<PAGE>
 
                         MOORESVILLE SAVINGS BANK, SSB
                          MANAGEMENT RECOGNITION PLAN

     Mooresville Savings Bank, SSB (the "Bank"), does herein set forth the terms
of its Management Recognition Plan (the "Plan").

     Section 1.  Purpose of this Plan.  The purpose of this Plan is to provide
     ----------  --------------------                                         
to the directors, officers and employees (the "Participants") of the Bank and of
any corporation or other entity of which the Bank owns, directly or indirectly,
not less than fifty percent (50%) of any class of the equity securities thereof
(a "Subsidiary"), an ownership interest in the Bank's parent holding company,
Coddle Creek Financial Corp. (the "Corporation") by making awards (hereinafter
referred to as "Awards" or singularly, "Award") of shares of common stock of the
Corporation (the "Common Stock").  The Board of Directors of the Bank (the
"Board") and the board of directors of the Corporation believe that
participation in the ownership of the Corporation will induce Participants to
continue to serve the Bank or any Subsidiary as directors, officers and/or
employees and encourage them to contribute to the future growth and profits of
the Bank and the Corporation.  In addition, the existence of this Plan will make
it possible for the Bank and its Subsidiaries to attract capable individuals to
serve as directors or officers of the Bank and its Subsidiaries.  The Board
believes that the existence of this Plan will provide incentives to the
directors, officers and employees of the Bank and any Subsidiaries which will
contribute materially to the success of such companies.

     Section 2.  Administration of this Plan.
     ----------  --------------------------- 

            (a)  This Plan shall be administered by a committee of the Board
(the "Committee") which shall consist of not less than two members of the Board
who are "Non-Employee Directors" as defined in Rule 16 b-3(b)(3) of the Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). In the absence of a duly appointed Committee, the Plan shall be
administered by the Board. The Committee shall have full power and authority to
construe, interpret and administer this Plan. All actions, decisions,
determinations, or interpretations of the Committee shall be final, conclusive,
and binding upon all parties. Members of the Committee shall serve at the
pleasure of the Board.

            (b) The Committee shall decide (i) to whom Awards shall be made
under this Plan, (ii) the number of shares of Common Stock subject to each
award, (iii) the number of additional shares, if any, to be purchased or
allocated for the purposes of this Plan, (iv) the determination of leaves of
absence which may be granted to Participants without constituting a termination
of their employment for purposes of the Plan and (v) such additional terms and
conditions for Awards as the Committee shall deem appropriate, including,
without limitation, any determinations as to the restrictions or conditions on
transfer of shares of Common Stock that are necessary or appropriate to satisfy
all applicable securities laws, rules, regulations, and listing requirements.

            (c) The Committee may designate any officers or employees of the
Bank or of any Subsidiary to assist in the administration of this Plan. The
Committee may authorize such individuals to execute documents on its behalf and
may delegate to them such other ministerial and limited discretionary duties as
the Committee may see fit.

                                       1
<PAGE>
 
          (d) Any unallocated, undistributed or forfeited shares of Common Stock
held under this Plan shall be held by the Committee.

   Section 3. Shares of Common Stock Available Under the Plan.
   ---------- ------------------------------------------------

          The Plan shall acquire up to 26,979 shares of Common Stock of the
Corporation.  Such shares of Common Stock may be purchased by the Plan in the
open market or, subject to approval of the Board of Directors of the
Corporation, may be acquired through the issuance by the Corporation to the Plan
of authorized but unissued shares of Common Stock on such terms as may be
approved by the Committee and the Board of Directors of the Corporation.  Such
shares shall be held or delivered by the Trustees or shall be allocated and
distributed pursuant to the terms of this Plan.

   Section 4.  Eligibility and Awards.
   ----------  ---------------------- 

          (a) The Participants in this Plan to whom Awards may be made shall be
the following:  members of the Board, members of the board of directors of the
Corporation or any Subsidiary, and such officers and employees of the Bank, the
Corporation and/or of any Subsidiary as may be designated by the Committee.

          (b) As promptly as practicable after a determination is made that an
Award of Common Stock is to be made, the Committee shall notify the Participant
in writing of the grant of the Award, the number of shares of Common Stock
covered by the Award, and the terms upon which the Common Stock subject to the
Award shall vest and be distributed to the Participant.  Awards of Common Stock
under this Plan shall be effective upon execution and delivery of the Stock
Grant Agreement which sets forth the terms and conditions of the Award of Common
Stock (the "Stock Grant Agreement").

          (c) Notwithstanding anything to the contrary contained in Sections
4(a) and 4(b) above, no Participant shall have any right or entitlement to
receive an Award hereunder, such awards being at the total discretion of the
Committee.

   Section 5.  Vesting and Distribution of Common Stock.
   ----------  ---------------------------------------- 

          (a) Awards made under this Plan shall vest and the right of a
Participant to the Award shall be nonforfeitable as determined by the Committee
and as set forth in the Stock Grant Agreement.

          (b) In determining the number of shares vested under any applicable
vesting schedule, a Participant shall not receive fractional shares.  If the
product resulting from multiplying the vested percentage times the allocated
shares results in a fractional share, then a Participant's vested right shall be
rounded down to the nearest whole number of shares.

          (c) In the event any Participant shall no longer be either a director
or an employee of the Bank, the Corporation or any Subsidiary for any reason
(whichever position resulted in the Award, as set forth in the Stock Grant
Agreement), other than as provided in Sections 5(d) and 5(e) below, and

                                       2
<PAGE>
 
such Participant does not have a 100% vested interest in his or her shares
under the Plan, then any shares which are not vested based upon the applicable
schedule set forth in the Stock Grant Agreement shall be forfeited and, provided
this Plan has not terminated pursuant to Section 14 below, shall be available
again for Awards to Participants as may be determined by the Committee.

          (d) In the event that a Participant shall no longer be an employee or
a director of the Bank, the Corporation or any Subsidiary (whichever position
resulted in the award, as set forth in the Stock Grant Agreement), because of
such Participant's disability or death, prior to the date when all shares
allocated to him or her would be 100% vested in accordance with the schedule set
forth in the Stock Grant Agreement, then, notwithstanding such vesting schedule,
all shares allocated to such Participant shall immediately become fully vested
and nonforfeitable.  For purposes of this Plan, the term "disability" shall be
defined in the same manner as such term is defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code").

          (e) In the event that a Participant ceases to be an employee or a
director of the Bank, the Corporation or a Subsidiary (whichever position
resulted in the award, as set forth in the Stock Grant Agreement), for any
reason after the occurrence of a "change in control" and prior to the time that
all shares allocated to him or her would be 100% vested in accordance with the
schedule set forth in the Stock Grant Agreement, then, notwithstanding such
vesting schedule, all shares allocated to such Participant shall immediately
become fully vested and nonforfeitable.  For purposes of this Plan, a "change in
control" shall mean (i) a change in control of a nature that would be required
to be reported by the Corporation in response to Item 1 of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Exchange Act; (ii) such time as any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than the Corporation is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation or Bank
representing 25 percent or more of the combined voting power of the outstanding
Common Stock of the Corporation or outstanding common stock of the Bank, as
applicable; or (iii) individuals who constitute the board of directors of the
Corporation or the Board on the date hereof (the "Incumbent Board" and
"Incumbent Bank Board," respectively) cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board or Incumbent Bank
Board, as applicable, or whose nomination for election by the Corporation's or
Bank's shareholders was approved by the Corporation's or Bank's Board of
Directors or Nominating Committee, shall be considered as though he or she were
a member of the Incumbent Board or Incumbent Bank Board, as applicable; or (iv)
either the Corporation or the Bank consolidates or merges with or into another
corporation, association or entity or is otherwise reorganized, where neither
the Corporation nor the Bank, respectively, is the surviving corporation in such
transaction; or (v) all or substantially all of the assets of either the
Corporation or the Bank are sold or otherwise transferred to or are acquired by
any other entity or group.

          (f) Shares of Common Stock which have vested shall be distributed to
the Participant or any transferee permitted by Section 11  (a "Permitted
Transferee"), as the case may be, as soon as practicable after such shares of
Common Stock have vested in accordance with the schedule contained in the Stock
Grant Agreement.

                                       3
<PAGE>
 
          (g) The Corporation, the Bank and any Subsidiary shall have the right
to require any Participant or Permitted Transferee to remit to the Corporation,
the Bank or any  Subsidiary an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or release of
any certificate or certificates for shares or delivery of any cash or other
assets with respect to shares or otherwise pursuant to this Plan.
Alternatively, the Corporation, Bank and any Subsidiary may deliver or release
shares or make other distributions of cash or other assets net of the number of
shares or cash sufficient to satisfy the withholding tax requirements.  For
withholding tax purposes, the shares, cash and other assets to be distributed
shall be valued on the date the withholding obligation is incurred.

          (h) Each Participant receiving an Award under this Plan shall deliver
to the Bank a Stock Grant Agreement, which shall be signed by such Participant.

     Section 6. Restrictions on Selling of Shares.  Awards of Common Stock may
     ---------- ---------------------------------                             
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are vested and distributed pursuant to the terms of this Plan.  The Board
or the Committee may require the Participant or his Permitted Transferee, as the
case may be, to agree not to sell or otherwise dispose of his distributed shares
except in accordance with all then applicable federal and state securities laws,
and the Board or the Committee may cause a legend to be placed on the stock
certificate(s) representing the distributed shares in order to restrict the
transfer of the distributed shares for such period of time or under such
circumstances as the Board or the Committee, upon the advice of counsel, may
deem appropriate.

     Section 7.  Effect of Award on Status of Participant.  The fact that an
     ----------  ----------------------------------------                   
Award is made to a Participant under this Plan shall not confer on such
Participant any right to continued service on the Board or on the board of
directors of the Corporation or any Subsidiary, nor any right to continued
employment with the Bank, the Corporation or any Subsidiary; nor shall it limit
the right of the Bank, the Corporation, or any Subsidiary to remove such
Participant from any such boards, or to terminate his or her employment at any
time.

     Section 8.  Voting Rights; Dividends; Other Distributions. After an Award
     ----------  ---------------------------------------------                
has been made, the Participant or Permitted Transferee shall be entitled to
receive all cash dividends declared upon the shares awarded and to direct the
Committee as to the voting of the shares which are covered by the Award and
which are not yet vested and distributed to him, subject to rules and procedures
adopted by the Committee for this purpose.  All shares of Common Stock which
have been awarded as to which Participants or Permitted Transferees have not
directed the voting shall be voted by the Committee in the same proportion as
the trustees of the Bank's Employee Stock Ownership Plan vote Common Stock held
in trust associated therewith, and in the absence of any such voting, shall be
voted in the manner directed by the Board.

          Notwithstanding the foregoing, if a Participant or Permitted
Transferee hereunder forfeits any Awards pursuant to the terms of this Plan, the
Participant or Permitted Transferee, as applicable, shall, within 30 days after
the effective date of such forfeiture, pay the Corporation an amount equal to
the dividends received by such Participant or Permitted Transferee with respect
to such forfeited Awards.

                                       4
<PAGE>
 
     Section 9.  Adjustment Upon Changes in Capitalization; Dissolution or
     ----------  ---------------------------------------------------------
Liquidation.  In the event of a change in the number or type of shares of Common
-----------                                                                     
Stock outstanding, or in the event shares of Common Stock are decreased, changed
into or exchanged for securities of a different entity, by reason of a
reclassification, recapitalization, reorganization, other similar capital
adjustment, by reason of a merger or consolidation of the Corporation,  by
reason of the sale by the Corporation of all or a substantial portion of its
assets, or by reason of the occurrence of any other event which could affect the
implementation of this Plan and the realization of its objectives, the number or
kind of shares subject to Awards which have occurred, or could occur, under this
Plan shall be proportionately and equitably adjusted by the Committee.

     Section 10.    Non-Transferability.  Prior to the time Awards become vested
     -----------    -------------------                                         
and are distributed by the Committee, Awards may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution.  Notwithstanding the foregoing, or any
other provision of this Plan, a Participant who holds Awards may transfer such
Awards to his or her spouse, lineal ascendants, lineal descendants, or to a duly
established trust for the benefit of one or more of these individuals.  Awards
so transferred may thereafter be transferred only to the Participant who
originally received the grant or to an individual or trust to whom the
Participant could have initially transferred the Awards pursuant to this Section
10.   Awards which are transferred pursuant to this Section 10 shall be subject
to the same terms and conditions as applied to the Participant. In addition,
such shares may be tendered in response to a tender offer for or a request or
invitation to tenders of greater than fifty percent (50%) of the outstanding
Common Stock and may be surrendered in a merger, consolidation or share exchange
involving the Corporation; provided, however, in each case, that except as
otherwise provided herein, the securities or other consideration received in
exchange therefor shall thereafter be subject to the restrictions and conditions
set forth in this Plan.

     Section 11.    Impact of Award on Other Benefits of Participant.  The value
     -----------    ------------------------------------------------            
of any Award, either on the date of the Award or at the time such shares become
vested, shall not be includable as compensation or earnings for purposes of any
other benefit plan offered by the Bank, the Corporation or any Subsidiary other
than any qualified employee benefit plan which provides that such value shall be
included as compensation or earnings for purposes of such plan.

     Section 12.    Corporate Action.  The making of an Award under this Plan
     -----------    ----------------                                         
shall not affect in any way the right or power of the Corporation or its
shareholders or the Bank or its shareholders or any Subsidiary or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Corporation's, the Bank's or any
Subsidiary's capital structure or its business, or any merger or consolidation
of the Corporation, the Bank or any Subsidiary, or the issuance of any bonds,
debentures, preferred or other capital stock or rights with respect thereto, or
the dissolution or liquidation of the Corporation, the Bank or any Subsidiary,
or any sale or transfer of all or any part of the Corporation's, the Bank's or
any Subsidiary's assets or business.

     Section 13.    Exculpation and Indemnification.  In connection with this
     -----------    -------------------------------                          
Plan, no member of the Board, no member of the board of directors of the
Corporation and no member of the Committee shall be personally liable for any
act or omission to act in his capacity as a member of the Board, the board of
directors of the Corporation or the Committee, nor for any mistake in judgment
made in good faith, unless arising out of, or resulting from, such person's own
bad faith, willful misconduct, or 

                                       5
<PAGE>
 
criminal acts. To the extent permitted by applicable law and regulation, the
Bank shall indemnify, defend and hold harmless the members of the Board, the
members of the board of directors of the Corporation, the members of the board
of directors of any Subsidiary, and the Committee and each other officer or
employee of the Bank, the Corporation or of any Subsidiary to whom any duty or
power relating to the administration or interpretation of this Plan may be
assigned or delegated, from and against any and all liabilities (including any
amount paid in settlement of a claim with the approval of the Board) and any
costs or expenses (including counsel fees) incurred by such persons arising out
of, or as a result of, any act or omission to act in connection with the
performance of such person's duties, responsibilities, and obligations under
this Plan, other than such liabilities, costs, and expenses as may arise out of,
or result from, the bad faith, willful misconduct, or criminal acts of such
persons.

     Section 14.    Amendment and Modification of this Plan.  The Board may at
     -----------    ---------------------------------------                   
any time, and from time to time, amend or modify this Plan (including the form
of Stock Grant Agreement) in any respect, subject to any applicable regulatory
requirements and any required stockholder approval or any stockholder approval
which the Board may deem advisable for any reason, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange or quotation
system listing requirements.  However, any amendment or modification of this
Plan shall not in any manner affect any Award theretofore made to a Participant
under this Plan without the consent of such  Participant or any Permitted
Transferee of such Participant.

     Section 15.    Termination and Expiration of this Plan.  This Plan may be
     -----------    ---------------------------------------                   
abandoned, suspended, or terminated, in whole or in part, at any time by the
Board; provided, however, that abandonment, suspension, or termination of this
Plan shall not affect any Award theretofore made under this Plan.  Unless sooner
terminated, this Plan shall terminate at the close of business on the day that
is the tenth (10th) anniversary of the date of approval of the Plan by  the
shareholders of the Corporation; and no Award may be made under this Plan
thereafter.  Such termination shall not effect any Award theretofore made.

     Section 16.    Miscellaneous.
     -----------    ------------- 
 
     (a)  This Plan has been adopted by the Board to be effective as of the date
of approval of the Plan by the shareholders of the Corporation.

     (b)  Captions and paragraph headings used herein are for convenience only,
do not modify or affect the meaning of any provision herein, are not a part
hereof, and shall not serve as a basis for interpretation or construction of
this Plan.  As used herein, the masculine gender shall include the feminine and
neuter, and the singular number shall include the plural, and vice versa,
whenever such meanings are appropriate.

     (c)  All costs and expenses incurred in the operation and administration of
this Plan shall be borne by the Bank or by a Subsidiary.

     (d)  Without regard to the principles of conflicts of laws, the laws of the
State of North Carolina shall govern and control the validity, interpretation,
performance, and enforcement of this Plan.

     (e)  A copy of this Plan, and any amendments thereto, shall be maintained
by the Secretary of the Bank and shall be shown to any proper person making
inquiry about it.

                                       6
<PAGE>
 
STATE OF NORTH CAROLINA
COUNTY OF IREDELL
                                                           STOCK GRANT AGREEMENT

     THIS STOCK GRANT AGREEMENT (the "Agreement") is made and entered into as of
the ____ of ___________________, _______ (the "Effective Date"), by and among
Mooresville Savings Bank, SSB (the "Bank"), and _____________________________
__________________ (the "Participant").

     WHEREAS, a Management Recognition Plan (the "Plan") was adopted by the
Board of Directors of the Bank (the "Bank") and approved by the Board of
Directors and by the shareholders of Coddle Creek Financial Corp., the holding
company of the Bank (the "Corporation") on   ____________, 1999.

     WHEREAS, it has been determined that it is desirable and in the best
interest of the Bank to make an award (the "Award") of certain shares of the
Common Stock of the Corporation, under the Plan, to the Participant, subject to
certain restrictions as specified below; and

     WHEREAS, capitalized terms not otherwise defined herein shall have the same
meaning given to such terms in the Plan.

     NOW, THEREFORE, the Parties agree as follows:

     1.   Date of Award.  The date of making the Award under this Agreement is
          -------------                                                       
the _____ day of _________________, 1999.  This Award has been made in
recognition of the Participant's status and service as a ____________________ of
_____________________________________________.  The Participant is ____ or _____
is not a director or executive officer of the Bank.

     2.   Award of Plan Shares. The Participant is awarded, in the aggregate,
          --------------------                                               
___________________________ (__________) shares of Common Stock (the "Plan
Shares"), which shares become vested and nonforfeitable pursuant to paragraph 5
of this Agreement.

     3.   Investment Representation and Transfer Restrictions.
          --------------------------------------------------- 

          (a) Investment Representation.  Participant makes and agrees to the
              -------------------------                                      
investment representation, if any, attached hereto as Annex A, and the
Management Recognition Plan Committee (the "Committee") may cause a legend to be
placed on any certificate representing any of the Plan Shares to make
appropriate reference to such representation, as necessary.

          (b) Securities Law and Regulations.  The Participant agrees that the
              -------------------------------                                 
Plan Shares shall be subject to such stop-transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange or
interdealer quotation system upon which the Common Stock is then listed and any
other applicable federal or state securities laws, rules or regulations, and the
Committee may cause a legend or legends to be placed on any certificate
representing any of the Plan Shares to make appropriate reference to such
restrictions.

                                       1
<PAGE>
 
     4.   Vesting and Delivery of Plan Shares by the Committee.
          ---------------------------------------------------- 

          (a) Periodic Vesting.  Plan Shares shall vest and become
              ----------------                                    
nonforfeitable in accordance with the following schedule:

               _________ shares on ___________________, 1999
               _________ shares on ___________________, 2000
               _________ shares on ___________________, 2001
               _________ shares on ___________________, 2002

In addition, Plan Shares shall become vested and nonforfeitable upon disability,
death and a change in control as set forth in the Plan.

          (b) Delivery of Vested Plan Shares to the Participant.  After the date
              -------------------------------------------------                 
on which the Plan Shares have become vested as provided in this Agreement and in
the Plan, the Committee shall deliver to the Participant, the Participant's
designee, such other person as shall have been designated as Participant's
beneficiary in accordance with this Agreement, or any other permitted recipient
pursuant to the Plan, as applicable, certificates representing the Plan Shares
which have become vested and nonforfeitable, as the Committee shall determine,
free from any restrictions imposed by this Agreement other than such
restrictions and conditions as may be deemed necessary by the Committee pursuant
to paragraph 3 above.

          (c) Delivery of Forfeited Plan Shares.  If the Plan Shares, or any of
              ---------------------------------                                
them, are forfeited pursuant to the Plan, the Committee shall determine the
appropriate disposition of such forfeited shares.  Thereafter such forfeited
shares shall cease to be subject to this Agreement.

     5.   Repayment of Dividends. If the Participant forfeits Plan Shares
          ----------------------                                         
pursuant to the Plan, the Participant shall, within 30 days after the effective
date of such forfeiture, pay the Corporation an amount equal to the dividends
received by the Participant with respect to forfeited Plan Shares as set forth
in the Plan.

     6.   Designation of Beneficiary.  The Participant hereby designates the
          --------------------------                                        
person(s) described on Annex B as the beneficiary or beneficiaries who shall be
entitled to receive the Plan Shares and other assets, if any, distributable to
the Participant upon his death.  The Participant may, from time to time, revoke
or change his beneficiary designation without the consent of any prior
beneficiary, if any, by filing a new designation with the Committee.  The last
such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Committee prior to the Participant's death, and
in no event shall it be effective as of a date prior to such receipt.

          If no such beneficiary designation is in effect at the time of the
Participant's death, or if no designated beneficiary survives the Participant,
or if such designation conflicts with law, the Participant's estate shall be
deemed to have been designated his beneficiary and shall receive the Plan Shares
and other assets, if any, distributable to the Participant upon his death.  If
the Committee is in doubt as to the right of any person to receive such
distribution, the Committee may retain the Plan Shares and other assets, without
liability for any interest in respect thereof, until the rights thereto are

                                       2
<PAGE>
 
determined, or the Committee may transfer such Plan Shares into any court of
appropriate jurisdiction and such transfer shall be deemed a complete discharge
of the obligations of the Bank, the Corporation, and the Committee hereunder.

     7.   Effect of Award on Status of Participant.  The fact that an Award has
          ----------------------------------------                             
been made to the Participant under this Plan shall not confer on the Participant
any right to continued service on the Board, on the board of directors of the
Corporation or on the board of directors of any Subsidiary, nor to continued
employment with the Bank, the Corporation or any Subsidiary; nor shall it limit
the right of the Bank, the Corporation or of any Subsidiary to remove the
Participant from any such boards, or to terminate his employment at any time
without prior notice.

     8.   Impact of Award on Other Benefits of Participant.  The value of the
          ------------------------------------------------                   
Plan Shares on the date of the Award or at the time the Plan Shares become
vested, shall not be includable as compensation or earnings for purposes of any
other benefit plan offered by the Bank, the Corporation or any Subsidiary other
than any qualified employee benefit plan which provides that such value shall be
included as compensation or earnings for purposes of such plans.

     9.   Tax Withholding.  All Plan Shares distributed pursuant to this
          ---------------                                               
Agreement shall be subject to applicable federal, state and local withholding
for taxes.  The Participant expressly acknowledges and agrees to such
withholding without regard to whether the Plan Shares may then be sold or
otherwise transferred by the Participant.  The Participant acknowledges and
agrees to the tax withholding provisions which are set forth in the Plan.

     10.  Notices.  Any notices or other communications required or permitted to
          -------                                                               
be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or three (3) business days after
deposit in the United States mail by Certified Mail, return receipt requested,
properly addressed and postage prepaid, if to the Bank or the Committee at the
Bank's principal office address at 347 North Main Street, Mooresville, North
Carolina 28115; and, if to the Participant, at his last address appearing on the
books of the Bank.  The Bank and the Participant may change their address or
addresses by giving written notice of such change as provided herein.  Any
notice or other communication hereunder shall be deemed to have been given on
the date actually delivered or as of the third (3rd) business day following the
date mailed as set forth above, as the case may be.

     11.  Construction Controlled by Plan.  The Plan, a copy of which is
          -------------------------------                               
attached hereto as Annex C, is incorporated herein by reference.  The Award
shall be subject to the terms and conditions of the Plan, and the Participant
hereby assumes and agrees to comply with all of the obligations imposed upon the
Participant in the Plan.  This Agreement shall be construed so as to be
consistent with the Plan; and the provisions of the Plan shall be deemed to be
controlling in the event that any provision hereof should appear to be
inconsistent therewith.

     12.  Severability.  Whenever possible, each provision of this Agreement
          ------------                                                      
shall be interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or part
thereof shall not be affected thereby and this Agreement shall continue to be
binding on the parties hereto as if such unenforceable, invalid or illegal
provision or part thereof had not been included herein.


                                       3
<PAGE>
 
     13.  Governing Law.  Without regard to the principles of conflicts of laws,
          -------------                                                         
the laws of the State of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this Agreement.

     14.  Modification of Agreement; Waiver.  This Agreement may be modified,
          ---------------------------------                                  
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto or their successors in interest.  No waiver hereunder shall constitute a
waiver with respect to any subsequent occurrence or other transaction hereunder
or of any other provision hereof.

     15.  Binding Effect.  This Agreement shall be binding upon and shall inure
          --------------                                                       
to the benefit of the parties hereto, and their respective heirs, legatees,
personal representatives, executors, and administrators, successors and assigns.

     16.  Entire Agreement.  This Agreement and the Plan constitute and embody
          ----------------                                                    
the entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the matters
addressed herein.

     17.  Counterparts.  This Agreement may be executed in any number of
          ------------                                                  
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, the Bank has caused this instrument to be executed in
its corporate name by its President, or one of its Vice Presidents, and attested
by its Secretary or one of its Assistant Secretaries, and its corporate seal to
be hereto affixed, all by, authority of its Board of Directors first duly given;
and each individual party hereto has hereunto set his hand and adopted as his
seal the typewritten word "SEAL" appearing beside his name, all done this the
day and year first above written.

                                      MOORESVILLE SAVINGS BANK, SSB



                                      By:____________________________
                                      __________________ President

ATTEST:


__________________________________
____________________Secretary
                    

[Corporate Seal]

                                      PARTICIPANT


                                      ___________________________(SEAL)
                                      
                                      
                                       4
<PAGE>
 
                                    ANNEX A

                           Investment Representation
                           -------------------------


                                       5
<PAGE>
 
                                    ANNEX B

                          Management Recognition Plan
                          ---------------------------
                          Beneficiary Designation Form
                          ----------------------------


     As Beneficiary to receive any shares of stock distributable on my behalf
pursuant to the Mooresville Savings Bank, SSB Management Recognition Plan, I
hereby designate the following:

                     Name           Address              Relationship

Primary Beneficiary:_____________________________________________________
                      
                    _____________________________________________________

                    _____________________________________________________

Contingent Beneficiary:
(if any)            _____________________________________________________

                    _____________________________________________________  

                    _____________________________________________________
  
If more than one primary beneficiary is named, shares will be paid in equal
shares to surviving primary beneficiaries.  Should the contingent beneficiaries
be eligible to receive the benefits (i.e., all primary beneficiaries are
deceased), such benefits will be paid in equal shares to such surviving
contingent beneficiaries.

Name of Spouse if not given above: ______________________________________


----------------------------  ------------------------------------------- 
Witness                       Participant

                              -------------------------------------------
                              Date
<PAGE>
 
                                    ANNEX C

                          Management Recognition Plan
                          ---------------------------