<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 3rd day of September, 1979, and amended and restated this the 8th
day of September, 1997 (the "Agreement"), by and between Mooresville Savings
Bank, SSB, a mutual savings bank organized and existing under the laws of the
State of North Carolina (the "Bank"), and Donald R. Belk (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated September 3, 1979; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $200.00 per month from September 3, 1979 through August 31, 1984; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of his 70th birthday.
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
70th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $935 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's 70th
birthday shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his 70th
birthday, the Bank will pay $935 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director.  The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director died.  In the event of the death of the
last living Beneficiary before all installment payments shall have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his 70th birthday, he (or his Beneficiary)
shall be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                            Percentage of Retirement Benefits
     Full Number of Years Served            Stated in Section 2 of this Agreement
     Until Termination of Directorship      To Which the Director is Entitled
     ---------------------------------      ------------------------------------
     <S>                                    <C>  
                  2                                       40% 
                  3                                       60% 
                  4                                       80% 
                  5                                      100% 
</TABLE> 

                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since September 3, 1979, the original effective date of
this Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's 70th birthday or, if
earlier, death occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a) a change in control of a nature that would be required to be
       reported 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
       Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b) such time as any "person" (as such term is used in Sections 13(d)
       and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
       defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
       securities of the Bank or its holding company representing 25 percent or
       more of the combined voting power of the outstanding common stock of the
       Bank or common stock of such holding company, as applicable; or

          (c) individuals who constitute the board of directors of the Bank or
       its holding company on the date hereof (the "Incumbent Board" and
       "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
       nomination for election by the Bank's or its holding company's
       shareholders was approved by the Bank's or its holding company's board of
       directors or nominating committee, as applicable, shall be considered as
       though he or she were a member of the Incumbent Board or Incumbent
       Holding Company Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company,
     respectively, is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by
     any other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

                                       6
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams               By:    /s/ George W. Brawley, Jr.
------------------------------             ---------------------------------
         , Secretary
---------                           Title: President
                                           ------------------------------------
[Corporate Seal]
                                     /s/ Donald R. Belk           (Seal)
                                    ------------------------------
                                    DONALD R. BELK
                                    Director

                                       7
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 3rd day of September, 1979, and amended and restated this the 8th
day of September, 1997 (the "Agreement"), by and between Mooresville Savings
Bank, SSB, a mutual savings bank organized and existing under the laws of the
State of North Carolina (the "Bank"), and George W. Brawley, Jr. (the
"Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated September 3, 1979; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $200.00 per month from September 3, 1979 through August 31, 1984; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank as of his 70th birthday.
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
70th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $1,195 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's 70th
birthday shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his 70th
birthday, the Bank will pay $1,195 per month for a continuous period of 120
months to the Beneficiary or Beneficiaries of the Director.  The first such
monthly installment payment shall be made on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director died.  In the event of the
death of the last living Beneficiary before all installment payments shall have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his 70th birthday, he (or his Beneficiary)
shall be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                            Percentage of Retirement Benefits
     Full Number of Years Served            Stated in Section 2 of this Agreement
     Until Termination of Directorship      To Which the Director is Entitled
     ---------------------------------      ------------------------------------
     <S>                                    <C> 
                   2                                      40%
                   3                                      60%
                   4                                      80%
                   5                                     100%
</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since September 3, 1979, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's 70th birthday or, if
earlier, death occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.


                                       6
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams               By:  /s/ Calvin E. Tyner
------------------------------         ----------------------------------------
         , Secretary
---------                           Title: CHAIRMAN OF THE BOARD
                                          -------------------------------------
[Corporate Seal]
                                     George W. Brawley, Jr.       (Seal)
                                    ------------------------------
                                    GEORGE W. BRAWLEY, JR.
                                    Director


                                       7
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 3rd day of September, 1979, and amended and restated this the 8th
day of September, 1997 (the "Agreement"), by and between Mooresville Savings
Bank, SSB, a mutual savings bank organized and existing under the laws of the
State of North Carolina (the "Bank"), and Claude U. Voils, Jr. (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated September 3, 1979; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $200.00 per month from September 3, 1979 through August 31, 1984; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of his 70th birthday.
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
70th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $897 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's 70th
birthday shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his 70th
birthday, the Bank will pay $897 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director.  The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director died.  In the event of the death of the
last living Beneficiary before all installment payments shall have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his 70th birthday, he (or his Beneficiary)
shall be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                   <C> 
                   2                                        40%
                   3                                        60%
                   4                                        80%
                   5                                        100%
</TABLE> 

                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since September 3, 1979, the original effective date of
this Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's 70th birthday or, if
earlier, death occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

                                       6
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams
------------------------------      By:    /s/ George W. Brawley, Jr.
         , Secretary                       ------------------------------------
---------                           Title:   President
                                           ------------------------------------
[Corporate Seal]
                                     /s/ Claude U. Voils, Jr.     (Seal)
                                    ------------------------------
                                    CLAUDE U. VOILS, JR.
                                    Director

                                       7
<PAGE>
 
                               FIRST AMENDMENT TO
                          RETIREMENT PAYMENT AGREEMENT


     THIS FIRST AMENDMENT to that certain Retirement Payment Agreement
originally entered into as of the 3rd day of September, 1979 by and between
Mooresville Savings Bank, SSB, a mutual savings bank organized and existing
under the laws of the State of North Carolina (the "Bank"), and Calvin E. Tyner
(the "Director") (the "Agreement"), made this the 8th day of September, 1997.


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated September 3, 1979; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is currently receiving benefits under the Agreement;
and

     WHEREAS, the parties desire to amend the Agreement.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     1.  The text of Section 4 of the Agreement is deleted in its entirety, so
that as amended, Section 4 shall read as follows:

         4.  [Deleted].

     2.  The text of Section 5, Paragraph D of the Agreement is deleted in its
entirety, so that as amended, Section 5, Paragraph D shall read as follows:

         5.  General Provisions:
             ------------------ 

             D.  [Deleted].
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this First Amendment to Retirement
Payment Agreement to be signed in its corporate name by its duly authorized
officer, and impressed with its corporate seal, attested by its Secretary, and
the Director has hereunto set his hand and seal, all on the day and year first
above written.

                                     MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                By:    /s/ George W. Brawley, Jr.
------------------------------              ------------------------------
                    Secretary    
-----------------,                   Title:  President
                                            ------------------------------ 

[Corporate Seal]                      /s/ Calvin E. Tyner          (Seal)    
                                     ----------------------------- 
                                     CALVIN E. TYNER
                                     Director


                                       2
<PAGE>
 
                         RETIREMENT PAYMENT AGREEMENT

AGREEMENT entered into as of 3rd day of September, 1979 between Mooresville 
Federal Savings & Loan Association, a domestic Corporation having its principal 
office in Mooresville NC (hereinafter referred to as the Association) and Calvin
E. Tyner of Mooresville, NC (hereinafter referred to as the Director).

WITNESSETH:

WHEREAS, the Director is rendering valuable service and it is the desire of the 
Association to have the benefit of his continued loyalty and service and also to
assist him in providing for the contingencies of retirement and death; and,

WHEREAS, the Director hereby agrees to waive fees paid to him as a Director in 
the amount of $200 per month for five years from the date of the execution of 
this agreement;

NOW THEREFORE, in consideration of the premises contained herein, the parties 
hereto mutually agree as follows:

     1.  Retirement Benefit:  Should the Director still be in the Directorship 
         ------------------
of the Association upon attainment of his 70th birthday, the Association will 
commence to pay him $590 per month for a continuous period of 120 months. In the
event that the Director should die after becoming entitled to receive said 
monthly installments but before any or all of said installments have been paid, 
the Association will pay or will continue to pay said installments to such 
beneficiary or beneficiaries as the Director has directed by filing with the 
Association a notice in writing. In the event of the death of the last named 
beneficiary before all the unpaid payments have been made, the balance of any 
amount which remains unpaid at said death shall be commuted on the basis of 6 
percent per annum compound interest and shall be paid in a single sum to the 
executor or administrator of the estate of the last named beneficiary to die. In
the absence of any such beneficiary designation, any amount remaining unpaid at 
the Director's death shall be commuted on the basis of 6 percent per annum 
compound interest and shall be paid in a single sum to the executor or 
administrator of the Director's estate.

     2.  Death Benefit:  Should the Director die while in the Directorship of 
         -------------
the Association and prior to the attainment of his 70th birthday, the 
Association (beginning at a date to be determined by the Association but within 
six months from the date of such death) will commence to pay $590 per month for 
a continuous period of 120 months to such beneficiary or beneficiaries as the 
Director has directed by filing with the Association a notice in writing. 
Irrespective of the above, however, if the Director dies as a result of suicide 
within two years of the execution of this agreement, the death benefit shall not
exceed an amount equal to his waived Directors' fees plus interest at the rate 
of 7 1/2 percent per annum compounded annually. In the event of the death of the
last named beneficiary before all the unpaid payments have been made, the 
balance of any amount which remains unpaid at said death shall be commuted on 
the basis of 6 percent per annum compound interest and shall be paid in a single
sum to the executor or administrator of the estate of the last named beneficiary
to die. In the absence of any such beneficiary designation, any amount remaining
unpaid at the Director's death shall be commuted on the basis of 6 percent per 
annum compound interest and shall be paid in a single sum to the executor or 
administrator of the Director's estate.

<PAGE>
 
3.  Termination of Directorship:
    ---------------------------

    A. If the Director terminates his Directorship, for reasons other than death
    or the attainment of his  70th  birthday, prior to two years from the
                             ------ 
    execution date of this Agreement, the Director's benefits shall be limited
    to his waived Director fees plus interest at the rate of 7 1/2 percent per
    annum compounded annually and shall be paid in a single sum as soon as
    practical following the termination of his Directorship.

    B. If the Director terminates his Directorship, for reasons other than death
    or the attainment of his  70th  birthday, at the end of two or more years 
                             ------
    from the execution date of this Agreement, he or his beneficiary, as
    applicable, shall be entitled upon the attainment of his  70th  birthday, or
                                                             ------
    his prior death, to a percentage of the retirement benefits stated in
    Section 1 or this Agreement as determined by the following table:

<TABLE> 
<CAPTION> 

   FULL NUMBER OF YEARS SERVED                      PERCENTAGE OF RETIREMENT
    AS DIRECTOR FROM DATE OF                       BENEFITS STATED IN SECTION
   EXECUTION OF THIS AGREEMENT                  1 OF THIS AGREEMENT TO WHICH THE
UNTIL TERMINATION OF DIRECTORSHIP                     DIRECTOR IS ENTITLED
---------------------------------               --------------------------------
<S>                                             <C> 
              2                                                40%

              3                                                60%

              4                                                80%

              5                                               100%
</TABLE> 

4.  Forfeiture Provisions:
    ---------------------

    A. During the period the retirement benefit is payable to the Director under
    Section 1 of this Agreement, the Director shall not engage in business
    activities which are in competition with the Association without first
    obtaining the written consent of the Association.

    B. During the period the retirement payment is payable to the Director under
    Section 1 of the Agreement, the Director shall be available to render
    consulting services to the Association upon request by an officer of the
    Association, but such requests shall not be made more frequently than once
    each month. The Director shall not be considered to have breached this
    condition if he is unable to consult because of his mental or physical
    disability.

    C. Payment of the retirement benefit under this Agreement may be terminated
    by the Association, if the Director fails to comply with either of the
    conditions set forth in paragraph (A) and (B) of this Section 4.
<PAGE>
 
5.   General Provisions:
     ------------------

     A. Except as otherwise provided by this Agreement, it is agreed that
     neither the Director, nor his beneficiary shall have any right to commute,
     sell, assign, transfer or otherwise convey the right to receive any
     payments hereunder, which payments and the right thereto are expressly
     declared to be nonassignable and nontransferable.

     B. The benefits payable under this Agreement shall be independent of, and 
     in addition to, any other employment agreements that may exist from time to
     time between the parties hereto, concerning any other compensation payable
     by the Association to the Director whether as salary, bonus, or otherwise.
     This Agreement shall not be deemed to constitute a contract of employment
     between the parties hereto, nor shall any provision hereof restrict the
     right of the Association to discharge the Director or restrict the right of
     the Director to terminate his Directorship.

     C. The rights of the Director under this Agreement and of any beneficiary 
     of the Director shall be solely those of an unsecured creditor of the
     Association. Any asset acquired by the Association in connection with the
     liabilities assumed by it hereunder, shall not be deemed to be held under
     any trust for the benefit of the Director or his beneficiaries or to be
     considered security for the performance of the obligations of the
     Association but shall be, and remain, a general, unpledged, unrestricted
     asset of the Association.

     D. The Association hereby reserves the right to accelerate the payments 
     specified in Sections 1, 2 and 3 above without the consent of the Director,
     his estate, beneficiaries, or any other person claiming through or under
     him.

     E. The Association agrees that it will not merge or consolidate with any 
     other Association or organization, or permit its business activities to be
     taken over by any other organization unless and until the succeeding or
     continuing Association or other organization shall expressly assume the
     rights and obligations of the Association herein set forth. The Association
     further agrees that it will not cease its business activities or terminate
     its existence, other than as heretofore set forth in this Section, without
     having made adequate provision for the fulfilling of its obligations
     hereunder.

     F. This Agreement may be revoked or amended in whole or in part by a 
     writing signed by both of the parties hereto.

     G. This Agreement shall be subject to the construed under the laws of the 
     State of North Carolina.






<PAGE>
 
     IN WITNESS THEREOF, the said Association has caused this Agreement to be 
signed in its Corporate name by its duly authorized officer, and impressed with 
its corporate seal, attested by its Secretary, and the said Director has 
hereunto set his hand and seal, all on the day and year first above written.



ATTEST:                          Mooresville Federal Savings & Loan Association


/s/ Claude U. Voils, Jr.         By /s/ George W. Brawley, Jr. (Seal)
----------------------------        ---------------------------
                                           President

WITNESS: /s/ Donald R. Belk         /s/ Calvin E. Tyner        (Seal)
        --------------------        ---------------------------
                                    (The Director)

<PAGE>
 
                              AMENDED AND RESTATED
                   DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of January, 1985, and amended and
restated March 31, 1988 and amended and restated this the 8th day of September,
1997 (the "Agreement"), by and between Mooresville Savings Bank, SSB, a mutual
savings bank organized and existing under the laws of the State of North
Carolina (the "Bank"), and Donald R. Belk (the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated January 1, 1985, and subsequently amended and restated
March 31, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $3,600.00 per year from January 1, 1985 through December 31, 1989; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or January 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $1,750.00 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the calendar
month following the calendar month in which the Director's Retirement Age shall
occur. In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of seven and one-half percent (7 1/2%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Director, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,833.33 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent 
(7 1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                    <C> 
                    2                                      40%
                    3                                      60%
                    4                                      80%
                    5                                     100%
</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since January 1, 1985, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                        MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                   By:    /s/ George W. Brawley, Jr.
------------------------------                 -------------------------------
         , Secretary
---------
                                        Title:    President
                                               -------------------------------
[Corporate Seal]
                                         /s/ Donald R. Belk           (Seal)
                                        ------------------------------
                                        DONALD R. BELK
                                        Director

                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
           BETWEEN MOORESVILLE SAVINGS BANK, SSB AND DONALD R. BELK

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Donald R. Belk (the
"Director") previously entered into a Deferred Compensation Agreement on January
1, 1985, and amended and restated said agreement on March 31, 1988, and amended
and restated said agreement again on September 8, 1997 through the execution of
the Amended and Restated Director's Deferred Compensation Agreement (the
"Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $1,750.00 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service.  If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary 
<PAGE>
 
     before all remaining installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven and one-half percent (7 1/2%) per
     annum compounded interest and shall be paid in a single sum to the estate
     of the last Beneficiary to die. In the absence of such beneficiary
     designation, any payments remaining unpaid at the Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,833.33 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die.  In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:     /s/ George W. Brawley, Jr.
                                    -----------------------------

  /s/ Billy R. Williams       Title:  President
--------------------------          -----------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                  /s/
                              -----------------------------------
                              Donald R. Belk

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $1,750.00
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,837.50
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,929.38
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $2,025.84
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $2,127.14
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $2,233.49
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of January, 1985, and amended and
restated March 31, 1988 and amended and restated  this the 8th day of September,
1997 (the "Agreement"), by and between Mooresville Savings Bank, SSB, a mutual
savings bank organized and existing under the laws of the State of North
Carolina (the "Bank"), and George W. Brawley, Jr. (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated January 1, 1985, and subsequently amended and restated
March 31, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $3,600.00 per year from January 1, 1985 through December 31, 1989; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or January 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $1,833.33 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the calendar
month following the calendar month in which the Director's Retirement Age shall
occur. In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of seven and one-half  percent (7 1/2%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Director, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,916.66 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
                                          Percentage of Retirement Benefits
     Full Number of Years Served          Stated in Section 2 of this Agreement
     Until Termination of Directorship    To Which the Director is Entitled
     ---------------------------------    ------------------------------------
     <S>                                  <C> 
                 2                                      40%
                 3                                      60%
                 4                                      80%
                 5                                     100%
</TABLE> 


                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for
each full year served since January 1, 1985, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or


                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.


                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                     MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams
------------------------------       By:    /s/ Calvin E. Tyner
         , Secretary                        --------------------------------- 
---------                            Title:  Chairman of the Board
                                            --------------------------------- 
[Corporate Seal]                      /s/ George W. Brawley, Jr.
                                     -----------------------------(Seal)
                                     GEORGE W. BRAWLEY, JR.
                                     Director
 

                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Director") previously entered into a Deferred Compensation Agreement
on January 1, 1985, and amended and restated said agreement on March 31, 1988,
and amended and restated said agreement again on September 8, 1997 through the
execution of the Amended and Restated Director's Deferred Compensation Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.      Section 2 is deleted in its entirety and a new Section 2 is
             inserted in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $1,833.33 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service. If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any 
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die. In the absence of such beneficiary designation,
     any payments remaining unpaid at the Director's death shall be commuted on
     the basis of seven and one-half percent (7 1/2%) per annum compounded
     interest and shall be paid in a single sum to the Director's estate.

     2.      Section 3 is deleted in its entirety and a new Section 3 is
             inserted in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,916.66 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die.  In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     3.      Exhibit B attached hereto sets forth the Increased Benefit which
will be payable to the Director if he continues service with the Bank after
reaching the Retirement Age.

     4.      All of the other terms and provisions of the Agreement are not
modified in any respect and shall remain in full force and effect.


                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By:     /s/ Claude U. Voils, Jr.
                                         -----------------------------

  /s/ Billy R. Williams             Title:    Director
----------------------------                --------------------------
Secretary


[Corporate Seal]

                                    DIRECTOR:

                                         /s/ 
                                    ----------------------------------
                                    George W. Brawley, Jr.



                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
Date of Benefit                                         Amount of Increased Monthly Benefit
----------------------------------------------------------------------------------------------
<S>                                                     <C>
Retirement Age -- Age 65                                $1,833.33
----------------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01             $1,925.00
----------------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02             $2,021.25
----------------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03             $2,1-22.31
----------------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04             $2,228.42
---------------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05             $2,339.85
--------------------------------------------------------------------------------------------
</TABLE>



 
<PAGE>
 
                              AMENDED AND RESTATED
                   DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of January, 1985, and amended and
restated March 31, 1988 and amended and restated  this the 8th day of September,
1997 (the "Agreement"), by and between Mooresville Savings Bank, SSB, a mutual
savings bank organized and existing under the laws of the State of North
Carolina (the "Bank"), and Calvin E. Tyner (the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated January 1, 1985, and subsequently amended and restated
March 31, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $3,600.00 per year from January 1, 1985 through December 31, 1989; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or January 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $916.66 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the
calendar month following the calendar month in which the Director's Retirement
Age shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of seven and one-half  percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent 
(7 1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,083.33 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent 
(7 1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------

                    2                                     40%
                    3                                     60%
                    4                                     80%
                    5                                    100%




                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since January 1, 1985, the original effective date of this
Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or


                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.



                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.


                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:

/s/ Billy R. Williams               By:     /s/ George W. Brawley, Jr.
------------------------------              ---------------------------------
         , Secretary
---------                           Title:   President
                                            ---------------------------------

[Corporate Seal]

                                     /s/ Calvin E. Tyner          (Seal)
                                    ------------------------------
                                    CALVIN E. TYNER
                                    Director



                                       6
<PAGE>
 
                             AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered into as of the 1st day of January, 1985, and amended and
restated March 31, 1988 and amended and restated this the 8th day of September,
1997 (the "Agreement"), by and between Mooresville Savings Bank, SSB, a mutual
savings bank organized and existing under the laws of the State of North
Carolina (the "Bank"), and Claude U. Voils, Jr. (the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated January 1, 1985, and subsequently amended and restated
March 31, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $3,600.00 per year from January 1, 1985 through December 31, 1989; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above. In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described. Except as otherwise specifically provided herein, in order to receive
benefits under this Agreement, the Director must be a Director of the Bank as of
the later of his 65th birthday or January 1, 1989 (the "Retirement Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $1,250.00 per month for a continuous period of 120 months. Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the calendar
month following the calendar month in which the Director's Retirement Age shall
occur. In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries"). In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of seven and one-half percent (7 1/2%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Director, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,500.00 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died. In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die. In the absence of any such beneficiary designation, or if no
Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                   <C> 
                   2                                       40%
                   3                                       60%
                   4                                       80%
                   5                                       100%
</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since January 1, 1985, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                        MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                   By:    /s/ George W. Brawley, Jr.
------------------------------                 ---------------------------------
         , Secretary
---------
                                        Title:   President
                                               ---------------------------------

[Corporate Seal]
                                         /s/ Claude U. Voils, Jr.       (Seal)
                                        --------------------------------
                                        CLAUDE U. VOILS, JR.
                                        Director

                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
        BETWEEN MOORESVILLE SAVINGS BANK, SSB AND CLAUDE U. VOILS, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Claude U. Voils,
Jr. (the "Director") previously entered into a Deferred Compensation Agreement
on January 1, 1985, and amended and restated said agreement on March 31, 1988,
and amended and restated said agreement again on September 8, 1997 through the
execution of the Amended and Restated Director's Deferred Compensation Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $1,250.00 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service.  If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary 
<PAGE>
 
     before all remaining installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven and one-half percent (7 1/2%) per
     annum compounded interest and shall be paid in a single sum to the estate
     of the last Beneficiary to die. In the absence of such beneficiary
     designation, any payments remaining unpaid at the Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     2.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,500.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die.  In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     3.   Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.   All of the other terms and provisions of the Agreement are not
     modified in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                                      MOORESVILLE SAVINGS BANK, SSB

Attest:                               By:     /s/ George W. Brawley, Jr.
                                          -------------------------------

   /s/ Billy R. Williams              Title:   President
-----------------------------                ----------------------------
Secretary


[Corporate Seal]

                                      DIRECTOR:

                                                /s/
                                      -----------------------------------
                                      Claude U. Voils, Jr.


                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $1,250.00
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,312.50
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,378.13
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $1,447.03
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,519.38
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,595.35
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of December, 1985, and amended and
restated this the 8th day of September, 1997 (the "Agreement"), by and between
Mooresville Savings Bank, SSB, a mutual savings bank organized and existing
under the laws of the State of North Carolina (the "Bank"), and Donald R. Belk
(the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated December 1, 1985; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $2,400.00 per year from December 1, 1985 through December 31, 1990;
and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above. In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described. Except as otherwise specifically provided herein, in order to receive
benefits under this Agreement, the Director must be a Director of the Bank as of
the later of his 65th birthday or December 1, 1989 (the "Retirement Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $966.67 per month for a continuous period of 120 months. Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the calendar
month following the calendar month in which the Director's Retirement Age shall
occur. In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries"). In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of seven and one-half percent (7 1/2%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Director, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,100.00 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died. In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die. In the absence of any such beneficiary designation, or if no
Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:
<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                   <C> 
                 2                                         40%
                 3                                         60%
                 4                                         80%
                 5                                        100%

</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since January 1, 1985, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

           (a)   a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

           (b)   such time as any "person" (as such term is used in Sections
     13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
     (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

           (c)   individuals who constitute the board of directors of the Bank
     or its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
           (d)   either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

           (e)   all or substantially all of the assets of either the Bank or
     its holding company are sold or otherwise transferred to or are acquired by
     any other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement. The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship. The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid. The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement. The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10. No Trust Created.  Nothing contained in this Agreement and no
     ----------  ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11. Taxes.  The Bank shall have the right to deduct from any
     ----------  -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent. In addition,
the Bank agrees it shall not enter into any agreement providing for the merger
of the Bank with and into another business entity or the sale of more than a
majority of the Bank's assets to another business entity, person or group of
persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement. In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13. Effect on Other Benefit Plans.  Nothing contained in this
     ----------  -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14. Severability.  The provisions of this Agreement shall be
     ----------  ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15. Gender.  Whenever in this Agreement words are used in the
     ----------  ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16. Headings.  The titles and headings of Sections are included
     ----------  --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17. Law Governing.  This Agreement shall be governed by the laws
     ----------  -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                            MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                        By: /s/ George W. Brawley, Jr.
------------------------------                   ------------------------------
         , Secretary
---------                                   Title:   President
                                                    ---------------------------
[Corporate Seal]
                                            /s/ Donald R. Belk            (Seal)
                                            ------------------------------
                                            DONALD R. BELK
                                            Director


                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
           BETWEEN MOORESVILLE SAVINGS BANK, SSB AND DONALD R. BELK

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Donald R. Belk (the
"Director") previously entered into a Deferred Compensation Agreement on
December 1, 1985, and amended and restated said agreement on September 8, 1997
through the execution of the Amended and Restated Director's Deferred
Compensation Agreement (the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $966.67 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service.  If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any 
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die. In the absence of such beneficiary designation,
     any payments remaining unpaid at the Director's death shall be commuted on
     the basis of seven and one-half percent (7 1/2%) per annum compounded
     interest and shall be paid in a single sum to the Director's estate.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,100.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries. The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.
     
          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die. In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.
     
     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By:     /s/ George W. Brawley, Jr. 
                                                 ---------------------------
   /s/ Billy R. Williams                 Title:    President       
---------------------------------                --------------------------- 
Secretary


[Corporate Seal]

                                         DIRECTOR:

                                                         /s/
                                         -----------------------------------
                                         Donald R. Belk


                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $  966.67
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,015.00
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,065.75
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $1,119.04
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,174.99
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,233.74
------------------------------------------------------------------------------------
</TABLE>



                                      
<PAGE>
 
                             AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of December, 1985, and amended and
restated this the 8th day of September, 1997 (the "Agreement"), by and between
Mooresville Savings Bank, SSB, a mutual savings bank organized and existing
under the laws of the State of North Carolina (the "Bank"), and George W.
Brawley, Jr. (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated December 1, 1985; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $2,400.00 per year from December 1, 1985 through December 31, 1990;
and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or December 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $1,033.33 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the calendar
month following the calendar month in which the Director's Retirement Age shall
occur. In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of seven and one-half  percent (7 1/2%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Director, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $1,158.33 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     -------------------------------------
     <S>                                   <C>  
                 2                                      40%      
                 3                                      60%   
                 4                                      80%   
                 5                                      100%   
</TABLE> 


                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since January 1, 1985, the original effective date of this
Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                    By:    /s/ Calvin E. Tyner
------------------------------                  -------------------------------
         , Secretary
---------                                Title: Chairman of the Board
                                                -------------------------------
[Corporate Seal]

                                         /s/ George W. Brawley, Jr.   (Seal)
                                         -------------------------- 
                                         GEORGE W. BRAWLEY, JR.
                                         Director


                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Director") previously entered into a Deferred Compensation Agreement
on December 1, 1985, and amended and restated said agreement on September 8,
1997 through the execution of the Amended and Restated Director's Deferred
Compensation Agreement (the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $1,033.33 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service.  If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any 
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die. In the absence of such beneficiary designation,
     any payments remaining unpaid at the Director's death shall be commuted on
     the basis of seven and one-half percent (7 1/2%) per annum compounded
     interest and shall be paid in a single sum to the Director's estate.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,158.33 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die.  In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:       /s/ Claude U. Voils, Jr.
                                     ----------------------------------

/s/ Billy R. Williams         Title:    Director
------------------------             ----------------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                    /s/
                              -----------------------------------------
                              George W. Brawley, Jr.

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $1,033.33
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,085.00
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,139.25
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $1,196.21
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,256.10
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,318.82
------------------------------------------------------------------------------------
</TABLE>
 
<PAGE>
 
                             AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of December, 1985, and amended and
restated this the 8th day of September, 1997 (the "Agreement"), by and between
Mooresville Savings Bank, SSB, a mutual savings bank organized and existing
under the laws of the State of North Carolina (the "Bank"), and Calvin E. Tyner
(the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated December 1, 1985; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $2,400.00 per year from December 1, 1985 through December 31, 1990;
and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or December 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $508.33 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the
calendar month following the calendar month in which the Director's Retirement
Age shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of seven and one-half  percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $691.67 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent (7
1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                    <C> 
                     2                                  40%
                     3                                  60%
                     4                                  80%
                     5                                 100%
</TABLE> 
                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for
each full year served since January 1, 1985, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 8.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams               By:       /s/ George W. Brawley, Jr.
---------------------------                   ---------------------------------
         , Secretary 
---------                           Title:    President
                                              ---------------------------------

[Corporate Seal]
                                    /s/ Calvin E. Tyner     (Seal) 
                                    ------------------------------       
                                    CALVIN E. TYNER
                                    Director


                                       6
<PAGE>
 
                              AMENDED AND RESTATED
                   DIRECTOR'S DEFERRED COMPENSATION AGREEMENT



     THIS AMENDED AND RESTATED DIRECTOR'S DEFERRED COMPENSATION AGREEMENT,
originally entered  into as of the 1st day of December, 1985, and amended and
restated this the 8th day of September, 1997 (the "Agreement"), by and between
Mooresville Savings Bank, SSB, a mutual savings bank organized and existing
under the laws of the State of North Carolina (the "Bank"), and Claude U. Voils,
Jr. (the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered into a Director's Deferred Compensation Agreement
with the Director, dated December 1, 1985; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $2,400.00 per year from December 1, 1985 through December 31, 1990;
and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank  as of the later of his 65th birthday or December 1, 1989 (the "Retirement
Age").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
Retirement Age (except as otherwise specifically provided herein), the Bank will
pay to him $708.33 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the
calendar month following the calendar month in which the Director's Retirement
Age shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of seven and one-half  percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent 
(7 1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his Retirement
Age, the Bank will pay $891.67 per month for a continuous period of 120 months
to the Beneficiary or Beneficiaries of the Director. The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the calendar month following the calendar
month in which the Director died.  In the event of the death of the last living
Beneficiary before all installment payments shall have been made, the balance of
any payments which remain unpaid at the time of such Beneficiary's death shall
be commuted on the basis of seven and one-half percent (7 1/2%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die.  In the absence of any such beneficiary designation, or if
no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of seven and one-half percent 
(7 1/2%) per annum compounded interest and shall be paid in a single sum to the
Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his Retirement Age, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:
<TABLE> 
<CAPTION> 

                                       Percentage of Retirement Benefits
Full Number of Years Served            Stated in Section 2 of this Agreement
Until Termination of Directorship      To Which the Director is Entitled
---------------------------------      ------------------------------------
<S>                                    <C> 
              2                                         40%
              3                                         60%
              4                                         80%
              5                                        100%
</TABLE> 


                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since January 1, 1985, the original effective date of this
Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the calendar month following
the calendar month in which the Director's Retirement Age or, if earlier, death
occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or


                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.


                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.


                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Director's Deferred Compensation Agreement to be signed in its corporate name by
its duly authorized officer, and impressed with its corporate seal, attested by
its Secretary, and the Director has hereunto set his hand and seal, all on the
day and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:

/s/ Billy R. Williams               By: /s/ George W. Brawley, Jr.
--------------------------              ----------------------------
          ,Secretary
----------                          Title: President
                                          --------------------------

[Corporate Seal]
                                    /s/ Claude U. Voils, Jr. (Seal)
                                    --------------------------------
                                    CLAUDE U. VOILS, JR.
                                    Director

                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                  DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
        BETWEEN MOORESVILLE SAVINGS BANK, SSB AND CLAUDE U. VOILS, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Claude U. Voils,
Jr. (the "Director") previously entered into a Deferred Compensation Agreement
on December 1, 1985, and amended and restated said agreement on September 8,
1997 through the execution of the Amended and Restated Director's Deferred
Compensation Agreement (the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     Retirement Age (except as otherwise specifically provided herein), the Bank
     will pay to him $708.33 per month for a continuous period of 120 months.
     Such continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     calendar month following the calendar month in which the Director ceases
     being a Director of the Bank (except as otherwise provided herein).  If the
     Director's service with the Bank continues past the Director's Retirement
     Age, then the monthly benefit payments shall be postponed and shall be
     increased on an annual basis by five percent (5%) for each full Year of
     Service of the Director occurring after the Director's Retirement Age and
     continuing until age 70 or such time as the Director ceases serving as a
     Director, whichever shall occur first (hereafter "the Increased Benefit").
     For purposes of this Agreement, the Director will receive credit for a year
     of service for each twelve month period during which he completes 1,000
     hours of service.  If the Director reaches age 70 and has not previously
     begun receiving his retirement benefits under this Section 2, the monthly
     payments will begin upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any payments which
     remain unpaid at the time of such Beneficiary's death shall be 
<PAGE>
 
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die. In the absence of such beneficiary designation,
     any payments remaining unpaid at the Director's death shall be commuted on
     the basis of seven and one-half percent (7 1/2%) per annum compounded
     interest and shall be paid in a single sum to the Director's estate.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $891.67 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the estate of the
     last Beneficiary to die.  In the absence of any such beneficiary
     designation, any amount remaining unpaid at a Director's death shall be
     commuted on the basis of seven and one-half percent (7 1/2%) per annum
     compounded interest and shall be paid in a single sum to the Director's
     estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
          This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:      /s/ George W. Brawley, Jr.
                                     -----------------------------

  /s/ Billy R. Williams       Title:  President
--------------------------           -----------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                    /s/
                              ------------------------------------
                              Claude U. Voils, Jr.

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $708.33
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $743.75
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $780.93
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $819.98
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $860.98
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $904.03
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                           RETIREMENT PLAN AGREEMENT


     THIS AMENDED AND RESTATED RETIREMENT PLAN AGREEMENT originally entered into
the 1st day of November, 1993 and amended and restated this the 15th day of
September, 1997 (the "Agreement"), by and between Mooresville Savings Bank, SSB,
a mutual state savings bank organized and existing under the laws of the State
of North Carolina (the "Bank"), and those persons listed on attached Exhibit A
(the "Director" or the "Directors").

                              W I T N E S S E T H:

     WHEREAS, the Bank recognizes the valuable services heretofore performed for
it by the Directors and wishes to encourage their further service and assist
them in providing for the contingencies of retirement and death;

     WHEREAS, the parties hereto wish to provide the terms and conditions upon
which the Bank shall make certain payments to the Directors or their designated
beneficiaries;

     WHEREAS, the parties hereto intend that this Agreement be considered an
unfunded arrangement maintained to provide deferred compensation benefits for
the Directors; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

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

     Section 1.  Retirement Benefits.  The Bank agrees that, except as otherwise
     ---------   -------------------                                            
specifically provided herein, upon the later to occur of a Director's 65th
birthday and November 1, 1998 (the "Normal Retirement Date"), the Bank will pay
the Director $1,000.00 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Director's Normal
Retirement Date shall occur.

     In the event that a Director should die after becoming entitled to receive
monthly installment payments under this Section 1 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment  payments to such beneficiary or beneficiaries as are designated by
the Director to the Bank in writing (the "Beneficiaries").  In the event of the
death of the Director's last living Beneficiary before all installment payments
have been made, the balance of any payments which remain unpaid at the time of
such Beneficiary's death shall be commuted on the basis of seven percent (7%)
per annum compounded interest and shall be paid in a single sum to the estate of
the last Beneficiary to die.  In the absence of such beneficiary designation,
any payments remaining unpaid at the Director's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Director's estate.  Any 
<PAGE>
 
amount payable to a Director or his Beneficiary under this Section 1 shall be
reduced by any disability payments already paid to such Director under Section 3
of this Agreement.

     Section 2.  Pre-Retirement Death Benefits.  Should a Director die while
     ---------   -----------------------------                              
serving as a director of the Bank, and prior to the Normal Retirement Date, the
Bank will pay $1,000.00 per month for a continuous period of 120 months to the
Director's Beneficiary or Beneficiaries.  The first such monthly installment
payment shall be made on a date to be determined by the Bank, but in no event
later than the first day of the sixth calendar month following the calendar
month in which the Director died.

     In the event of the death of the Director's last living Beneficiary before
all the unpaid payments shall have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, any amount remaining unpaid at a Director's death
shall be commuted on the basis of seven percent (7%) per annum compounded
interest and shall be paid in a single sum to the Director's estate.  Any amount
payable to a Director's Beneficiary under this Section 2 shall be reduced by any
disability payments already paid to such Director under Section 3 of this
Agreement.

     Section 3.  Disability Benefits.  If a Director shall become disabled (as
     ----------  --------------------                                         
defined herein) prior to his Normal Retirement Date while continuing to serve as
a Director of the Bank, the Bank shall commence to pay him $1,000 per month for
a continuous period of 120 months.  Such continuous monthly installment payments
shall commence on a date to be determined by the Bank, but in no event later
than the first day of the sixth calendar month following the calendar month in
which the Director is determined to be disabled.

     In the event that a Director should die after becoming entitled to receive
monthly installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment  payments to the Director's Beneficiary or Beneficiaries. In the
event of the death of the Director's last living Beneficiary before all
installment payments have been made, the balance of any payments which remain
unpaid at the time of such Beneficiary's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the estate of the last Beneficiary to die.  In the absence of such
beneficiary designation, any payments remaining unpaid at the Director's death
shall be commuted on the basis of seven percent (7%) per annum compounded
interest and shall be paid in a single sum to the Director's estate.

     The Director shall be considered disabled for the purpose of this Agreement
if he is unable to perform the duties of his position for a continuous period of
six (6) months or more.  During such six (6) month period, the Director must be
under the regular care of a medical doctor (M.D.) or osteopathic physician
(D.O.) licensed in the State of North Carolina.  For the purpose of this
section, or any other section relating to disability, if there is any dispute
between the parties as to the 

                                       2
<PAGE>
 
Director's physical or mental disability, such dispute shall be settled by the
opinion of a medical doctor or osteopathic physician licensed in the State of
North Carolina who is selected by the mutual consent of the Director and the
Bank or their representatives. If the parties cannot agree within ten (10) days
after a written request for the designation of an examining physician is made by
either party to the other, then the examining physician shall be designated by
the president of the Iredell County Medical Society then serving. Certification
of that physician as to the matter in dispute shall be final and binding upon
the Director, his Beneficiaries, the Bank, and all parties claiming any right or
interest under this Agreement through them.

     Section 4.  Termination Benefits.  Should a Director voluntarily resign as
     ---------   --------------------                                          
a director prior to the Normal Retirement Date for any reason other than death
or disability, he or his Beneficiaries, as applicable, shall be entitled to
receive, commencing on a date to be determined by the Bank, but in no event
later than the first day of the first calendar month following the month in
which the earlier of the Director's Normal Retirement Date or death shall occur,
a percentage of the amount of the monthly installment payment stated in Section
1 of this Agreement determined under the following table:

<TABLE> 
<CAPTION> 
                                                PERCENTAGE OF MONTHLY INSTALLMENT
                                                PAYMENT STATED IN SECTION 1 OF THIS
     IF DIRECTOR'S TERMINATION OCCURS           AGREEMENT TO WHICH DIRECTOR IS
               ON OR AFTER                                 ENTITLED   
     --------------------------------          -----------------------------------
<S>                                            <C> 
           March 31, 1994                                     20%
           March 31, 1995                                     40%
           March 31, 1996                                     60%
           March 31, 1997                                     80%
           March 31, 1998                                    100%
</TABLE> 
 
       Section 5.  Extraordinary Transactions.  In the event that a Director's
       ---------   --------------------------                                 
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 1 and the Normal Retirement  Date shall be deemed to be the date that
such Change in Control occurred.  The Bank shall commence to make monthly
installment payments to the Director as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's service as a
director of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

                                       3
<PAGE>
 
          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to a Director if,
prior to the consummation or occurrence of such transaction or event, the
Director and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Directors, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Directors or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Directors to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Directors or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other 

                                       4
<PAGE>
 
employment agreements that may exist from time to time between the parties
hereto, concerning any other compensation payable by the Bank to a Director
whether as fees, salary, bonus, or otherwise. This Agreement shall not be deemed
to constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge a Director or
restrict the right of a Director to terminate his directorship. The rights
accruing to the Directors or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by all of the parties hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Directors, the
Directors' Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Directors be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Directors, the Directors' designated Beneficiaries or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to a Director hereunder without such Director's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and

                                       5
<PAGE>
 
every obligation of the Bank to the Directors under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Directors to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Retirement Plan Agreement as of the day and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:

__________________________         By:  _________________________________
_______________, Secretary

[Corporate Seal]                   Title: _______________________________

                                       6
<PAGE>
 
                                    DIRECTORS:

                                    __________________________________(Seal)
                                    Donald R. Belk


                                    __________________________________(Seal)
                                    George W. Brawley, Jr.


                                    __________________________________(Seal)
                                    Calvin E. Tyner


                                    __________________________________(Seal)
                                    Claude U. Voils, Jr.
<PAGE>
 
                                   Exhibit A

                   Current Directorship and Years of Service

<TABLE>
<CAPTION>

==============================================================
Director                    Date Service Began   Date of Birth
============================================================== 
<S>                         <C>                  <C>
Donald R. Belk                 03-07-1974         11-21-1931      
                                                                  
George W. Brawley, Jr.         05-09-1968         04-24-1933      
                                                                  
Calvin E. Tyner                12-05-1963         01-04-1924      

Claude U. Voils, Jr.           03-05-1970         04-21-1929       
============================================================== 
</TABLE>
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                           RETIREMENT PLAN AGREEMENT
           BETWEEN MOORESVILLE SAVINGS BANK, SSB AND DONALD R. BELK

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Donald R. Belk,
(the "Director") previously entered into a Retirement Plan Agreement on November
1, 1993, and amended and restated said agreement on September 15, 1997, through
the execution of the Amended and Restated Retirement Plan Agreement (the
"Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 1 of the Agreement, the Director became
entitled to  receive retirement benefits on November 1, 1998 and thus is in pay
status; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 1 is deleted in its entirety and a new Section 1 is inserted in
        lieu thereof to read as follows:

     Section 1.  Retirement Benefits. The Bank agrees that, except as otherwise
     ----------  -------------------                                           
     specifically provided herein, upon the later to occur of a Director's 65th
     birthday and November 1, 1998 (the "Normal Retirement Date"), the Bank will
     pay the Director $1,000.00 per month for a continuous period of 120 months.
     Such continuous monthly installments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     first calendar month following the calendar month in which the Director's
     Normal Retirement Date shall occur (except as otherwise provided herein).

          If the Director's service with the Bank continues past the Normal
     Retirement Date, then the monthly benefit payments shall be postponed and
     shall be increased on an annual basis by five percent (5%) for each full
     Year of Service of the Director occurring after the Normal Retirement Date
     and continuing until age 70 or such time as the Director ceases serving as
     a Director, whichever shall occur first (hereafter "the Increased
     Benefit").  For purposes of this Agreement, the Director will receive
     credit for a year of service for each twelve month period during which he
     completes 1,000 hours of service.  If the Director reaches age 70 and has
     not previously begun receiving his retirement benefits under this Section
     1, the monthly payments will begin upon the Director's attainment of age 70
     in any event.
<PAGE>
 
          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 1 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all installment
     payments have been made, the balance of any payments which remain unpaid at
     the time of such Beneficiary's death shall be commuted on the basis of
     seven percent (7%) per annum compounded interest and shall be paid in a
     single sum to the estate of the last Beneficiary to die.  In the absence of
     such beneficiary designation, any payments remaining unpaid at the
     Director's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Director's estate.  Any amount payable to a Director or his Beneficiary
     under this Section 1 shall be reduced by any disability payments already
     paid to such Director under Section 3 of this Agreement.

     2. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Pre-Retirement Death Benefits. Should a Director die while
     ----------  -----------------------------                             
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 1, the Bank will pay $1,000.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.  Any amount payable to a
     Director's Beneficiary under this Section 2 shall be reduced by any
     disability payments already paid to such Director under Section 3 of this
     Agreement.

     3. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Disability Benefits. If a Director shall become disabled (as
     ----------  -------------------                                         
     defined herein) while continuing to serve as a Director of the Bank, the
     Bank shall commence to pay 

                                       2
<PAGE>
 
     him $1,000 per month (or his Increased Benefit if such applies) for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director is determined to be disabled.

          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 3 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to the Director's Beneficiary or
     Beneficiaries.  In the event of the death of the Director's last living
     Beneficiary before all installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

          The Director shall be considered disabled for the purpose of this
     Agreement if he is unable to perform the duties of his position for a
     continuous period of six (6) months or more.  During such six (6) month
     period, the Director must be under the regular care of a medical doctor
     (M.D.) or osteopathic physician (D.O.) licensed in the State of North
     Carolina.  For the purpose of this section, or any other section relating
     to disability, if there is any dispute between the parties as to the
     Director's physical or mental disability, such dispute shall be settled by
     the opinion of a medical doctor or osteopathic physician licensed in the
     State of North Carolina who is selected by the mutual consent of the
     Director and the Bank or their representatives. If the parties cannot agree
     within ten (10) days after a written request for the designation of an
     examining physician is made by either party to the other, then the
     examining physician shall be designated by the president of the Iredell
     County Medical Society then serving.  Certification of that physician as to
     the matter in dispute shall be final and binding upon the Director, his
     Beneficiaries, the Bank and all parties claiming any right or interest
     under this Agreement through them.

     4.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching his Normal Retirement Date.

     5.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       3
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.

                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:       /s/ George W. Brawley, Jr.
                                     -------------------------------

  /s/ Billy R. Williams       Title:   President 
-------------------------            -------------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                  /s/
                              --------------------------------------
                              Donald R. Belk

                                       4
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Current Retirement Age (before amendment)        $1,000.00
 Age 65
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,050.00
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,102.50
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $1,157.63
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,215.51
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,276.28
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                           RETIREMENT PLAN AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr.(the "Director") previously entered into a Retirement Plan Agreement on
November 1, 1993, and amended and restated said agreement on September 15, 1997,
through the execution of the Amended and Restated Retirement Plan Agreement (the
"Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 1 of the Agreement, the Director became
entitled to  receive retirement benefits on November 1, 1998 and thus is in pay
status; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 1 is deleted in its entirety and a new Section 1 is inserted in
        lieu thereof to read as follows:

     Section 1.  Retirement Benefits. The Bank agrees that, except as otherwise
     ----------  -------------------                                           
     specifically provided herein, upon the later to occur of a Director's 65th
     birthday and November 1, 1998 (the "Normal Retirement Date"), the Bank will
     pay the Director $1,000.00 per month for a continuous period of 120 months.
     Such continuous monthly installments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     first calendar month following the calendar month in which the Director's
     Normal Retirement Date shall occur (except as otherwise provided herein).

          If the Director's service with the Bank continues past the Normal
     Retirement Date, then the monthly benefit payments shall be postponed and
     shall be increased on an annual basis by five percent (5%) for each full
     Year of Service of the Director occurring after the Normal Retirement Date
     and continuing until age 70 or such time as the Director ceases serving as
     a Director, whichever shall occur first (hereafter "the Increased
     Benefit").  For purposes of this Agreement, the Director will receive
     credit for a year of service for each twelve month period during which he
     completes 1,000 hours of service.  If the Director reaches age 70 and has
     not previously begun receiving his retirement benefits under this Section
     1, the monthly payments will begin upon the Director's attainment of age 70
     in any event.
<PAGE>
 
          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 1 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all installment
     payments have been made, the balance of any payments which remain unpaid at
     the time of such Beneficiary's death shall be commuted on the basis of
     seven percent (7%) per annum compounded interest and shall be paid in a
     single sum to the estate of the last Beneficiary to die.  In the absence of
     such beneficiary designation, any payments remaining unpaid at the
     Director's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Director's estate.  Any amount payable to a Director or his Beneficiary
     under this Section 1 shall be reduced by any disability payments already
     paid to such Director under Section 3 of this Agreement.

     2. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Pre-Retirement Death Benefits. Should a Director die while
     ----------  -----------------------------                             
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 1, the Bank will pay $1,000.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.  Any amount payable to a
     Director's Beneficiary under this Section 2 shall be reduced by any
     disability payments already paid to such Director under Section 3 of this
     Agreement.

     3. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Disability Benefits. If a Director shall become disabled (as
     ----------  -------------------                                         
     defined herein) while continuing to serve as a Director of the Bank, the
     Bank shall commence to pay 

                                       2
<PAGE>
 
     him $1,000 per month (or his Increased Benefit if such applies) for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director is determined to be disabled.

          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 3 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to the Director's Beneficiary or
     Beneficiaries.  In the event of the death of the Director's last living
     Beneficiary before all installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

          The Director shall be considered disabled for the purpose of this
     Agreement if he is unable to perform the duties of his position for a
     continuous period of six (6) months or more.  During such six (6) month
     period, the Director must be under the regular care of a medical doctor
     (M.D.) or osteopathic physician (D.O.) licensed in the State of North
     Carolina.  For the purpose of this section, or any other section relating
     to disability, if there is any dispute between the parties as to the
     Director's physical or mental disability, such dispute shall be settled by
     the opinion of a medical doctor or osteopathic physician licensed in the
     State of North Carolina who is selected by the mutual consent of the
     Director and the Bank or their representatives. If the parties cannot agree
     within ten (10) days after a written request for the designation of an
     examining physician is made by either party to the other, then the
     examining physician shall be designated by the president of the Iredell
     County Medical Society then serving.  Certification of that physician as to
     the matter in dispute shall be final and binding upon the Director, his
     Beneficiaries, the Bank and all parties claiming any right or interest
     under this Agreement through them.

     4.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching his Normal Retirement Date.

     5.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       3
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:       /s/ Claude U. Voils, Jr.
                                     ---------------------------------

  /s/ Billy R. Williams       Title:  Director
--------------------------           ---------------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                  /s/
                              ----------------------------------------
                              George W. Brawley, Jr.

                                       4
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Current Retirement Age (before amendment)        $1,000.00
 Age 65
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $1,050.00
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $1,102.50
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $1,157.63
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,215.51
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,276.28
------------------------------------------------------------------------------------
</TABLE>
 
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                           RETIREMENT PLAN AGREEMENT
        BETWEEN MOORESVILLE SAVINGS BANK, SSB AND CLAUDE U. VOILS, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Claude U. Voils,
Jr., (the "Director") previously entered into a Retirement Plan Agreement on
November 1, 1993, and amended and restated said agreement on September 15, 1997,
through the execution of the Amended and Restated Retirement Plan Agreement (the
"Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 1 of the Agreement, the Director became
entitled to  receive retirement benefits on November 1, 1998 and thus is in pay
status; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 1 is deleted in its entirety and a new Section 1 is inserted
          in lieu thereof to read as follows:

     Section 1.  Retirement Benefits. The Bank agrees that, except as otherwise
     ----------  -------------------                                           
     specifically provided herein, upon the later to occur of a Director's 65th
     birthday and November 1, 1998 (the "Normal Retirement Date"), the Bank will
     pay the Director $1,000.00 per month for a continuous period of 120 months.
     Such continuous monthly installments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     first calendar month following the calendar month in which the Director's
     Normal Retirement Date shall occur (except as otherwise provided herein).

          If the Director's service with the Bank continues past the Normal
     Retirement Date, then the monthly benefit payments shall be postponed and
     shall be increased on an annual basis by five percent (5%) for each full
     Year of Service of the Director occurring after the Normal Retirement Date
     and continuing until age 70 or such time as the Director ceases serving as
     a Director, whichever shall occur first (hereafter "the Increased
     Benefit"). For purposes of this Agreement, the Director will receive credit
     for a year of service for each twelve month period during which he
     completes 1,000 hours of service. If the Director reaches age 70 and has
     not previously begun receiving his retirement benefits under this Section
     1, the monthly payments will begin upon the Director's attainment of age 70
     in any event.
<PAGE>
 
          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 1 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all installment
     payments have been made, the balance of any payments which remain unpaid at
     the time of such Beneficiary's death shall be commuted on the basis of
     seven percent (7%) per annum compounded interest and shall be paid in a
     single sum to the estate of the last Beneficiary to die.  In the absence of
     such beneficiary designation, any payments remaining unpaid at the
     Director's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Director's estate.  Any amount payable to a Director or his Beneficiary
     under this Section 1 shall be reduced by any disability payments already
     paid to such Director under Section 3 of this Agreement.

     2.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Pre-Retirement Death Benefits. Should a Director die while
     ----------  -----------------------------                             
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 1, the Bank will pay $1,000.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.  Any amount payable to a
     Director's Beneficiary under this Section 2 shall be reduced by any
     disability payments already paid to such Director under Section 3 of this
     Agreement.

     3.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Disability Benefits. If a Director shall become disabled (as
     ----------  -------------------                                         
     defined herein) while continuing to serve as a Director of the Bank, the
     Bank shall commence to pay

                                       2
<PAGE>
 
     him $1,000 per month (or his Increased Benefit if such applies) for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director is determined to be disabled.

          In the event that a Director should die after becoming entitled to
     receive monthly installment payments under this Section 3 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to the Director's Beneficiary or
     Beneficiaries.  In the event of the death of the Director's last living
     Beneficiary before all installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of seven percent (7%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

          The Director shall be considered disabled for the purpose of this
     Agreement if he is unable to perform the duties of his position for a
     continuous period of six (6) months or more.  During such six (6) month
     period, the Director must be under the regular care of a medical doctor
     (M.D.) or osteopathic physician (D.O.) licensed in the State of North
     Carolina.  For the purpose of this section, or any other section relating
     to disability, if there is any dispute between the parties as to the
     Director's physical or mental disability, such dispute shall be settled by
     the opinion of a medical doctor or osteopathic physician licensed in the
     State of North Carolina who is selected by the mutual consent of the
     Director and the Bank or their representatives.  If the parties cannot
     agree within ten (10) days after a written request for the designation of
     an examining physician is made by either party to the other, then the
     examining physician shall be designated by the president of the Iredell
     County Medical Society then serving.  Certification of that physician as to
     the matter in dispute shall be final and binding upon the Director, his
     Beneficiaries, the Bank and all parties claiming any right or interest
     under this Agreement through them.

     4.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching his Normal Retirement Date.

     5.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       3
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.

                                     MOORESVILLE SAVINGS BANK, SSB        
                                                                          
Attest:                              By:  /s/ George W. Brawley, Jr.      
                                        ----------------------------------
                                                                          
  /s/ Billy R. Williams              Title:        President              
----------------------------               ------------------------------- 
Secretary


[Corporate Seal]

                                     DIRECTOR:

                                       /s/
                                      -------------------------------------
                                      Claude U. Voils, Jr.

                                       4
<PAGE>
 
                                 EXHIBIT B
<TABLE>
<CAPTION>
------------------------------------------------------------------------------- 
       Date of Benefit                    Amount of Increased Monthly Benefit
------------------------------------------------------------------------------- 
<S>                                              <C>
Current Retirement Age (before amendment)          $1,000.00
Age 65                                             
------------------------------------------------------------------------------- 
Retire on or after 1/1/00 but before 1/1/01        $1,050.00
------------------------------------------------------------------------------- 
Retire on or after 1/1/01 but before 1/1/02        $1,102.50
------------------------------------------------------------------------------- 
Retire on or after 1/1/02 but before 1/1/03        $1,157.63
------------------------------------------------------------------------------- 
Retire on or after 1/1/03 but before 1/1/04        $1,215.51
------------------------------------------------------------------------------- 
Retire on or after 1/1/04 but before 1/1/05        $1,276.28
------------------------------------------------------------------------------- 
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT


     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of December, 1990, and amended and restated this the 8th
day of September, 1997 (the "Agreement"), by and between Mooresville Savings
Bank, SSB, a mutual savings bank organized and existing under the laws of the
State of North Carolina (the "Bank"), and George W. Brawley, Jr. (the
"Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated December 1, 1990; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director heretofore deferred receipt of director's fees in the
amount of $500.00 per month from December 1, 1990 through November 30, 1995; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director heretofore has deferred the
     ---------   -----------------                                           
receipt by him of director's fees as described above.  In exchange for such
deferral, the Director shall receive from the Bank the benefits hereinafter
described.  Except as otherwise specifically provided herein, in order to
receive benefits under this Agreement, the Director must be a Director of the
Bank as of his 65th birthday.
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
65th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $1,957 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's 65th
birthday shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the occurrence of his 65th
birthday, the Bank will pay $1,957 per month for a continuous period of 120
months to the Beneficiary or Beneficiaries of the Director.  The first such
monthly installment payment shall be made on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director died.  In the event of the
death of the last living Beneficiary before all installment payments shall have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compounded interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Director, any payments remaining unpaid at the
Director's death shall be commuted on the basis of eight percent (8%) per annum
compounded interest and shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his 65th birthday, he (or his Beneficiary)
shall be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                            Percentage of Retirement Benefits
     Full Number of Years Served            Stated in Section 2 of this Agreement
     Until Termination of Directorship      To Which the Director is Entitled
     ---------------------------------      -------------------------------------
     <S>                                    <C> 
                     2                                       40%
                     3                                       60%
                     4                                       80%
                     5                                      100%
</TABLE> 

                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since December 1, 1990, the original effective date of
this Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's 65th birthday or, if
earlier, death occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Bank shall commence to make monthly installment payments to
the Director as described therein on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Director's service as a director of the Bank is
terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

            (a)  a change in control of a nature that would be required to be
       reported 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
       Securities Exchange Act of 1934 (the "Exchange Act"); or

            (b)  such time as any "person" (as such term is used in Sections
       13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
       (as defined in Rule 13d-3 under the Exchange Act), directly or
       indirectly, of securities of the Bank or its holding company representing
       25 percent or more of the combined voting power of the outstanding common
       stock of the Bank or common stock of such holding company, as applicable;
       or

            (c)  individuals who constitute the board of directors of the Bank
       or its holding company on the date hereof (the "Incumbent Board" and
       "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
       nomination for election by the Bank's or its holding company's
       shareholders was approved by the Bank's or its holding company's board of
       directors or nominating committee, as applicable, shall be considered as
       though he or she were a member of the Incumbent Board or Incumbent
       Holding Company Board, as applicable; or

                                       3
<PAGE>
 
            (d)  either the Bank or its holding company consolidates or merges
       with or into another corporation, association or entity or is otherwise
       reorganized, where neither the Bank nor its holding company,
       respectively, is the surviving corporation in such transaction; or

            (e)  all or substantially all of the assets of either the Bank or
       its holding company are sold or otherwise transferred to or are acquired
       by any other entity or group.

       Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

       Section 6.  Assignability.  Except as otherwise provided by this 
       ---------   -------------   
Agreement, it is agreed that neither the Director, any Beneficiary, nor any
other person claiming any right or interest under this Agreement through the
Director or any Beneficiary shall have any right to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the right hereto are expressly declared to be nonassignable.

       Section 7.  Director's Rights.  This Agreement creates no right in the
       ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 8.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

       Section 9.  Financing of Benefits.  All benefits under this Agreement 
       ---------   ---------------------   
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid. The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement. The Director, the
Director's Beneficiaries, and any successor in interest shall be and remain a
general creditor of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

                                       6
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
                                    By:  
/s/ Billy R. Williams                   /s/ Calvin E. Tyner
------------------------------          ---------------------------------
         , Secretary
---------                           Title:  Chairman of the Board
                                           ------------------------------   
[Corporate Seal]
                                    /s/ George W. Brawley, Jr. (Seal)
                                    ---------------------------------
                                    GEORGE W. BRAWLEY, JR.
                                    Director

                                       7

<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Director") previously entered into a Retirement Payment Agreement on
December 1, 1990, and amended and restated said agreement on September 8, 1997
through the execution of the Amended and Restated Retirement Payment Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     65/th/ birthday ("Retirement Age") (except as otherwise specifically
     provided herein), the Bank will pay to him $1,957.00 per month for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director ceases being a Director of the Bank
     (except as otherwise provided herein).  If the Director's service with the
     Bank continues past the Director's Retirement Age, then the monthly benefit
     payments shall be postponed and shall be increased on an annual basis by
     five percent (5%) for each full Year of Service of the Director occurring
     after the Director's Retirement Age and continuing until age 70 or such
     time as the Director ceases serving as a Director, whichever shall occur
     first (hereafter "the Increased Benefit").  For purposes of this Agreement,
     the Director will receive credit for a year of service for each twelve
     month period during which he completes 1,000 hours of service.  If the
     Director reaches age 70 and has not previously begun receiving his
     retirement benefits under this Section 2, the monthly payments will begin
     upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any 
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die. In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     2.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $1,957.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     3.   Exhibit B attached hereto sets forth the Increased Benefit which will
          be payable to the Director if he continues service with the Bank after
          reaching the Retirement Age.

     4.   All of the other terms and provisions of the Agreement are not
          modified in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By:    /s/ Claude U. Voils, Jr.
                                        --------------------------------------

   /s/ Billy R. Williams            Title:  Director
-------------------------------           ------------------------------------
Secretary


[Corporate Seal]

                                     DIRECTOR:   
                                            /s/
                                     -----------------------------------------
                                     George W. Brawley, Jr.

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
  Date of Benefit                                  Amount of Increased Monthly Benefit
-------------------------------------------------------------------------------------------
<S>                                                  <C>
Retirement Age -- Age 65                              $1,957.00
-------------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01           $2,054.85
-------------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02           $2,157.59
-------------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03           $2,265.47
-------------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04           $2,378.75
-------------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05           $2,497.68
-------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of November, 1990, amended and restated October 21, 1993,
and amended and restated this the 8th day of September, 1997 (the "Agreement"),
by and between Mooresville Savings Bank, SSB, a mutual savings bank organized
and existing under the laws of the State of North Carolina (the "Bank"), and
Dale W. Brawley (the "Executive").


                             W I T N E S S E T H:

     WHEREAS, the Executive previously served as a Director of the Bank; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Executive,
dated November 1, 1990; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB", and the Executive resigned as a
Director of the Bank; and

     WHEREAS, the Executive continued to render valuable service to the Bank in
his capacity as an executive officer of the Bank, and it was the desire of the
Bank to have the benefit of his continued loyalty and service and also to assist
him in providing for the contingencies of retirement and death, and so effective
with the date of the Bank's charter conversion and the Executive's retirement as
a Director of the Bank, the parties amended and restated the Retirement Payment
Agreement on October 21, 1993; and

     WHEREAS, the Executive heretofore deferred receipt of compensation and
director's fees in the amount of $500.00 per month from November 1, 1990 through
October 31, 1995; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Executive heretofore has deferred the
     ---------   -----------------                                            
receipt by him of compensation and director's fees as described above.  In
exchange for such deferral, the Executive shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically
<PAGE>
 
provided herein, in order to receive benefits under this Agreement, the
Executive must be an Executive of the Bank as of his 65th birthday.

     Section 2.  Retirement Benefits.  Upon the occurrence of the Executive's
     ---------   -------------------                                         
65th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $8,303 per month for a continuous period of 120 months. Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive's 65th
birthday shall occur. In the event that the Executive should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Executive has designated in writing to the
Bank (the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die while
     ---------   -----------------------------                                 
in the service of the Bank and prior to the occurrence of his 65th birthday, the
Bank will pay $8,303 per month for a continuous period of 120 months to the
Beneficiary or Beneficiaries of the Executive.  The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive died.  In the event of the death of the
last living Beneficiary before all installment payments shall have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compounded interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any payments remaining unpaid at the
Executive's death shall be commuted on the basis of eight percent (8%) per annum
compounded interest and shall be paid in a single sum to the Executive's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Executive terminates his service as an executive officer of the Bank, for
any reason other than death or the attainment of his 65th birthday, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
       Full Number of Years Served         Stated in Section 2 of this Agreement
       Until Termination of Employment     To Which the Executive is Entitled
       -------------------------------     -------------------------------------
       <S>                                 <C> 
                     2                                      40%
                     3                                      60%
                     4                                      80%
</TABLE> 

                                       2
<PAGE>
 
<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
       Full Number of Years Served         Stated in Section 2 of this Agreement
       Until Termination of Employment     To Which the Executive is Entitled
       -------------------------------     -------------------------------------
       <S>                                 <C> 
                     5                                     100%
 
</TABLE> 

     For purposes of this Section 4, the Executive shall receive credit for each
full year served since November 1, 1990, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Executive's 65th birthday or, if
earlier, death occurs.

     Section 5.  Extraordinary Transactions. In the event that the Executive's
     ---------   --------------------------
service as an executive officer of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a Change in Control
(as defined herein), then the Executive shall be entitled to the benefits set
forth in Section 2 and the Bank shall commence to make monthly installment
payments to the Executive as described therein on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Executive's service as an executive
officer of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or


                                       3
<PAGE>
 
          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Executive and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as salary, bonus, or otherwise. This Agreement shall not be deemed to constitute
a contract of employment between the parties hereto, nor shall any provision
hereof restrict the right of the Bank to discharge the Executive or restrict the
right of the Executive to terminate his employment. The rights accruing to the
Executive or any designated beneficiary under the provisions of the Agreement
shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid. The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement. The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain a
general creditor of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.


                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Executive's prior written consent. In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Executive under this Agreement. In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.


                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.


                                         MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams
------------------------------           By: /s/ George W. Brawley, Jr.
                                             ----------------------------------
----------Secretary                      

                                         Title:  President
                                                -------------------------------

[Corporate Seal]
 
                                         /s/ Dale W. Brawley    (Seal)
                                         -------------------------------
                                         DALE W. BRAWLEY
                                         Executive



                                       6
<PAGE>
 
                                  APPENDIX A

ERISA Claims and Review Procedures.
---------------------------------- 

     A.   General. For the purposes of implementing a claims procedure under
          -------
          this Agreement as required by the Employee Retirement Income Security
          Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
          hereby designated as the named fiduciary and Plan Administrator of
          this unfunded, nonqualified deferred compensation plan. If any person
          believes he is being denied any rights or benefits under the
          Agreement, such person may file a claim in writing with the Plan
          Administrator for resolution in accordance with the provisions of
          Paragraph B of this procedure.

     B.   Claims Procedure. If any claim filed hereunder is wholly or partially
          ----------------
          denied, the Plan Administrator will notify the claimant of its
          decision in writing. Such notification will be written in a manner
          calculated to be understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Paragraph C of
          this procedure.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
          claimant receives a written notice of a denied claim (or, if
          applicable, within sixty (60) days after the date on which such denial
          is considered to have occurred) the claimant (or his duly authorized
          representative) may:


                                       7
<PAGE>
 
          (i)    file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

          (ii)   submit written issues and comments to the Plan Administrator.

          The Plan Administrator will notify the claimant of its decision in
          writing. Such notification will be written in a manner calculated to
          be understood by the claimant and will contain specific reasons for
          the decision as well as specific references to pertinent provisions of
          the Agreement. The decision on review will be made within sixty (60)
          days after the request for review is received by the Plan
          Administrator (or within one hundred twenty (120) days, if special
          circumstances require an extension of time for processing the request
          (such as an election by the Plan Administrator to hold a hearing), and
          if written notice of such extension and circumstances is given to the
          claimant within the initial sixty (60) day period.



                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of March, 1993, and amended and restated this the 8th day
of September, 1997 (the "Agreement"), by and between Mooresville Savings Bank,
SSB, a mutual savings bank organized and existing under the laws of the State of
North Carolina (the "Bank"), and Donald R. Belk (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated March 1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director previously agreed to defer receipt of director's fees
in the amount of $300.00 per month for a period of five (5) years, which period
commenced on March 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director hereby elects and agrees to
     ---------   -----------------                                           
continue to defer each month the receipt by him of $300.00 in director's fees
for the sixty (60) months beginning March 1, 1993 and ending February 28, 1998.
In exchange for such deferral, the Director shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically provided
herein, in order to receive benefits under this Agreement, the Director must be
a Director of the Bank as of March 1, 1998 (the "Qualifying Date").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Qualifying
     ---------   -------------------                                        
Date (except  as otherwise specifically provided herein), the Bank will pay to
the Director $414 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Qualifying Date shall
occur.  In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of eight percent (8%) per annum compounded interest and shall be paid
in a single sum to the estate of the last Beneficiary to die.  In the absence of
any such beneficiary designation, or if no Beneficiary survives the Director,
any payments remaining unpaid at the Director's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the Qualifying Date, the Bank
will pay $414 per month for a continuous period of 120 months to the Beneficiary
or Beneficiaries of the Director.  The first such monthly installment payment
shall be made on a date to be determined by the Bank, but in no event later than
the first day of the sixth calendar month following the calendar month in which
the Director died.  In the event of the death of the last living Beneficiary
before all installment payments shall have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank  prior to the
Qualifying Date, for any reason other than death, he (or his Beneficiary) shall
be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

                                            Percentage of Retirement Benefits
       Full Number of Years Served        Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------    -------------------------------------

                   2                                    40% 
                   3                                    60% 
                   4                                    80% 
                   5                                    100% 


                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since March 1, 1993, the original effective date of this
Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Qualifying Date, or, if earlier, the
Director's death, occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Qualifying  Date shall be deemed to be the date that such
Change in Control occurred.  The Bank shall commence to make monthly installment
payments to the Director as described in Section 2 on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's service as a director of
the Bank is terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 8.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.


                                       5

<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                    By:    /s/ George W. Brawley, Jr.
------------------------------                  -------------------------------
         , Secretary
---------                                Title:  President
                                                -------------------------------
[Corporate Seal]
                                          /s/ Donald R. Belk           (Seal)
                                         ------------------------------  
                                         DONALD R. BELK
                                         Director


                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT
           BETWEEN MOORESVILLE SAVINGS BANK, SSB AND DONALD R. BELK

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Donald R. Belk (the
"Director") previously entered into a Retirement Payment Agreement on March 1,
1993, and amended and restated said agreement on June 6, 1994, and amended and
restated said agreement again on September 8, 1997 through the execution of the
Amended and Restated Retirement Payment Agreement (the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     65/th/ birthday ("Retirement Age") (except as otherwise specifically
     provided herein), the Bank will pay to him $697.00 per month for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director ceases being a Director of the Bank
     (except as otherwise provided herein).  If the Director's service with the
     Bank continues past the Director's Retirement Age, then the monthly benefit
     payments shall be postponed and shall be increased on an annual basis by
     five percent (5%) for each full Year of Service of the Director occurring
     after the Director's Retirement Age and continuing until age 70 or such
     time as the Director ceases serving as a Director, whichever shall occur
     first (hereafter "the Increased Benefit").  For purposes of this Agreement,
     the Director will receive credit for a year of service for each twelve
     month period during which he completes 1,000 hours of service.  If the
     Director reaches age 70 and has not previously begun receiving his
     retirement benefits under this Section 2, the monthly payments will begin
     upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary

                                      148
<PAGE>
 
     before all remaining installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die. In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     2.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $697.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                      149
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By:      /s/ George W. Brawley, Jr.
                                             -----------------------------

/s/ Billy R. Williams               Title:   President
--------------------------                   -----------------------------  
Secretary



[Corporate Seal]

                                    DIRECTOR:
  
                                        /s/
                                    --------------------------------------
                                    Donald R. Belk

                                      150
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $697.00
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $731.85
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $768.44
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $806.86
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $847.21
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $889.57
------------------------------------------------------------------------------------
</TABLE>

                                      151
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of February, 1993, amended and restated October 21, 1993,
and amended and restated this the 8th day of September, 1997 (the "Agreement"),
by and between Mooresville Savings Bank, SSB, a mutual savings bank organized
and existing under the laws of the State of North Carolina (the "Bank"), and
Dale W. Brawley (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive previously served as a Director of the Bank; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Executive,
dated February  1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB", and the Executive resigned as a
Director of the Bank; and

     WHEREAS, the Executive continued to render valuable service to the Bank in
his capacity as an executive officer of the Bank, and it was the desire of the
Bank to have the benefit of his continued loyalty and service and also to assist
him in providing for the contingencies of retirement and death, and so effective
with the date of the Bank's charter conversion and the Executive's retirement as
a Director of the Bank, the parties amended and restated the Retirement Payment
Agreement on October 21, 1993; and

     WHEREAS, the Executive previously agreed to defer receipt of compensation
and director's fees in the amount of $100.00 per month for a period of five (5)
years, which period commenced February 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Executive hereby elects and agrees to
     ---------   -----------------                                            
continue to defer each month the receipt by him of compensation and director's
fees for sixty (60) months beginning February 1, 1993 and ending January 31,
1998.  In exchange for such deferral, the Executive shall receive from the Bank
the benefits hereinafter described.  Except as otherwise specifically provided
<PAGE>
 
herein, in order to receive benefits under this Agreement, the Executive must be
an Executive of the Bank  as of his 65th birthday.

     Section 2.  Retirement Benefits.  Upon the occurrence of the Executive's
     ---------   -------------------                                         
65th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $1,074 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive's 65th
birthday shall occur.  In the event that the Executive should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Executive has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die while
     ---------   -----------------------------                                 
in the service of the Bank and prior to the occurrence of his 65th birthday, the
Bank will pay $1,074 per month for a continuous period of 120 months to the
Beneficiary or Beneficiaries of the Executive.  The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive died.  In the event of the death of the
last living Beneficiary before all installment payments shall have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compounded interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any payments remaining unpaid at the
Executive's death shall be commuted on the basis of eight percent (8%) per annum
compounded interest and shall be paid in a single sum to the Executive's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Executive terminates his service as an executive officer of the Bank, for
any reason other than death or the attainment of his 65th birthday, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                          Percentage of Retirement Benefits
     Full Number of Years Served          Stated in Section 2 of this Agreement
     Until Termination of Employment      To Which the Executive is Entitled
     -------------------------------      -------------------------------------
     <S>                                  <C>                                   
                   2                                      40%
                   3                                      60%
                   4                                      80%
</TABLE> 

                                       2
<PAGE>
 
<TABLE> 
<CAPTION> 

                                          Percentage of Retirement Benefits
     Full Number of Years Served          Stated in Section 2 of this Agreement
     Until Termination of Employment      To Which the Executive is Entitled    
     -------------------------------      -------------------------------------
     <S>                                  <C>         
                   5                                     100% 
</TABLE> 

     For purposes of this Section 4, the Executive shall receive credit for each
full year served since February 1, 1993, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Executive's 65th birthday or, if
earlier, death occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Executive's 
     ---------   --------------------------                        
service as an executive officer of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a Change in Control
(as defined herein), then the Executive shall be entitled to the benefits set
forth in Section 2 and shall be 100% vested therein, and the Bank shall commence
to make monthly installment payments to the Executive as described therein on a
date to be determined by the Bank, but in no event later than the first day of
the sixth calendar month following the calendar month in which the Executive's
service as an executive officer of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Executive and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as salary, bonus, or otherwise. This Agreement shall not be deemed to constitute
a contract of employment between the parties hereto, nor shall any provision
hereof restrict the right of the Bank to discharge the Executive or restrict the
right of the Executive to terminate his employment. The rights accruing to the
Executive or any designated beneficiary under the provisions of the Agreement
shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain a
general creditor of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Executive's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Executive under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:

/s/ Billy R. Williams               By:  /s/ George W. Brawley, Jr.
------------------------------          ----------------------------------
          Secretary
---------
                                    Title:  President
                                           ------------------------------- 

[Corporate Seal]
 

                                     /s/ Dale W. Brawley            (Seal)
                                    --------------------------------
                                    DALE W. BRAWLEY
                                    Executive


                                       6
<PAGE>
 
                                   APPENDIX A

ERISA Claims and Review Procedures.
---------------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under 
          -------                                                       
          this Agreement as required by the Employee Retirement Income Security
          Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
          hereby designated as the named fiduciary and Plan Administrator of
          this unfunded, nonqualified deferred compensation plan. If any person
          believes he is being denied any rights or benefits under the
          Agreement, such person may file a claim in writing with the Plan
          Administrator for resolution in accordance with the provisions of
          Paragraph B of this procedure.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
          denied, the Plan Administrator will notify the claimant of its
          decision in writing. Such notification will be written in a manner
          calculated to be understood by the claimant and will contain:

          (i)     specific reasons for the denial,

          (ii)    specific reference to pertinent provisions of the Agreement on
                  which the Plan Administrator based its denial,

          (iii)   a description of any additional material or information
                  necessary for the claimant to perfect such claim and an
                  explanation of why such material or information is necessary,
                  and

          (iv)    information as to the steps to be taken if the claimant wishes
                  to submit a request for review.

          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Paragraph C of
          this procedure.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
          claimant receives a written notice of a denied claim (or, if
          applicable, within sixty (60) days after the date on which such denial
          is considered to have occurred) the claimant (or his duly authorized
          representative) may:

                                       7
<PAGE>
 
          (i)     file a written request with the Plan Administrator for a
                  review of his denied claim and of pertinent documents; and

          (ii)    submit written issues and comments to the Plan Administrator.

          The Plan Administrator will notify the claimant of its decision in
          writing. Such notification will be written in a manner calculated to
          be understood by the claimant and will contain specific reasons for
          the decision as well as specific references to pertinent provisions of
          the Agreement. The decision on review will be made within sixty (60)
          days after the request for review is received by the Plan
          Administrator (or within one hundred twenty (120) days, if special
          circumstances require an extension of time for processing the request
          (such as an election by the Plan Administrator to hold a hearing), and
          if written notice of such extension and circumstances is given to the
          claimant within the initial sixty (60) day period.


                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of March, 1993, and amended and restated this the 8th day
of September, 1997 (the "Agreement"), by and between Mooresville Savings Bank,
SSB, a mutual savings bank organized and existing under the laws of the State of
North Carolina (the "Bank"), and George W. Brawley, Jr. (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated March 1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director previously agreed to defer receipt of director's fees
in the amount of $100.00 per month for a period of five (5) years, which period
commenced on March 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director hereby elects and agrees to
     ---------   -----------------                                           
continue to defer each month the receipt by him of $100.00 in director's fees
for the sixty (60) months beginning March 1, 1993 and ending February 28, 1998.
In exchange for such deferral, the Director shall receive from the Bank the
benefits hereinafter described. Except as otherwise specifically provided
herein, in order to receive benefits under this Agreement, the Director must be
a Director of the Bank as of his 65th birthday.
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ---------   -------------------                                        
65th birthday (except as otherwise specifically provided herein), the Bank will
pay to the Director $333 per month for a continuous period of 120 months. Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Director's 65th
birthday shall occur. In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the Qualifying Date, the Bank
will pay $333 per month for a continuous period of 120 months to the Beneficiary
or Beneficiaries of the Director. The first such monthly installment payment
shall be made on a date to be determined by the Bank, but in no event later than
the first day of the sixth calendar month following the calendar month in which
the Director died. In the event of the death of the last living Beneficiary
before all installment payments shall have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank, for any reason
other than death or the attainment of his 65th birthday, he (or his Beneficiary)
shall be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:
<TABLE> 
<CAPTION> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                   <C> 
                   2                                       40%
                   3                                       60%
                   4                                       80%
                   5                                      100%
</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since March 1, 1993, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's 65th birthday, or, if
earlier, death, occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and shall be deemed to be 100% vested therein. The Bank shall commence
to make monthly installment payments to the Director as described in Section 2
on a date to be determined by the Bank, but in no event later than the first day
of the sixth calendar month following the calendar month in which the Director's
service as a director of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

           (a)   a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

           (b)   such time as any "person" (as such term is used in Sections
     13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
     (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

           (c)   individuals who constitute the board of directors of the Bank
     or its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
           (d)   either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

           (e)   all or substantially all of the assets of either the Bank or
     its holding company are sold or otherwise transferred to or are acquired by
     any other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement. The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship. The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid. The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement. The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10. No Trust Created.  Nothing contained in this Agreement and no
     ----------  ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11. Taxes.  The Bank shall have the right to deduct from any
     ----------  -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent. In addition,
the Bank agrees it shall not enter into any agreement providing for the merger
of the Bank with and into another business entity or the sale of more than a
majority of the Bank's assets to another business entity, person or group of
persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement. In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13. Effect on Other Benefit Plans.  Nothing contained in this
     ----------  -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14. Severability.  The provisions of this Agreement shall be
     ----------  ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15. Gender.  Whenever in this Agreement words are used in the
     ----------  ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16. Headings.  The titles and headings of Sections are included
     ----------  --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17. Law Governing.  This Agreement shall be governed by the laws
     ----------  -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                            MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                       By:  /s/ Calvin E. Tyner
------------------------------                   ------------------------------
         , Secretary
---------                                   Title:  Chairman of the Board
                                                    ---------------------------
[Corporate Seal]
                                             /s/ Geroge W. Brawley, Jr.   (Seal)
                                            ------------------------------
                                            GEORGE W. BRAWLEY, JR.
                                            Director

                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Director") previously entered into a Retirement Payment Agreement on
March 1, 1993, and amended and restated said agreement on September 8, 1997
through the execution of the Amended and Restated Retirement Payment Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     65th birthday ("Retirement Age") (except as otherwise specifically provided
     herein), the Bank will pay to him $333.00 per month for a continuous period
     of 120 months. Such continuous monthly installment payments shall commence
     on a date to be determined by the Bank, but in no event later than the
     first day of the sixth calendar month following the calendar month in which
     the Director ceases being a Director of the Bank (except as otherwise
     provided herein).  If the Director's service with the Bank continues past
     the Director's Retirement Age, then the monthly benefit payments shall be
     postponed and shall be increased on an annual basis by five percent (5%)
     for each full Year of Service of the Director occurring after the
     Director's Retirement Age and continuing until age 70 or such time as the
     Director ceases serving as a Director, whichever shall occur first
     (hereafter "the Increased Benefit").  For purposes of this Agreement, the
     Director will receive credit for a year of service for each twelve month
     period during which he completes 1,000 hours of service.  If the Director
     reaches age 70 and has not previously begun receiving his retirement
     benefits under this Section 2, the monthly payments will begin upon the
     Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die. In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     2.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $333.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     3.   Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4. All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed this the 16th day of December, 1998.



                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:    /s/ Claude U. Voils, Jr.
                                   ------------------------------------

   /s/ Billy R. Williams      Title:        Director
---------------------------         -----------------------------------
Secretary

                                       3
[Corporate Seal]

                              DIRECTOR:

                                                   /s/
                              ----------------------------------------
                              George W. Brawley, Jr.
<PAGE>
 
                                   EXHIBIT B



<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
  Date of Benefit                            Amount of Increased Monthly Benefit
--------------------------------------------------------------------------------
<S>                                          <C>
Retirement Age -- Age 65                     $333.00
--------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01  $349.65
--------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02  $367.13
--------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03  $385.49
--------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04  $404.76
--------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05  $425.00
--------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                              AMENDED AND RESTATED
                          RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of March, 1993, and amended and restated this the 8th day
of September, 1997 (the "Agreement"), by and between Mooresville Savings Bank,
SSB, a mutual savings bank organized and existing under the laws of the State of
North Carolina (the "Bank"), and Claude U. Voils, Jr. (the "Director").


                              W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated March 1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director previously agreed to defer receipt of director's fees
in the amount of $300.00 per month for a period of five (5) years, which period
commenced on March 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director hereby elects and agrees to
     ---------   -----------------                                           
continue to defer each month the receipt by him of $300.00 in director's fees
for the sixty (60) months beginning March 1, 1993 and ending February 28, 1998.
In exchange for such deferral, the Director shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically provided
herein, in order to receive benefits under this Agreement, the Director must be
a Director of the Bank as of March 1, 1998 (the "Qualifying Date").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Qualifying
     ---------   -------------------                                        
Date (except  as otherwise specifically provided herein), the Bank will pay to
the Director $673 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Qualifying Date shall
occur.  In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of eight percent (8%) per annum compounded interest and shall be paid
in a single sum to the estate of the last Beneficiary to die.  In the absence of
any such beneficiary designation, or if no Beneficiary survives the Director,
any payments remaining unpaid at the Director's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the Qualifying Date, the Bank
will pay $673 per month for a continuous period of 120 months to the Beneficiary
or Beneficiaries of the Director.  The first such monthly installment payment
shall be made on a date to be determined by the Bank, but in no event later than
the first day of the sixth calendar month following the calendar month in which
the Director died.  In the event of the death of the last living Beneficiary
before all installment payments shall have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank  prior to the
Qualifying Date, for any reason other than death, he (or his Beneficiary) shall
be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:


<TABLE> 
                                           Percentage of Retirement Benefits
     Full Number of Years Served           Stated in Section 2 of this Agreement
     Until Termination of Directorship     To Which the Director is Entitled
     ---------------------------------     ------------------------------------
     <S>                                   <C> 
                    2                                     40%
                    3                                     60%
                    4                                     80%
                    5                                     100%
</TABLE> 

                                       2
<PAGE>
 
       For purposes of this Section 4, the Director shall receive credit for
each full year served since March 1, 1993, the original effective date of this
Agreement.

       Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Qualifying Date, or, if earlier, the
Director's death, occurs.

       Section 5.  Extraordinary Transactions.  In the event that the Director's
       ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Qualifying  Date shall be deemed to be the date that such
Change in Control occurred.  The Bank shall commence to make monthly installment
payments to the Director as described in Section 2 on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's service as a director of
the Bank is terminated.

       For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams                    By:    /s/ Geroge W. Brawley, Jr.
------------------------------                  --------------------------------
         , Secretary
---------                                Title: President
                                                --------------------------------
[Corporate Seal]
                                          /s/ Claude U. Voils, Jr.      (Seal)
                                         ------------------------------
                                         CLAUDE U. VOILS, JR.
                                         Director



                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT
        BETWEEN MOORESVILLE SAVINGS BANK, SSB AND CLAUDE U. VOILS, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and Claude U. Voils,
Jr. (the "Director") previously entered into a Retirement Payment Agreement on
March 1, 1993, and amended and restated said agreement on September 8, 1997
through the execution of the Amended and Restated Retirement Payment Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1.   Section 2 is deleted in its entirety and a new Section 2 is inserted
          in lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Director's
     ----------  -------------------                                        
     65/th/ birthday ("Retirement Age") (except as otherwise specifically
     provided herein), the Bank will pay to him $673.00 per month for a
     continuous period of 120 months. Such continuous monthly installment
     payments shall commence on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director ceases being a Director of the Bank
     (except as otherwise provided herein).  If the Director's service with the
     Bank continues past the Director's Retirement Age, then the monthly benefit
     payments shall be postponed and shall be increased on an annual basis by
     five percent (5%) for each full Year of Service of the Director occurring
     after the Director's Retirement Age and continuing until age 70 or such
     time as the Director ceases serving as a Director, whichever shall occur
     first (hereafter "the Increased Benefit").  For purposes of this Agreement,
     the Director will receive credit for a year of service for each twelve
     month period during which he completes 1,000 hours of service.  If the
     Director reaches age 70 and has not previously begun receiving his
     retirement benefits under this Section 2, the monthly payments will begin
     upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any 
<PAGE>
 
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die. In the absence of such beneficiary designation, any
     payments remaining unpaid at the Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     2.   Section 3 is deleted in its entirety and a new Section 3 is inserted
          in lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $673.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     3.   Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.   All of the other terms and provisions of the Agreement are not
     modified in any respect and shall remain in full force and effect.


                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                                 MOORESVILLE SAVINGS BANK, SSB

Attest:                          By:     /s/ George W. Brawley, Jr.
                                       -----------------------------------
   /s/ Billy R. Williams         Title:  President
-----------------------------          -----------------------------------
Secretary


[Corporate Seal]

                                 DIRECTOR:

                                      /s/
                                 -----------------------------------------
                                 Claude U. Voils, Jr.



                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
   Date of Benefit                                    Amount of Increased Monthly Benefit
-------------------------------------------------------------------------------------------
<S>                                                 <C>
Retirement Age -- Age 65                             $673.00
-------------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01          $706.65
-------------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02          $741.98
-------------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03          $779.08
-------------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04          $818.04
-------------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05          $858.94
-------------------------------------------------------------------------------------------
</TABLE>



 
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of August, 1993, amended and restated October 21, 1993,
and amended and restated this the 8th day of September 1997 (the "Agreement"),
by and between Mooresville Savings Bank, SSB, a mutual savings bank organized
and existing under the laws of the State of North Carolina (the "Bank"), and
Dale W. Brawley (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive previously served as a Director of the Bank; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Executive,
dated August 1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB", and the Executive resigned as a
Director of the Bank; and

     WHEREAS, the Executive continued to render valuable service to the Bank in
his capacity as an executive officer of the Bank, and it was the desire of the
Bank to have the benefit of his continued loyalty and service and also to assist
him in providing for the contingencies of retirement and death, and so effective
with the date of the Bank's charter conversion and the Executive's retirement as
a Director of the Bank, the parties amended and restated the Retirement Payment
Agreement on October 21, 1993; and

     WHEREAS, the Executive previously agreed to defer receipt of compensation
and director's fees in the amount of $200.00 per month for a period of five (5)
years, which period commenced August 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Executive hereby elects and agrees to
     ---------   -----------------                                            
continue to defer each month the receipt by him of compensation and director's
fees for sixty (60) months beginning August 1, 1993 and ending July 31, 1998.
In exchange for such deferral, the Executive shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically provided
herein,
<PAGE>
 
in order to receive benefits under this Agreement, the Executive must be an
Executive of the Bank as of his 55th birthday.

     Section 2.  Retirement Benefits.  Upon the occurrence of the Executive's
     ---------   -------------------                                         
55th birthday (except as otherwise specifically provided herein), the Bank will
pay to him $2,070 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive's 55th
birthday shall occur.  In the event that the Executive should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Executive has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die while
     ---------   -----------------------------                                 
in the service of the Bank and prior to the occurrence of his 55th birthday, the
Bank will pay $2,070 per month for a continuous period of 120 months to the
Beneficiary or Beneficiaries of the Executive.  The first such monthly
installment payment shall be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive died.  In the event of the death of the
last living Beneficiary before all installment payments shall have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compounded interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any payments remaining unpaid at the
Executive's death shall be commuted on the basis of eight percent (8%) per annum
compounded interest and shall be paid in a single sum to the Executive's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Executive terminates his service as an executive officer of the Bank, for
any reason other than death or the attainment of his 55th birthday, he (or his
Beneficiary) shall be entitled to a percentage of the benefits set forth in
Section 2 of this Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 
                                          Percentage of Retirement Benefits
     Full Number of Years Served          Stated in Section 2 of this Agreement
     Until Termination of Employment      To Which the Executive is Entitled
     -------------------------------      -------------------------------------
<S>                                       <C>     
                    2                                    40%
                    3                                    60%
                    4                                    80%
                    5                                   100%
</TABLE> 
                                       2
<PAGE>
 
         For purposes of this Section 4, the Executive shall receive credit for
each full year served since August 1, 1993, the original effective date of this
Agreement.

         Payment of such benefits shall commence on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Executive's 55th birthday or, if
earlier, death occurs.

         Section 5.  Extraordinary Transactions.  In the event that the
         ---------   --------------------------                        
Executive's service as an executive officer of the Bank is terminated for any
reason coincident with or within twenty-four (24) months following a Change in
Control (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 2 and shall be 100% vested therein, and the Bank
shall commence to make monthly installment payments to the Executive as
described therein on a date to be determined by the Bank, but in no event later
than the first day of the sixth calendar month following the calendar month in
which the Executive's service as an executive officer of the Bank is terminated.

         For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Executive and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as salary, bonus, or otherwise. This Agreement shall not be deemed to constitute
a contract of employment between the parties hereto, nor shall any provision
hereof restrict the right of the Bank to discharge the Executive or restrict the
right of the Executive to terminate his employment. The rights accruing to the
Executive or any designated beneficiary under the provisions of the Agreement
shall be solely those of an unsecured creditor of the Bank.

       Section 8.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain a
general creditor of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Executive's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Executive under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams
------------------------------           By:  /s/ George W. Brawley, Jr.
          Secretary                           ---------------------------------
----------                                      President
                                    Title:    ---------------------------------


[Corporate Seal]
 

                                     /s/ Dale W. Brawley          (Seal)
                                    ------------------------------
                                    DALE W. BRAWLEY
                                    Executive

                                       6
<PAGE>
 
                                  APPENDIX A

ERISA Claims and Review Procedures.
---------------------------------- 

A.   General.  For the purposes of implementing a claims procedure under this
     -------                                                                 
     Agreement as required by the Employee Retirement Income Security Act of
     1974 ("ERISA") (but not for any other purpose), the Bank is hereby
     designated as the named fiduciary and Plan Administrator of this unfunded,
     nonqualified deferred compensation plan. If any person believes he is being
     denied any rights or benefits under the Agreement, such person may file a
     claim in writing with the Plan Administrator for resolution in accordance
     with the provisions of Paragraph B of this procedure.

B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
     ----------------                                                      
     denied, the Plan Administrator will notify the claimant of its decision in
     writing. Such notification will be written in a manner calculated to be
     understood by the claimant and will contain:

     (i)   specific reasons for the denial,

     (ii)  specific reference to pertinent provisions of the Agreement on which
           the Plan Administrator based its denial,

     (iii) a description of any additional material or information necessary for
           the claimant to perfect such claim and an explanation of why such
           material or information is necessary, and

     (iv)  information as to the steps to be taken if the claimant wishes to
           submit a request for review.

     Such notification will be given within ninety (90) days after the claim is
     received by the Plan Administrator (or within 180 days, if special
     circumstances require an extension of time for processing the claim, and if
     written notice of such extension and circumstances is given to the claimant
     within the initial ninety (90) day period). If such notification is not
     given within such period, the claim will be considered denied as of the
     last day of such period and the claimant may request a review of his claim
     in accordance with Paragraph C of this procedure.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
     claimant receives a written notice of a denied claim (or, if applicable,
     within sixty (60) days after the date on which such denial is considered to
     have occurred) the claimant (or his duly authorized representative) may:

                                       7
<PAGE>
 
          (i) file a written request with the Plan Administrator for a review of
              his denied claim and of pertinent documents; and

         (ii) submit written issues and comments to the Plan Administrator.

         The Plan Administrator will notify the claimant of its decision in
         writing. Such notification will be written in a manner calculated to be
         understood by the claimant and will contain specific reasons for the
         decision as well as specific references to pertinent provisions of the
         Agreement. The decision on review will be made within sixty (60) days
         after the request for review is received by the Plan Administrator (or
         within one hundred twenty (120) days, if special circumstances require
         an extension of time for processing the request (such as an election by
         the Plan Administrator to hold a hearing), and if written notice of
         such extension and circumstances is given to the claimant within the
         initial sixty (60) day period.

                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT



     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of August, 1993, and amended and restated this the 8th
day of September 1997 (the "Agreement"), by and between Mooresville Savings
Bank, SSB, a mutual savings bank organized and existing under the laws of the
State of North Carolina (the "Bank"), and George W. Brawley, Jr. (the
"Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated August 1, 1993; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director previously agreed to defer receipt of director's fees
in the amount of $200.00 per month for a period of five (5) years, which period
commenced on August 1, 1993; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director hereby elects and agrees to
     ---------   -----------------                                           
continue to defer each month the receipt by him of $200.00 in director's fees
for the sixty (60) months beginning August 1, 1993 and ending July 31, 1998.  In
exchange for such deferral, the Director shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically provided
herein, in order to receive benefits under this Agreement, the Director must be
a Director of the Bank as of August 1, 1998 (the "Qualifying Date").
<PAGE>
 
     Section 2.  Retirement Benefits.  Upon the occurrence of the Qualifying
     ---------   -------------------                                        
Date (except as otherwise specifically provided herein), the Bank will pay to
the Director $671 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Qualifying Date shall
occur.  In the event that the Director should die after becoming entitled to
receive such installment payments but before all such payments have been made,
the Bank will pay all remaining installment payments to such beneficiary or
beneficiaries as the Director has designated in writing to the Bank (the
"Beneficiaries").  In the event of the death of the last living Beneficiary
before all remaining installment payments have been made, the balance of any
payments which remain unpaid at such Beneficiary's death shall be commuted on
the basis of eight percent (8%) per annum compounded interest and shall be paid
in a single sum to the estate of the last Beneficiary to die.  In the absence of
any such beneficiary designation, or if no Beneficiary survives the Director,
any payments remaining unpaid at the Director's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the Qualifying Date, the Bank
will pay $671 per month for a continuous period of 120 months to the Beneficiary
or Beneficiaries of the Director.  The first such monthly installment payment
shall be made on a date to be determined by the Bank, but in no event later than
the first day of the sixth calendar month following the calendar month in which
the Director died.  In the event of the death of the last living Beneficiary
before all installment payments shall have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank prior to the
Qualifying Date for any reason other than death, he (or his Beneficiary) shall
be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                            Percentage of Retirement Benefits
     Full Number of Years Served            Stated in Section 2 of this Agreement
     Until Termination of Directorship      To Which the Director is Entitled
     ---------------------------------      ------------------------------------
     <S>                                    <C> 
                  2                                       40%
                  3                                       60%
                  4                                       80%
                  5                                      100%
</TABLE> 

                                       2
<PAGE>
 
     For purposes of this Section 4, the Director shall receive credit for each
full year served since August 1, 1993, the original effective date of this
Agreement.

     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Qualifying Date, or, if earlier, the
Director's death, occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Qualifying Date shall be deemed to be the date that such
Change in Control occurred.  The Bank shall commence to make monthly installment
payments to the Director as described in Section 2 on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's service as a director of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall
mean any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

                                       3
<PAGE>
 
          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

                                       4
<PAGE>
 
     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Director be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

                                       5
<PAGE>
 
     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams               By:  /s/ Calvin E. Tyner
------------------------------         --------------------------------------
         , Secretary
---------                           Title: Chairman of the Board
                                          -----------------------------------
[Corporate Seal]
                                      /s/ George W. Brawley, Jr.  (Seal)
                                    ------------------------------
                                    GEORGE W. BRAWLEY, JR.
                                    Director


                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Director") previously entered into a Retirement Payment Agreement on
August 1, 1993, and amended and restated said agreement on September 8, 1997
through the execution of the Amended and Restated Retirement Payment Agreement
(the "Agreement"); and

     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 8 of the Agreement, the Bank and the Director
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Upon the occurrence of the Qualifying
     ----------  -------------------                                        
     Date (except as otherwise specifically provided herein), the Bank will pay
     to him $671.00 per month for a continuous period of 120 months. Such
     continuous monthly installment payments shall commence on a date to be
     determined by the Bank, but in no event later than the first day of the
     sixth calendar month following the calendar month in which the Qualifying
     Date shall occur (except as otherwise provided herein).  If the Director's
     service with the Bank continues past the Qualifying Date, then the monthly
     benefit payments shall be postponed and shall be increased on an annual
     basis by five percent (5%) for each full Year of Service of the Director
     occurring after the Director's Retirement Age and continuing until age 70
     or such time as the Director ceases serving as a Director, whichever shall
     occur first (hereafter "the Increased Benefit").  For purposes of this
     Agreement, the Director will receive credit for a year of service for each
     twelve month period during which he completes 1,000 hours of service.  If
     the Director reaches age 70 and has not previously begun receiving his
     retirement benefits under this Section 2, the monthly payments will begin
     upon the Director's attainment of age 70 in any event.

          In the event that a Director should die after becoming entitled to
     receive such installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Director to the Bank in writing (the "Beneficiaries").  In the event of
     the death of the Director's last living Beneficiary before all remaining
     installment payments have been made, the balance of any payments which
     remain unpaid at the time of such Beneficiary's death shall be 
<PAGE>
 
     commuted on the basis of eight percent (8%) per annum compounded interest
     and shall be paid in a single sum to the estate of the last Beneficiary to
     die. In the absence of such beneficiary designation, any payments remaining
     unpaid at the Director's death shall be commuted on the basis of eight
     percent (8%) per annum compounded interest and shall be paid in a single
     sum to the Director's estate.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Director die while
     ----------  -----------------------------                               
     serving as a director of the Bank, and prior to his receiving any benefits
     under Section 2, the Bank will pay $671.00 per month (or the Increased
     Benefit if such applies) for a continuous period of 120 months to the
     Director's Beneficiary or Beneficiaries.  The first monthly installment
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Director died.

          In the event of the death of the Director's last living Beneficiary
     before all the unpaid payment shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of eight percent (8%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation,
     any amount remaining unpaid at a Director's death shall be commuted on the
     basis of eight percent (8%) per annum compounded interest and shall be paid
     in a single sum to the Director's estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Director if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.


                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:       /s/ Claude U. Voils, Jr.
                                     ------------------------------

  /s/ Billy R. Williams       Title:    Director
---------------------------          ------------------------------
Secretary


[Corporate Seal]

                              DIRECTOR:

                                  /s/
                              -------------------------------------
                              George W. Brawley, Jr.

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Qualifying Date - August 1, 1998                 $671.00
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $704.55
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $739.78
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $776.77
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $815.60
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $856.38
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                         RETIREMENT PAYMENT AGREEMENT


     THIS AMENDED AND RESTATED RETIREMENT PAYMENT AGREEMENT, originally entered
into as of the 1st day of June, 1994, and amended and restated this the 8th day
of September, 1997 (the "Agreement"), by and between Mooresville Savings Bank,
SSB, a mutual savings bank organized and existing under the laws of the State of
North Carolina (the "Bank"), and Jack G. Lawler (the "Director").


                             W I T N E S S E T H:

     WHEREAS, the Director is serving as a Director of the Bank as of the date
hereof; and

     WHEREAS, in that capacity, in order to reward his continued loyalty and
service and also to assist him in providing for the contingencies of retirement
and death, the Bank entered a Retirement Payment Agreement with the Director,
dated June 1, 1994; and

     WHEREAS, the Director is rendering valuable service to the Bank and it is
the desire of the Bank to have the benefit of his continued loyalty and service
and also to assist him in providing for the contingencies of retirement and
death; and

     WHEREAS, the Director has previously agreed to defer receipt of director's
fees in the amount of $500.00 per month for a period of five (5) years, which
period commenced on June 1, 1994; and

     WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  The Director hereby elects and agrees to
     ---------   -----------------                                           
continue to defer each month the receipt by him of $500.00 in director's fees
for the sixty (60) months beginning June 1, 1994 and ending May 31, 1999.  In
exchange for such deferral, the Director shall receive from the Bank the
benefits hereinafter described.  Except as otherwise specifically provided
herein, in order to receive benefits under this Agreement, the Director must be
a Director of the Bank as of June 1, 1999 (the "Qualifying Date").

     Section 2.  Retirement Benefits.  Upon the occurrence of the Qualifying
     ---------   -------------------                                        
Date, (except as otherwise specifically provided herein), the Bank will pay to
the Director $882 per month for a continuous period of 120 months.  Such
continuous monthly installment payments shall commence
<PAGE>
 
on a date to be determined by the Bank, but in no event later than the first day
of the sixth calendar month following the calendar month in which the Qualifying
Date shall occur.  In the event that the Director should die after becoming
entitled to receive such installment payments but before all such payments have
been made, the Bank will pay all remaining installment payments to such
beneficiary or beneficiaries as the Director has designated in writing to the
Bank (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining installment payments have been made, the
balance of any payments which remain unpaid at such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 3.  Pre-Retirement Death Benefits.  Should the Director die while
     ---------   -----------------------------                                
serving as a director of the Bank and prior to the Qualifying Date, the Bank
will pay $882 per month for a continuous period of 120 months to the Beneficiary
or Beneficiaries of the Director.  The first such monthly installment payment
shall be made on a date to be determined by the Bank, but in no event later than
the first day of the sixth calendar month following the calendar month in which
the Director died.  In the event of the death of the last living Beneficiary
before all installment payments shall have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of any such beneficiary designation, or if no Beneficiary survives
the Director, any payments remaining unpaid at the Director's death shall be
commuted on the basis of eight percent (8%) per annum compounded interest and
shall be paid in a single sum to the Director's estate.

     Section 4.  Termination Benefits.  Except as provided in Section 5 hereof,
     ---------   --------------------                                          
if the Director terminates his service as a director of the Bank prior to the
Qualifying Date for any reason other than death, he (or his Beneficiary) shall
be entitled to a percentage of the benefits set forth in Section 2 of this
Agreement, as determined by the following table:

<TABLE> 
<CAPTION> 

                                            Percentage of Retirement Benefits
     Full Number of Years Served            Stated in Section 2 of this Agreement
     Until Termination of Directorship      To Which the Director is Entitled
     ---------------------------------      ------------------------------------
     <S>                                    <C> 
                    2                                       40%
                    3                                       60%
                    4                                       80%
                    5                                      100%
</TABLE> 

       For purposes of this Section 4, the Director shall receive credit for
each full year served since June 1, 1994, the original effective date of this
Agreement.

                                       2
<PAGE>
 
     Payment of such benefits shall commence on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Qualifying Date or, if earlier, the
Director's death, occurs.

     Section 5.  Extraordinary Transactions.  In the event that the Director's
     ---------   --------------------------                                   
service as a director of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Director shall be entitled to the benefits set forth in
Section 2 and the Qualifying Date shall be deemed to be the date that such
Change in Control occurred.  The Bank shall commence to make monthly installment
payments to the Director as described in Section 2 on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Director's service as a director of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where 

                                       3
<PAGE>
 
     neither the Bank nor its holding company, respectively, is the surviving
     corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
or occurrence of such transaction or event, the Director and the Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     Section 6.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Director, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Director or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 7.  Director's Rights.  This Agreement creates no right in the
     ---------   -----------------                                         
Director to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Director or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Director whether as
fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Director or
restrict the right of the Director to terminate his directorship.  The rights
accruing to the Director or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 8.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by both of the parties
hereto.

     Section 9.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Director, the Director's
Beneficiaries, and any successor in interest shall be and remain a general
creditor of the Bank with respect to any benefits due under this Agreement, in
the same manner as any other creditor having a general claim for matured and
unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the

                                       4
<PAGE>
 
extent, nature, and method of such funding.  Should the Bank elect to fund this
Agreement, in whole or in part, through the purchase of life insurance,
certificates of deposit, mutual funds, disability policies or annuities, the
Bank reserves the absolute right, in its sole discretion, to terminate such
funding at any time, in whole or in part.  At no time shall the Director be
deemed to have any lien upon or right, title or interest in or to any specific
funding investment or to any assets of the Bank.

     Section 10.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Director, the Director's designated Beneficiary or any other
person.

     Section 11.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 12.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations hereunder without the Director's prior written consent.  In
addition, the Bank agrees it shall not enter into any agreement providing for
the merger of the Bank with and into another business entity or the sale of more
than a majority of the Bank's assets to another business entity, person or group
of persons that does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every obligation of the
Bank to the Director under this Agreement.  In the case of an asset sale, such
assumption shall not relieve the Bank of its liability to fulfill such
obligations.

     Section 13.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part of the
Bank's existing or future compensation structure.

     Section 14.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 15.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 16.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 17.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

                                       5
<PAGE>
 
     IN WITNESS THEREOF, the Bank has caused this Amended and Restated
Retirement Payment Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Director has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB
Attest:
/s/ Billy R. Williams               By:  /s/ George W. Brawley, Jr.
------------------------------          -----------------------------------
         , Secretary
---------                           Title:  President
                                           --------------------------------

[Corporate Seal]
                                     /s/ Jack G. Lawler           (Seal)
                                    ------------------------------
                                    JACK G. LAWLER
                                    Director


                                       6
<PAGE>
 
                              AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of September, 1984 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Dale W. Brawley (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on September 1, 1984; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to his Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
       Section 3.  Extraordinary Transactions.  In the event that the
       ---------   --------------------------                        
Executive's service as an Executive of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a "Change in
Control" (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 1 as if the Executive had remained employed until
Retirement Age, and the Retirement Age shall be deemed to occur on the date that
such Change in Control occurred. The Bank shall commence to make monthly
installment payments to the Executive as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's service as
an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 6.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of his Retirement Age, or his death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)     specific reasons for the denial,

          (ii)    specific reference to pertinent provisions of the Agreement on
                  which the Plan Administrator based its denial,

          (iii)   a description of any additional material or information
                  necessary for the claimant to perfect such claim and an
                  explanation of why such material or information is necessary,
                  and

          (iv)    information as to the steps to be taken if the claimant wishes
                  to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)     file a written request with the Plan Administrator for a
                  review of his denied claim and of pertinent documents; and

          (ii)    submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By:     /s/ George W. Brawley, Jr.
                                           ----------------------------------

/s/ Billy R. Williams               Title:  President
------------------------------             ----------------------------------
Secretary

[Corporate Seal]                    EXECUTIVE:
                                     /s/ Dale W. Brawley
                                    -----------------------------------------
                                    Dale W. Brawley


                                       6
<PAGE>
 
                             AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of September, 1984 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and George W. Brawley (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on September 1, 1984; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to his Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the
     ---------   --------------------------                        
Executive's service as an Executive of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a "Change in
Control" (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 1 as if the Executive had remained employed until
Retirement Age, and the Retirement Age shall be deemed to occur on the date that
such Change in Control occurred. The Bank shall commence to make monthly
installment payments to the Executive as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's service as
an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of his Retirement Age, or his death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By:    /s/ Dale W. Brawley
/s/ Billy R. Williams                           ------------------------------
-----------------------------            Title: Executive Vice President
Secretary                                       ------------------------------
          

[Corporate Seal]                         EXECUTIVE:
                                          /s/ George W. Brawley, Jr.
                                         -------------------------------------
                                         George W. Brawley, Jr.



                                       6
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT
       BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Executive") previously entered into a Salary Continuation Agreement on
September 1, 1984, and amended and restated said agreement on September 17, 1997
through the execution of the Amended and Restated Supplemental Income Agreement
(the "Agreement"); and
 
     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 6 of the Agreement, the Bank and the Executive
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 1 is deleted in its entirety and a new Section 1 is inserted in
        lieu thereof to read as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ----------  -------------------                                            
     herein, upon the occurrence of the Executive's 65/th/ birthday (the
     "Retirement Age"), if the Executive is employed by the Bank at that time,
     the Bank will pay the Executive $833.33 per month for a continuous period
     of sixty (60) months. The first monthly payment will be made on a date to
     be determined by the Bank, but in no event later than the first day of the
     first calendar month following the calendar month in which the Executive
     retires from service with the Bank (except as otherwise provided herein).

          If the Executive's service with the Bank continues past the
     Executive's Retirement Age, then the annual benefit payments shall be
     postponed and shall be increased on an annual basis by an additional five
     percent (5%) for each full Year of Service of the Executive occurring after
     the Executive's Retirement Age and continuing until age 70 or such time as
     the Executive ceases serving as an Executive, whichever shall occur first
     (hereafter "the Increased Benefit").   For purposes of this Agreement, the
     Executive will receive credit for a Year of Service for each twelve month
     period during which he completes 1,000 hours of service. If the Executive
     reaches age 70 and has not previously begun receiving his retirement
     benefits under this Section 2, the monthly payments will begin upon the
     Executive's attainment of age 70 in any event.

          In the event that an Executive should die after becoming entitled to
     receive monthly installment payments under this Agreement but before all of
     such payments have been made, the Bank will pay all remaining payments to
     such beneficiaries as 
<PAGE>
 
     are designated by the Executive to the Bank in writing (the
     "Beneficiaries"). In the event of the death of the Executive's last living
     Beneficiary before all remaining installment payments have been made, the
     balance of any payments which remain unpaid at the time of such
     Beneficiary's death shall be commuted on the basis of seven percent (7%)
     per annum compounded interest and shall be paid in a single sum to the
     estate of the last Beneficiary to die. In the absence of such beneficiary
     designation, of if no Beneficiary survives the Executive, any payments
     remaining unpaid at the Executive's death shall be commuted on the basis of
     seven percent (7%) per annum compounded interest and shall be paid in a
     single sum to the Executive's estate.

     2. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Pre-Retirement Death Benefits. Should the Executive die prior
     ----------  -----------------------------                                
     to Retirement Age while in the service of the Bank, the Bank will pay
     $833.33 per month for a continuous period of sixty (60) months to the
     Executive's Beneficiary or Beneficiaries.  Such annual payment shall be
     increased five percent (5%) for each full Year of Service of the Executive
     occurring after the Executive's Retirement Age (hereafter "the Increased
     Benefit").  The first monthly payment shall be made on a date to be
     determined by the Bank, but in no event later than the first day of the
     first calendar month following the calendar month in which the Executive
     died.

          In the event of the death of the Executive's last living Beneficiary
     before all annual payments shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation, or
     if no Beneficiary survives the Executive, any amount remaining unpaid at an
     Executive's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Executive's estate.

     3.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Executive if he continues service with the Bank after
     reaching the Retirement Age.

     4.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.

                                       2
<PAGE>
 
     This Amendment is effective as of the 16th day of December, 1998.



                              MOORESVILLE SAVINGS BANK, SSB

Attest:                       By:     /s/ Dale W. Brawley
                                     ----------------------------------

  /s/ Billy R. Williams       Title:  Executive Vice President
------------------------             ----------------------------------
Secretary


[Corporate Seal]

                              EXECUTIVE:

                                          /s/
                              -----------------------------------------
                              George W. Brawley, Jr.

                                       3
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------
Date of Benefit                                  Amount of Increased Monthly Benefit
------------------------------------------------------------------------------------
<S>                                              <C>
Retirement Age -- Age 65                         $  833.33
------------------------------------------------------------------------------------
Retire on or after 1/1/00 but before 1/1/01      $  875.00
------------------------------------------------------------------------------------
Retire on or after 1/1/01 but before 1/1/02      $  918.75
------------------------------------------------------------------------------------
Retire on or after 1/1/02 but before 1/1/03      $  964.68
------------------------------------------------------------------------------------
Retire on or after 1/1/03 but before 1/1/04      $1,012.92
------------------------------------------------------------------------------------
Retire on or after 1/1/04 but before 1/1/05      $1,063.56
------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                              AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of September, 1984 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Patricia B. Clontz (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on September 1, 1984; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $416.67 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $416.67
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the Executive's
     ---------   --------------------------
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Executive shall be entitled to the benefits set forth in
Section 1 as if the Executive had remained employed until Retirement Age, and
the Retirement Age shall be deemed to occur on the date that such Change in
Control occurred. The Bank shall commence to make monthly installment payments
to the Executive as described in Section 1 on a date to be determined by the
Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Executive's service as an Executive of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c) individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 6.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

       Section 7.  Financing of Benefits.  All benefits under this Agreement
       ---------   ---------------------
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid. The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement. The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

       The Bank reserves the absolute right in its sole discretion to either
fund the obligations undertaken by this Agreement or to refrain from funding the
same and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

       Section 8.  No Trust Created.  Nothing contained in this Agreement and no
       ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

       Section 9.  Taxes.  The Bank shall have the right to deduct from any
       ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

       Section 10.  Binding Obligation of the Bank and Any Successor in
       ----------   ---------------------------------------------------
Interest. This Agreement and the Bank's obligations hereunder shall be binding
--------
upon its successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent. In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement. In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)   specific reasons for the denial,

          (ii)  specific reference to pertinent provisions of the Agreement on
                which the Plan Administrator based its denial,

          (iii) a description of any additional material or information
                necessary for the claimant to perfect such claim and an
                explanation of why such material or information is necessary,
                and

          (iv)  information as to the steps to be taken if the claimant wishes
                to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.
  
     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By:   /s/ George W. Brawley, Jr.
                                               ---------------------------------

/s/ Billy R. Williams                    Title: President
---------------------------------              ---------------------------------
Secretary

[Corporate Seal]                         EXECUTIVE:

                                           /s/ Patricia B. Clontz
                                         ---------------------------------------
                                         Patricia B. Clontz

                                       6
<PAGE>
 
                              AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of September, 1984 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Richard E. Woods (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on September 1, 1984; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to his Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
       Section 3.  Extraordinary Transactions.  In the event that the
       ---------   --------------------------                        
Executive's service as an Executive of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a "Change in
Control" (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 1 as if the Executive had remained employed until
Retirement Age, and the Retirement Age shall be deemed to occur on the date that
such Change in Control occurred. The Bank shall commence to make monthly
installment payments to the Executive as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's service as
an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of


                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive



                                       3
<PAGE>
 
or restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of his Retirement Age, or his death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.


                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.


                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)    file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

          (ii)   submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By:     /s/ George W. Brawley, Jr.
                                            -----------------------------------
/s/ Billy R. Williams                Title:   President
------------------------------              -----------------------------------
Secretary

[Corporate Seal]                    EXECUTIVE:

                                     /s/ Richard E. Woods
                                    -------------------------------------------
                                    Richard E. Woods




                                       6
<PAGE>
 
                             AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT


     THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of November, 1993 and amended and restated this 17th day of
                                                                   ----   
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
---------
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Dale W. Brawley (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive has been an employee of the Bank since August 18,
1980, and is a member of a select group of management employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Supplemental Income Agreement with the
Executive on November 1, 1993; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  During the period of the Executive's
     ---------   -----------------                                       
employment by the Bank, the Executive shall defer monthly a portion of his cash
compensation otherwise receivable by the Executive from the Bank.

     Section 2.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday or, if earlier,
upon the Executive's actual retirement after age 60 (the "Retirement Age"), the
Bank will pay the Executive $15,000 annually for a continuous period of fifteen
(15) years. The first annual payment will be made on a date to be determined by
the Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Retirement Age shall occur. Such
annual payment shall be increased five percent (5%) for each full Year of
Service of the Executive occurring after November 1, 1994, except that there
will be no increases in benefits for more than ten (10) years of additional
service. For purposes of this Agreement, the Executive will receive credit for a
Year of Service for each twelve month period during which he completes 1,000
hours of service. The first twelve month
<PAGE>
 
period shall begin November 1, 1994, and subsequent periods shall begin on the
anniversary of that date.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or, if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Executive's estate. Any amount payable to an Executive or his
Beneficiary under this Section 2 shall be reduced by any disability payments
already paid to such Executive under Section 4 of this Agreement.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age, the Bank will pay $15,000 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries. Such annual payment
shall be increased five percent (5%) for each full Year of Service of the
Executive occurring after November 1, 1994, except that there will be no
increases in benefits for more than ten (10) years of additional service. The
first annual payment will be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive's death occurred. In the event of the
death of the last living Beneficiary before all annual installment payments have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of seven percent (7%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die. In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any amount remaining unpaid at the
Executive's death shall be commuted on the basis of seven percent (7%) per annum
compound interest and shall be paid in a single sum to the Executive's estate.
Any amount payable to an Executive's Beneficiary under this Section 3 shall be
reduced by any disability payments already paid to such Executive under Section
4 of this Agreement.

     Section 4.  Disability Benefits.  If the Executive shall become disabled
     ----------  --------------------                                        
(as defined herein) prior to Retirement Age, while continuing to serve as an
Executive of the Bank, the Bank shall commence to pay to the Executive the same
benefit that would have been payable if the Executive's death occurred on the
date of disability. The first annual payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive is determined
to be disabled.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment payments to the Executive's Beneficiary or

                                       2
<PAGE>
 
Beneficiaries. In the event of the death of the Executive's last living
Beneficiary before all installment payments have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of such beneficiary designation, or if no Beneficiary survives the
Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     The Executive shall be considered disabled for the purpose of this
Agreement if he is unable to perform the duties of his position for a continuous
period of six (6) months or more. During such six (6) month period, the
Executive must be under the regular care of a medical doctor (M.D.) or
osteopathic physician (D.O.) licensed in the State of North Carolina. For the
purpose of this section, or any other section relating to disability, if there
is any dispute between the parties as to the Executive's physical or mental
disability, such dispute shall be settled by the opinion of a medical doctor or
osteopathic physician licensed in the State of North Carolina who is selected by
the mutual consent of the Executive and the Bank or their representatives. If
the parties cannot agree within ten (10) days after a written request for the
designation of an examining physician is made by either party to the other, then
the examining physician shall be designated by the President of the Iredell
County Medical Society then serving. Certification of that physician as to the
matter in dispute shall be final and binding upon the Executive, his
Beneficiaries, the Bank, and all parties claiming any right or interest under
this Agreement through them.

     Section 5.  Termination of Employment.  Should the Executive's employment
     ---------   -------------------------                                    
by the Bank terminate other than by reason of death or retirement upon the
occurrence of the Retirement Age, the Executive or his Beneficiary (or
Beneficiaries), as applicable, shall be entitled upon the occurrence of the
earlier of the Retirement Age and the Executive's death to receive the
percentage of the annual installment payment stated in Section 2 of this
Agreement determined under the following table:
<TABLE> 
<CAPTION> 
                                            PERCENTAGE OF ANNUAL INSTALLMENT
                                            PAYMENT STATED IN SECTION 2 OF THIS
     IF EXECUTIVE'S TERMINATION OCCURS      AGREEMENT TO WHICH EXECUTIVE IS
               ON OR AFTER                             ENTITLED
     ---------------------------------      -----------------------------------
     <S>                                    <C> 
          March 31, 1994                                  20%
          March 31, 1995                                  40%
          March 31, 1996                                  60%
          March 31, 1997                                  80%
          March 31, 1998                                 100%
</TABLE> 
     Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the first calendar month following
the calendar month in which the Retirement Age or the Executive's death, as
applicable, occurs.

     Section 6.  Extraordinary Transactions.  In the event that an Executive's
     ---------   --------------------------                                   
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) 

                                       3
<PAGE>
 
months following a "Change in Control" (as defined herein), then the Executive
shall be entitled to the maximum benefits set forth in Section 2 as if the
Executive had remained employed until age 65, and the Retirement Age shall be
deemed to occur on the date that such Change in Control occurred. The Bank shall
commence to make annual installment payments to the Executive as described in
Section 2 on a date to be determined by the Bank, but in no event later than the
first day of the first calendar month following the calendar month in which the
Executive's service as an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

           (a)   a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

           (b)   such time as any "person" (as such term is used in Sections
     13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
     (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

           (c)   individuals who constitute the board of directors of the Bank
     or its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

           (d)   either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

           (e)   all or substantially all of the assets of either the Bank or
     its holding company are sold or otherwise transferred to or are acquired by
     any other entity or group.

                                       4
<PAGE>
 
     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 7.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 8.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement. The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive or
restrict the right of the Executive to terminate his employment. The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 9.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.

     Section 10. Financing of Benefits.  All benefits under this Agreement
     ----------  ---------------------                                    
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid. The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement. The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

                                       5
<PAGE>
 
     Section 11. No Trust Created.  Nothing contained in this Agreement and no
     ----------  ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 12. Taxes.  The Bank shall have the right to deduct from any
     ----------  -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 13. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent. In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement. In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 14. Effect on Other Benefit Plans.  Nothing contained in this
     ----------  -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 15. Severability.  The provisions of this Agreement shall be
     ----------  ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 16. Gender.  Whenever in this Agreement words are used in the
     ----------  ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 17. Headings.  The titles and headings of Sections are included
     ----------  --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 18. Law Governing.  This Agreement shall be governed by the laws
     ----------  -------------                                               
of the State of North Carolina.

     Section 19. Claims and Review Procedures.
     ----------  ---------------------------- 

     A.    General.  For the purposes of implementing a claims procedure under
           -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this

                                       6
<PAGE>
 
unfunded, nonqualified deferred compensation plan. If any person believes he is
being denied any rights or benefits under the Agreement, such person may file a
claim in writing with the Plan Administrator for resolution in accordance with
the provisions of Paragraph B of this Section 19.

     B.    Claims Procedure.  If any claim filed hereunder is wholly or 
           ----------------                                             
partially denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain:

           (i)   specific reasons for the denial,

           (ii)  specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

           (iii) a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

           (iv)  information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

           Such notification will be given within ninety (90) days after the
           claim is received by the Plan Administrator (or within 180 days, if
           special circumstances require an extension of time for processing the
           claim, and if written notice of such extension and circumstances is
           given to the claimant within the initial ninety (90) day period). If
           such notification is not given within such period, the claim will be
           considered denied as of the last day of such period and the claimant
           may request a review of his claim in accordance with Section 19.C
           hereof.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

           (i)   file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

           (ii)  submit written issues and comments to the Plan Administrator.

           The Plan Administrator will notify the claimant of its decision in
           writing. Such notification will be written in a manner calculated to
           be understood by the claimant and will contain specific reasons for
           the decision as well as specific references to pertinent provisions
           of the Agreement. The decision on review will be made within sixty
           (60) days after the request for review is received by the Plan
           Administrator (or within one hundred twenty (120) days, if special
           circumstances require an extension

                                       7
<PAGE>
 
           of time for processing the request (such as an election by the Plan
           Administrator to hold a hearing), and if written notice of such
           extension and circumstances is given to the claimant within the
           initial sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                            MOORESVILLE SAVINGS BANK, SSB

Attest:                                     By:  /s/ George W. Brawley, Jr.
                                                 ------------------------------
                                            Title: President
/s/ Billy R. Williams                             -----------------------------
---------------------------------
Secretary

[Corporate Seal]                            EXECUTIVE:
                                              /s/ Dale W. Brawley
                                            -----------------------------------
                                            Dale W. Brawley


                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT


     THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of November, 1993 and amended and restated this 17th day of
                                                                   ----
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
---------
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and George W. Brawley, Jr. (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive has been an employee of the Bank since August 9,
1957, and is a member of a select group of management employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Supplemental Income Agreement with the
Executive on November 1, 1993; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  During the period of the Executive's
     ---------   -----------------                                       
employment by the Bank, the Executive shall defer monthly a portion of his cash
compensation otherwise receivable by the Executive from the Bank.

     Section 2.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, on March 31, 1998,or if earlier, upon the Executive's actual retirement
after age 60 (the "Retirement Age"), the Bank will pay the Executive $25,000
annually for a continuous period of fifteen (15) years. The first annual payment
will be made on a date to be determined by the Bank, but in no event later than
the first day of the first calendar month following the calendar month in which
the Retirement Age shall occur. Such annual payment shall be increased five
percent (5%) for each full Year of Service of the Executive occurring after
November 1, 1994, except that there will be no increases in benefits after March
31, 1998. For purposes of this Agreement, the Executive will receive credit for
a Year of Service for each twelve month period during which he completes 1,000
hours of service. The first
<PAGE>
 
twelve month period shall begin November 1, 1994, and subsequent periods shall
begin on the anniversary of that date.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or, if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Executive's estate. Any amount payable to an Executive or his
Beneficiary under this Section 2 shall be reduced by any disability payments
already paid to such Executive under Section 4 of this Agreement.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age, the Bank will pay $25,000 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries. Such annual payment
shall be increased five percent (5%) for each full Year of Service of the
Executive occurring after November 1, 1994, except that there will be no
increases in benefits after March 31, 1998. The first annual payment will be
made on a date to be determined by the Bank, but in no event later than the
first day of the sixth calendar month following the calendar month in which the
Executive's death occurred. In the event of the death of the last living
Beneficiary before all annual installment payments have been made, the balance
of any payments which remain unpaid at the time of such Beneficiary's death
shall be commuted on the basis of seven percent (7%) per annum compound interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of any such beneficiary designation, or if no Beneficiary
survives the Executive, any amount remaining unpaid at the Executive's death
shall be commuted on the basis of seven percent (7%) per annum compound interest
and shall be paid in a single sum to the Executive's estate. Any amount payable
to an Executive's Beneficiary under this Section 3 shall be reduced by any
disability payments already paid to such Executive under Section 4 of this
Agreement.

     Section 4.  Disability Benefits.  If the Executive shall become disabled
     ----------  --------------------                                        
(as defined herein) prior to Retirement Age, while continuing to serve as an
Executive of the Bank, the Bank shall commence to pay to the Executive the same
benefit that would have been payable if the Executive's death occurred on the
date of disability. The first annual payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive is determined
to be disabled.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment payments to the Executive's Beneficiary

                                       2
<PAGE>
 
or Beneficiaries. In the event of the death of the Executive's last living
Beneficiary before all installment payments have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of such beneficiary designation, or if no Beneficiary survives the
Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     The Executive shall be considered disabled for the purpose of this
Agreement if he is unable to perform the duties of his position for a continuous
period of six (6) months or more. During such six (6) month period, the
Executive must be under the regular care of a medical doctor (M.D.) or
osteopathic physician (D.O.) licensed in the State of North Carolina. For the
purpose of this section, or any other section relating to disability, if there
is any dispute between the parties as to the Executive's physical or mental
disability, such dispute shall be settled by the opinion of a medical doctor or
osteopathic physician licensed in the State of North Carolina who is selected by
the mutual consent of the Executive and the Bank or their representatives. If
the parties cannot agree within ten (10) days after a written request for the
designation of an examining physician is made by either party to the other, then
the examining physician shall be designated by the President of the Iredell
County Medical Society then serving. Certification of that physician as to the
matter in dispute shall be final and binding upon the Executive, his
Beneficiaries, the Bank, and all parties claiming any right or interest under
this Agreement through them.

     Section 5.  Termination of Employment.  Should the Executive's employment
     ---------   -------------------------                                    
by the Bank terminate other than by reason of death or retirement upon the
occurrence of the Retirement Age, the Executive or his Beneficiary (or
Beneficiaries), as applicable, shall be entitled upon the occurrence of the
earlier of the Retirement Age and the Executive's death to receive the
percentage of the annual installment payment stated in Section 2 of this
Agreement determined under the following table:
<TABLE> 
<CAPTION> 
                                            PERCENTAGE OF ANNUAL INSTALLMENT
                                            PAYMENT STATED IN SECTION 2 OF THIS
     IF EXECUTIVE'S TERMINATION OCCURS      AGREEMENT TO WHICH EXECUTIVE IS
               ON OR AFTER                            ENTITLED
     ---------------------------------      -----------------------------------
     <S>                                    <C> 
          March 31, 1994                                  20%
          March 31, 1995                                  40%
          March 31, 1996                                  60%
          March 31, 1997                                  80%
          March 31, 1998                                 100%
</TABLE> 
     Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the first calendar month following
the calendar month in which the Retirement Age or the Executive's death, as
applicable, occurs.

     Section 6.  Extraordinary Transactions.  In the event that an Executive's
     ---------   --------------------------                                   
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) 

                                       3
<PAGE>
 
months following a "Change in Control" (as defined herein), then the Executive
shall be entitled to the maximum benefits set forth in Section 2 as if the
Executive had remained employed until March 31, 1998, and the Retirement Age
shall be deemed to occur on the date that such Change in Control occurred. The
Bank shall commence to make annual installment payments to the Executive as
described in Section 2 on a date to be determined by the Bank, but in no event
later than the first day of the first calendar month following the calendar
month in which the Executive's service as an Executive of the Bank is
terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

           (a)   a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

           (b)   such time as any "person" (as such term is used in Sections
     13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
     (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

           (c)   individuals who constitute the board of directors of the Bank
     or its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

           (d)   either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

           (e)   all or substantially all of the assets of either the Bank or
     its holding company are sold or otherwise transferred to or are acquired by
     any other entity or group.

                                       4
<PAGE>
 
     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 7.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 8.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement. The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive or
restrict the right of the Executive to terminate his employment. The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 9.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.

     Section 10. Financing of Benefits.  All benefits under this Agreement
     ----------  ---------------------                                    
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid. The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement. The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

                                       5
<PAGE>
 
     Section 11. No Trust Created.  Nothing contained in this Agreement and no
     ----------  ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 12. Taxes.  The Bank shall have the right to deduct from any
     ----------  -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 13. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent. In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement. In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 14. Effect on Other Benefit Plans.  Nothing contained in this
     ----------  -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 15. Severability.  The provisions of this Agreement shall be
     ----------  ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 16. Gender.  Whenever in this Agreement words are used in the
     ----------  ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 17. Headings.  The titles and headings of Sections are included
     ----------  --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 18. Law Governing.  This Agreement shall be governed by the laws
     ----------  -------------                                               
of the State of North Carolina.

     Section 19. Claims and Review Procedures.
     ----------  ---------------------------- 

     A.    General.  For the purposes of implementing a claims procedure under
           -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this

                                       6
<PAGE>
 
unfunded, nonqualified deferred compensation plan. If any person believes he is
being denied any rights or benefits under the Agreement, such person may file a
claim in writing with the Plan Administrator for resolution in accordance with
the provisions of Paragraph B of this Section 19.

     B.    Claims Procedure.  If any claim filed hereunder is wholly or 
           ----------------                                             
partially denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain:

           (i)   specific reasons for the denial,

           (ii)  specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

           (iii) a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

           (iv)  information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

           Such notification will be given within ninety (90) days after the
           claim is received by the Plan Administrator (or within 180 days, if
           special circumstances require an extension of time for processing the
           claim, and if written notice of such extension and circumstances is
           given to the claimant within the initial ninety (90) day period). If
           such notification is not given within such period, the claim will be
           considered denied as of the last day of such period and the claimant
           may request a review of his claim in accordance with Section 19.C
           hereof.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

           (i)   file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

           (ii)  submit written issues and comments to the Plan Administrator.

           The Plan Administrator will notify the claimant of its decision in
           writing. Such notification will be written in a manner calculated to
           be understood by the claimant and will contain specific reasons for
           the decision as well as specific references to pertinent provisions
           of the Agreement. The decision on review will be made within sixty
           (60) days after the request for review is received by the Plan
           Administrator (or within one hundred twenty (120) days, if special
           circumstances require an extension

                                       7
<PAGE>
 
           of time for processing the request (such as an election by the Plan
           Administrator to hold a hearing), and if written notice of such
           extension and circumstances is given to the claimant within the
           initial sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                            MOORESVILLE SAVINGS BANK, SSB

Attest:                                     By:  /s/ Dale W. Brawley
                                                 ------------------------------
                                            Title: Executive Vice President
/s/ Billy R. Williams                            ------------------------------
---------------------------------
Secretary

[Corporate Seal]                            EXECUTIVE:

                                            /s/ George W. Brawley, Jr.
                                            ----------------------------------
                                            George W. Brawley, Jr.


                                       8
<PAGE>
 
                       AMENDMENT TO AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT
        BETWEEN MOORESVILLE SAVINGS BANK, SSB AND GEORGE W. BRAWLEY, JR.

     WHEREAS, Mooresville Savings Bank, SSB (the "Bank") and George W. Brawley,
Jr. (the "Executive") previously entered into a Supplemental Income Agreement on
November 1, 1993, and amended and restated said agreement on September 17, 1997
through the execution of the Amended and Restated Supplemental Income Agreement
(the "Agreement"); and
 
     WHEREAS, the Board of Directors of the Bank adopted a Resolution on
December 15, 1998 (the "Resolution"), authorizing modifications to the Agreement
as set forth in the Resolution attached hereto as Exhibit A; and

     WHEREAS, pursuant to Section 9 of the Agreement, the Bank and the Executive
have agreed to modify the Agreement as provided herein.

     NOW, THEREFORE, the Agreement is hereby modified as follows:

     1. Section 2 is deleted in its entirety and a new Section 2 is inserted in
        lieu thereof to read as follows:

     Section 2.  Retirement Benefits.  Except as otherwise specifically provided
     ----------  -------------------                                            
     herein, on March 31, 1998, or if earlier, upon the Executive's actual
     retirement after age 60 (the "Retirement Age"), the Bank will pay the
     Executive $25,000 annually for a continuous period of fifteen (15) years.
     The first annual payment will be made on a date to be determined by the
     Bank, but in no event later than the first day of the first calendar month
     following the calendar month in which the Retirement Age shall occur
     (except as otherwise provided herein).  Such annual payment shall be
     increased five percent (5%) for each full Year of Service of the Executive
     occurring between November 1, 1994 and March 31, 1998.  For purposes of
     this Agreement, the Executive will receive credit for a Year of Service for
     each twelve month period during which he completes 1,000 hours of service.
     The first twelve month period shall begin November 1, 1994, and subsequent
     periods shall begin on the anniversary of that date.

          If the Executive's service with the Bank continues past the
     Executive's Retirement Age, then the annual benefit payments shall be
     postponed and shall be increased on an annual basis by an additional five
     percent (5%) for each full Year of Service of the Executive occurring after
     the Executive's Retirement Age and continuing until age 70 or such time as
     the Executive ceases serving as an Executive, whichever shall occur first
     (hereafter "the Increased Benefit").  If the Executive reaches age 70 and
     has not previously begun receiving his retirement benefits under this
     Section 2, the monthly payments will begin upon the Executive's attainment
     of age 70 in any event.
<PAGE>
 
          In the event that an Executive should die after becoming entitled to
     receive annual installment payments under this Section 2 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to such beneficiaries as are designated by
     the Executive to the Bank in writing (the "Beneficiaries").  In the event
     of the death of the Executive's last living Beneficiary before all
     remaining installment payments have been made, the balance of any payments
     which remain unpaid at the time of such Beneficiary's death shall be
     commuted on the basis of seven percent (7%) per annum compounded interest
     and shall be paid in a single sum to the estate of the last Beneficiary to
     die.  In the absence of such beneficiary designation, or if no Beneficiary
     survives the Executive, any payments remaining unpaid at the Executive's
     death shall be commuted on the basis of seven percent (7%) per annum
     compounded interest and shall be paid in a single sum to the Executive's
     estate.   Any amount payable to an Executive or his Beneficiary under this
     Section 2 shall be reduced by any disability payments already paid to such
     Executive under Section 4 of this Agreement.

     2. Section 3 is deleted in its entirety and a new Section 3 is inserted in
        lieu thereof to read as follows:

     Section 3.  Pre-Retirement Death Benefits. Should the Executive die while
     ----------  -----------------------------                                
     serving as an executive of the Bank, and prior to his receiving any
     benefits under Section 2, the Bank will pay $25,000.00 annually for a
     continuous period of fifteen (15) years to the Executive's Beneficiary or
     Beneficiaries.  Such annual payment shall be increased five percent (5%)
     for each full Year of Service of the Executive occurring between November
     1, 1994 and March 31, 1998.  If the Executive continued serving as an
     Executive of the Bank after March 31, 1998, then the annual payment will be
     increased an additional five percent (5%) for each full Year of Service for
     each full Year of Service of the Executive occurring after the Executive's
     Retirement Age (hereafter "the Increased Benefit").  The first annual
     payment shall be made on a date to be determined by the Bank, but in no
     event later than the first day of the sixth calendar month following the
     calendar month in which the Executive died.

          In the event of the death of the Executive's last living Beneficiary
     before all annual payments shall have been made, the balance of any
     payments which remain unpaid at the time of such Beneficiary's death shall
     be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of any such beneficiary designation, or
     if no Beneficiary survives the Executive, any amount remaining unpaid at an
     Executive's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Executive's estate.  Any amount payable to an Executive's Beneficiary under
     this Section 3 shall be reduced by any disability payments already paid to
     such Executive under Section 4 of this Agreement.


                                       2
<PAGE>
 
     3. Section 4 is deleted in its entirety and a new Section 4 is inserted in
        lieu thereof to read as follows:

     Section 4.  Disability Benefits. If the Executive shall become disabled (as
     ----------  -------------------                                            
     defined herein) while continuing to serve as an Executive of the Bank, the
     Bank shall commence to pay to the Executive the same benefit that would
     have been payable if the Executive had died on the date of disability.  The
     first annual payment will be made on a date to be determined by the Bank,
     but in no event later than the first day of the sixth calendar month
     following the calendar month in which the Executive is determined to be
     disabled.

          In the event that the Executive should die after becoming entitled to
     receive annual installment payments under this Section 4 but before any or
     all remaining installment payments have been made, the Bank will pay all
     remaining installment payments to the Executive's Beneficiary or
     Beneficiaries.  In the event of the death of the Executive's last living
     Beneficiary before all installment payments have been made, the balance of
     any payments which remain unpaid at the time of such Beneficiary's death
     shall be commuted on the basis of seven percent (7%) per annum compounded
     interest and shall be paid in a single sum to the estate of the last
     Beneficiary to die.  In the absence of such beneficiary designation, or if
     no Beneficiary survives the Executive, any payments remaining unpaid at the
     Executive's death shall be commuted on the basis of seven percent (7%) per
     annum compounded interest and shall be paid in a single sum to the
     Executive's estate.

          The Executive shall be considered disabled for the purpose of this
     Agreement if he is unable to perform the duties of his position for a
     continuous period of six (6) months or more.  During such six (6) month
     period, the Executive must be under the regular care of a medical doctor
     (M.D.) or osteopathic physician (D.O.) licensed in the State of North
     Carolina.  For the purpose of this section, or any other section relating
     to disability, if there is any dispute between the parties as to the
     Executive's physical or mental disability, such dispute shall be settled by
     the opinion of a medical doctor or osteopathic physician licensed in the
     State of North Carolina who is selected by the mutual consent of the
     Executive and the Bank or their representatives. If the parties cannot
     agree within ten (10) days after a written request for the designation of
     an examining physician is made by either party to the other, then the
     examining physician shall be designated by the president of the Iredell
     County Medical Society then serving.  Certification of that physician as to
     the matter in dispute shall be final and binding upon the Executive, his
     Beneficiaries, the Bank and all parties claiming any right or interest
     under this Agreement through them.

     4.  Exhibit B attached hereto sets forth the Increased Benefit which will
     be payable to the Executive if he continues service with the Bank after
     reaching the Retirement Age.


                                       3
<PAGE>
 
     5.  All of the other terms and provisions of the Agreement are not modified
     in any respect and shall remain in full force and effect.


     This Amendment is effective as of the 16th day of December, 1998.


                                      MOORESVILLE SAVINGS BANK, SSB

Attest:                               By:    /s/ Claude U. Voils, Jr.
                                             ------------------------

   /s/ Billy R. Williams              Title: Director
----------------------------                 ------------------------
Secretary


[Corporate Seal]

                                      DIRECTOR:

                                            /s/
                                      --------------------------------
                                      George W. Brawley, Jr.


                                       4
<PAGE>
 
                                   EXHIBIT B


<TABLE>
<CAPTION>
Date of Benefit                                    Amount of Increased Annual Benefit
-------------------------------------------------------------------------------------
<S>                                                 <C>
Retire before 11/1/94                              $25,000.00
-------------------------------------------------------------------------------------
Retire on or after 11/1/95 but before 11/1/96      $26,250.00
-------------------------------------------------------------------------------------
Retire on or after 11/1/96 but before 11/1/97      $27,562.50
-------------------------------------------------------------------------------------
Retire on or after 11/1/97 but before 11/1/98      $28,940.63
-------------------------------------------------------------------------------------
Retire on or after 11/1/98 but before 11/1/99      $30,387.66
-------------------------------------------------------------------------------------
Retire on or after 11/1/99 but before 11/1/00      $31,907.04
-------------------------------------------------------------------------------------
Retire on or after 11/1/00 but before 11/1/01      $33,502.39
-------------------------------------------------------------------------------------
Retire on or after 11/1/01 but before 11/1/02      $35,177.51
-------------------------------------------------------------------------------------
Retire on or after 11/1/02 but before 11/1/03      $36,936.39
-------------------------------------------------------------------------------------
Retire on or after 11/1/03 but before 11/1/04      $38,936.39
-------------------------------------------------------------------------------------
Retire on or after 11/1/04 but before 11/1/05      $40,722.37
-------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                             AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT


     THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered 
into as of the 1st of November, 1993 and amended and restated this 17 day of
September, 1997 (the "Agreement") by and between Mooresville Savings 
Bank, SSB, a mutual state savings bank chartered under the laws of the State of 
North Carolina (the "Bank"), and Donald G. Jones (the "Executive").


                             W I T N E S S E T H:

     WHEREAS, the Executive has been an employee of the Bank since October 20, 
1986, and is a member of a select group of management employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the 
Bank, the Bank previously entered into a Supplemental Income Agreement with the 
Executive on November 1, 1993; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and 
realizes that if the Executive were to terminate his employment, the Bank would 
suffer a substantial financial loss; and 

     WHEREAS, the parties hereto desire to amend the Agreement and to restate 
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the 
parties hereto mutually agree as follows:

     Section 1. Deferral Election. During the period of the Executive's 
     ---------  -----------------   
employment by the Bank, the Executive shall defer monthly a portion of his cash 
compensation otherwise receivable by the Executive from the Bank.

     Section 2. Retirement Benefits. Except as otherwise specifically provided 
     ---------  -------------------
herein, upon the occurrence of the Executive's 65th birthday or, if earlier,
upon the Executive's actual retirement after age 60 (the "Retirement Age"), the
Bank will pay the Executive $10,000 annually for a continuous period of fifteen
(15) years. The first annual payment will be made on a date to be determined by
the Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Retirement Age shall occur. Such
annual payment shall be increased five percent (5%) for each full Year of
Service of the Executive occurring after November 1, 1994, except that there
will be no increases in benefits for more than ten (10) years of additional
service. For purposes of this Agreement, the Executive will receive credit for a
Year of Service for each twelve month period during which he completes 1,000
hours of service. The first twelve month
<PAGE>
 
period shall begin November 1, 1994, and subsequent periods shall begin on the
anniversary of that date.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or, if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Executive's estate.  Any amount payable to an Executive or his
Beneficiary under this Section 2 shall be reduced by any disability payments
already paid to such Executive under Section 4 of this Agreement.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age, the Bank will pay $10,000 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries.  Such annual payment
shall be increased five percent (5%) for each full Year of Service of the
Executive occurring after November 1, 1994, except that there will be no
increases in benefits for more than ten (10) years of additional service.  The
first annual payment will be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive's death occurred.  In the event of the
death of the last living Beneficiary before all annual installment payments have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of seven percent (7%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any amount remaining unpaid at the
Executive's death shall be commuted on the basis of seven percent (7%) per annum
compound interest and shall be paid in a single sum to the Executive's estate.
Any amount payable to an Executive's Beneficiary under this Section 3 shall be
reduced by any disability payments already paid to such Executive under Section
4 of this Agreement.

     Section 4.  Disability Benefits.  If the Executive shall become disabled
     ----------  --------------------                                        
(as defined herein) prior to Retirement Age, while continuing to serve as an
Executive of the Bank, the Bank shall commence to pay to the Executive the same
benefit that would have been payable if the Executive's death occurred on the
date of disability.  The first annual payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive is determined
to be disabled.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment  payments to the Executive's Beneficiary 


                                       2
<PAGE>
 
or Beneficiaries.  In the event of the death of the Executive's last living
Beneficiary before all installment payments have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of such beneficiary designation, or if no Beneficiary survives the
Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     The Executive shall be considered disabled for the purpose of this
Agreement if he is unable to perform the duties of his position for a continuous
period of six (6) months or more.  During such six (6) month period, the
Executive must be under the regular care of a medical doctor (M.D.) or
osteopathic physician (D.O.) licensed in the State of North Carolina.  For the
purpose of this section, or any other section relating to disability, if there
is any dispute between the parties as to the Executive's physical or mental
disability, such dispute shall be settled by the opinion of a medical doctor or
osteopathic physician licensed in the State of North Carolina who is selected by
the mutual consent of the Executive and the Bank or their representatives.  If
the parties cannot agree within ten (10) days after a written request for the
designation of an examining physician is made by either party to the other, then
the examining physician shall be designated by the President of the Iredell
County Medical Society then serving.  Certification of that physician as to the
matter in dispute shall be final and binding upon the Executive, his
Beneficiaries, the Bank, and all parties claiming any right or interest under
this Agreement through them.

     Section 5.  Termination of Employment.  Should the Executive's employment
     ---------   -------------------------                                    
by the Bank terminate other than by reason of death or retirement upon the
occurrence of the Retirement Age, the Executive or his Beneficiary (or
Beneficiaries), as applicable, shall be entitled upon the occurrence of the
earlier of the Retirement Age and the Executive's death to receive the
percentage of the annual installment payment stated in Section 2 of this
Agreement determined under the following table:

<TABLE> 
<CAPTION> 

                                            PERCENTAGE OF ANNUAL INSTALLMENT
                                           PAYMENT STATED IN SECTION 2 OF THIS
 IF EXECUTIVE'S TERMINATION OCCURS          AGREEMENT TO WHICH EXECUTIVE IS
           ON OR AFTER                                  ENTITLED
 ---------------------------------         -----------------------------------
 <S>                                       <C>     
          March 31, 1994                                  20%
          March 31, 1995                                  40%
          March 31, 1996                                  60%
          March 31, 1997                                  80%
          March 31, 1998                                  100%
</TABLE> 

     Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the first calendar month following
the calendar month in which the Retirement Age or the Executive's death, as
applicable, occurs.

     Section 6.  Extraordinary Transactions.  In the event that an Executive's
     ---------   --------------------------                                   
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) 


                                       3
<PAGE>
 
months following a "Change in Control" (as defined herein), then the Executive
shall be entitled to the maximum benefits set forth in Section 2 as if the
Executive had remained employed until age 65, and the Retirement Age shall be
deemed to occur on the date that such Change in Control occurred. The Bank shall
commence to make annual installment payments to the Executive as described in
Section 2 on a date to be determined by the Bank, but in no event later than the
first day of the first calendar month following the calendar month in which the
Executive's service as an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.



                                       4
<PAGE>
 
     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 7.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 8.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive or
restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 9.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.

     Section 10.  Financing of Benefits.  All benefits under this Agreement
     ----------   ---------------------                                    
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid.  The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.


                                       5
<PAGE>
 
     Section 11.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 12.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 13.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 14.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 15.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 16.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 17.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 18.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 19.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this


                                       6
<PAGE>
 
unfunded, nonqualified deferred compensation plan.  If any person believes he is
being denied any rights or benefits under the Agreement, such person may file a
claim in writing with the Plan Administrator for resolution in accordance with
the provisions of Paragraph B of this Section 19.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)   specific reasons for the denial,

          (ii)  specific reference to pertinent provisions of the Agreement on
                which the Plan Administrator based its denial,

          (iii) a description of any additional material or information
                necessary for the claimant to perfect such claim and an
                explanation of why such material or information is necessary,
                and

          (iv)  information as to the steps to be taken if the claimant wishes
                to submit a request for review.

          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 19.C
          hereof.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

          The Plan Administrator will notify the claimant of its decision in
          writing. Such notification will be written in a manner calculated to
          be understood by the claimant and will contain specific reasons for
          the decision as well as specific references to pertinent provisions of
          the Agreement. The decision on review will be made within sixty (60)
          days after the request for review is received by the Plan
          Administrator (or within one hundred twenty (120) days, if special
          circumstances require an extension

                                       7
<PAGE>
 
          of time for processing the request (such as an election by the Plan
          Administrator to hold a hearing), and if written notice of such
          extension and circumstances is given to the claimant within the
          initial sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By: /s/ George W. Brawley, Jr. 
                                       --------------------------------
/s/ Billy R. Williams               Title: President
--------------------------------          -----------------------------
Secretary

[Corporate Seal]                    EXECUTIVE:
                                    /s/ Donald G. Jones
                                    -----------------------------------
                                    Donald G. Jones


                                       8
<PAGE>
 
                              AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT


     THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of November, 1993 and amended and restated this 17 day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Billy R. Williams (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive has been an employee of the Bank since July 21,
1986, and is a member of a select group of management employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Supplemental Income Agreement with the
Executive on November 1, 1993; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  During the period of the Executive's
     ---------   -----------------                                       
employment by the Bank, the Executive shall defer monthly a portion of his cash
compensation otherwise receivable by the Executive from the Bank.

     Section 2.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday or, if earlier,
upon the Executive's actual retirement after age 60 (the "Retirement Age"), the
Bank will pay the Executive $7,900 annually for a continuous period of fifteen
(15) years.  The first annual payment will be made on a date to be determined by
the Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Retirement Age shall occur.  Such
annual payment shall be increased five percent (5%) for each full Year of
Service of the Executive occurring after November 1, 1994, except that there
will be no increases in benefits for more than ten (10) years of additional
service. For purposes of this Agreement, the Executive will receive credit for a
Year of Service for each twelve month period during which he completes 1,000
hours of service.  The first twelve month
<PAGE>
 
period shall begin November 1, 1994, and subsequent periods shall begin on the
anniversary of that date.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or, if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Executive's estate.  Any amount payable to an Executive or his
Beneficiary under this Section 2 shall be reduced by any disability payments
already paid to such Executive under Section 4 of this Agreement.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age, the Bank will pay $7,900 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries.  Such annual payment
shall be increased five percent (5%) for each full Year of Service of the
Executive occurring after November 1, 1994, except that there will be no
increases in benefits for more than ten (10) years of additional service.  The
first annual payment will be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive's death occurred.  In the event of the
death of the last living Beneficiary before all annual installment payments have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of seven percent (7%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any amount remaining unpaid at the
Executive's death shall be commuted on the basis of seven percent (7%) per annum
compound interest and shall be paid in a single sum to the Executive's estate.
Any amount payable to an Executive's Beneficiary under this Section 3 shall be
reduced by any disability payments already paid to such Executive under Section
4 of this Agreement.

     Section 4.  Disability Benefits.  If the Executive shall become disabled
     ----------  --------------------                                        
(as defined herein) prior to Retirement Age, while continuing to serve as an
Executive of the Bank, the Bank shall commence to pay to the Executive the same
benefit that would have been payable if the Executive's death occurred on the
date of disability.  The first annual payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive is determined
to be disabled.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment  payments to the Executive's Beneficiary 

                                       2
<PAGE>
 
or Beneficiaries.  In the event of the death of the Executive's last living
Beneficiary before all installment payments have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of such beneficiary designation, or if no Beneficiary survives the
Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     The Executive shall be considered disabled for the purpose of this
Agreement if he is unable to perform the duties of his position for a continuous
period of six (6) months or more.  During such six (6) month period, the
Executive must be under the regular care of a medical doctor (M.D.) or
osteopathic physician (D.O.) licensed in the State of North Carolina.  For the
purpose of this section, or any other section relating to disability, if there
is any dispute between the parties as to the Executive's physical or mental
disability, such dispute shall be settled by the opinion of a medical doctor or
osteopathic physician licensed in the State of North Carolina who is selected by
the mutual consent of the Executive and the Bank or their representatives.  If
the parties cannot agree within ten (10) days after a written request for the
designation of an examining physician is made by either party to the other, then
the examining physician shall be designated by the President of the Iredell
County Medical Society then serving.  Certification of that physician as to the
matter in dispute shall be final and binding upon the Executive, his
Beneficiaries, the Bank, and all parties claiming any right or interest under
this Agreement through them.

     Section 5.  Termination of Employment.  Should the Executive's employment
     ---------   -------------------------                                    
by the Bank terminate other than by reason of death or retirement upon the
occurrence of the Retirement Age, the Executive or his Beneficiary (or
Beneficiaries), as applicable, shall be entitled upon the occurrence of the
earlier of the Retirement Age and the Executive's death to receive the
percentage of the annual installment payment stated in Section 2 of this
Agreement determined under the following table:


<TABLE> 
<CAPTION> 
                                           PERCENTAGE OF ANNUAL INSTALLMENT
                                          PAYMENT STATED IN SECTION 2 OF THIS
IF EXECUTIVE'S TERMINATION OCCURS           AGREEMENT TO WHICH EXECUTIVE IS
          ON OR AFTER                                   ENTITLED
---------------------------------         -----------------------------------
<S>                                       <C>   
         March 31, 1994                                   20%
         March 31, 1995                                   40%
         March 31, 1996                                   60%
         March 31, 1997                                   80%
         March 31, 1998                                  100%
</TABLE> 

     Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the first calendar month following
the calendar month in which the Retirement Age or the Executive's death, as
applicable, occurs.

     Section 6.  Extraordinary Transactions.  In the event that an Executive's
     ---------   --------------------------                                   
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) 

                                       3
<PAGE>
 
months following a "Change in Control" (as defined herein), then the Executive
shall be entitled to the maximum benefits set forth in Section 2 as if the
Executive had remained employed until age 65, and the Retirement Age shall be
deemed to occur on the date that such Change in Control occurred. The Bank shall
commence to make annual installment payments to the Executive as described in
Section 2 on a date to be determined by the Bank, but in no event later than the
first day of the first calendar month following the calendar month in which the
Executive's service as an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.


                                       4
<PAGE>
 
     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 7.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 8.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive or
restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 9.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.

     Section 10.  Financing of Benefits.  All benefits under this Agreement
     ----------   ---------------------                                    
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid.  The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.


                                       5
<PAGE>
 
     Section 11.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 12.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 13.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 14.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 15.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 16.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 17.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 18.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 19.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this


                                       6
<PAGE>
 
unfunded, nonqualified deferred compensation plan.  If any person believes he is
being denied any rights or benefits under the Agreement, such person may file a
claim in writing with the Plan Administrator for resolution in accordance with
the provisions of Paragraph B of this Section 19.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

     (i)   specific reasons for the denial,

     (ii)  specific reference to pertinent provisions of the Agreement on which
           the Plan Administrator based its denial,

     (iii) a description of any additional material or information necessary for
           the claimant to perfect such claim and an explanation of why such
           material or information is necessary, and

     (iv)  information as to the steps to be taken if the claimant wishes to
           submit a request for review.

     Such notification will be given within ninety (90) days after the claim is
     received by the Plan Administrator (or within 180 days, if special
     circumstances require an extension of time for processing the claim, and if
     written notice of such extension and circumstances is given to the claimant
     within the initial ninety (90) day period). If such notification is not
     given within such period, the claim will be considered denied as of the
     last day of such period and the claimant may request a review of his claim
     in accordance with Section 19.C hereof.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

     (i)  file a written request with the Plan Administrator for a review of his
          denied claim and of pertinent documents; and

     (ii) submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
     Such notification will be written in a manner calculated to be understood
     by the claimant and will contain specific reasons for the decision as well
     as specific references to pertinent provisions of the Agreement. The
     decision on review will be made within sixty (60) days after the request
     for review is received by the Plan Administrator (or within one hundred
     twenty (120) days, if special circumstances require an extension

                                       7
<PAGE>
 
     of time for processing the request (such as an election by the Plan
     Administrator to hold a hearing), and if written notice of such extension
     and circumstances is given to the claimant within the initial sixty (60)
     day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By: /s/ George W. Brawley, Jr.
                                        ------------------------------
/s/ Billy R. Williams               Title: President
_________________________________          ---------------------------
Secretary

[Corporate Seal]                    EXECUTIVE:
                                    /s/ Billy R. Williams
                                    _______________________________________
                                    Billy R. Williams


                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         SUPPLEMENTAL INCOME AGREEMENT


     THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of November, 1993 and amended and restated this 17th day of
                                                                   ----
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
---------
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Richard E. Woods (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive has been an employee of the Bank since September 26,
1980, and is a member of a select group of management employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Supplemental Income Agreement with the
Executive on November 1, 1993; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Deferral Election.  During the period of the Executive's
     ---------   -----------------                                       
employment by the Bank, the Executive shall defer monthly a portion of his cash
compensation otherwise receivable by the Executive from the Bank.

     Section 2.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday or, if earlier,
upon the Executive's actual retirement after age 60 (the "Retirement Age"), the
Bank will pay the Executive $10,000 annually for a continuous period of fifteen
(15) years.  The first annual payment will be made on a date to be determined by
the Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Retirement Age shall occur.  Such
annual payment shall be increased five percent (5%) for each full Year of
Service of the Executive occurring after November 1, 1994, except that there
will be no increases in benefits for more than ten (10) years of additional
service. For purposes of this Agreement, the Executive will receive credit for a
Year of Service for each twelve month period during which he completes 1,000
hours of service.  The first twelve month
<PAGE>
 
period shall begin November 1, 1994, and subsequent periods shall begin on the
anniversary of that date.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or, if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the Executive's estate.  Any amount payable to an Executive or his
Beneficiary under this Section 2 shall be reduced by any disability payments
already paid to such Executive under Section 4 of this Agreement.

     Section 3.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age, the Bank will pay $10,000 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries.  Such annual payment
shall be increased five percent (5%) for each full Year of Service of the
Executive occurring after November 1, 1994, except that there will be no
increases in benefits for more than ten (10) years of additional service.  The
first annual payment will be made on a date to be determined by the Bank, but in
no event later than the first day of the sixth calendar month following the
calendar month in which the Executive's death occurred.  In the event of the
death of the last living Beneficiary before all annual installment payments have
been made, the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of seven percent (7%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die.  In the absence of any such beneficiary designation, or
if no Beneficiary survives the Executive, any amount remaining unpaid at the
Executive's death shall be commuted on the basis of seven percent (7%) per annum
compound interest and shall be paid in a single sum to the Executive's estate.
Any amount payable to an Executive's Beneficiary under this Section 3 shall be
reduced by any disability payments already paid to such Executive under Section
4 of this Agreement.

     Section 4.  Disability Benefits.  If the Executive shall become disabled
     ----------  --------------------                                        
(as defined herein) prior to Retirement Age, while continuing to serve as an
Executive of the Bank, the Bank shall commence to pay to the Executive the same
benefit that would have been payable if the Executive's death occurred on the
date of disability.  The first annual payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Executive is determined
to be disabled.

     In the event that the Executive should die after becoming entitled to
receive annual installment payments under this Section 3 but before any or all
remaining installment payments have been made, the Bank will pay all remaining
installment  payments to the Executive's Beneficiary 

                                       2
<PAGE>
 
or Beneficiaries.  In the event of the death of the Executive's last living
Beneficiary before all installment payments have been made, the balance of any
payments which remain unpaid at the time of such Beneficiary's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die.  In
the absence of such beneficiary designation, or if no Beneficiary survives the
Executive, any payments remaining unpaid at the Executive's death shall be
commuted on the basis of seven percent (7%) per annum compounded interest and
shall be paid in a single sum to the Executive's estate.

     The Executive shall be considered disabled for the purpose of this
Agreement if he is unable to perform the duties of his position for a continuous
period of six (6) months or more.  During such six (6) month period, the
Executive must be under the regular care of a medical doctor (M.D.) or
osteopathic physician (D.O.) licensed in the State of North Carolina.  For the
purpose of this section, or any other section relating to disability, if there
is any dispute between the parties as to the Executive's physical or mental
disability, such dispute shall be settled by the opinion of a medical doctor or
osteopathic physician licensed in the State of North Carolina who is selected by
the mutual consent of the Executive and the Bank or their representatives.  If
the parties cannot agree within ten (10) days after a written request for the
designation of an examining physician is made by either party to the other, then
the examining physician shall be designated by the President of the Iredell
County Medical Society then serving.  Certification of that physician as to the
matter in dispute shall be final and binding upon the Executive, his
Beneficiaries, the Bank, and all parties claiming any right or interest under
this Agreement through them.

     Section 5.  Termination of Employment.  Should the Executive's employment
     ---------   -------------------------                                    
by the Bank terminate other than by reason of death or retirement upon the
occurrence of the Retirement Age, the Executive or his Beneficiary (or
Beneficiaries), as applicable, shall be entitled upon the occurrence of the
earlier of the Retirement Age and the Executive's death to receive the
percentage of the annual installment payment stated in Section 2 of this
Agreement determined under the following table:

<TABLE> 
<CAPTION> 
                                          PERCENTAGE OF ANNUAL INSTALLMENT
                                         PAYMENT STATED IN SECTION 2 OF THIS
     IF EXECUTIVE'S TERMINATION OCCURS     AGREEMENT TO WHICH EXECUTIVE IS
               ON OR AFTER                            ENTITLED
     ---------------------------------   -----------------------------------
     <S>                                 <C> 
          March 31, 1994                                  20%
          March 31, 1995                                  40%
          March 31, 1996                                  60%
          March 31, 1997                                  80%
          March 31, 1998                                 100%
</TABLE> 

     Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the first calendar month following
the calendar month in which the Retirement Age or the Executive's death, as
applicable, occurs.

       Section 6.  Extraordinary Transactions.  In the event that an Executive's
       ---------   --------------------------                                   
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) 

                                       3
<PAGE>
 
months following a "Change in Control" (as defined herein), then the Executive
shall be entitled to the maximum benefits set forth in Section 2 as if the
Executive had remained employed until age 65, and the Retirement Age shall be
deemed to occur on the date that such Change in Control occurred. The Bank shall
commence to make annual installment payments to the Executive as described in
Section 2 on a date to be determined by the Bank, but in no event later than the
first day of the first calendar month following the calendar month in which the
Executive's service as an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of the outstanding common stock of the
     Bank or common stock of such holding company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

                                       4
<PAGE>
 
     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 7.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 8.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive or
restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

       Section 9.  Amendment and Termination.  This Agreement may be amended or
       ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.

       Section 10.  Financing of Benefits.  All benefits under this Agreement
       ----------   ---------------------                                    
shall be provided out of the general assets of the Bank at the time such
benefits are to be paid.  The parties agree that the Bank is under no obligation
to set aside funds in advance of the time for payment hereunder, or to otherwise
provide security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

                                       5
<PAGE>
 
     Section 11.  No Trust Created.  Nothing contained in this Agreement and no
     ----------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 12.  Taxes.  The Bank shall have the right to deduct from any
     ----------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 13.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

     Section 14.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 15.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 16.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 17.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 18.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 19.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this

                                       6
<PAGE>
 
unfunded, nonqualified deferred compensation plan.  If any person believes he is
being denied any rights or benefits under the Agreement, such person may file a
claim in writing with the Plan Administrator for resolution in accordance with
the provisions of Paragraph B of this Section 19.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)   specific reasons for the denial,

          (ii)  specific reference to pertinent provisions of the Agreement on
                which the Plan Administrator based its denial,

          (iii) a description of any additional material or information
                necessary for the claimant to perfect such claim and an
                explanation of why such material or information is necessary,
                and

          (iv)  information as to the steps to be taken if the claimant wishes
                to submit a request for review.

          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 19.C
          hereof.

C.   Review Procedure.  Within sixty (60) days after the date on which a
     ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

          The Plan Administrator will notify the claimant of its decision in
          writing. Such notification will be written in a manner calculated to
          be understood by the claimant and will contain specific reasons for
          the decision as well as specific references to pertinent provisions of
          the Agreement. The decision on review will be made within sixty (60)
          days after the request for review is received by the Plan
          Administrator (or within one hundred twenty (120) days, if special
          circumstances require an extension

                                       7
<PAGE>
 
          of time for processing the request (such as an election by the Plan
          Administrator to hold a hearing), and if written notice of such
          extension and circumstances is given to the claimant within the
          initial sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By: /s/ George W. Brawley, Jr.
                                             ---------------------------------
                                                 Title: President
/s/ Billy R. Williams
--------------------------------
Secretary

[Corporate Seal]                         EXECUTIVE:
                                         /s/ Richard E. Woods
                                         ---------------------------------------
                                         Richard E. Woods


                                       8
<PAGE>
 
                             AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Lucille Doster (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the Executive's 
     ---------   --------------------------                        
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Executive shall be entitled to the benefits set forth in
Section 1 as if the Executive had remained employed until Retirement Age, and
the Retirement Age shall be deemed to occur on the date that such Change in
Control occurred. The Bank shall commence to make monthly installment payments
to the Executive as described in Section 1 on a date to be determined by the
Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Executive's service as an Executive of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)    file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

          (ii)   submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By: /s/ George W. Brawley, Jr. 
                                        ----------------------------------

/s/ Billy R. Williams               Title: President
------------------------------             -------------------------------
Secretary

[Corporate Seal]                    EXECUTIVE:
                                     /s/ Lucille Doster
                                    --------------------------------------
                                    Lucille Doster


                                       6
<PAGE>
 
                              AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Marie Hedrick (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the Executive's
     ---------   --------------------------
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Executive shall be entitled to the benefits set forth in
Section 1 as if the Executive had remained employed until Retirement Age, and
the Retirement Age shall be deemed to occur on the date that such Change in
Control occurred. The Bank shall commence to make monthly installment payments
to the Executive as described in Section 1 on a date to be determined by the
Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Executive's service as an Executive of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c) individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

                                       5
<PAGE>
 
     Such notification will be given within ninety (90) days after the claim is
     received by the Plan Administrator (or within 180 days, if special
     circumstances require an extension of time for processing the claim, and if
     written notice of such extension and circumstances is given to the claimant
     within the initial ninety (90) day period). If such notification is not
     given within such period, the claim will be considered denied as of the
     last day of such period and the claimant may request a review of his claim
     in accordance with Section 16.C hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)    file a written request with the Plan Administrator for a review
                 of his denied claim and of pertinent documents; and

          (ii)   submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By: /s/ George W. Brawley, Jr. 
                                             -----------------------------------
/s/ Billy R. Williams                    Title: President
--------------------------------                --------------------------------
Secretary

[Corporate Seal]                         EXECUTIVE:

                                         /s/ Marie Hedrick
                                         ---------------------------------------
                                         Marie Hedrick

                                       6
<PAGE>
 
                             AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Carol Huffman (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the Executive's
     ---------   --------------------------                        
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Executive shall be entitled to the benefits set forth in
Section 1 as if the Executive had remained employed until Retirement Age, and
the Retirement Age shall be deemed to occur on the date that such Change in
Control occurred. The Bank shall commence to make monthly installment payments
to the Executive as described in Section 1 on a date to be determined by the
Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Executive's service as an Executive of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of


                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.


                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)   specific reasons for the denial,

          (ii)  specific reference to pertinent provisions of the Agreement on
                which the Plan Administrator based its denial,

          (iii) a description of any additional material or information 
                necessary for the claimant to perfect such claim and an 
                explanation of why such material or information is necessary, 
                and

          (iv)  information as to the steps to be taken if the claimant wishes
                to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review 
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By: /s/ George W. Brawley, Jr.
                                        -----------------------------------

/s/ Billy R. Williams               Title: President
----------------------------              --------------------------------- 
Secretary

[Corporate Seal]                    EXECUTIVE:
                                    /s/ Carol Huffman
                                    ---------------------------------------
                                    Carol Huffman


                                       6
<PAGE>
 
                             AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September,  1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Brenda Johnson (the "Executive").

                             W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3.  Extraordinary Transactions.  In the event that the
     ---------   --------------------------                        
Executive's service as an Executive of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a "Change in
Control" (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 1 as if the Executive had remained employed until
Retirement Age, and the Retirement Age shall be deemed to occur on the date that
such Change in Control occurred. The Bank shall commence to make monthly
installment payments to the Executive as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's service as
an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

                                       5
<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                             By: /s/ George W. Brawley, Jr.
/s/ Billy R. Williams                   ---------------------------------
----------------------------        Title: President
Secretary                                  ------------------------------
          

[Corporate Seal]                    EXECUTIVE:
                                    /s/ Brenda Johnson
                                    -------------------------------------
                                    Brenda Johnson

                                       6
<PAGE>
 
                              AMENDED AND RESTATED
                         SALARY CONTINUATION AGREEMENT


     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and D. Glenn Jones (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate his employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to his Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
       Section 3.  Extraordinary Transactions.  In the event that the
       ---------   --------------------------                        
Executive's service as an Executive of the Bank is terminated for any reason
coincident with or within twenty-four (24) months following a "Change in
Control" (as defined herein), then the Executive shall be entitled to the
benefits set forth in Section 1 as if the Executive had remained employed until
Retirement Age, and the Retirement Age shall be deemed to occur on the date that
such Change in Control occurred. The Bank shall commence to make monthly
installment payments to the Executive as described in Section 1 on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's service as
an Executive of the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d) either the Bank or its holding company consolidates or merges with
     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e) all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate his employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of his Retirement Age, or his death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10.  Binding Obligation of the Bank and Any Successor in Interest.
     ----------   ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)   specific reasons for the denial,

          (ii)  specific reference to pertinent provisions of the Agreement on
                which the Plan Administrator based its denial,

          (iii) a description of any additional material or information
                necessary for the claimant to perfect such claim and an
                explanation of why such material or information is necessary,
                and

          (iv)  information as to the steps to be taken if the claimant wishes
                to submit a request for review.

Such notification will be given within ninety (90) days after the claim is
received by the Plan Administrator (or within 180 days, if special circumstances
require an extension of time for processing the claim, and if written notice of
such extension and circumstances is given to the claimant within the initial
ninety (90) day period). If such notification is not given within such period,
the claim will be considered denied as of the last day of such period and the
claimant may request a review of his claim in accordance with Section 16.C
hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)  file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and

          (ii) submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set his hand and seal, all on the day
and year first above written.

                                    MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By: /s/ George W. Brawley, Jr. 
/s/ Billy R. Williams                        --------------------------------
---------------------------------
                                         Title: President
---------------------------------              ------------------------------ 
Secretary

[Corporate Seal]                         EXECUTIVE:
                                    /s/ D. Glenn Jones
                                    -----------------------------------------
                                    D. Glenn Jones




                                       5
<PAGE>
 
                              AMENDED AND RESTATED

                         SALARY CONTINUATION AGREEMENT

     THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT, made and entered
into as of the 1st of February, 1988 and amended and restated this 17th day of
September, 1997 (the "Agreement") by and between Mooresville Savings Bank, SSB,
a mutual state savings bank chartered under the laws of the State of North
Carolina (the "Bank"), and Nancy Lee Petrea (the "Executive").

                              W I T N E S E T H:

     WHEREAS, the Executive is a member of a select group of management
employees of the Bank; and

     WHEREAS, in order to help assure the Executive's continued service to the
Bank, the Bank previously entered into a Salary Continuation Agreement with the
Executive on February 1, 1988; and

     WHEREAS, thereafter, the Bank converted its charter to a state savings bank
charter and changed its name from "Mooresville Federal Savings and Loan
Association" to "Mooresville Savings Bank, SSB"; and

     WHEREAS, the value of the Executive is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and

     WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to terminate her employment, the Bank would
suffer a substantial financial loss; and

     WHEREAS, the parties hereto desire to amend the Agreement and to restate
the Agreement as amended.

     NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

     Section 1.  Retirement Benefits.  Except as otherwise specifically provided
     ---------   -------------------                                            
herein, upon the occurrence of the Executive's 65th birthday (the "Retirement
Age"), if the Executive is employed by the Bank at that time, the Bank will pay
the Executive $833.33 per month for a continuous period of sixty (60) months.
The first monthly payment will be made on the first day of the first calendar
month following the calendar month in which the Executive retires from service
with the Bank.

     In the event that the Executive should die after becoming entitled to
receive monthly installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Executive has designated to the Bank in
writing (the "Beneficiaries").  In the event of the death of the last living
<PAGE>
 
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, or if no Beneficiary survives the Executive, any amount
remaining unpaid at the Executive's death shall be commuted on the basis of
seven percent (7%) per annum compounded interest and shall be paid in a single
sum to the Executive's estate.

     Section 2.  Pre-Retirement Death Benefits.  Should the Executive die prior
     ---------   -----------------------------                                 
to Retirement Age while in the service of the Bank, the Bank will pay $833.33
per month for a continuous period of sixty (60) months to her Beneficiary or
Beneficiaries.  The first monthly payment will be made on a date to be
determined by the Bank, but in no event later than the first day of the first
calendar month following the calendar month in which the Executive's death
occurred.  In the event of the death of the last living Beneficiary before all
annual installment payments have been made, the balance of any payments which
remain unpaid at the time of such Beneficiary's death shall be commuted on the
basis of seven percent (7%) per annum compound interest and shall be paid in a
single sum to the estate of the last Beneficiary to die.  In the absence of any
such beneficiary designation, or if no Beneficiary survives the Executive, any
amount remaining unpaid at the Executive's death shall be commuted on the basis
of seven percent (7%) per annum compound interest and shall be paid in a single
sum to the Executive's estate.
 
     Section 3. Extraordinary Transactions. In the event that the Executive's
     ---------   -------------------------                        
service as an Executive of the Bank is terminated for any reason coincident with
or within twenty-four (24) months following a "Change in Control" (as defined
herein), then the Executive shall be entitled to the benefits set forth in
Section 1 as if the Executive had remained employed until Retirement Age, and
the Retirement Age shall be deemed to occur on the date that such Change in
Control occurred. The Bank shall commence to make monthly installment payments
to the Executive as described in Section 1 on a date to be determined by the
Bank, but in no event later than the first day of the first calendar month
following the calendar month in which the Executive's service as an Executive of
the Bank is terminated.

     For the purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (a)  a change in control of a nature that would be required to be
     reported 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
     Securities Exchange Act of 1934 (the "Exchange Act"); or

          (b)  such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Bank or its holding company representing 25 percent or
     more of the combined voting power of 

                                       2
<PAGE>
 
     the outstanding common stock of the Bank or common stock of such holding
     company, as applicable; or

          (c)  individuals who constitute the board of directors of the Bank or
     its holding company on the date hereof (the "Incumbent Board" and
     "Incumbent Holding Company 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 Holding Company Board, as applicable, or whose
     nomination for election by the Bank's or its holding company's shareholders
     was approved by the Bank's or its holding company's board of directors or
     nominating committee, as applicable, shall be considered as though he or
     she were a member of the Incumbent Board or Incumbent Holding Company
     Board, as applicable; or

          (d)  either the Bank or its holding company consolidates or merges
     with or into another corporation, association or entity or is otherwise
     reorganized, where neither the Bank nor its holding company, respectively,
     is the surviving corporation in such transaction; or

          (e)  all or substantially all of the assets of either the Bank or its
     holding company are sold or otherwise transferred to or are acquired by any
     other entity or group.

     Notwithstanding the other provisions of this paragraph, a transaction or
event shall not be considered a Change in Control with respect to an Executive
if, prior to the consummation or occurrence of such transaction or event, the
Executive and the Bank agree in writing that the same shall not be treated as a
Change in Control for purposes of this Agreement.

     Section 4.  Assignability.  Except as otherwise provided by this Agreement,
     ---------   -------------                                                  
it is agreed that neither the Executive, any Beneficiary, nor any other person
claiming any right or interest under this Agreement through the Executive or any
Beneficiary shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
hereto are expressly declared to be nonassignable.

     Section 5.  Executive's Rights.  This Agreement creates no right in the
     ---------   ------------------                                         
Executive to continue in the Bank's service for any specific length of time; nor
does it create any other rights in the Executive or obligations on the part of
the Bank, except those set forth in this Agreement.  The benefits payable under
this Agreement shall be independent of and in addition to, any other employment
agreements that may exist from time to time between the parties hereto,
concerning any other compensation payable by the Bank to the Executive whether
as fees, salary, bonus, or otherwise.  This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive

                                       3
<PAGE>
 
or restrict the right of the Executive to terminate her employment.  The rights
accruing to the Executive or any designated beneficiary under the provisions of
the Agreement shall be solely those of an unsecured creditor of the Bank.

     Section 6.  Amendment and Termination.  This Agreement may be amended or
     ---------   -------------------------                                   
terminated in whole or in part by a writing signed by the parties hereto.  In
addition, except as provided in Section 3 hereof, this Agreement shall terminate
if the Executive's employment with the Bank is terminated for any reason other
than retirement after attainment of her Retirement Age, or her death.

     Section 7.  Financing of Benefits.  All benefits under this Agreement shall
     ---------   ---------------------                                          
be provided out of the general assets of the Bank at the time such benefits are
to be paid.  The parties agree that the Bank is under no obligation to set aside
funds in advance of the time for payment hereunder, or to otherwise provide
security for its obligations under this Agreement.  The Executive, the
Executive's Beneficiaries, and any successor in interest shall be and remain
general creditors of the Bank with respect to any benefits due under this
Agreement, in the same manner as any other creditor having a general claim for
matured and unpaid compensation.

     The Bank reserves the absolute right in its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the same
and if funded, to determine the extent, nature, and method of such funding.
Should the Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, certificates of deposit, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part.  At no
time shall the Executive be deemed to have any lien upon or right, title or
interest in or to any specific funding investment or to any assets of the Bank.

     Section 8.  No Trust Created.  Nothing contained in this Agreement and no
     ---------   ----------------                                             
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Bank and the Executive, the Executive's designated Beneficiaries or any other
person.

     Section 9.  Taxes.  The Bank shall have the right to deduct from any
     ---------   -----                                                   
distribution or payment in cash under this Agreement, any state, federal or
local taxes required by law to be withheld with respect to such distribution or
payment.

     Section 10. Binding Obligation of the Bank and Any Successor in Interest.
     ----------  ------------------------------------------------------------  
This Agreement and the Bank's obligations hereunder shall be binding upon its
successors and permitted assigns. The Bank may not assign its rights or
obligations to the Executive hereunder without such Executive's prior written
consent.  In addition, the Bank agrees it shall not enter into any agreement
providing for the merger of the Bank with and into another business entity or
the sale of more than a majority of the Bank's assets to another business
entity, person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Executive under this Agreement.  In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.


                                       4
<PAGE>
 
     Section 11.  Effect on Other Benefit Plans.  Nothing contained in this
     ----------   -----------------------------                            
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit-sharing, group, bonus
or other supplemental compensation or fringe benefit plan constituting a part of
the Bank's existing or future compensation structure.

     Section 12.  Severability.  The provisions of this Agreement shall be
     ----------   ------------                                            
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

     Section 13.  Gender.  Whenever in this Agreement words are used in the
     ----------   ------                                                   
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.

     Section 14.  Headings.  The titles and headings of Sections are included
     ----------   --------                                                   
for convenience of reference only and are not to be considered in construction
of the provisions of this Agreement.

     Section 15.  Law Governing.  This Agreement shall be governed by the laws
     ----------   -------------                                               
of the State of North Carolina.

     Section 16.  Claims and Review Procedures.
     ----------   ---------------------------- 

     A.   General.  For the purposes of implementing a claims procedure under
          -------                                                            
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan.  If any person believes he is being denied any
rights or benefits under the Agreement, such person may file a claim in writing
with the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 16.

     B.   Claims Procedure.  If any claim filed hereunder is wholly or partially
          ----------------                                                      
denied, the Plan Administrator will notify the claimant of its decision in
writing.  Such notification will be written in a manner calculated to be
understood by the claimant and will contain:

          (i)    specific reasons for the denial,

          (ii)   specific reference to pertinent provisions of the Agreement on
                 which the Plan Administrator based its denial,

          (iii)  a description of any additional material or information
                 necessary for the claimant to perfect such claim and an
                 explanation of why such material or information is necessary,
                 and

          (iv)   information as to the steps to be taken if the claimant wishes
                 to submit a request for review.

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<PAGE>
 
          Such notification will be given within ninety (90) days after the
          claim is received by the Plan Administrator (or within 180 days, if
          special circumstances require an extension of time for processing the
          claim, and if written notice of such extension and circumstances is
          given to the claimant within the initial ninety (90) day period). If
          such notification is not given within such period, the claim will be
          considered denied as of the last day of such period and the claimant
          may request a review of his claim in accordance with Section 16.C
          hereof.

     C.   Review Procedure.  Within sixty (60) days after the date on which a
          ----------------                                                   
claimant receives a written notice of a denied claim (or, if applicable, within
sixty (60) days after the date on which such denial is considered to have
occurred) the claimant (or his duly authorized representative) may:

          (i)   file a written request with the Plan Administrator for a review
                of his denied claim and of pertinent documents; and

          (ii)  submit written issues and comments to the Plan Administrator.

     The Plan Administrator will notify the claimant of its decision in writing.
Such notification will be written in a manner calculated to be understood by the
claimant and will contain specific reasons for the decision as well as specific
references to pertinent provisions of the Agreement.  The decision on review
will be made within sixty (60) days after the request for review is received by
the Plan Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request (such as
an election by the Plan Administrator to hold a hearing), and if written notice
of such extension and circumstances is given to the claimant within the initial
sixty (60) day period.

     IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Executive has hereunto set her hand and seal, all on the day
and year first above written.

                                         MOORESVILLE SAVINGS BANK, SSB

Attest:                                  By: /s/ George W. Brawley, Jr. 
                                             ---------------------------------
/s/ Billy R. Williams                    Title: President
---------------------------------              --------------------------------
Secretary

[Corporate Seal]                         EXECUTIVE:

                                         /s/ Nancy Lea Petrea
                                         --------------------------------------
                                         Nancy Lee Petrea


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