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                                       A-1
                                   APPENDIX A


                         CAROLINA FIRST BANCSHARES, INC.
                          1999 LONG-TERM INCENTIVE PLAN

                                    ARTICLE I
                                     PURPOSE

         1.1 GENERAL.  The purpose of the Carolina First  BancShares,  Inc. 1999
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value,  of Carolina  First  BancShares,  Inc.  (the  "Company"),  by linking the
personal interests of its employees,  officers and directors to those of Company
shareholders  and by providing  such persons with an incentive  for  outstanding
performance.  The Plan is further intended to provide flexibility to the Company
in its ability to  motivate,  attract,  and retain the  services  of  employees,
officers and directors  upon whose  judgment,  interest,  and special effort the
successful conduct of the Company's operation is largely dependent. Accordingly,
the Plan  permits  the grant of  incentive  awards from time to time to selected
employees, officers and directors.

                                    ARTICLE 2
                                 EFFECTIVE DATE

         2.1      EFFECTIVE  DATE.  The Plan shall  be  effective as of the date
upon which it shall be approved by the  shareholders  of the Company.

                                    ARTICLE 3
                                   DEFINITIONS

         3.1  DEFINITIONS.  When a word or phrase  appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall  generally be given the meaning  ascribed to it in this
Section or in Section 1.1 unless a clearly  different meaning is required by the
context. The following words and phrases shall have the following meanings:

                  (a) "Award" means any Option or Stock  Appreciation  Right, or
         any other  right or interest  relating  to Stock or cash,  granted to a
         Participant under the Plan.

                  (b) "Award Agreement" means any written  agreement,  contract,
         or other instrument or document evidencing an Award.

                  (c) "Board" means the Board of Directors of the Company.

                  (d)  "Change  in  Control"  means  and  includes  each  of the
                        following:

                           (1) The  acquisition  by any  individual,  entity  or
                  group  (within the meaning of Section  13(d)(3) or 14(d)(2) of
                  the 1934 Act) (a "Person") of beneficial ownership (within the
                  meaning of Rule 13d-3  promulgated  under the 1934 Act) of 25%
                  or more of the combined  voting power of the then  outstanding
                  voting securities of the Company entitled to vote generally in
                  the election of directors  (the  "Outstanding  Company  Voting
                  Securities");  provided,  however,  that for  purposes of this
                  subsection   (1),  the   following   acquisitions   shall  not
                  constitute  a Change  of  Control:  (i) any  acquisition  by a
                  Person who is on the Effective  Date the  beneficial  owner of
                  25% or more of the Outstanding Company Voting Securities, (ii)
                  any   acquisition   directly  from  the  Company,   (iii)  any
                  acquisition  by  the  Company,  (iv)  any  acquisition  by any
                  employee   benefit  plan  (or  related  trust)   sponsored  or
                  maintained by the Company or any corporation controlled by the
                  Company, or (v) any acquisition by any corporation pursuant to
                  a transaction  which complies with clauses (i), (ii) and (iii)
                  of subsection (3) of this definition; or
<PAGE>

                           (2)  Individuals  who,  as  of  the  Effective  Date,
                  constitute  the Board (the  "Incumbent  Board")  cease for any
                  reason  to  constitute  at  least  a  majority  of the  Board;
                  provided,  however,  that any  individual  becoming a director
                  subsequent to the Effective Date whose election, or nomination
                  for election by the Company's shareholders,  was approved by a
                  vote of at least a majority of the directors  then  comprising
                  the  Incumbent  Board  shall  be  considered  as  though  such
                  individual  were  a  member  of  the  Incumbent   Board,   but
                  excluding, for this purpose, any such individual whose initial
                  assumption  of  office  occurs  as a result  of an  actual  or
                  threatened  election  contest  with respect to the election or
                  removal   of   directors   or  other   actual  or   threatened
                  solicitation  of  proxies  or  consents  by or on  behalf of a
                  Person other than the Board; or

                           (3)  Consummation  of  a  reorganization,  merger  or
                  consolidation   or  sale  or  other   disposition  of  all  or
                  substantially  all of the assets of the  Company (a  "Business
                  Combination"),  in each case, unless,  following such Business
                  Combination,  (i) all or substantially  all of the individuals
                  and entities who were the beneficial owners of the Outstanding
                  Company Voting  Securities  immediately prior to such Business
                  Combination  beneficially  own,  directly or indirectly,  more
                  than 50% of the combined voting power of the then  outstanding
                  voting  securities  entitled to vote generally in the election
                  of directors of the  corporation  resulting from such Business
                  Combination  (including,  without  limitation,  a  corporation
                  which as a result of such  transaction owns the Company or all
                  or  substantially  all of the Company's assets either directly
                  or through one or more subsidiaries) in substantially the same
                  proportions  as  their  ownership,  immediately  prior to such
                  Business   Combination  of  the  Outstanding   Company  Voting
                  Securities,  and (ii) no  Person  (excluding  any  corporation
                  resulting  from  such  Business  Combination  or any  employee
                  benefit  plan  (or  related  trust)  of the  Company  or  such
                  corporation   resulting   from  such   Business   Combination)
                  beneficially owns, directly or indirectly,  25% or more of the
                  combined   voting  power  of  the  then   outstanding   voting
                  securities of such corporation  except to the extent that such
                  ownership existed prior to the Business Combination, and (iii)
                  at least a majority of the  members of the board of  directors
                  of the  corporation  resulting from such Business  Combination
                  were  members  of  the  Incumbent  Board  at the  time  of the
                  execution  of the initial  agreement,  or of the action of the
                  Board, providing for such Business Combination; or

                           (4)      Approval  by the shareholders of the Company
                   of a complete liquidation or  dissolution  of   the  Company.

                  (e) "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  (f) "Committee"  means the committee of the Board described in
         Article 4.

                  (g) "Company" means Carolina First  BancShares,  Inc., a North
         Carolina corporation.

                  (h) "Covered  Employee" means a covered employee as defined in
         Code Section 162(m)(3).

                  (i)  "Disability"  shall mean any illness or other physical or
         mental   condition  of  a  Participant  that  renders  the  Participant
         incapable of performing his customary and usual duties for the Company,
         or any  medically  determinable  illness  or other  physical  or mental
         condition  resulting from a bodily injury,  disease or mental  disorder
         which, in the judgment of the Committee, is permanent and continuous in
         nature.  The Committee may require such medical or other evidence as it
         deems necessary to judge the nature and permanency of the Participant's
         condition.
<PAGE>

                  (j)  "Effective  Date" has the meaning  assigned  such term in
         Section 2.1.

                  (k) "Fair Market Value",  on any date,  means (i) if the Stock
         is  listed  on a  securities  exchange  or is  traded  over the  Nasdaq
         National Market,  the closing sales price on such exchange or over such
         system on such date or, in the absence of reported  sales on such date,
         the closing  sales  price on the  immediately  preceding  date on which
         sales were reported, or (ii) if the Stock is not listed on a securities
         exchange or traded over the Nasdaq  National  Market,  the mean between
         the bid and offered prices as quoted by Nasdaq for such date,  provided
         that if it is  determined  that the fair market  value is not  properly
         reflected  by  such  Nasdaq  quotations,  Fair  Market  Value  will  be
         determined  by such other method as the  Committee  determines  in good
         faith to be reasonable.

                  (l)      "Incentive  Stock  Option" means  an Option  that  is
         intended  to meet  the  requirements  of Section 422 of the Code or any
         successor provision thereto.

                  (m)  "Non-Qualified  Stock Option" means an Option that is not
         an Incentive Stock Option.

                  (n)  "Option"  means a right  granted to a  Participant  under
         Article 7 of the Plan to  purchase  Stock at a specified  price  during
         specified  time  periods.  An Option may be either an  Incentive  Stock
         Option or a Non-Qualified Stock Option.

                  (o) "Parent"  means a corporation  which owns or  beneficially
         owns a majority of the outstanding  voting stock or voting power of the
         Company.  For  Incentive  Stock  Options,  the term shall have the same
         meaning as set forth in Code Section 424(e).

                  (p) "Participant" means a person who, as an employee,  officer
         or director of the Company or any Subsidiary, has been granted an Award
         under the Plan.

                  (q) "Plan" means the Carolina First BancShares, Inc.1999 Long-
         Term  Incentive  Plan, as amended from time to time.

                  (r)  "Stock"  means the $2.50  par value  common  stock of the
         Company and such other  securities of the Company as may be substituted
         for Stock pursuant to Article 14.

                  (s) "Stock  Appreciation Right" or "SAR" means a right granted
         to a  Participant  under  Article 8 to  receive a payment  equal to the
         difference  between the Fair Market Value of a share of Stock as of the
         date of  exercise  of the SAR over the grant  price of the SAR,  all as
         determined pursuant to Article 8.

                  (t)  "Subsidiary"  means any  corporation,  limited  liability
         company,  partnership  or  other  entity  of  which a  majority  of the
         outstanding voting stock or voting power is beneficially owned directly
         or indirectly by the Company.  For Incentive  Stock  Options,  the term
         shall have the meaning set forth in Code Section 424(f).

                  (u) "1933 Act" means the  Securities  Act of 1933,  as amended
         from time to time.

                  (v) "1934 Act" means the  Securities  Exchange Act of 1934, as
         amended from time to time.
<PAGE>

                                    ARTICLE 4
                                 ADMINISTRATION

         4.1 COMMITTEE.  The Plan shall be administered by the  Compensation and
Benefits  Committee of the Board or, at the discretion of the Board from time to
time, by the Board.  The  Committee  shall consist of two or more members of the
Board.  It is intended  that the  directors  appointed to serve on the Committee
shall be "non-employee  directors" (within the meaning of Rule 16b-3 promulgated
under the 1934 Act) and "outside  directors" (within the meaning of Code Section
162(m) and the  regulations  thereunder)  to the extent  that Rule 16b-3 and, if
necessary  for relief from the  limitation  under Code  Section  162(m) and such
relief  is  sought  by the  Company,  Code  Section  162(m),  respectively,  are
applicable. However, the mere fact that a Committee member shall fail to qualify
under either of the foregoing  requirements  shall not invalidate any Award made
by the  Committee  which Award is  otherwise  validly  made under the Plan.  The
members of the  Committee  shall be appointed by, and may be changed at any time
and from time to time in the discretion of, the Board.  During any time that the
Board is acting as  administrator  of the Plan,  it shall have all the powers of
the Committee  hereunder,  and any reference herein to the Committee (other than
in this Section 4.1) shall include the Board.

         4.2 ACTION BY THE COMMITTEE.  For purposes of  administering  the Plan,
the following rules of procedure  shall govern the Committee.  A majority of the
Committee  shall  constitute  a quorum.  The acts of a majority  of the  members
present  at any  meeting  at  which a  quorum  is  present,  and  acts  approved
unanimously  in writing by the  members of the  Committee  in lieu of a meeting,
shall be deemed  the acts of the  Committee.  Each  member of the  Committee  is
entitled  to, in good  faith,  rely or act upon any report or other  information
furnished to that member by any officer or other  employee of the Company or any
Parent or Subsidiary, the Company's independent certified public accountants, or
any  executive  compensation  consultant or other  professional  retained by the
Company to assist in the administration of the Plan.

         4.3      AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:

                  (a)      Designate Participants;

                  (b)      Determine the type or types  of  Awards to be granted
         to each Participant;

                  (c)  Determine  the  number of Awards  to be  granted  and the
         number of shares of Stock to which an Award will relate;

                  (d)  Determine  the terms and  conditions of any Award granted
         under the Plan, including but not limited to, the exercise price, grant
         price, or purchase price, any restrictions or limitations on the Award,
         any schedule for lapse of forfeiture  restrictions  or  restrictions on
         the  exercisability  of an Award, and accelerations or waivers thereof,
         based in each case on such  considerations as the Committee in its sole
         discretion determines;

                  (e)  Accelerate  the vesting or lapse of  restrictions  of any
         outstanding  Award,  based in each case on such  considerations  as the
         Committee in its sole discretion determines;

                  (f)  Determine  whether,   to  what  extent,  and  under  what
         circumstances  an Award may be settled in, or the exercise  price of an
         Award may be paid in, cash, Stock, other Awards, or other property,  or
         an Award may be canceled, forfeited, or surrendered;
<PAGE>

                  (g) Prescribe the form of each Award Agreement, which need not
         be identical for each Participant;

                  (h)  Decide  all  other  matters  that must be  determined  in
         connection with an Award;

                  (i) Establish, adopt or revise any rules and regulations as it
         may deem necessary or advisable to administer the Plan;

                  (j) Make all other  decisions and  determinations  that may be
         required  under  the  Plan  or as  the  Committee  deems  necessary  or
         advisable to administer the Plan; and

                  (k) Amend the Plan or any Award Agreement as provided herein.

         4.4. DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards  granted  under  the Plan,  any Award  Agreement  and all  decisions  and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

                                    ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

         5.1.  NUMBER OF SHARES.  Subject to  adjustment  as provided in Section
10.1, the aggregate  number of shares of Stock reserved and available for Awards
or which may be used to provide a basis of  measurement  for or to determine the
value of an Award (such as with a Stock Appreciation Right) shall be 500,000.

         5.2.  LAPSED  AWARDS.   To  the  extent  that  an  Award  is  canceled,
terminates, expires or lapses for any reason, any shares of Stock subject to the
Award  will  again be  available  for the  grant of an Award  under the Plan and
shares subject to SARs or other Awards settled in cash will be available for the
grant of an Award under the Plan.

         5.3. STOCK DISTRIBUTED.  Any Stock distributed pursuant to an Award may
consist,  in whole or in part, of authorized and unissued Stock,  treasury Stock
or Stock purchased on the open market.

         5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to
the  contrary  (but  subject to  adjustment  as provided in Section  10.1),  the
maximum  number of shares of Stock with  respect to one or more  Options  and/or
SARs that may be granted  during any one calendar year under the Plan to any one
Participant shall be 100,000.
<PAGE>

                                    ARTICLE 6
                                   ELIGIBILITY

         6.1.  GENERAL.  Awards  may be  granted  only  to  individuals  who are
employees, officers or directors of the Company or a Parent or Subsidiary.

                                    ARTICLE 7
                                  STOCK OPTIONS

         7.1.  GENERAL.   The  Committee  is  authorized  to  grant  Options  to
Participants on the following terms and conditions:

                  (a)  EXERCISE  PRICE.  The  exercise  price per share of Stock
         under an Option shall be determined by the Committee, provided that the
         exercise  price for any Option  shall not be less than the Fair  Market
         Value as of the date of the grant.

                  (b) TIME AND  CONDITIONS  OF  EXERCISE.  The  Committee  shall
         determine  the time or times at which an  Option  may be  exercised  in
         whole or in part. The Committee also shall determine the performance or
         other conditions,  if any, that must be satisfied before all or part of
         an Option  may be  exercised.  The  Committee  may  waive any  exercise
         provisions  at any time in whole or in part based  upon  factors as the
         Committee  may  determine  in its sole  discretion  so that the  Option
         becomes exerciseable at an earlier date.

                  (c) PAYMENT.  The  Committee  shall  determine  the methods by
         which the exercise price of an Option may be paid, the form of payment,
         including, without limitation, cash, shares of Stock, or other property
         (including "cashless exercise" arrangements),  and the methods by which
         shares  of Stock  shall be  delivered  or  deemed  to be  delivered  to
         Participants;  provided that if shares of Stock  surrendered in payment
         of the exercise price were  themselves  acquired  otherwise than on the
         open market, such shares shall have been held by the Participant for at
         least six months.

                  (d)  EVIDENCE OF GRANT.  All Options  shall be  evidenced by a
         written Award Agreement  between the Company and the  Participant.  The
         Award Agreement shall include such provisions,  not  inconsistent  with
         the Plan, as may be specified by the Committee.

                  (e) ADDITIONAL  OPTIONS UPON  EXERCISE.  The Committee may, in
         its sole discretion,  provide in an Award Agreement, or in an amendment
         thereto, for the automatic grant of a new Option to any Participant who
         delivers  shares of Stock as full or partial  payment  of the  exercise
         price of the original Option. Any new Option granted in such a case (i)
         shall be for the same  number  of  shares  of Stock as the  Participant
         delivered  in  exercising  the  original  Option,  (ii)  shall  have an
         exercise  price of 100% of the  Fair  Market  Value of the  surrendered
         shares of Stock on the date of  exercise  of the  original  Option (the
         grant date for the new  Option),  and (iii)  shall have a term equal to
         the unexpired term of the original Option.

         7.2.     INCENTIVE  STOCK  OPTIONS.  The terms of any  Incentive  Stock
Options  granted under the Plan must comply with the following additional rules:

                  (a)  EXERCISE  PRICE.  The  exercise  price per share of Stock
         shall be set by the Committee, provided that the exercise price for any
         Incentive  Stock Option shall not be less than the Fair Market Value as
         of the date of the grant.

                  (b) EXERCISE.  In no event may any  Incentive  Stock Option be
         exercisable for more than ten years from the date of its grant.

                  (c) LAPSE OF OPTION.  An  Incentive  Stock  Option shall lapse
         under the earliest of the following circumstances;  provided,  however,
         that the  Committee  may,  prior to the  lapse of the  Incentive  Stock
         Option under the circumstances described in paragraphs (3), (4) and (5)
         below,  provide in writing  that the Option will  extend  until a later
         date,  but  if  Option  is  exercised  after  the  dates  specified  in
         paragraphs  (3),  (4) and (5)  below,  it will  automatically  become a
         Non-Qualified Stock Option:
<PAGE>

                           (1) The Incentive  Stock Option shall lapse as of the
                  option expiration date set forth in the Award Agreement.

                           (2) The Incentive  Stock Option shall lapse ten years
                  after it is  granted,  unless  an  earlier  time is set in the
                  Award Agreement.

                           (3) If the Participant  terminates employment for any
                  reason other than as provided in  paragraph  (4) or (5) below,
                  the  Incentive   Stock  Option  shall  lapse,   unless  it  is
                  previously  exercised,  three months  after the  Participant's
                  termination  of  employment;  provided,  however,  that if the
                  Participant's  employment  is  terminated  by the  Company for
                  cause  or by  the  Participant  without  the  consent  of  the
                  Company,  the Incentive  Stock Option shall (to the extent not
                  previously exercised) lapse immediately.

                           (4)  If  the  Participant  terminates  employment  by
                  reason of his  Disability,  the  Incentive  Stock Option shall
                  lapse, unless it is previously  exercised,  one year after the
                  Participant's termination of employment.

                           (5) If the Participant dies while employed, or during
                  the  three-month  period  described in paragraph (3) or during
                  the one-year period  described in paragraph (4) and before the
                  Option otherwise lapses, the Option shall lapse one year after
                  the Participant's  death.  Upon the  Participant's  death, any
                  exercisable  Incentive  Stock  Options may be exercised by the
                  Participant's  beneficiary,   determined  in  accordance  with
                  Section 9.6.

                  Unless the  exercisability  of the  Incentive  Stock Option is
         accelerated  as provided in Article 13, if a  Participant  exercises an
         Option after  termination  of  employment,  the Option may be exercised
         only with  respect  to the  shares  that were  otherwise  vested on the
         Participant's termination of employment.

                  (d) INDIVIDUAL  DOLLAR  LIMITATION.  The aggregate Fair Market
         Value  (determined  as of the time an Award is made) of all  shares  of
         Stock  with  respect  to  which   Incentive  Stock  Options  are  first
         exercisable  by a  Participant  in any  calendar  year  may not  exceed
         $100,000.00.

                  (e) TEN PERCENT  OWNERS.  No  Incentive  Stock Option shall be
         granted  to any  individual  who,  at the  date of  grant,  owns  stock
         possessing  more than ten percent of the total combined voting power of
         all classes of stock of the Company or any Parent or Subsidiary  unless
         the  exercise  price per share of such  Option is at least  110% of the
         Fair  Market  Value  per  share of  Stock at the date of grant  and the
         Option expires no later than five years after the date of grant.

                  (f)  EXPIRATION  OF INCENTIVE  STOCK  OPTIONS.  No Award of an
         Incentive  Stock Option may be made  pursuant to the Plan after the day
         immediately prior to the tenth anniversary of the Effective Date.

                  (g) RIGHT TO EXERCISE.  During a  Participant's  lifetime,  an
         Incentive  Stock Option may be exercised only by the Participant or, in
         the case of the Participant's Disability, by the Participant's guardian
         or legal representative.

                  (h) DIRECTORS.  The Committee may not grant an Incentive Stock
         Option to a non-employee director. The Committee may grant an Incentive
         Stock  Option to a director  who is also an  employee of the Company or
         Parent  or  Subsidiary  but only in that  individual's  position  as an
         employee and not as a director.
<PAGE>

                                    ARTICLE 8
                            STOCK APPRECIATION RIGHTS

         8.1.  GRANT OF SARs.  The  Committee  is  authorized  to grant  SARs to
Participants on the following terms and conditions:

                  (a)      RIGHT TO PAYMENT.  Upon the exercise of a Stock  App-
         reciation  Right,  the Participant  to whom it is granted has the right
         to receive the excess, if any, of:

                          (1)       The Fair Market Value of one share of Stock 
                 on the date of exercise; over

                          (2) The grant price of the Stock Appreciation Right as
                 determined by the  Committee,  which shall not be less than the
                 Fair Market Value of one share of Stock on the date of grant.

                  (b) OTHER TERMS. All awards of Stock Appreciation Rights shall
         be evidenced  by an Award  Agreement.  The terms,  methods of exercise,
         methods of settlement, form of consideration payable in settlement, and
         any other terms and conditions of any Stock Appreciation Right shall be
         determined  by the  Committee at the time of the grant of the Award and
         shall be reflected in the Award Agreement.

                                    ARTICLE 9

                         PROVISIONS APPLICABLE TO AWARDS

         9.1.  STAND-ALONE,  TANDEM, AND SUBSTITUTE AWARDS. Awards granted under
the Plan may, in the discretion of the Committee,  be granted either alone or in
addition to, in tandem with,  or in  substitution  for, any other Award  granted
under the Plan. If an Award is granted in  substitution  for another Award,  the
Committee may require the surrender of such other Award in  consideration of the
grant of the new Award.  Awards  granted in  addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.

         9.2.  EXCHANGE  PROVISIONS.  The  Committee  may at any  time  offer to
exchange or buy out any previously  granted Award for a payment in cash,  Stock,
or another Award  (subject to Section  10.1),  based on the terms and conditions
the Committee  determines and  communicates  to the  Participant at the time the
offer is made, and after taking into account the tax,  securities and accounting
effects of such an exchange.

         9.3.  TERM OF AWARD.  The term of each Award shall be for the period as
determined  by the  Committee,  provided  that in no event shall the term of any
Incentive Stock Option or a Stock  Appreciation Right granted in tandem with the
Incentive  Stock Option  exceed a period of ten years from the date of its grant
(or, if Section 7.2(e) applies, five years from the date of its grant).

         9.4.  FORM OF PAYMENT FOR AWARDS.  Subject to the terms of the Plan and
any applicable law or Award  Agreement,  payments or transfers to be made by the
Company or a Parent or  Subsidiary  on the grant or  exercise of an Award may be
made in such  form as the  Committee  determines  at or after the time of grant,
including without limitation,  cash, Stock, other Awards, or other property,  or
any  combination,  and  may  be  made  in  a  single  payment  or  transfer,  in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
<PAGE>

         9.5.  LIMITS ON TRANSFER.  No right or interest of a Participant in any
unexercised or restricted Award may be pledged,  encumbered,  or hypothecated to
or in favor of any party  other than the Company or a Parent or  Subsidiary,  or
shall be subject to any lien,  obligation,  or liability of such  Participant to
any other party other than the Company or a Parent or Subsidiary. No unexercised
or restricted  Award shall be assignable or transferable by a Participant  other
than by will or the laws of descent and  distribution  or, except in the case of
an Incentive  Stock Option,  pursuant to a domestic  relations  order that would
satisfy  Section  414(p)(1)(A)  of the Code if such Section  applied to an Award
under the Plan; provided,  however, that the Committee may (but need not) permit
other transfers where the Committee concludes that such transferability (i) does
not result in accelerated  taxation,  (ii) does not cause any Option intended to
be an Incentive Stock Option to fail to be described in Code Section 422(b), and
(iii) is otherwise  appropriate  and desirable,  taking into account any factors
deemed  relevant,  including  without  limitation,  any state or federal  tax or
securities laws or regulations applicable to transferable Awards.

         9.6 BENEFICIARIES.  Notwithstanding  Section 9.5, a Participant may, in
the manner determined by the Committee,  designate a beneficiary to exercise the
rights of the  Participant and to receive any  distribution  with respect to any
Award  upon the  Participant's  death.  A  beneficiary,  legal  guardian,  legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award  Agreement  applicable to the
Participant,  except  to the  extent  the Plan  and  Award  Agreement  otherwise
provide,  and to any additional  restrictions deemed necessary or appropriate by
the  Committee.   If  no  beneficiary   has  been  designated  or  survives  the
Participant,  payment shall be made to the Participant's estate.  Subject to the
foregoing, a beneficiary  designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

         9.7. STOCK  CERTIFICATES.  All Stock  certificates  delivered under the
Plan are  subject  to any  stop-transfer  orders and other  restrictions  as the
Committee  deems  necessary  or  advisable  to  comply  with  federal  or  state
securities laws, rules and regulations and the rules of any national  securities
exchange or automated quotation system on which the Stock is listed,  quoted, or
traded.  The Committee may place legends on any Stock  certificate  to reference
restrictions applicable to the Stock.

         9.8.  ACCELERATION  UPON A  CHANGE  IN  CONTROL.  Except  as  otherwise
provided in the Award Agreement, upon the occurrence of a Change in Control, all
outstanding Options and Stock Appreciation Rights shall become fully exercisable
and all restrictions on outstanding Awards shall lapse;  provided,  however that
such   acceleration  will  not  occur  if,  in  the  opinion  of  the  Company's
accountants,  such acceleration  would preclude the use of "pooling of interest"
accounting  treatment  for a  Change  in  Control  transaction  that  (a)  would
otherwise  qualify for such  accounting  treatment,  and (b) is contingent  upon
qualifying  for such  accounting  treatment.  To the extent that this  provision
causes  Incentive  Stock  Options to exceed the dollar  limitation  set forth in
Section  7.2(d),  the excess Options shall be deemed to be  Non-Qualified  Stock
Options.
<PAGE>

         9.9.  ACCELERATION  UPON CERTAIN  EVENTS NOT  CONSTITUTING  A CHANGE IN
CONTROL.  In the event of the  occurrence of any  circumstance,  transaction  or
event not constituting a Change in Control (as defined in Section 3.1) but which
the Board of Directors  deems to be, or to be  reasonably  likely to lead to, an
effective change in control of the Company of a nature that would be required to
be  reported  in  response  to Item 6(e) of  Schedule  14A of the 1934 Act,  the
Committee may in its sole discretion  declare all outstanding  Options and Stock
Appreciation  Rights to be fully  exercisable,  and/or all  restrictions  on all
outstanding  Awards  to have  lapsed,  in  each  case,  as of  such  date as the
Committee may, in its sole  discretion,  declare,  which may be on or before the
consummation  of such  transaction  or event.  To the extent that this provision
causes  Incentive  Stock  Options to exceed the dollar  limitation  set forth in
Section  7.2(d),  the excess Options shall be deemed to be  Non-Qualified  Stock
Options.

         9.10. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event
has occurred as described in Section 9.8 or 9.9 above,  the Committee may in its
sole  discretion at any time determine that all or a portion of a  Participant's
Options  and  Stock   Appreciation   Rights  shall  become  fully  or  partially
exercisable,  and/or that all or a part of the  restrictions on all or a portion
of the  outstanding  Awards  shall lapse,  in each case,  as of such date as the
Committee may, in its sole discretion,  declare.  The Committee may discriminate
among  Participants  and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 9.10.

         9.11 EFFECT OF ACCELERATION.  If an Award is accelerated  under Section
9.8 or 9.9,  the  Committee  may, in its sole  discretion,  provide (i) that the
Award will expire after a designated  period of time after such  acceleration to
the  extent  not then  exercised,  (ii) that the Award  will be  settled in cash
rather than Stock,  (iii) that the Award will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably  converted
in connection with such  transaction,  or (iv) any combination of the foregoing.
The  Committee's  determination  need not be uniform  and may be  different  for
different Participants, whether or not such Participants are similarly situated.

         9.12.  PERFORMANCE  GOALS.  The Committee may determine  that any Award
granted pursuant to this Plan to a Participant  (including,  but not limited to,
Participants who are Covered  Employees) shall be determined solely on the basis
of (a) the  achievement  by the Company or a Parent or Subsidiary of a specified
target  return,  or target  growth in  return,  on  equity  or  assets,  (b) the
Company's,  Parent's or  Subsidiary's  stock price,  (c) the  achievement  by an
individual  or a  business  unit  of the  Company,  Parent  or  Subsidiary  of a
specified  target,  or target  growth in,  revenues,  net income or earnings per
share,  (d) the  achievement of objectively  determinable  goals with respect to
service or product delivery,  service or product quality, customer satisfaction,
meeting  budgets and/or  retention of employees,  or (e) any  combination of the
goals set forth in (a) through (d) above. If an Award is made on such basis, the
Committee  shall  establish goals prior to the beginning of the period for which
such performance goal relates (or such later date as may be permitted under Code
Section  162(m) or the  regulations  thereunder)  and the  Committee may for any
reason reduce (but not increase) any Award, notwithstanding the achievement of a
specified goal. Any payment of an Award granted with performance  goals shall be
conditioned on the written  certification of the Committee in each case that the
performance goals and any other material conditions were satisfied.

         9.13. TERMINATION OF EMPLOYMENT.  Whether military, government or other
service or other leave of absence shall  constitute a termination  of employment
shall be  determined in each case by the  Committee at its  discretion,  and any
determination  by the Committee shall be final and conclusive.  A termination of
employment  shall not occur in a circumstance  in which a Participant  transfers
from the Company to one of its Parents or Subsidiaries,  transfers from a Parent
or  Subsidiary  to the Company,  or transfers  from one Parent or  Subsidiary to
another Parent or Subsidiary.
<PAGE>

                                   ARTICLE 10
                          CHANGES IN CAPITAL STRUCTURE

         10.1.  GENERAL.  In the event a stock  dividend  is  declared  upon the
Stock,  the  authorization  limits under  Section 5.1 and 5.4 shall be increased
proportionately,  and the  shares of Stock then  subject to each Award  shall be
increased  proportionately  without any change in the aggregate  purchase  price
therefor.  In the event the  Stock  shall be  changed  into or  exchanged  for a
different  number or class of shares of stock or securities of the Company or of
another   corporation,   whether   through   reorganization,   recapitalization,
reclassification,  share exchange, stock split-up, combination of shares, merger
or consolidation,  the  authorization  limits under Section 5.1 and 5.4 shall be
adjusted proportionately,  and there shall be substituted for each such share of
Stock then  subject to each Award the number and class of shares into which each
outstanding share of Stock shall be so exchanged,  all without any change in the
aggregate  purchase price for the shares then subject to each Award, or, subject
to Section  11.2,  there shall be made such other  equitable  adjustment  as the
Committee shall approve.

                ARTICLE 11AMENDMENT, MODIFICATION AND TERMINATION
         11.1.  AMENDMENT,  MODIFICATION  AND  TERMINATION.  The  Board  or  the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan  without  shareholder  approval;  provided,  however,  that  the  Board  or
Committee  may  condition  any  amendment  or  modification  on the  approval of
shareholders  of the Company if such  approval is necessary or deemed  advisable
with  respect  to  tax,   securities  or  other  applicable  laws,  policies  or
regulations.

         11.2 AWARDS PREVIOUSLY  GRANTED. At any time and from time to time, the
Committee may amend,  modify or terminate any outstanding Award without approval
of the  Participant;  provided,  however,  that,  subject  to the  terms  of the
applicable Award Agreement,  such amendment,  modification or termination  shall
not,  without the  Participant's  consent,  reduce or diminish the value of such
Award  determined  as if the  Award  had been  exercised,  vested,  cashed in or
otherwise  settled on the date of such  amendment or  termination,  and provided
further that,  except as otherwise  permitted in the Plan, the exercise price of
any  Option may not be reduced  and the  original  term of any Option may not be
extended. No termination, amendment, or modification of the Plan shall adversely
affect any Award previously  granted under the Plan, without the written consent
of the Participant.

                                   ARTICLE 12
                               GENERAL PROVISIONS

         12.1. NO RIGHTS TO AWARDS. No Participant or eligible participant shall
have any claim to be granted any Award  under the Plan,  and neither the Company
nor the Committee is obligated to treat  Participants  or eligible  participants
uniformly.

         12.2. NO SHAREHOLDER  RIGHTS. No Award gives the Participant any of the
rights of a shareholder  of the Company  unless and until shares of Stock are in
fact issued to such person in connection with such Award.

         12.3.  WITHHOLDING.  The Company or any Parent or Subsidiary shall have
the authority and the right to deduct or withhold,  or require a Participant  to
remit to the Company, an amount sufficient to satisfy federal,  state, and local
taxes  (including  the  Participant's  FICA  obligation)  required  by law to be
withheld with respect to any taxable event arising as a result of the Plan. With
respect to  withholding  required  upon any taxable  event  under the Plan,  the
Committee may, at the time the Award is granted or thereafter,  require that any
such withholding  requirement be satisfied,  in whole or in part, by withholding
shares of Stock having a Fair Market Value on the date of  withholding  equal to
the amount required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
<PAGE>

         12.4. NO RIGHT TO CONTINUED  SERVICE.  Nothing in the Plan or any Award
Agreement  shall  interfere with or limit in any way the right of the Company or
any Parent or Subsidiary to terminate any Participant's  employment or status as
an officer or director at any time, nor confer upon any Participant any right to
continue  as an  employee,  officer or  director of the Company or any Parent or
Subsidiary.

         l2.5.  UNFUNDED  STATUS  OF  AWARDS.  The  Plan  is  intended  to be an
"unfunded"  plan for  incentive and deferred  compensation.  With respect to any
payments not yet made to a Participant  pursuant to an Award,  nothing contained
in the Plan or any Award  Agreement  shall give the  Participant any rights that
are  greater  than those of a general  creditor  of the Company or any Parent or
Subsidiary.

         12.6.  INDEMNIFICATION.  To the extent  allowable under applicable law,
each  member of the  Committee  shall be  indemnified  and held  harmless by the
Company from any loss, cost,  liability,  or expense that may be imposed upon or
reasonably  incurred by such member in  connection  with or  resulting  from any
claim,  action,  suit,  or  proceeding to which such member may be a party or in
which he may be  involved  by reason of any  action or  failure to act under the
Plan  and  against  and  from  any  and all  amounts  paid  by  such  member  in
satisfaction  of  judgment  in such  action,  suit,  or  proceeding  against him
provided he gives the Company an opportunity,  at its own expense, to handle and
defend the same before he  undertakes to handle and defend it on his own behalf.
The  foregoing  right of  indemnification  shall not be  exclusive  of any other
rights of  indemnification  to which  such  persons  may be  entitled  under the
Company's  Certificate  of  Incorporation  or  Bylaws,  as a matter  of law,  or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

         12.7.  RELATIONSHIP TO OTHER BENEFITS.  No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Parent or Subsidiary unless provided otherwise in such other plan.

         12.8.    EXPENSES.   The expenses  of  administering the  Plan shall be
borne by the Company and its Parents or Subsidiaries.

         12.9.  TITLES AND HEADINGS.  The titles and headings of the Sections in
the  Plan  are for  convenience  of  reference  only,  and in the  event  of any
conflict,  the text of the Plan,  rather  than such  titles or  headings,  shall
control.

         12.10.  GENDER AND NUMBER.  Except  where  otherwise  indicated  by the
context,  any masculine  term used herein also shall  include the feminine,  the
plural shall include the singular, and the singular shall include the plural.

         12.11.  FRACTIONAL  SHARES.  No  fractional  shares  of Stock  shall be
issued, and the Committee shall determine, in its discretion, whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.

         12.12. GOVERNMENT AND OTHER REGULATIONS.  The obligation of the Company
to make  payment  of  Awards  in Stock or  otherwise  shall  be  subject  to all
applicable laws,  rules,  and  regulations,  and to such approvals by government
agencies  as may be  required.  The  Company  shall be under  no  obligation  to
register under the 1933 Act, or any state  securities  act, any of the shares of
Stock  paid  under the  Plan.  The  shares  paid  under the Plan may in  certain
circumstances  be exempt from  registration  under the 1933 Act, and the Company
may restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

         12.13.  GOVERNING  LAW. To the extent not  governed by federal law, the
Plan and all Award Agreements shall be construed in accordance with and governed
by the laws of the State of North Carolina.

         12.14  ADDITIONAL  PROVISIONS.  Each Award  Agreement  may contain such
other terms and  conditions as the Committee may  determine;  provided that such
other terms and  conditions  are not  inconsistent  with the  provisions of this
Plan.