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                                                                   Exhibit 10(b)

                         SPECIAL TERMINATION AGREEMENT


     THIS AGREEMENT entered into as of March 29, 1996, by and between SCOTLAND
SAVINGS BANK, INC., SSB (the "Savings Bank") and JOHN B. CLARK (the "Employee")
and is joined in by SCOTLAND BANCORP, INC., the parent holding company of the
Savings Bank (the "Holding Company").

     WHEREAS, the Employee has heretofore been employed by the Savings Bank as
its Senior Vice President; and

     WHEREAS, the Savings Bank is a North Carolina-chartered stock saving bank
and the wholly-owned subsidiary of the Holding Company; and

     WHEREAS, the services of the Employee, his experience and knowledge of the
affairs of the Savings Bank, and his reputation and contacts in the community
are extremely valuable to the Savings Bank; and

     WHEREAS, the Savings Bank wishes to attract and retain such well-qualified
employees and it is in the best interests of the Savings Bank and of the
Employee to secure the continued services of the Employee notwithstanding any
change in control of the Savings Bank or the Holding Company; and

     WHEREAS, the Savings Bank considers the establishment and maintenance of a
sound and vital management to be part of its overall corporate strategy and to
be essential to protecting and enhancing the best interests of the Savings Bank,
the Holding Company and their shareholders; and

     WHEREAS, the parties desire to enter into this Agreement to provide the
Employee with security in the event of a change in control of the Savings Bank
or the Holding Company to ensure the continued loyalty of the Employee.
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     NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree as follows:

     1.  Term. The initial term of employment under this Agreement shall be for
         ----                                                                  
the period commencing upon the effective date of this Agreement and ending three
(3) calendar years from the effective date of this Agreement.  On each
anniversary of the effective date of this Agreement, the term of this Agreement
shall automatically be extended for an additional one year period beyond the
then effective expiration date unless written notice from the Savings Bank or
the Employee is received 90 days prior to an anniversary date advising the other
party that this Agreement shall not be further extended; provided that the
Directors shall review the Employee's performance annually and make a specific
determination pursuant to such review to renew this Agreement prior to the 90
day notice period.

     2.  Change in Control.
         ----------------- 

         (a)  In the event of a termination of the Employee's employment in
     connection with, or within twenty-four (24) months after, a "Change in
     Control" (as defined in Subparagraph (e) below) of the Savings Bank or the
     Holding Company, for reasons other than for "cause" (as defined in
     Subparagraph (b) below), the Employee shall be entitled to receive the
     amounts set forth in Subparagraphs (d) and (f) below. Said sum shall be
     payable as provided in Subparagraph (g) below.

         (b)  For purposes of this Agreement, termination for "cause" shall
     include termination because of the Employee's personal dishonesty,
     incompetence, willful misconduct, breach of fiduciary duty involving
     personal profit, intentional failure to perform stated duties, or

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     willful violation of any law, rule, or regulation (other than traffic
     violations or similar offenses) or final cease-and-desist order.

         (c)  The Employee shall have the right to terminate his employment and
     this Agreement with the Savings Bank upon the occurrence of any of the
     following events (the "Termination Events") within twenty-four (24) months
     following a Change in Control of the Holding Company or the Savings Bank:

              (i) Employee is assigned any duties and/or responsibilities that
              are inconsistent with his position, duties, responsibilities or
              status at the time of the Change in Control or with his reporting
              responsibilities or titles with the Savings Bank in effect at such
              time; or

              (ii) Employee's annual base salary rate is reduced below the
              annual amount in effect as of the effective date of a Change in
              Control or as the same shall have been increased from time to time
              following such effective date; or

              (iii) Employee's life insurance, medical or hospitalization
              insurance, disability insurance, stock option plans, stock
              purchase plans, deferred compensation plans, management retention
              plans, retirement plans or similar plans or benefits being
              provided by the Savings Bank or the Holding Company to the
              Employee as of the effective date of the Change in Control are
              reduced in their level, scope or coverage, or any such insurance,
              plans or benefits are eliminated, unless such reduction or
              elimination applies proportionately to all salaried employees of
              the Savings Bank or the Holding Company who participated in such
              benefits prior to such Change in Control; or

              (iv) Employee is transferred to a location which is an
              unreasonable distance from his current principal work

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               location, without the Employee's express written consent.

     A Termination Event shall be deemed to have occurred on the date such
action or event is implemented or takes effect.

     (d) In the event that the Employee's employment is terminated as set forth
in Paragraphs 2(a) or 2(c), the Savings Bank will be obligated to pay or cause
to be paid to Employee an amount equal to two (2) times the Employee's "base
amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986,
as amended (the "Code").

     (e) For the purposes of this Agreement, the term Change in Control shall
mean: (i) 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, as amended (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) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Holding Company or Savings Bank representing
25 percent or more of the combined voting power of the outstanding common stock
of the Holding Company or outstanding common stock of the Savings Bank, as
applicable; or (iii) individuals who constitute the board of directors of the
Holding Company or board of directors of the Savings Bank on the date hereof
(the "Incumbent Board" and "Incumbent Savings 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

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Incumbent Board or Incumbent Savings Bank Board, as applicable, or whose
nomination for election by the Holding Company's or Savings Bank's shareholders
was approved by the Holding Company's or Savings 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 Savings Bank Board, as applicable; or (iv)
either the Holding Company or the Savings Bank consolidates or merges with or
into another corporation, association or entity or is otherwise reorganized,
where neither the Holding Company nor the Savings Bank, respectively, is the
surviving corporation in such transaction; or (v) all or substantially all of
the assets of either the Holding Company or the Savings Bank are sold or
otherwise transferred to or are acquired by any other entity or group.

     Notwithstanding the other provisions of this Paragraph 2, a transaction or
event shall not be considered a Change in Control if, prior to the consummation
of occurrence of such transaction or event, Employee and Savings Bank agree in
writing that the same shall not be treated as a Change in Control for purposes
of this Agreement.

     (f) Such amounts payable pursuant to this Paragraph 2 shall be paid, at the
irrevocable option of the Employee, as follows:

Participant's Initials
----------------------

(i)  ___________________  Payment in a lump-sum.

(ii) ___________________  Payment in monthly installments over a fixed
                          reasonable period of time. Such payments shall begin
                          within thirty (30) days following the calendar month
                          in which the Employee terminates his employment with
                          the Savings Bank.

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          (g) Following a Termination Event which gives rise to Employee's
rights hereunder, the Employee shall have twelve (12) months from the date of
occurrence of the Termination Event to terminate his employment with the Savings
Bank pursuant to this Paragraph 2. Any such termination shall be deemed to have
occurred only upon delivery to the Savings Bank (or to any successor
corporation) of written notice of termination which describes the Change in
Control and Termination Event. If the Employee does not so terminate his
employment with the Savings Bank within such twelve-month period, he shall
thereafter have no further rights hereunder with respect to that Termination
Event, but shall retain rights, if any, hereunder with respect to any other
Termination Event as to which such period has not expired.

          (h) In the event any dispute shall arise between the Employee and the
Savings Bank as to the terms or interpretation of this Agreement, including this
Paragraph 2, whether instituted by formal legal proceedings or otherwise,
including any action taken by the Employee to enforce the terms of this
Paragraph 2 or in defending against any action taken by the Savings Bank, the
Savings Bank shall reimburse the Employee for all costs and expenses incurred in
such proceedings or actions, including attorneys' fees, in the event the
Employee prevails in any such action.

     3.   Successors and Assigns.  This Agreement shall inure to the benefit of
          ----------------------                                               
and be binding upon any corporate or other successor of the Savings Bank which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the Holding
Company or of the Savings Bank.

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     4.   Modification; Waiver; Amendments.  No provision of this Agreement may
          --------------------------------                                     
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Employee and the Savings Bank, except
as herein otherwise provided.  No waiver by either party hereto, at any time, of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.  With the exception of Paragraph 2(f) of this
Agreement which may not be amended, no amendments or additions to this Agreement
shall be binding unless in writing and signed by both parties, except as herein
otherwise provided.

     5.   Applicable Law.  This Agreement shall be governed in all respects
          --------------                                                   
whether as to validity, construction, capacity, performance or otherwise, by the
laws of North Carolina, except to the extent that federal law shall be deemed to
apply.

     6.   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.

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     IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the day and year first hereinabove written.


                                    SCOTLAND SAVINGS BANK, INC., SSB

(CORPORATE SEAL)
                                    By: /s/ William C. Fitzgerald, III
                                       --------------------------------------
                                       William C. Fitzgerald, III, President
ATTEST:
 
/s/ Freddie C. Davis
------------------------
      Secretary                     /s/ John B. Clark
------                              -----------------------------------(SEAL)
                                    John B. Clark
 
     The foregoing agreement is consented and agreed to by Scotland Bancorp,
Inc., the parent holding company of Scotland Savings Bank, Inc., SSB.


(CORPORATE SEAL)                    SCOTLAND BANCORP, INC.


ATTEST:                             By: /s/ William C. Fitzgerald, III
                                       ---------------------------------------
                                       William C. Fitzgerald, III, President
/s/ John B. Clark
------------------------
      Secretary
------




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