1  Claims  Procedure.  Any  individual  ("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:

               6.1.1.1  Initiation - Written  Claim.  The  Claimant  initiates a
          claim by submitting to the Company a written claim for the benefits.

               6.1.1.2 Timing of Company Response.  The Company shall respond to
          such Claimant within 90 days after receiving the claim. If the Company
          determines  that special  circumstances  require  additional  time for
          processing the claim, the Company can extend the response period by an
          additional 90 days by notifying the Claimant in writing,  prior to the
          end of the  initial  90-day  period,  that  an  additional  period  is
          required.   The  notice  of  extension  must  set  forth  the  special
          circumstances  and the date by which the Company expects to render its
          decision.

               6.1.1.3 Notice of Decision.  If the Company denies part or all of
          the claim,  the Company  shall  notify the Claimant in writing of such
          denial.   The  Company  shall  write  the  notification  in  a  manner
          calculated to be understood by the Claimant.  The  notification  shall
          set forth:

                    (a)  The specific reasons for the denial,

                    (b)  A  reference  to  the  specific   provisions   of  this
                         Agreement on which the denial is based,

                    (c)  A description of any additional information or material
                         necessary  for the Claimant to perfect the claim and an
                         explanation of why it is needed,



                                       3
<PAGE>

                    (d)  An explanation of this  Agreement's  review  procedures
                         and the time limits applicable to such procedures, and

                    (e)  A statement  of the  Claimant's  right to bring a civil
                         action under ERISA Section 502(a)  following an adverse
                         benefit determination on review.

          6.1.2  Review  Procedure.  If the  Company  denies  part or all of the
     claim,  the Claimant shall have the  opportunity for a full and fair review
     by the Company of the denial, as follows:

               6.1.2.1 Initiation - Written Request. To initiate the review, the
          Claimant,  within 60 days  after  receiving  the  Company's  notice of
          denial, must file with the Company a written request for review.

               6.1.2.2 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 Company 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.

               6.1.2.3  Considerations on Review. In considering the review, the
          Company  shall take into account all  materials  and  information  the
          Claimant submits relating to the claim, without regard to whether such
          information  was  submitted  or  considered  in  the  initial  benefit
          determination.

               6.1.2.4 Timing of Company Response.  The Company shall respond in
          writing to such  Claimant  within 60 days after  receiving the request
          for  review.  If the Company  determines  that  special  circumstances
          require  additional  time for  processing  the claim,  the Company can
          extend the response  period by an  additional 60 days by notifying the
          Claimant in writing,  prior to the end of the initial  60-day  period,
          that an additional  period is required.  The notice of extension  must
          set forth the special  circumstances and the date by which the Company
          expects to render its decision.

               6.1.2.5 Notice of Decision. The Company shall notify the Claimant
          in writing of its  decision  on review.  The  Company  shall write the
          notification in a manner  calculated to be understood by the Claimant.
          The notification shall set forth:

                    (a)  The specific reasons for the denial,

                    (b)  A  reference  to  the  specific   provisions   of  this
                         Agreement on which the denial is based,

                    (c)  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

                    (d)  A statement  of the  Claimant's  right to bring a civil
                         action under ERISA Section 502(a).

     6.2 For disability claims:

          6.2.1  Claims  Procedures.  Any  individual  ("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:

               6.2.1.1  Initiation - Written  Claim.  The  Claimant  initiates a
          claim by submitting to the Company a written claim for the benefits.



                                       4
<PAGE>

               6.2.1.2 Timing of Company Response.  The Company shall notify the
          Claimant in writing or electronically of any adverse  determination as
          set out in this Section.

               6.2.1.3 Notice of Decision.  If the Company denies part or all of
          the claim,  the Company  shall  notify the Claimant in writing of such
          denial.   The  Company  shall  write  the  notification  in  a  manner
          calculated to be understood by the Claimant.  The  notification  shall
          set forth:

                    (a)  The specific reasons for the denial,

                    (b)  A  reference  to  the  specific   provisions   of  this
                         Agreement on which the denial is based,

                    (c)  A description of any additional information or material
                         necessary  for the Claimant to perfect the claim and an
                         explanation of why it is needed,

                    (d)  An explanation of the Agreement's review procedures and
                         the time limits applicable to such procedures,

                    (e)  A statement  of the  Claimant's  right to bring a civil
                         action under ERISA Section 502(a)  following an adverse
                         benefit determination on review,

                    (f)  [See   ss.   2560.503-1(g)(v)]   Any   internal   rule,
                         guideline,  protocol, or other similar criterion relied
                         upon  in  making  the  adverse   determination,   or  a
                         statement  that such a rule,  guideline,  protocol,  or
                         other  similar  criterion was relied upon in making the
                         adverse determination and that the Claimant can request
                         and  receive  free  of  charge  a copy  of  such  rule,
                         guideline,   protocol  or  other   criterion  from  the
                         Company, and

                    (g)  If the  adverse  benefit  determination  is  based on a
                         medical necessity or experimental  treatment or similar
                         exclusion  or  limit,  either  an  explanation  of  the
                         scientific or clinical judgment for the  determination,
                         applying the terms of this  Agreement to the Claimant's
                         medical   circumstances,   or  a  statement  that  such
                         explanation  will  be  provided  free  of  charge  upon
                         request.

                    6.2.1.4 Timing of Notice of  Denial/Extensions.  The Company
               shall  notify the  Claimant  of denial of  benefits in writing or
               electronically  not later than 45 days after receipt of the claim
               by the Company.  The Company may elect to extend  notification by
               two 30-day periods subject to the following requirements:

                    (a)  For the  first  30-day  extension,  the  Company  shall
                         notify  the  Claimant  (1)  of  the  necessity  of  the
                         extension and the factors beyond the Company's  control
                         requiring  an  extension;  (2)  prior to the end of the
                         initial 45-day period; and (3) of the date by which the
                         Company expects to render a decision.

                    (b)  If  the  Company   determines   that  a  second  30-day
                         extension  is  necessary  based on  factors  beyond the
                         Company's  control,  the Company  shall follow the same
                         procedure  in (a) above,  with the  exception  that the
                         notification  must be provided to the  Claimant  before
                         the end of the first 30-day extension period.

                    (c)  For any  extension  provided  under this  section,  the
                         Notice of  Extension  shall  specifically  explain  the
                         standards upon which entitlement to a benefit is based,
                         the  unresolved  issues that  prevent a decision on the
                         claim, and the additional information needed to resolve
                         those  issues.  The Claimant  shall be afforded 45 days
                         within which to provide the specified information.

          6.2.2 Review  Procedures - Denial of Benefits.  If the Company  denies
     part or all of the claim,  the Claimant  shall have the  opportunity  for a
     full and fair review by the Company of the denial, as follows:



                                       5
<PAGE>

               6.2.2.1 Initiation of Appeal. Within 180 days following notice of
          denial  of  benefits,   the  Claimant  shall  initiate  an  appeal  by
          submitting a written notice of appeal to Company.

               6.2.2.2  Submissions on Appeal - Information Access. The Claimant
          shall be allowed to provide written comments,  documents, records, and
          other  information  relating  to the claim for  benefits.  The Company
          shall  provide  to 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.

               6.2.2.3 Additional Company Responsibilities on Appeal. On appeal,
          the Company shall:

                    (a)  [See ss. 2560.503-1(h)(3)(i)-(v)] Take into account all
                         materials and information the Claimant submits relating
                         to  the  claim,   without   regard  to   whether   such
                         information  was submitted or considered in the initial
                         benefit determination;

                    (b)  Provide for a review that does not afford  deference to
                         the initial adverse benefit  determination  and that is
                         conducted  by an  appropriate  named  fiduciary  of the
                         Company  who is  neither  the  individual  who made the
                         adverse  benefit  determination  that is the subject of
                         the appeal, nor the subordinate of such individual;

                    (c)  In   deciding   an  appeal  of  any   adverse   benefit
                         determination  that is  based  in whole or in part on a
                         medical judgment,  including determinations with regard
                         to whether a particular treatment,  drug, or other item
                         is  experimental,  investigational,  or  not  medically
                         necessary  or  appropriate,  consult with a health care
                         professional   who   has   appropriate   training   and
                         experience  in the field of  medicine  involved  in the
                         medical judgment;

                    (d)  Identify medical or vocational experts whose advise was
                         obtained on behalf of the Company in connection  with a
                         Claimant's  adverse  benefit   determination,   without
                         regard to whether  the advice was relied upon in making
                         the benefit determination; and

                    (e)  Ensure  that the health care  professional  engaged for
                         purposes of a consultation  under  subsection (c) above
                         shall be an  individual  who was neither an  individual
                         who  was  consulted  in  connection  with  the  adverse
                         benefit  determination  that  is  the  subject  of  the
                         appeal, nor the subordinate of any such individual.

                       6.2.2.4 Timing of Notification of Benefit Denial - Appeal
              Denial.  The Company  shall  notify the Claimant not later than 45
              days after  receipt of the  Claimant's  request  for review by the
              Company,  unless the Company determines that special circumstances
              require an  extension  of time for  processing  the claim.  If the
              Company  determines that an extension is required,  written notice
              of  such  shall  be  furnished  to  the  Claimant   prior  to  the
              termination of the initial 45-day period, and such extension shall
              not  exceed  45 days.  The  Company  shall  indicate  the  special
              circumstances requiring an extension of time and the date by which
              the Company expects to render the determination on review.

                    6.2.2.5  Content  of  Notification  of Benefit  Denial.  The
               Company shall provide the Claimant with a notice calculated to be
               understood by the Claimant, which shall contain:

                    (a)  The   specific   reason  or  reasons  for  the  adverse
                         determination;

                    (b)  Reference to the specific plan  provisions on which the
                         benefit determination is based;

                    (c)  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
                         relevant  information  (as defined in applicable  ERISA
                         regulations);



                                       6
<PAGE>

                    (d)  A statement of the Claimant's  right to bring an action
                         under ERISA Section 502(a);

                    (e)  [See   ss.   2560.503-1(j)(5)]   Any   internal   rule,
                         guideline,  protocol, or other similar criterion relied
                         upon  in  making  the  adverse   determination,   or  a
                         statement  that such a rule,  guideline,  protocol,  or
                         other  similar  criterion was relied upon in making the
                         adverse determination and that the Claimant can request
                         and  receive  free  of  charge  a copy  of  such  rule,
                         guideline,   protocol  or  other   criterion  from  the
                         Company;

                    (f)  If the  adverse  benefit  determination  is  based on a
                         medical necessity or experimental  treatment or similar
                         exclusion  or  limit,  either  an  explanation  of  the
                         scientific or clinical judgment for the  determination,
                         applying the terms of this  Agreement to the Claimant's
                         medical   circumstances,   or  a  statement  that  such
                         explanation  will  be  provided  free  of  charge  upon
                         request; and

                    (g)  The following statement: "You and your Company may have
                         other voluntary  alternative dispute resolution options
                         such as  mediation.  One way to find  out  what  may be
                         available is to contact your local U.S.  Department  of
                         Labor  Office  and  your  state  insurance   regulatory
                         agency."

     Schedule A of the  Agreement  shall be deleted in its entirety and replaced
by the attached First Amended Schedule A.


     IN WITNESS OF THE ABOVE,  the Executive and the Company have agreed to this
First Amendment.

                             [SIGNATURES OMITTED]


                                       7

<PAGE>
Clark/Bardes Consulting      The Peoples National Bank       Plan Year Reporting
         Executive Salary Continuation Plan - First Amended - Schedule A

<TABLE>
<CAPTION>
Robert E. Dye
DOB:  9/2/41                                                        Early Retirement                Disability           Pre-retire.
Plan Anniv Date:  10/1/03                                                                                                   Death
Retirement Age:  66                                                    Installment                 Installment             Benefit
Payments:  Monthly Installments                                       Payable at 66               Payable at 66            Lump Sum
---------  --------------------                                       -------------               -------------            --------
                                   Benefit        Accrual                      Based On                     Based On       Based On
Period                            Level (2)       Balance        Vesting       Benefit       Vesting         Accrual        Accrual
Ending                  Age          (1)            (2)            (3)           (4)           (5)             (6)            (7)
------                            ---------       -------        -------       -------       -------         -------        -------
<S>                     <C>        <C>            <C>             <C>             <C>          <C>            <C>            <C>
Jan 2003(1)             61                        144,519         100%                 0       100%           21,357         144,519
                        1/31/03 Accrual Balance Rollover
Sep 2003                62         70,094         210,358         100%            70,094       100%           29,477         210,358
Sep 2004                63         72,898         321,999         100%            72,898       100%           41,663         321,999
Sep 2005                64         75,814         451,698         100%            75,814       100%           53,965         451,698
Sep 2006                65         78,846         606,454         100%            78,846       100%           66,901         606,454
Sep 2007                66         82,000         805,018         100%            82,000       100%           82,000         805,018
</TABLE>
        September 2, 2007 Retirement; October 1, 2007 First Payment Date

(1)  The first line reflects just the initial values as of January 31, 2003.
(2)  The benefit amount is based on a $70,094  beginning  benefit,  inflating at
     4.00% each year to $82,000 at retirement.  The benefit amount also includes
     a 3.00 % nonguaranteed inflator during the payout period.



</TEXT>
</DOCUMENT>
