EXHIBIT (10)((ii)(e)


                       HILLSBOROUGH SAVING BANK, INC., SSB
                              EMPLOYMENT AGREEMENT



         This  agreement  entered  into as of March  10,  1997,  by and  between
HILLSBOROUGH  SAVINGS BANK, INC., SSB  (hereinafter  referred to as the "Savings
Bank") and Ted R. Laws (hereinafter  referred to as the "Officer") and is joined
in by PIEDMONT  BANCORP,  INC., the parent  holding  company of the Savings Bank
(hereinafter referred to as the "Holding Company").

         WHEREAS,  the Savings Bank is a state-chartered  stock savings bank and
the  wholly-owned  subsidiary of the Holding Company;  and

         WHEREAS, the Savings Bank desires to retain the services of the Officer
as Vice  President and Chief Lending  Officer of the Savings Bank upon the terms
and conditions set forth herein; and

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

         WHEREAS,   the   Savings   Bank  wishes  to  attract  and  retain  such
well-qualified executives and it is in the best interest of the Savings Bank and
of the Officer to secure the continued  services of the Officer  notwithstanding
any change in any change of 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 Holding
Company, the Savings Bank and their stockholders; and

         WHEREAS,  the parties  desire to enter into this  Agreement in order to
set forth the terms and conditions of the Officer's employment relationship with
the Savings Bank.

         NOW,  THEREFORE,  for and in  consideration  of the premises and mutual
promises,  covenants  and  conditions  hereinafter  set forth and other good and
valuable  considerations,  the  receipt  and  sufficiency  of which  hereby  are
acknowledged, the parties hereby do agree as follows:

         1. Employment. The Savings Bank hereby agrees to employ the Officer and
the Officer  hereby agrees to accept  employment,  upon the terms and conditions
stated herein,  as Vice President and Chief Lending Officer of the Savings Bank.
The Officer  shall render such  administrative  and  management  services to the
Savings  Bank as are  customarily  performed  by persons  situated  in a similar
executive  capacity.  The Officer shall promote the business of the Savings Bank
and  perform  such  other  duties as shall,  from  time to time,  be  reasonably
prescribed by the Board of Directors of the Savings Bank (the "Board").

         2. Compensation. The Savings Bank shall pay the Officer during the term
of this  Agreement,  as  compensation  for all  service  rendered  by him to the
Savings Bank, a base salary at the rate of $56,500.00 per annum (to be increased
to  $58,000.00  per  annum  after  six  months  subject  to   satisfactory   job
performance),  payable in cash not less frequently  than monthly;  provided that
<PAGE>
the rate of such  salary  shall be  reviewed  by the Board not less  often  than
annually. Such rate of salary, or increased rate of salary, as the case may, may
be further  increased  from time to time in such  amounts  as the Board,  in its
discretion,  may  decide.  In  determining  salary  increases,  the Board  shall
compensate  the Officer for increases in the cost of living and may also provide
for performance or merit  increases.  Participation  in incentive  compensation,
deferred compensation,  discretionary bonus,  profit-sharing,  retirement, stock
option and other  employee  benefit  plans that the Savings  Bank or the Holding
Company have adopted or may from time to time adopt,  and  participation  in any
fringe  benefits,  shall not reduce the salary payable to the Officer under this
Section.  The  Officer  will be  entitled  to such  customary  fringe  benefits,
vacation  and  sick  leave  as are  consistent  with the  normal  practices  and
established  policies of the Savings  Bank.  In the event of a Change of Control
(as defined in Section 10), the officer's  rate of salary shall be increased not
less than six percent (6%) annually during the term of this Agreement.

         3.  Discretionary  Bonuses.  During  the  term of this  Agreement,  the
Officer shall be entitled in an equitable  manner with all other key  management
personnel  of  the  Savings  Bank,  to  such  discretionary  bonuses  as  may be
authorized,  declared  and  paid by the  Directors  to the  Savings  Bank's  key
management employees. No other compensation provided for in this Agreement shall
be deemed a substitute  for the Officer's  right to such  discretionary  bonuses
when and as declared by the Directors.

         4.  Participation  in Retirement  and Employee  Benefit  Plans:  Fringe
Benefits.  The Officer shall be entitled to  participate in any plan relating to
deferred compensation,  stock awards, stock options,  stock purchases,  pension,
thrift,  profit  sharing,  group life  insurance,  medical and dental  coverage,
disability  coverage,  education,  or other retirement or employee benefits that
the Savings Bank or the Holding Company have adopted,  or may, from time to time
adopt,  for benefit of their  executive  employees and for employees  generally,
subject to the eligibility rules of such plans.

         The Officer shall also be entitled to  participate  in any other fringe
benefits  which are now or may be or become  applicable  to the  Officer  or the
Savings Bank's other  executive  employees,  including the payment of reasonable
expenses for attending annual and periodic meetings of trade  associations,  and
any other benefits which are commensurate  with the duties and  responsibilities
to be performed by the Officer under this Agreement.  Additionally,  the Officer
shall be entitled to such vacation and sick leave as shall be established  under
uniform employee policies  promulgated by the Directors.  The Savings Bank shall
reimburse the Officer for all  out-of-pocket  reasonable and necessary  business
expenses  which the Officer may incur in connection  with his services on behalf
of the Savings Bank.

         5. 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 of the Savings Bank,  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 Officer 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 Officer's  performance annually and
make a specific  determination  pursuant to such review to renew this  Agreement
prior to the 90 day notice period.
<PAGE>
         6.  Loyalty.  The  Officer  shall  devote his full  efforts  and entire
business time to the performance of his duties and  responsibilities  under this
Agreement.

         The Officer  agrees that he will hold in  confidence  all  knowledge or
information of a confidential  nature with respect to the respective  businesses
of the Holding  Company,  the  Savings  Bank or of their  subsidiaries,  if any,
received by him during the term of this  Agreement and will not disclose or make
use of such information,  except in the ordinary course of his duties under this
Agreement,  without  the prior  written  consent of the  Holding  Company or the
Savings Bank.

         7. Standards. The Officer shall perform his duties and responsibilities
under this Agreement in accordance  with such reasonable  standards  expected of
employees with comparable  positions in comparable  organizations  and as may be
established  from time to time by the Board.  The Savings  Bank will provide the
Officer with the working  facilities and staff customary for similar  executives
and necessary for him to perform his duties.

         8. Termination and Termination Pay.

         (a) The Officer's  employment  under this Agreement shall be terminated
upon the death of the Officer during the term of this Agreement, in which event,
the  Officer's  estate  shall be entitled to receive  the  compensation  due the
Officer through the last day of the calendar month in which his death shall have
occurred and for a period of one month thereafter.

         (b) The Officer's  employment under this Agreement may be terminated at
any time by the  Officer  upon sixty (60) days'  written  notice to the Board of
Directors.  Upon such  termination,  the  Officer  shall be  entitled to receive
compensation through the effective date of such termination.

         (c) The Board may terminate the Officer's  employment at any time,  but
any  termination  by the Board,  other  than  termination  for cause,  shall not
prejudice the  Officer's  right to  compensation  or other  benefits  under this
Agreement  for the  remaining  period  which  would  have been  covered  by this
Agreement if such termination had not occurred.  The Officer shall have no right
to receive  compensation or other benefits for any period after  termination for
"cause."  Termination  for  "cause"  shall  include  termination  because of the
Officer's  personal  dishonesty,  incompetence,  willful  misconduct,  breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation  of any law,  rule,  regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach  of  any  provisions  of  this  Agreement. 

         9. Additional Regulatory Requirements.

         (a) If the Officer is  suspended  and/or  temporarily  prohibited  from
participating  in the conduct of the Savings  Bank's  affairs by a notice served
under Section 8(e)(3) or Section  8(g)(1) of the Federal  Deposit  Insurance Act
(12 U.S.C.  1818(e)(3) and (g)(1)),  the Savings Bank's  obligations  under this
Agreement  shall  be  suspended  as of the date of  service,  unless  stayed  by
appropriate proceedings. If the charges in the notice are dismissed, the Savings
Bank  shall  (i) pay the  Officer  all of the  compensation  withheld  while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of its obligations which were suspended.
<PAGE>
         (b) If the  Officer  is  removed  and/or  permanently  prohibited  from
participating  in the conduct of the Savings  Bank's  affairs by an order issued
under Section 8(e)(4) of Section  8(g)(1) of the Federal  Deposit  Insurance Act
(12U.S.C.1818(e)(4)  and (g)(1)), all obligations of the Savings Bank under this
Agreement  shall  terminate as of the  effective  date of the order,  but vested
rights of the contracting parties shall not be affected.

         (c) If the Savings Bank is in default as defined in Section  3(x)(1) of
the Federal Deposit Insurance Act (12U.S.C. * 1818(x)(1)), all obligations under
this  Agreement  shall  terminate as of the date of default,  but this paragraph
shall not affect any vested rights of the contracting parties.

         (d) All obligations under this Agreement shall be terminated, except to
the extent  determined  that  continuation of the Agreement is necessary for the
continued  operation of the Savings Bank, (i) by the Federal  Deposit  Insurance
Corporation  (the  "Corporation"),  at the time the  Corporation  enters into an
agreement  to provide  assistance  to or on behalf of the Savings Bank under the
authority  contained in Section 13(c) of the Federal  Deposit  Insurance Act (12
U.S.C. ss.  1818(c));  or (ii) by the  Administrator of the Savings  Institution
Division of the North Carolina Department of Commerce (the "Administrator"),  at
the time the  Administrator  approves a supervisory  merger to resolve  problems
related to operation of the Savings Bank or when the Savings Bank is  determined
by the Administrator to be in an unsafe or unsound condition.  Any rights of the
parties that have already vested, however, shall not be affected by such action.

10. Change in Control.

         (a) In the event of a "Change in Control" (as defined in Subsection (b)
below),  the acquiror shall be  prohibited,  during the remainder of the term of
this Agreement, from:

         (i)  Assigning  Officer  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 equivalent  titles with the Savings Bank in effect
         at such time; or

         (ii)  Adjusting  Officer's  annual  base  salary  rate  other  than  in
         accordance with the provisions of Section 2 of this Agreement; or

         (iii)  Reducing in level,  scope or coverage or  eliminating  Officer's
         life  insurance,  medical  or  hospitalization  insurance,   disability
         insurance,  profit  sharing plans,  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 Officer as of the effective
         date of the Change in Control; or

         (iv) Transferring Officer to a location outside of Orange County, North
         Carolina, without the Officer's express written consent.

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

         (i) a change  in  control  of a nature  that  would be  required  to be
         reported in response to Item I of the Current  Report on Form 8K, as in
         effect on the date  hereof,  pursuant  to  Section  13 or 1 5(d) of the
         Exchange Act; or
<PAGE>
         (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 Common Stock of the Savings  Bank,  as
         applicable; or

         (iii) individuals who constitute the Board or board of directors of the
         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 Savings Bank's or
         Holding  Company's  shareholders  was approved by the Savings Bank's or
         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

         (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 Section 10, a transaction
or  event  shall  not be  considered  a  Change  in  Control  if,  prior  to the
consummation  or occurrence of such  transaction  or event,  Officer and Savings
Bank agree in writing  that the same shall not be treated as a Change in Control
for purposes of this Agreement.

         (c) If, after the occurrence of a Change in Control, (i) the employment
of the Officer  shall be terminated by the Savings Bank or its successor for any
reason other than for "cause" as defined in Section 8(c) or (ii) the  employment
of the  Officer  shall be  terminated  by the Officer as a result of a breach of
this  Agreement  by the Savings Bank or its  successor,  and as a result of such
termination,  the Officer shall not become fully vested in benefits  provided to
the Officer under any retirement plan, restricted stock plan, stock option plan,
stock  ownership  plan, or other employee  benefit plan, then in addition to any
liability arising under this Agreement,  the Savings Bank or its successor shall
pay to the  Officer an amount  equal to the value of the  benefits  in which the
Officer shall not become fully vested as a result of such termination.

         (d) In the event any dispute  shall  arise  between the Officer and the
Savings Bank as to the terms or interpretation of this Agreement, including this
Section  10,  whether  instituted  by formal  legal  proceedings  or  otherwise,
including  any action  taken by the Officer to enforce the terms of this Section
10 or in  defending  against any action taken by the Savings  Bank,  the Savings
Bank shall  reimburse  the Officer for all costs and  expenses  incurred in such
proceedings  or actions,  including  attorney's  fees,  in the event the Officer
prevails in any such action.
<PAGE>
11. Successors and Assigns.

         (a) 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 the
Savings Bank.

         (b) Since the Savings Bank is  contracting  for the unique and personal
skills  of the  Officer,  the  Officer  shall be  precluded  from  assigning  or
delegating his rights or duties  hereunder  without first  obtaining the written
consent of the Savings Bank.

         12. Modification:  Waiver:  Ammendments. No provision of this Agreement
may be  modified,  waived or  discharged  unless such  waiver,  modification  or
discharge  is agreed to in  writing,  signed by the Officer and on behalf of the
Savings Bank by such officer as may be specifically designated by the Directors.
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. No amendments or additions to this  Agreement  shall be binding  unless in
writing and signed by both parties, except as herein otherwise provided.

         13.  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.

         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.

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

                                            HILLSBOROUGH SAVINGS BANK, INC., SSB


                                        By: /s/M. Marion Clark
                                            ------------------
                                            Chairman of the Board

                                           

                                            /s/Ted R. Laws
                                            ---------------------- (SEAL)



         The foregoing Agreement is consented and agreed to by Piedmont Bancorp,
Inc., the parent holding company of Hillsborough Savings Bank, Inc., SSB.


                                            PIEDMONT BANCORP, INC.


                                        By: /s/M. Marion Clark
                                            ------------------
                                            Chairman of the Board

<PAGE>
                                                            EXHIBIT (10)((ii)(f)


                      HILLSBOROUGH SAVINGS BANK, INC., SSB
                              EMPLOYMENT AGREEMENT



         THIS  AGREEMENT  entered  into as of  March  3,  1997,  by and  between
HILLSBOROUGH  SAVINGS BANK, INC., SSB  (hereinafter  referred to as the "Savings
Bank") and Eric J. Schuppenhauer  (hereinafter referred to as the "Officer") and
is joined in by  PIEDMONT  BANCORP,  INC.,  the  parent  holding  company of the
Savings Bank (hereinafter referred to as the "Holding Company").

         WHEREAS,  the Savings Bank is a state-chartered  stock savings bank and
the  wholly-owned  subsidiary of the Holding Company,  and WHEREAS,  the Savings
Bank desires to retain the services of the Officer as Vice  President  and Chief
Financial  Officer of the Savings Bank upon the terms and  conditions  set forth
herein; and

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

         WHEREAS,   the   Savings   Bank  wishes  to  attract  and  retain  such
well-qualified executives and it is in the best interest of the Savings Bank and
of the Officer to secure the continued  services of the Officer  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 Holding
Company, the Savings Bank and their stockholders; and

         WHEREAS,  the parties  desire to enter into this  Agreement in order to
set forth the terms and conditions of the Officer's employment relationship with
the Savings Bank.

         NOW,  THEREFORE,  for and in  consideration  of the premises and mutual
promises,  covenants  and  conditions  hereinafter  set forth and other good and
valuable  considerations,  the  receipt  and  sufficiency  of which  hereby  are
acknowledged, the parties hereby do agree as follows:

         1. Employment. The Savings Bank hereby agrees to employ the Officer and
the Officer  hereby agrees to accept  employment,  upon the terms and conditions
stated  herein,  as Vice  President and Chief  Financial  Officer of the Savings
Bank. The Officer shall render such  administrative  and management  services to
the Savings Bank as are customarily  performed by persons  situated in a similar
executive  capacity.  The Officer shall promote the business of the Savings Bank
and  perform  such  other  duties as shall,  from  time to time,  be  reasonably
prescribed by the Board of Directors of the Savings Bank (the "Board").

         2. Compensation. The Savings Bank shall pay the Officer during the term
of this  agreement,  as  compensation  for all  service  rendered  by him to the
Savings Bank, a base salary at the rate of $59,000.00 per annum, payable in cash
not less  frequently  than  monthly;  provided  that the rate of salary shall be
reviewed  by the Board not less often  than  annually.  Such rate of salary,  or
increased rate of salary, as the case may be, may be further increased from time
<PAGE>
to  time in such  amounts  as  the  Board,  in its discretion,  may  decide.  In
determining  salary  increases,  the Board  shall  compensate  the  Officer  for
increases  in the cost of living and may also provide for  performance  or merit
increases.  Participation  in  incentive  compensation,  deferred  compensation,
discretionary bonus, profit-sharing, retirement, stock option and other employee
benefit  plans that the Savings Bank or the Holding  Company have adopted or may
from time to time adopt, and  participation  in any fringe  benefits,  shall not
reduce that salary  payable to the Officer under this Section.  The Officer will
be entitled  to such  customary  fringe  benefits,  vacation,  sick leave as are
consistent  with the normal  practices and  established  policies of the Savings
Bank.  In the event of a Change of  Control  (as  defined in  Section  10),  the
Officer's  rate of salary  shall be  increased  not less than six  percent  (6%)
annually during the term of this Agreement.

         3.  Discretionary  Bonuses.  During  the  term of this  Agreement,  the
Officer shall be entitled in an equitable  manner with all other key  management
personnel  of  the  Savings  Bank,  to  such  discretionary  bonuses  as  may be
authorized,  declared  and  paid by the  Directors  to the  Savings  Bank's  key
management employees. No other compensation provided for in this Agreement shall
be deemed a substitute  for the Officer's  right to such  discretionary  bonuses
when and as declared by the Directors.

         4.  Participation  in Retirement  and Employee  Benefit  Plans:  Fringe
Benefits.  The Officer shall be entitled to  participate in any plan relating to
deferred compensation,  stock awards, stock options,  stock purchases,  pension,
thrift,  profit  sharing,  group life  insurance,  medical and dental  coverage,
disability  coverage,  education,  or other retirement or employee benefits that
the Savings Bank or the Holding Company have adopted,  or may, from time to time
adopt,  for benefit of their  executive  employees and for employees  generally,
subject to the eligibility rules of such plans.

         The Officer  shall also be entitled to  participate in any other fringe
benefits  which are now or may be or become  applicable  to the  Officer  or the
Savings Bank's other  executive  employees,  including the payment of reasonable
expenses for attending annual and periodic meetings of trade  associations,  and
any other benefits which are commensurate  with the duties and  responsibilities
to be performed by the Officer under this Agreement.  Additionally,  the Officer
shall be entitled to such vacation and sick leave as shall be established  under
uniform employee policies  promulgated by the Directors.  The Savings Bank shall
reimburse the Officer for all  out-of-pocket  reasonable and necessary  business
expenses  which the Officer may incur in connection  with his services on behalf
of the Savings Bank.

         5. 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 of the Savings Bank,  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 Officer 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 Officer's  performance annually and
make a specific  determination  pursuant to such review to renew this  Agreement
prior to the 90 day notice period.

         6.  Loyalty.  The  Officer  shall  devote his full  efforts  and entire
business time to the performance of his duties and  responsibilities  under this
Agreement.
<PAGE>
         The Officer  agrees that he will hold in  confidence  all  knowledge or
information of a confidential  nature with respect to the respective  businesses
of the Holding  Company,  the  Savings  Bank or of their  subsidiaries,  if any,
received by him during the term of this  Agreement and will not disclose or make
use of such information,  except in the ordinary course of his duties under this
Agreement,  without  the prior  written  consent of the  Holding  Company or the
Savings Bank.

         7. Standards. The Officer shall perform his duties and responsibilities
under this Agreement in accordance  with such reasonable  standards  expected of
employees with comparable  positions in comparable  organizations  and as may be
established  from time to time by the Board.  The Savings  Bank will provide the
Officer with the working  facilities and staff customary for similar  executives
and necessary for him to perform his duties.

         8. Termination and Termination Pay.

         (a) The Officer's  employment  under this Agreement shall be terminated
upon the death of the Officer during the term of this Agreement, in which event,
the  Officer's  estate  shall be entitled to receive  the  compensation  due the
Officer through the last day of the calendar month in which his death shall have
occurred and for a period of one month thereafter.

         (b) The Officer's  employment under this Agreement may be terminated at
any time by the  Officer  upon sixty (60) days'  written  notice to the Board of
Directors.  Upon such  termination,  the  Officer  shall be  entitled to receive
compensation through the effective date of such termination.

         (c) The Board may terminate the Officer's  employment at any time,  but
any  termination  by the Board,  other  than  termination  for cause,  shall not
prejudice the  Officer's  right to  compensation  or other  benefits  under this
Agreement  for the  remaining  period  which  would  have been  covered  by this
Agreement if such termination had not occurred.  The Officer shall have no right
to receive  compensation or other benefits for any period after  termination for
"cause."  Termination  for  "cause"  shall  include  termination  because of the
Officer's  personal  dishonesty,  incompetence,  willful  misconduct,  breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation  of any law,  rule,  regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provisions of this Agreement.

         9. Additional Regulatory Requirements.

         (a) If the Officer is  suspended  and/or  temporarily  prohibited  from
participating  in the conduct of the Savings  Bank's  affairs by a notice served
under Section 8(e)(3) or Section  8(g)(1) of the Federal  Deposit  Insurance Act
(12 U.S.C.  1818(e)(3) and (g)(l)),  the Savings Bank's  obligations  under this
Agreement  shall  be  suspended  as of the date of  service,  unless  stayed  by
appropriate proceedings. If the charges in the notice are dismissed, the Savings
Bank  shall  (i) pay the  Officer  all of the  compensation  withheld  while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of its obligations which were suspended.

         (b) If the  Officer  is  removed  and/or  permanently  prohibited  from
participating  in the conduct of the Savings  Bank's  affairs by an order issued
under Section 8(e)(4) of Section  8(g)(l) of the Federal  Deposit  lnsurance Act
(12U.S.C.1818(e)(4)  and (g)(1)), all obligations of the Savings Bank under this
Agreement  shall  terminate as of the  effective  date of the order,  but vested
rights of the contracting parties shall not be affected.
<PAGE>
         (c) If the Savings Bank is in default as defined in Section  3(x)(1) of
the Federal Deposit  Insurance Act (12U.S.C.  ss.  1818(x)(1)),  all obligations
under  this  Agreement  shall  terminate  as of the  date of  default,  but this
paragraph shall not affect any vested rights of the contracting parties.

         (d) All obligations under this Agreement shall be terminated, except to
the extent  determined  that  continuation of the Agreement is necessary for the
continued  operation of the Savings Bank, (i) by the Federal  Deposit  Insurance
Corporation  (the  "Corporation"),  at the time the  Corporation  enters into an
agreement  to provide  assistance  to or on behalf of the Savings Bank under the
authority  contained in Section 13(c) of the Federal  Deposit  Insurance Act (12
U.S.C. ss.  1818(c));  or (ii) by the  Administrator of the Savings  Institution
Division of the North Carolina Department of Commerce (the "Administrator"),  at
the time the  Administrator  approves a supervisory  merger to resolve  problems
related to operation of the Savings Bank or when the Savings Bank is  determined
by the Administrator to be in an unsafe or unsound condition.  Any rights of the
parties that have already vested, however, shall not be affected by such action.

         10. Change in Control.

         (a) In the event of a "Change in Control" (as defined in Subsection (b)
below),  the acquiror shall be  prohibited,  during the remainder of the term of
this Agreement, from:

         (i)  Assigning  Officer  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 equivalent  titles with the Savings Bank in effect
         at such time; or

         (ii)  Adjusting  Officer's  annual  base  salary  rate  other  than  in
         accordance with the provisions of Section 2 of this Agreement; or

         (iii)  Reducing in level,  scope or coverage or  eliminating  Officer's
         life  insurance,  medical  or  hospitalization  insurance,   disability
         insurance,  profit  sharing plans,  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 Officer as of the effective
         date of the Change in Control; or

         (iv) Transferring Officer to a location outside of Orange County, North
         Carolina, without the Officer's express written consent.

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

         (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 8K, as in
         effect on the date  hereof,  pursuant  to  Section  13 or 1 5(d) of the
         Exchange Act; or

         (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 Common Stock of the Savings  Bank,  as
         applicable; or
<PAGE>
         (iii) individuals who constitute the Board or board of directors of the
         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 Savings Bank's or
         Holding  Company's  shareholders  was approved by the Savings Bank's or
         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

         (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 Section 10, a transaction
or  event  shall  not be  considered  a  Change  in  Control  if,  prior  to the
consummation  or occurrence of such  transaction  or event,  Officer and Savings
Bank agree in writing  that the same shall not be treated as a Change in Control
for purposes of this Agreement.

         (c) If, after the occurrence of a Change in Control, (i) the employment
of the Officer  shall be terminated by the Savings Bank or its successor for any
reason other than for "cause" as defined in Section 8(c) or (ii) the  employment
of the  Officer  shall be  terminated  by the Officer as a result of a breach of
this  Agreement  by the Savings Bank or its  successor,  and as a result of such
termination,  the Officer shall not become fully vested in benefits  provided to
the Officer under any retirement plan, restricted stock plan, stock option plan,
stock  ownership  plan, or other employee  benefit plan, then in addition to any
liability arising under this Agreement,  the Savings Bank or its successor shall
pay to the  Officer an amount  equal to the value of the  benefits  in which the
Officer shall not become fully vested as a result of such termination.

         (d) In the event any dispute  shall  arise  between the Officer and the
Savings Bank as to the terms or interpretation of this Agreement, including this
Section  10,  whether  instituted  by formal  legal  proceedings  or  otherwise,
including  any action  taken by the Officer to enforce the terms of this Section
10 or in  defending  against any action taken by the Savings  Bank,  the Savings
Bank shall  reimburse  the Officer for all costs and  expenses  incurred in such
proceedings  or actions,  including  attorney's  fees,  in the event the Officer
prevails in any such action.

         11. Successors and Assigns.

         (a) 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 the
Savings Bank.
<PAGE>
         (b) Since the Savings Bank is  contracting  for the unique and personal
skills  of the  Officer,  the  Officer  shall be  precluded  from  assigning  or
delegating his rights or duties  hereunder  without first  obtaining the written
consent of the Savings Bank.

         12. 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,  signed by the Officer and on behalf of the
Savings Bank by such officer as may be specifically designated by the Directors.
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. No amendments or additions to this  Agreement  shall be binding  unless in
writing and signed by both parties, except as herein otherwise provided.

         13.  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.

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

                                            HILLSBOROUGH SAVINGS BANK, INC., SSB


                                        By: /s/M. Marion Clark
                                            ------------------
                                            Chairman of the Board

                                        By: /s/Eric J. Schuppenhauer  (SEAL)
                                            ------------------------

                                 

         The foregoing Agreement is consented and agreed to by Piedmont Bancorp,
Inc., the parent holding company of Hillsborough Savings Bank, Inc., SSB.


                                            PIEDMONT BANCORP, INC.


                                        By: /s/M. Marion Clark
                                            ------------------
                                            Chairman of the Board