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                                                                      APPENDIX B
                                                                      ----------

                              CITIZENS BANK, FSB
                MANAGEMENT RECOGNITION PLAN AND TRUST AGREEMENT

     Citizens Bank, FSB, a federally-chartered savings bank (the "Bank"), does
herein set forth the terms of its Management Recognition Plan (the "Plan") and
Trust (the "Trust") and the Trustees hereby accept this Trust and agree to hold
the Trust assets existing on the date of the Agreement and all additions and
accretions thereto upon the terms and conditions hereinafter stated.

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

     Section 2.  Administration of this Plan.
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          (a) This Plan shall be administered by a committee  of the Board (the
"Committee") which shall consist of not less than two members of the Board who
are "Non-Employee Directors" as defined in Rule 16 b-3(b)(3) of the Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").  In the absence of a duly appointed Committee, the Plan shall be
administered by the Board.  The Committee shall have full power and authority to
construe, interpret and administer this Plan.  All actions, decisions,
determinations, or interpretations of the Committee shall be final, conclusive,
and binding upon all parties.  Members of the Committee shall serve at the
pleasure of the Board.

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

          (c) The Committee may designate any officers or employees of the Bank
or of any Subsidiary to assist in the administration of this Plan.  The
Committee may authorize such individuals to execute documents on its behalf and
may delegate to them such other ministerial and limited discretionary duties as
the Committee may see fit.
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          (d)    Any shares of Common Stock held under this Plan, including
without limitation unallocated, undistributed and forfeited shares, shall be
held by the Trust.

          (e)    The Trustees shall be appointed by the Board.

     Section 3.  Contributions to Trust.
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          (a)    The Board shall determine the amount (or the method of
computing the amount) and timing of any contributions by the Bank and any
Subsidiaries to the Trust established under this Plan. Such amounts may be paid
in cash or in shares of Common Stock and shall be paid to the Trust at the
designated time of contribution. No contributions by Participants shall be
permitted.

          (b)    Subject to Section 9 hereof, the Trustees shall invest all of
the Trust's assets primarily in Common Stock. The Trust shall acquire, in the
aggregate, 89,930 shares of Common Stock, which is equal to four percent (4%) of
the shares of Common Stock issued in connection with the conversion of the Bank
from a federally-chartered mutual savings bank to a federally-chartered stock
savings bank on December 28, 1998 (the "Conversion"). Such shares of Common
Stock may be purchased by the Trust in the open market, or, subject to approval
of the board of directors of the Corporation, may be acquired through the
issuance by the Corporation to the Trust of authorized but unissued shares of
Common Stock on such terms as may be approved by the Committee and the board of
directors of the Corporation. Such shares (the "Plan Shares") shall be held by
the Trust until they have been awarded and distributed pursuant to the terms of
this Plan. In the event that the Trust receives cash pursuant to receipt of
dividends on Common Stock held by the Trust which has not been awarded to
participants, including the receipt of a special cash dividend or return of
capital with respect to such shares, the Trustees may distribute such cash
received by the Trust along with the Common Stock upon which it was earned upon
the award of such previously unallocated shares.

          (c)    The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Bank and shall be used
exclusively for the uses and purposes of Participants and general creditors as
herein set forth. Participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and the Trust shall be mere unsecured contractual
rights of Participants and their beneficiaries against the Bank. Any assets held
by the Trust will be subject to the claims of the Bank's general creditors under
federal and state law in the event of insolvency or bankruptcy, as defined in
Section 9(e) herein.

     Section 4.  Eligibility and Award of Plan Shares.
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          (a)    The Participants in this Plan to whom Awards may be made shall
be the following: members of the Board, members of the board of directors of any
Subsidiary, and such officers and employees of the Bank and/or of any Subsidiary
as may be designated by the Committee. Notwithstanding the foregoing, no member
of the Committee is eligible to receive any grants or any Awards under this Plan
during the one-year period prior to serving on the Committee or during such

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service, except for the initial Awards of Plan Shares which will be distributed
after the Plan is approved by a majority of the shareholders of the Corporation.
Such initial Awards shall be made pursuant to the provisions of Section 4(b).

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

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

     Section 5.  Vesting and Distribution of Plan Shares.
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          (a)    Shares granted under this Plan shall vest and the right of a
Participant to the Plan Shares shall be nonforfeitable as determined by the
Committee and as set forth in the Stock Grant Agreement.

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

          (c)    In the event any Participant shall no longer be either a
director or an employee of the Bank or any Subsidiary for any reason (whichever
position resulted in the award, as set forth in the Stock Grant Agreement),
other than as provided in Sections 5(d) and 5(e) below, and such Participant
does not have a 100% vested interest in his or her shares under the Plan, then
any shares which are not vested based upon the applicable schedule set forth in
the Stock Grant Agreement shall be forfeited and, provided this Plan has not
terminated pursuant to Section 16 below, shall be available again for Awards to
Participants as may be determined by the Committee.

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

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<PAGE>

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

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

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

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

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

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

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

          Any cash dividends or other cash or noncash distributions (including
special large and nonrecurring dividends and including one that has the effect
of a return of capital to the Corporation's stockholders) or stock dividends
declared in respect of each unvested Plan Share will be held by the Trustees for
the benefit of the Participant or Permitted Transferee on whose behalf such
Award is then held by the Trust and such dividends, including any interest
thereon, will be paid out proportionately by the Trust to the Participant or
Permitted Transferee thereof as soon as practicable after the Plan Shares become
vested in accordance with the Stock Grant Agreement, or otherwise. Any cash
dividends, cash or noncash distributions or stock dividends declared in respect
of each vested Plan Share held by the Trust will be paid by the Trust, as soon
as practicable after the Trust's receipt thereof, to the Participant or
Permitted Transferee on whose behalf such Plan Share is then held by the Trust.
In the event that the Trust receives cash pursuant to receipt of dividends or
other distributions on Common Stock held by the Trust and unallocated to
participants (including the receipt of a special cash dividend or return of
capital) then such funds may be used by the Trust to purchase additional shares
of Common Stock available for future award under this Plan, or the Committee or
Board may distribute such cash received by the Trust along with the Common Stock
upon which it was earned upon the award of such previously unallocated shares.

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<PAGE>

     Section 9.  Trust.
     ----------  -----

          (a)    The Trustees shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of this Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Board or the Committee pursuant to
the Plan.

          (b)    It is the intent of this Plan and Trust that the Trustees shall
have complete authority and discretion with respect to the arrangement, control
and investment of the Trust, and that the Trustees shall invest all assets of
the Trust in Common Stock to the fullest extent practicable, except to the
extent that the Trustees determine that the holding of monies in cash or cash
equivalents is necessary to meet the obligations of the Trust. In performing
their duties, the Trustees shall have the power to do all things and execute
such instruments as may be deemed necessary or proper, including the following
powers;

               (i)    To invest up to one hundred percent (100%) of all Trust
     assets in Common Stock without regard to any law now or hereafter in force
     limiting investments for trustees or other fiduciaries. The investment
     authorized herein may constitute the only investment of the Trust, and in
     making such investment, the Trustees are authorized to purchase Common
     Stock from the Corporation or from any other source, and such Common Stock
     so purchased may be outstanding, newly issued, or treasury shares.

               (ii)   To invest any Trust assets not otherwise invested in
     accordance with (i) above, in deposit accounts and certificates of deposit
     at the Bank or in obligations of the United States Government or its
     agencies or such other investments as shall be considered the equivalent of
     cash.

               (iii)  To sell, exchange or otherwise dispose of any property
     at any time held or acquired by the Trust.

               (iv)   To cause stocks, bonds or other securities to be
     registered in the name of a nominee, without the addition of words
     indicating that such security is an asset of the Trust (but accurate
     records shall be maintained showing that such security is an asset of the
     Trust).

               (v)    To hold cash without interest in such amounts as may in
     the opinion of the Trustees be reasonable for the proper operation of the
     Plan and Trust.

               (vi)   To employ brokers, agents, custodians, consultants and
     accountants.

               (vii)    To hire counsel to render advice with respect to their
     rights, duties and obligations hereunder, and such other legal services or
     representation as the Trustees deem desirable.

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<PAGE>

               (viii)   To hold funds and securities representing the amounts to
     be distributed to a Recipient or his Permitted Transferee as a consequence
     of a dispute as to the disposition thereof, whether in a segregated account
     or held in common with other assets of the Trust.

     Notwithstanding anything herein contained to the contrary, the Trustees
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of any court for the exercise of any power
herein contained, or give bond.

          (c)    The Trustees shall maintain accurate and detailed records and
accounts of all transactions of the Trust, which shall be available at all
reasonable times for inspection by any legally entitled person or entity to the
extent required by applicable law, or by any other person determined by the
Board or the Committee.

          (d)    Notwithstanding anything to the contrary in this Plan or Trust,
the assets of the Plan and Trust are subject to the payment of the claims of
creditors of the Bank in the event of its insolvency or bankruptcy. The Bank is
insolvent or bankrupt if it is the subject of a proceeding under the Bankruptcy
Code, 11 U.S.C. Section 101 et seq. or is unable to pay its debts. The Board or
the chief executive officer of the Bank must give written notice to the Trustees
of the Bank's bankruptcy or insolvency as soon as practicable following the
occurrence of such event. Upon receipt of such notice or other written
allegations of the Bank's bankruptcy or insolvency, or in the case of the
Trustees' actual knowledge of or determination of the Bank's bankruptcy or
insolvency, the Trustees shall discontinue delivery of Trust assets to the
Participants or the Bank and shall hold the assets of the Trust for the benefit
of the Bank's general creditors and, upon a determination that the Bank is
bankrupt or insolvent, shall distribute such assets to or for the benefit of the
general creditors. The Trustees shall resume delivery of Trust assets to the
Participants or the Bank only after it is determined that the Bank is no longer
bankrupt or insolvent. Determination of the bankruptcy or insolvency shall be
determined by a court of competent jurisdiction or by an arbitrator selected by
and pursuant to rules of the American Arbitration Association upon petition by
an interested party.

     Section 10. Adjustment Upon Changes in Capitalization; Dissolution or
     ----------- ---------------------------------------------------------
Liquidation.  In the event of a change in the number or type of shares of Common
-----------
Stock outstanding, or in the event shares of Common Stock are decreased, changed
into or exchanged for securities of a different entity, by reason of a
reclassification, recapitalization, reorganization, other similar capital
adjustment; by reason of a merger or consolidation of the Corporation; by reason
of the sale by the Corporation of all or a substantial portion of its assets; or
by reason of the occurrence of any other event which could affect the
implementation of this Plan and the realization of its objectives, the number or
kind of shares subject to Awards which have occurred, or could occur, under this
Plan shall be proportionately and equitably adjusted by the Committee.

     Section 11. Non-Transferability.  Prior to the time Plan Share Awards
     ----------- -------------------
become vested and are distributed by the Trustees, Plan Share Awards may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution. Notwithstanding
the foregoing, or any other provision of this Plan, a Participant who holds Plan
Share Awards may transfer such awards to his or her spouse, lineal ascendants,
lineal descendants, or to a duly established trust for the benefit of one or
more of these individuals. Plan Share Awards so transferred

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<PAGE>

may thereafter be transferred only to the Participant who originally received
the grant or to an individual or trust to whom the Participant could have
initially transferred the awards pursuant to this Section 11. Plan Share Awards
which are transferred pursuant to this Section 11 shall be subject to the same
terms and conditions as applied to the Participant. In addition, such shares may
be tendered in response to a tender offer for or a request or invitation to
tenders of greater than fifty percent (50%) of the outstanding Common Stock and
may be surrendered in a merger, consolidation or share exchange involving the
Corporation; provided, however, in each case, that except as otherwise provided
herein, the securities or other consideration received in exchange therefor
shall thereafter be subject to the restrictions and conditions set forth in this
Plan.

     Section 12.  Impact of Award on Other Benefits of Participant.  The value
     -----------  ------------------------------------------------
of any Award, either on the date of the Award or at the time such shares become
vested, shall not be includable as compensation or earnings for purposes of any
other benefit plan offered by the Bank, the Corporation or any Subsidiary other
than any qualified employee benefit plan which provides that such value shall be
included as compensation or earnings for purposes of such plan.

     Section 13.  Corporate Action.  The making of an Award under this Plan
     -----------  ----------------
shall not affect in any way the right or power of the Corporation or its
shareholders or the Bank or its shareholders or any Subsidiary or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Corporation's, the Bank's or any
Subsidiary's capital structure or its business, or any merger or consolidation
of the Corporation, the Bank or any Subsidiary, or the issuance of any bonds,
debentures, preferred or other capital stock or rights with respect thereto, or
the dissolution or liquidation of the Corporation, the Bank or any Subsidiary,
or any sale or transfer of all or any part of the Corporation's, the Bank's or
any Subsidiary's assets or business.

     Section 14.  Exculpation and Indemnification.  In connection with this
     -----------  -------------------------------
Plan, no member of the Board, no member of the board of directors of the
Corporation, no member of the Committee and no Trustee shall be personally
liable for any act or omission to act in his capacity as a member of the Board,
the board of directors of the Corporation or the Committee or as Trustees, nor
for any mistake in judgment made in good faith, unless arising out of, or
resulting from, such person's own bad faith, willful misconduct, or criminal
acts. To the extent permitted by applicable law and regulation, the Bank shall
indemnify, defend and hold harmless the members of the Board, the members of the
board of directors of the Corporation, the members of the board of directors of
any Subsidiary, the Committee and each Trustee and each other officer or
employee of the Bank, the Corporation or of any Subsidiary to whom any duty or
power relating to the administration or interpretation of this Plan may be
assigned or delegated, from and against any and all liabilities (including any
amount paid in settlement of a claim with the approval of the Board) and any
costs or expenses (including counsel fees) incurred by such persons arising out
of, or as a result of, any act or omission to act in connection with the
performance of such person's duties, responsibilities, and obligations under
this Plan, other than such liabilities, costs, and expenses as may arise out of,
or result from, the bad faith, willful misconduct, or criminal acts of such
persons.

     Section 15.  Amendment and Modification of this Plan.  The Board may at
     -----------  ---------------------------------------
any time, and from time to time, amend or modify this Plan (including the form
of Stock Grant Agreement) in any respect, subject to any applicable regulatory
requirements and any required stockholder approval or any

                                       8
<PAGE>

stockholder approval which the Board may deem advisable for any reason, such as
for the purpose of obtaining or retaining any statutory or regulatory benefits
under tax, securities or other laws or satisfying applicable stock exchange or
quotation system listing requirements. However, any amendment or modification of
this Plan shall not in any manner affect any Award of shares theretofore made to
a Participant under this Plan without the consent of such Participant or any
Permitted Transferee of such Participant.

     Section 16.  Termination and Expiration of this Plan.  This Plan may be
     -----------  ---------------------------------------
abandoned, suspended, or terminated, in whole or in part, at any time by the
Board; provided, however, that abandonment, suspension, or termination of this
Plan shall not affect any Award theretofore made under this Plan. Unless sooner
terminated, this Plan shall terminate at the close of business on the day that
is the tenth (10th) anniversary of the date of approval of the Plan by the
shareholders of the Corporation; and no Award of shares may be made under this
Plan thereafter. Such termination shall not effect any Award of shares
theretofore made. In the event that the Board terminates this Plan in whole, any
shares held by the Trust which have not been allocated to eligible Participants,
together with any other assets held by the Trust, shall revert to the Bank.

     17.   Tax Status of Trust.  It is intended that the trust established
           -------------------
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 et seq. of the Code, as the same may be amended from time to time.
            -- ---

     18.   Miscellaneous.
           -------------

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

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

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

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

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

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