EXHIBIT 10.4

                             AMERICAN COMMUNITY BANK
                       1999 NONSTATUTORY STOCK OPTION PLAN


         American Community Trust Bank, a North Carolina banking corporation
(hereinafter referred to as the "Bank"), does herein set forth the terms of the
American Community Bank 1999 Nonstatutory Stock Option Plan (hereinafter
referred to as this "Plan"), which was adopted by the Board of Directors
(hereinafter referred to as the "Board") of the Bank subject to shareholder and
regulatory approval as provided in paragraph 21 hereof.

         1. PURPOSE OF THIS PLAN. The purpose of this Plan is to provide for the
grant of Nonstatutory Stock Options (hereinafter referred to as "Options" or
singularly, "Option") to Eligible Directors (as hereinafter defined) of the Bank
who wish to invest in the Bank's common stock (hereinafter referred to as
"Common Stock"). The Board believes that participation in the ownership of the
Bank by the Eligible Directors will be to the mutual benefit of the Bank and the
Eligible Directors. In addition, the existence of this Plan will make it
possible for the Bank to attract capable individuals to serve on the Board. As
used herein, the term "Eligible Directors" or singularly, "Eligible Director,"
shall mean those members of the Board who are not employed by the Bank and are
ineligible to participate in American Community Bank 1999 Incentive Stock Option
Plan.

         2. ADMINISTRATION OF THIS PLAN.

              (a) This Plan shall be administered by the Board. The Board shall
have full power and authority to construe, interpret and administer this Plan.
All actions, decisions, determinations, or interpretations of the Board shall be
final, conclusive, and binding upon all parties.

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

         3. SHARES OF COMMON STOCK SUBJECT TO THIS PLAN. The maximum number of
shares of Common Stock that shall be offered under this Plan is One Hundred
Twenty-Four Thousand Three Hundred Thirty (124,330) shares, subject to
adjustment as provided in paragraph 14. Shares subject to Options which expire
or terminate prior to the issuance of the shares of Common Stock shall lapse and
the shares of Common Stock originally subject to such Options shall again be
available for future grants of Options under this Plan.

         4. ELIGIBILITY; GRANT OF OPTIONS. Each Eligible Director serving on the
Board shall receive an Option to purchase shares of Common Stock in the amount
as shall be determined by the Board of Directors by a majority vote. Any Options
not granted hereby may be reserved for future issuance by a majority vote of the
entire Board.

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         5. VESTING OF OPTIONS. Options granted under this Plan shall be fully
vested upon grant.

         6. OPTION PRICE.

              (a) The price per share of each Option granted under this Plan
(hereinafter called the "Option Price") shall be determined by the Board as of
the effective date of grant of such Option, but in no event shall such Option
Price be less than 100% of the fair market value of Common Stock on the date of
grant. An Option shall be considered as granted on the later of (i) the date
that the Board acts to grant such Option, or (ii) such later date as the Board
shall specify in an Option Agreement (as hereinafter defined).

              (b) The fair market value of a share of Common Stock shall be
determined as follows: (i) if on the date as of which such determination is
being made, Common Stock being valued is admitted to trading on a securities
exchange or exchanges for which actual sale prices are regularly reported, or
actual sale prices are otherwise regularly published, the fair market value of a
share of Common Stock shall be deemed to be equal to the mean of the closing
sale price as reported for each of the five (5) trading days immediately
preceding the date as of which such determination is made; provided, however,
that, if a closing sale price is not reported for each of the five (5) trading
days immediately preceding the date as of which such determination is made, then
the fair market value shall be equal to the mean of the closing sale prices on
those trading days for which such price is available, or (ii) if on the date as
of which such determination is made, no such closing sale prices are reported,
but quotations for Common Stock being valued are regularly listed on the
National Association of Securities Dealers Automated Quotation System or another
comparable system, the fair market value of a share of Common Stock shall be
deemed to be equal to the mean of the average of the closing bid and asked
prices for such Common Stock quoted on such system on each of the five (5)
trading days preceding the date as of which such determination is made, but if a
closing bid and asked price is not available for each of the five (5) trading
days, then the fair market value shall be equal to the mean of the average of
the closing bid and asked prices on those trading days during the five-day
period for which such prices are available, or (iii) if no such quotations are
available, the fair market value of a share of Common Stock shall be deemed to
be the average of the closing bid and asked prices furnished by a professional
securities dealer making a market in such shares, as selected by the Board, for
the trading date first preceding the date as of which such determination is
made. If the Board determines that the price as determined above does not
represent the fair market value of a share of Common Stock, the Board may then
consider such other factors as it deems appropriate and then fix the fair market
value for the purposes of this Plan.

         7. PAYMENT OF OPTION PRICE. Payment for shares subject to an Option may
only be made in cash.

         8. TERMS AND CONDITIONS OF GRANT OF OPTIONS. Each Option granted
pursuant to this Plan shall be evidenced by a written Nonstatutory Stock Option
Agreement (hereinafter referred to as "Option Agreement") with each Eligible
Director (hereinafter referred to as "Optionee") to whom an Option is granted;
such agreement shall be substantially in the form attached hereto as "Exhibit
A," unless the Board shall adopt a different form and, in each case,

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may contain such other, different, or additional terms and conditions as the
Board may determine. The Option shall terminate as provided in paragraph 12
hereof. Furthermore, Options granted pursuant to this Plan shall be subject to
the right of the North Carolina Commissioner of Banks (the "Commissioner") and
the Federal Deposit Insurance Corporation ("FDIC") to direct the Bank to require
an Optionee to exercise or forfeit his or her stock rights if the Bank's capital
falls below the minimum requirements, as determined by the Commissioner or FDIC.

         9. OPTION PERIOD. Each Option Agreement shall set forth a period during
which such Option may be exercised (hereinafter referred to as the "Option
Period"); provided, however, that the Option Period shall not exceed ten (10)
years after the date of grant of such Option as specified in an Option
Agreement.

         10. LIMITATION ON GRANT OF STOCK OPTIONS. No one individual shall be
granted Options under this Plan in excess of 40% of the shares reserved for
issuance pursuant to Paragraph 3 hereof.

         11. EXERCISE OF OPTIONS. An Option shall be exercised by written notice
to the Board signed by an Optionee or by such other person as may be entitled to
exercise such Option. In the case of the exercise of an Option, the aggregate
Option Price for the shares being purchased may only be paid in cash and must be
accompanied by a notice of exercise. The written notice shall state the number
of shares with respect to which an Option is being exercised and shall either be
accompanied by the payment of the aggregate Option Price for such shares or
shall fix a date (not more than ten (10) business days after the date of such
notice) by which the payment of the aggregate Option Price will be made. An
Optionee shall not exercise an Option to purchase less than 100 shares, unless
the Board otherwise approves or unless the partial exercise is for the remaining
shares available under such Option. A certificate or certificates for the shares
of Common Stock purchased by the exercise of an Option shall be issued in the
regular course of business subsequent to the exercise of such Option and the
payment therefor. During the Option Period, no person entitled to exercise any
Option granted under this Plan shall have any of the rights or privileges of a
shareholder with respect to any shares of Common Stock issuable upon exercise of
such Option, until certificates representing such shares shall have been issued
and delivered and the individual's name entered as a shareholder of record on
the books of the Bank for such shares.

         12. EFFECT OF LEAVING THE BOARD OR DEATH.

              (a) In the event that an Optionee leaves the Board for any reason
other than retirement, disability, death, or following a "change in control" of
the Bank (as defined in paragraph 12(e)) any Option granted to the Optionee
under this Plan, to the extent not previously exercised by the Optionee or
expired, shall immediately terminate and shall be available again for the
granting of additional options to Eligible Directors during the remaining term
of this Plan upon such terms and conditions as may be determined by the Board.

              (b) In the event that an Optionee should leave the Board as a
result of such Optionee's retirement, such Optionee shall have the right to
exercise an Option granted under this Plan, to the extent that it has not
previously been exercised by the Optionee or expired, for such

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period of time as may be determined by the Board and specified in an Option
Agreement, but in no event may any Option be exercised later than the end of the
Option Period provided in the Option Agreement in accordance with paragraph 8
hereof. For purposes of this Plan, the term "retirement" shall mean termination
of an Eligible Director's membership on the Board (i) at any time after
attaining age 65 with the approval of the Board; or (ii) at the election of the
Eligible Director, at any time after not less than five (5) years service as a
member of the Board, such service shall be computed cumulatively for purposes of
this clause (ii).

              (c) In the event that an Optionee should leave the Board by reason
of such Optionee's disability, such Optionee shall have the right to exercise an
Option granted under this Plan, to the extent that it has not previously been
exercised or expired, for such period of time as may be determined by the Board
and specified in an Option Agreement, but in no event may any Option be
exercised later than the end of the Option Period provided in the Option
Agreement in accordance with paragraph 8 hereof. For purposes of this Plan, the
term "disability" shall be defined as may be determined by the Board, from time
to time, or as determined at any time with respect to any individual Optionee.

              (d) In the event that an Optionee should die while serving on the
Board or after leaving by reason of disability or retirement or following a
change in control during the Option Period provided in an Option Agreement in
accordance with paragraph 8 hereof, an Option granted under this Plan, to the
extent that it has not previously been exercised or expired, shall be
exercisable, in accordance with its terms, by the personal representative of
such Optionee, the executor or administrator of such Optionee's estate, or by
any person or persons who acquired such Option by bequest or inheritance from
such Optionee, notwithstanding any limitations placed on the exercise of such
Option by this Plan or an Option Agreement, at any time within twelve (12)
months after the date of death of such Optionee, but in no event may an Option
be exercised later than the end of the Option Period provided in an Option
Agreement in accordance with paragraph 8 hereof. Any references herein to an
Optionee shall be deemed to include any person entitled to exercise an Option
after the death of such Optionee under the terms of this Plan.

              (e) In the event an Optionee shall leave the Board as a result of
a "change in control" of the Bank, such Optionee shall have the right to
exercise the Option granted under this Plan, to the extent that it has not
previously been exercised by the Optionee or expired, for such period of time as
may be determined by the Board as specified in an Option Agreement, but in no
event may any Option be exercised later than the end of the Option Period
provided in the Option Agreement in accordance with paragraph 8 hereof. For
purposes of this Plan, the phrase "change in control" refers to (i) the
acquisition by any person, group of persons or entity of the beneficial
ownership or power to vote more than twenty-five percent (25%) of the Bank's
outstanding stock, (ii) during any period of two (2) consecutive years, a change
in the majority of the Board unless the election of each new Director was
approved by at least two-thirds of the Directors then still in office who were
Directors at the beginning of such two (2) year period, or (iii) a
reorganization, merger, or consolidation of the Bank with one or more other
entities in which the Bank is not the surviving entity, or the transfer of all
or substantially all of the assets or shares of the Bank to another person or
entity. Notwithstanding anything else herein, for purposes of this Plan the term
"change in control" shall not include a transaction approved by the Board which

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results in the Bank merging with, transferring its assets to or becoming the
subsidiary of a corporation newly formed at the direction of the Board for the
purpose of such transaction or serving as a bank holding company for the Bank,
and in connection with which transaction the Bank's shareholders (other than
those who exercise statutory rights of dissent and appraisal) become the holders
of substantially all of the voting stock of such corporation. Further,
notwithstanding anything else herein, 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 Optionee and the Bank agree in writing that the
same shall not be treated as a change in control for purposes of this Plan.

         13. EFFECT OF PLAN ON STATUS AS MEMBER OF A BOARD. The fact that an
Eligible Director has been granted an Option under this Plan shall not confer on
such Eligible Director any right to continued service on the Board, nor shall it
limit the right of the Bank to remove such Eligible Director from the Board at
any time.

         14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; DISSOLUTION OR
LIQUIDATION.

              (a) In the event of a change in the number of shares of Common
Stock outstanding by reason of a stock dividend, stock split, recapitalization,
reorganization, merger, exchange of shares, or other similar capital adjustment
prior to the termination of an Optionee's rights under this Plan, equitable
proportionate adjustments shall be made by the Board in (i) the number and kind
of shares which remain available under this Plan, and (ii) the number, kind, and
the Option Price of shares subject to the unexercised portion of an Option under
this Plan. The adjustments to be made shall be determined by the Board and shall
be consistent with such change or changes in the Bank's total number of
outstanding shares; provided, however, that no adjustment shall change the
aggregate Option Price for the exercise of Options granted under this Plan.

              (b) The grant of Options under this Plan shall not affect in any
way the right or power of the Bank or its shareholders to make or authorize any
adjustment, recapitalization, reorganization, or other change in the Bank's
capital structure or its business, or any merger or consolidation of the Bank,
or to issue bonds, debentures, preferred or other preference stock ahead of or
affecting Common Stock or the rights thereof, or the dissolution or liquidation
of the Bank, or any sale or transfer of all or any part of the Bank's assets or
business.

              (c) Except upon a "change in control", upon the effective date of
the dissolution or liquidation of the Bank, this Plan and any Options granted
hereunder, shall terminate.

         15. NON-TRANSFERABILITY. An Option granted under this Plan shall not be
assignable or transferable except, in the event of the death of an Optionee, by
will or by the laws of descent and distribution. In the event of the death of an
Optionee, his personal representative, the executor or the administrator of such
Optionee's estate, or the person or persons who acquired by bequest or
inheritance the rights to exercise such Options, may exercise any Option or
portion thereof to the extent not previously exercisable or surrendered by an
Optionee or expired, in

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accordance with its terms, prior to the expiration of
the exercise period as specified in subparagraph 12(d) hereof.

         16. TAX WITHHOLDING. The Bank or any of its subsidiaries shall have the
right to deduct or otherwise effect a withholding of any amount required by
federal or state laws to be withheld with respect to the grant, exercise or the
sale of stock acquired upon the exercise of an Option in order for the Bank or
any of its subsidiaries to obtain a tax deduction otherwise available as a
consequence of such grant, exercise or sale, as the case may be.

         17. LISTING AND REGISTRATION OF OPTION SHARES. Any Option granted under
this Plan shall be subject to the requirement that if at any time the Board
shall determine, in its discretion, that the listing, registration, or
qualification of the shares covered thereby upon any securities exchange or
under any state or federal law or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the issuance or purchase of shares
thereunder, such Option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the Board.

         18. EXCULPATION AND INDEMNIFICATION. In connection with this Plan, no
member of the Board shall be personally liable for any act or omission to act in
such person's capacity as a member of the Board, nor for any mistake in judgment
made in good faith, unless arising out of, or resulting from, such person's own
bad faith, gross negligence, willful misconduct, or criminal acts. To the extent
permitted by applicable law and regulation, the Bank shall indemnify and hold
harmless the members of the Board, and each other officer or employee of the
Bank or of any of its subsidiaries 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, gross
negligence, willful misconduct, or criminal acts of such persons.

         19. 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 Option
Agreement) in any respect consistent with applicable regulations; provided,
however, that no amendment or modification shall be made that increases the
total number of shares covered by this Plan or effects any change in the
category of persons who may receive Options under this Plan or materially
increases the benefits accruing to Optionees under this Plan unless such change
is approved by the holders of two thirds (2/3) of the issued and outstanding
shares of Common Stock and the amended Plan is approved by the Commissioner. Any
amendment or modification of this Plan shall not materially reduce the benefits
under any Option theretofore granted to an Optionee under this Plan without the
consent of such Optionee or the transferee in the event of the death of such
Optionee.

         20. TERMINATION AND EXPIRATION OF THIS PLAN. This Plan may be
abandoned, suspended, or terminated at any time by the Board; provided, however,
that abandonment,

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suspension, or termination of this Plan shall not affect any Options then
outstanding under this Plan. No Option shall be granted pursuant to this Plan
after ten (10) years from the effective date of this Plan as provided in
paragraph 21 hereof.

         21. EFFECTIVE DATE; SHAREHOLDER APPROVAL; REGULATORY APPROVAL. This
Plan shall not be effective until approved by the holders of two-thirds of the
issued and outstanding shares of Common Stock present or represented at an
annual or special shareholders' meeting (the "Effective Date") and approved by
the North Carolina Commissioner of Banks.

         22. CAPTIONS AND HEADINGS; GENDER AND NUMBER. 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 in construction of this Plan. As used herein, the
masculine gender shall include the feminine and neuter, the singular number, the
plural, and vice versa, whenever such meanings are appropriate.

         23. EXPENSES OF ADMINISTRATION OF PLAN. All costs and expenses incurred
in the operation and administration of this Plan shall be borne by the Bank or
by one of its subsidiaries.

         24. GOVERNING LAW. Without regard to the principles of conflicts of
laws, the laws of the State of North Carolina shall govern and control the
validity, interpretation, performance, and enforcement of this Plan.

         25. INSPECTION OF PLAN. A copy of this Plan, and any amendments thereto
or modifications thereof, 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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STATE OF NORTH CAROLINA                                                EXHIBIT A
COUNTY OF UNION

                       NONSTATUTORY STOCK OPTION AGREEMENT

         THIS NONSTATUTORY STOCK OPTION AGREEMENT (hereinafter referred to as
this "Agreement") is made and entered into as of this ____ day of __________,
______, between AMERICAN COMMUNITY BANK, a North Carolina Bank (hereinafter
referred to as the "Bank"), and _________________________________, a resident of
_______________ County, North Carolina (hereinafter referred to as the
"Optionee").

         WHEREAS, the Board of Directors of the Bank (hereinafter referred to as
the "Board") has adopted the American Community Bank 1999 Nonstatutory Stock
Option Plan (hereinafter referred to as the "Plan") subject to approval by the
Bank's shareholders as provided in the Plan; and

         WHEREAS, the shareholders of the Bank at an annual meeting duly called
and held on March 18, 1999, approved the Plan (the "Effective Date") and the
North Carolina Commissioner of Banks has approved the Plan; and

         WHEREAS, the Plan provides that the Board will make available to the
Directors (as defined in the Plan) of the Bank, the right to purchase shares of
the Bank's common stock (hereinafter referred to as "Common Stock"); and

         WHEREAS, the Board has determined that the Optionee is entitled to
purchase shares of Common Stock under the Plan;

         NOW, THEREFORE, the Bank and the Optionee agree as follows:

         1. DATE OF GRANT OF OPTION. The date of grant of the option granted
under this Agreement _____________________________ is the ______ day of _______,
______.

         2. GRANT OF OPTION. Pursuant to the Plan, the Bank grants to the
Optionee the right (hereinafter referred to as the "Option") to purchase from
the Bank all or a portion of an aggregate number of __________________ (______)
shares of Common Stock (hereinafter referred to as the "Option Shares") which
shall be authorized but unissued shares.

         3. VESTING OF OPTIONS. The Option shall fully vest upon grant.

         4. OPTION PRICE. The price to be paid for the Option Shares shall be
_______________ Dollars ($_____) per share (hereinafter referred to as the
"Option Price") which is the fair market value of the Option Shares as
determined by the Board as of the date of grant of this Option.

<PAGE>

         5. WHEN AND EXTENT TO WHICH OPTIONS MAY BE EXERCISED . At such time as
the Option shall become exercisable in accordance with this Agreement, the
Optionee, in his discretion, may exercise all or any portion of the Option,
subject to paragraph 7 hereof. The Option shall terminate as provided in
paragraph 8 hereof. Furthermore, Options granted pursuant to this Plan shall be
subject to the right of the North Carolina Commissioner of Banks (the
"Commissioner") and the Federal Deposit Insurance Corporation (the "FDIC") to
direct the Bank to require an Optionee to exercise or forfeit his or her stock
rights if the Bank's capital falls below the minimum requirements, as determined
by the Commissioner or the FDIC.

         6. CHANGE IN CONTROL. When used herein, the phrase "change in control"
refers to (i) the acquisition by any person, group of persons or entity of the
beneficial ownership or power to vote more than twenty-five (25%) percent of the
Bank's outstanding stock, (ii) during any period of two (2) consecutive years, a
change in the majority of the Board unless the election of each new Director was
approved by at least two-thirds of the Directors then still in office who were
Directors at the beginning of such two (2) year period, or (iii) a
reorganization, merger, or consolidation of the Bank with one or more other
Banks in which the Bank is not the surviving Bank, or the transfer of all or
substantially all of the assets or shares of the Bank to another person or
entity. Notwithstanding anything else herein, for purposes of this Plan the term
"change in control" shall not include a transaction approved by the Board which
results in the Bank merging with, transferring its assets to or becoming the
subsidiary of a corporation newly formed at the direction of the Board for the
purpose of such transaction or serving as a bank holding company for the Bank,
and in connection with which transaction the Bank's shareholders (other than
those who exercise statutory rights of dissent and appraisal) become the holders
of substantially all of the voting stock of such corporation. Further,
notwithstanding anything else herein, 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 Optionee and the Bank agree in writing that the
same shall not be treated as a change in control for purposes of this Plan.

         7. METHOD OF EXERCISE. The Option shall be exercised by written notice
to the Board signed by the Optionee or by such other person as may be entitled
to exercise the Option. In the exercise of the Option, the aggregate Option
Price for the shares being purchased may only be paid in cash and must be
accompanied by a notice of exercise. The written notice shall state the number
of shares with respect to which the Option is being exercised and, shall either
be accompanied by the payment of the aggregate Option Price for such shares or
shall fix a date (not more than ten (10) business days after the date of such
notice) by which the payment of the aggregate Option Price will be made. The
Optionee shall not exercise the Option to purchase less than 100 shares, unless
the Board otherwise approves or unless the partial exercise is for the remaining
shares available under the Option. A certificate or certificates for the shares
of Common Stock purchased by the exercise of the Option shall be issued in the
regular course of business subsequent to the exercise of the Option and the
payment therefor. Neither the Optionee, nor any other person who may be entitled
to exercise the Option, shall have any of the rights or privileges of a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Option, until certificates representing such shares shall have been issued
and delivered and the individual's name entered as a shareholder of record on
the books of the Bank for such shares.

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         8. TERMINATION OF OPTION. The Option shall terminate, and shall
thereupon be available again for grant to Eligible Directors as may be
determined by the Board, as follows:

              (a) Except as provided in subparagraphs (b), (c), (d) and (e)
below, the Option, to the extent that it has not been exercised or expired,
shall terminate on the earlier of (i) the date the Optionee leaves the Board for
any reason other than the Optionee's retirement, disability, death, or following
a change in control of the Bank or (ii) the date which is ten (10) years after
the date of grant of the Option as set forth in paragraph 1 hereof.

              (b) In the event the Optionee retires prior to the date which is
ten (10) years after the date of grant of the Option as set forth in paragraph 1
hereof, the Optionee shall have the right to exercise all Options, to the extent
not exercised or expired, for the remainder of such ten (10) year period. For
purposes of the plan, the term "retirement" shall mean any termination of an
Optionee's membership on the Board (i) at any time after attaining age 65 with
the approval of the Board, or (ii) at the election of the Optionee, at any time
after not less than five years service as a member of the Board, computed on a
cumulative basis.

              (c) In the event the Optionee leaves the Board by reason of such
Optionee's disability prior to the date which is ten (10) years after the date
of grant of the Option as set forth in paragraph 1 hereof, the Optionee shall
have the right to exercise all Options, to the extent not exercised by him or
expired, for the remainder of such ten (10) year period. For purposes of the
Plan, the term "disability" shall be defined as may be determined by the Board,
from time to time, or as determined at any time with respect to any individual
Optionee.

              (d) In the event the Optionee dies while serving on the Board or
after his or her retirement or after his or her leaving by reason of disability
or following a change in control and prior to the date which is ten (10) years
after the date of grant of the Option as set forth in paragraph 1 hereof, all
Options, to the extent not exercised by the Optionee or expired, shall be
exercisable, according to its terms, by the personal representative, the
executor or the administrator of the Optionee's estate, or the person or persons
who acquired the Option by bequest or inheritance from the Optionee, at any time
within twelve (12) months after the date of death of the Optionee, but in no
event may the Option be exercised later than ten (10) years after the date of
grant of the Option as set forth in paragraph 1 hereof.

              (e) In the event the Optionee leaves the Board following a change
in control of the Bank, prior to the date which is ten (10) years after the date
of grant of Options as set forth in paragraph 1 hereof, the Optionee shall have
the right to exercise the Option, to the extent that it has not been exercised
by him or her or expired, for the remainder of such ten (10) year period.

         9. EFFECT OF AGREEMENT ON STATUS OF OPTIONEE. The fact that the
Optionee has been granted the Option under the Plan shall not confer on the
Optionee any right to continued service on the Board, nor shall it limit the
right of the Bank to remove the Optionee from the Board at any time.

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         10. LISTING AND REGISTRATION OF OPTION SHARES. The Bank's obligation to
issue shares of Common Stock upon exercise of the Option is expressly
conditioned upon the completion by the Bank of any registration or other
qualification of such shares under any state or federal law or regulations or
rulings of any governmental regulatory body or the making of such investment
representations or other representations and agreements by the Optionee or any
person entitled to exercise the Option in order to comply with the requirements
of any exemption from any such registration or other qualification of the Option
Shares which the Board shall, in its discretion, deem necessary or advisable.
Notwithstanding the foregoing, the Bank shall be under no obligation to register
or qualify the Option Shares under any state or federal law. The required
representations and agreements referenced above may include representations and
agreements that the Optionee, or any other person entitled to exercise the
Option, (i) is purchasing such shares on his or her own behalf as an investment
and not with a present intention of distribution or re-sale and (ii) agrees to
have placed upon any certificates representing the Option Shares a legend
setting forth any representations and agreements which have been given to the
Board or a reference thereto and stating that such shares may not be transferred
except in accordance with all applicable state and federal securities laws and
regulations, and further representing that, prior to making any sale or other
disposition of the Option Shares, the Optionee, or any other person entitled to
exercise the Option, will give the Bank notice of the intention to sell or
dispose of such shares not less than five (5) days prior to such sale or
disposition.

         11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; DISSOLUTION OR
LIQUIDATION.

              (a) In the event of a change in the number of shares of Common
Stock outstanding by reason of a stock dividend, stock split, recapitalization,
reorganization, merger, exchange of shares, or other similar capital adjustment,
prior to the termination of the Optionee's rights under this Agreement,
equitable proportionate adjustments shall be made by the Board in the number,
kind, and the Option Price of shares subject to the unexercised portion of the
Option. The adjustments to be made shall be determined by the Board and shall be
consistent with such changes or changes in the Bank's total number of
outstanding shares; provided, however, that no adjustment shall change the
aggregate Option Price for the exercise of the Option granted.

              (b) The grant of the Option under this Agreement shall not affect
in any way the right or power of the Bank or its shareholders to make or
authorize any adjustment, recapitalization, reorganization, or other change in
the Bank's capital structure or its business, or any merger or consolidation of
the Bank, or to issue bonds, debentures, preferred or other preference stock
ahead of or affecting Common Stock or the rights thereof, or the dissolution or
liquidation of the Bank, or any sale or transfer of all or any part of the
Bank's assets or business.

              (c) Except upon a change in control as set forth in paragraph 6
hereof, upon the effective date of the dissolution or liquidation of the Bank,
the Option granted under this Agreement shall terminate.

         12. NON-TRANSFERABILITY. The Option granted under this Agreement shall
not be assignable or transferable except, in the event of the death of the
Optionee, by will or by the

                                       4
<PAGE>

laws of descent and distribution. In the event of the death of the Optionee, the
personal representative, the executor or the administrator of the Optionee's
estate, or the person or persons who acquired by bequest or inheritance the
right to exercise the Option may exercise the unexercised Option or portion
thereof, in accordance with its terms and paragraph 8(d) hereof, prior to the
date which is ten (10) years after the date of grant of the Option as set forth
in paragraph 1 hereof.

         13. TAX WITHHOLDING. The grant of the Option and Option Shares
delivered pursuant to this Agreement, and any amounts distributed with respect
thereto, may be subject to applicable federal, state and local withholding for
taxes. The Optionee expressly acknowledges and agrees to such withholding, where
applicable, without regard to whether the Option Shares may then be sold or
otherwise transferred by the Optionee.

         14. NOTICES. Any notices or other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or when deposited in the United
States mail as Certified Mail, return receipt requested, properly addressed and
postage prepaid, if to the Bank, at its principal office at 2593 West Roosevelt
Boulevard, Monroe, North Carolina 28110; and, if to the Optionee, at his or her
last address appearing on the books of the Bank. The Bank and the Optionee may
change their address or addresses by giving written notice of such change as
provided herein. Any notice or other communication hereunder shall be deemed to
have been given on the date actually delivered or as of the third (3rd) business
day following the date mailed, as the case may be.

         15. CONSTRUCTION CONTROLLED BY PLAN. This Agreement shall be construed
so as to be consistent with the Plan; and the provisions of the Plan shall be
deemed to be controlling in the event that any provision hereof should appear to
be inconsistent therewith. The Optionee hereby acknowledges receipt of a copy of
the Plan from the Bank.

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

         17. MODIFICATION OF AGREEMENT; WAIVER. This Agreement may be modified,
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto. No waiver hereunder shall constitute a waiver with respect to any
subsequent occurrence or other transaction hereunder or of any other provision
hereof.

         18. CAPTIONS AND HEARINGS; GENDER AND NUMBER. 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 in construction of this Agreement. As used herein,
the masculine gender shall include the feminine

                                       5
<PAGE>

and neuter, the singular number, the plural, and vice versa, whenever such
meanings are appropriate.

         19. GOVERNING LAW; VENUE AND JURISDICTION. Without regard to the
principles of conflicts of laws, the laws of the State of North Carolina shall
govern and control the validity, interpretation, performance, and enforcement of
this Agreement. The parties hereto agree that any suit or action relating to
this Agreement shall be instituted and prosecuted in the courts of the County of
Union, State of North Carolina, and each party hereby does waive any right or
defense relating to such jurisdiction and venue.

         20. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the Bank, its successors and assigns, and shall be
binding upon and inure to the benefit of the Optionee, his heirs, legatees,
personal representatives, executors, and administrators.

         21. ENTIRE AGREEMENT. This Agreement constitutes and embodies the
entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the matters
addressed herein.

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

                                       6
<PAGE>


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

                                    AMERICAN COMMUNITY BANK


                                    By: ________________________________
                                        Kenneth W. Long, Chairman


Attest:

---------------------------------

________________, Corporate Secretary


[CORPORATE SEAL]


                                            __________________________(SEAL)

                                            ________________________, Optionee



<PAGE>


                                    EXHIBIT A


NOTICE OF EXERCISE OF
NONSTATUTORY STOCK OPTION

To:      The Board of Directors of American Community Bank

The undersigned hereby elects to purchase ________ whole shares of Common Stock
of American Community Bank (the "Bank") pursuant to the Nonstatutory Stock
Option granted to the undersigned in that certain Nonstatutory Stock Option
Agreement between the Bank and the undersigned dated the ____ day of _________,
______. The aggregate purchase price for such shares is $_______________, which
amount is (i) being tendered herewith, (ii) will be tendered on or before
_______________, ________, (cross out provision which does not apply) in cash.
The effective date of this election shall be ____________________, ________, or
the date of receipt of this Notice by the Bank if later.

Executed this ___ day of ___________________,_______, at ______________________.


                                             ___________________________________
                                             ___________________________________

                                             ___________________________________
                                             (Social Security Number)