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                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT is entered into as of ____________, 200__ by and between
CRESCENT STATE BANK, a North Carolina banking corporation (hereinafter referred
to as the "Bank") and ______________ of ________, North Carolina (hereinafter
referred to as the "Officer").

     For and in consideration of their mutual promises, covenants and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which hereby is acknowledged, the parties agree as follows:

     1. Employment. The Bank agrees to employ the Officer and the Officer agrees
        ----------
to accept employment upon the terms and conditions stated herein as
__________________ of the Bank. The Officer shall render such administrative and
management services to the Bank as are customarily performed by persons situated
in a similar executive capacity. The Officer shall promote the business of the
Bank and perform such other duties as shall, from time to time, be reasonably
assigned by the President. Upon the request of the President, the Officer shall
disclose all business activities or commercial pursuits in which Officer is
engaged, other than Bank duties.

     2. Compensation. The Bank shall pay the Officer during the term of this
        -------------
Agreement, as compensation for all services rendered by the Officer to the Bank,
a base salary at the rate of $___________ per annum, payable in cash not less
frequently than monthly. The rate of such salary shall be reviewed by the Board
of Directors of the Bank (the "Directors") not less often than annually and the
Directors may increase, but shall not decrease, such rate during the term of
this Agreement. Such rate of salary, or increased rate of salary, as the case
may be, may be further increased from time to time in such amounts as the
Directors, in their discretion, may decide. In determining salary increases, the
Directors shall compensate the Officer for increases in the cost of living and
may also provide for performance or merit increases. Participation in the Bank's
incentive compensation, deferred compensation, discretionary bonus,
profit-sharing, retirement and other employee benefit plans and participation in
any fringe benefits shall not reduce the salary payable to the Officer under
this Paragraph. In the event of a Change in Control (as defined in Paragraph
10), the Officer's rate of salary shall be increased not less than four percent
annually during the term of this Agreement. Any payments made under this
Agreement shall be subject to such deductions as are required by law or
regulation or as may be agreed to by the Bank and the Officer.

     3. Discretionary Bonuses. During the term of this Agreement, the Officer
        ---------------------
shall be entitled to such discretionary bonuses as may be authorized, declared
and paid by the Directors to the Bank's key management employees. No other
compensation provided for in this



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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.
         ---------
     (a) The Bank shall provide family medical coverage and disability insurance
for the Officer and the Officer shall also be entitled to participate in any
plan relating to deferred compensation, stock options, stock purchases, pension,
thrift, profit sharing, group life insurance, education, or other retirement or
employee benefits that the Bank has adopted, or may, from time to time adopt,
for the benefit of its executive employees or for employees generally, subject
to the eligibility rules of such plans.

     (b) The Bank shall pay the expenses of the Officer for membership dues in
civic clubs.

     (c) The Officer shall also be entitled to participate in any other fringe
benefits which are now or may be or become applicable to the Bank's 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 Bank shall reimburse the Officer for all
out-of-pocket reasonable and necessary business expenses which the Officer may
incur in connection with the Officer's services on behalf of the 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 calendar years from the effective date of this Agreement.

     6.  Loyalty;  Noncompetition.
         ------------------------
     (a) The Officer shall devote his full efforts and entire business time to
the performance of the Officer's duties and responsibilities under this
Agreement.

     (b) During the term of this Agreement, or any renewals thereof, and for a
period of one year after termination, the Officer agrees he will not, within
Wake County, North Carolina, or within 15 miles of any Bank office opened during
the term of this Agreement, directly or indirectly, own, manage, operate, join,
control or participate in the management, operation or control of, or be
employed by or connected in any manner with any business which competes with the
Bank or any of its subsidiaries without the prior written consent of the Bank;
provided, however, that the provisions of this Paragraph shall not apply in the
event the Officer's employment is unilaterally terminated by the Bank for Cause,
(as such term is defined in Paragraph 8(c) hereof) or in the event the Officer
terminates his employment with the Bank after the occurrence of a "Termination
Event" (as such term is defined in Paragraph 10(b) hereof) following a "Change
of Control" (as such term is defined in Paragraph 10(d) hereof). Notwithstanding
the foregoing, the Officer shall be free, without such consent, to purchase or
hold as an investment or otherwise, up to five percent of the outstanding stock
or
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other security of any corporation which has its securities publicly traded on
any recognized securities exchange or in any over-the counter market.

     (c) The Officer agrees he will hold in confidence all knowledge or
information of a confidential nature with respect to the business of the Bank or
any subsidiary received by the Officer during the term of this Agreement and
will not disclose or make use of such information without the prior written
consent of the Bank. The Officer agrees that he will be liable to the Bank for
any damages caused by unauthorized disclosure of such information. Upon
termination of his employment, the Officer agrees to return all records or
copies thereof of the Bank or any subsidiary in his possession or under his
control which relate to the activities of the Bank or any subsidiary.

     (d) The Officer acknowledges that it would not be possible to ascertain the
amount of monetary damages in the event of a breach by the Officer under the
provisions of this Paragraph 6. The Officer agrees that, in the event of a
breach of this Paragraph 6, injunctive relief enforcing the terms of this
Paragraph 6 is an appropriate remedy. If the scope of any restriction contained
in this Paragraph 6 is determined to be too broad by any court of competent
jurisdiction, then such restriction shall be enforced to the maximum extent
permitted by law and the Officer consents that the scope of this restriction may
be modified judicially.

     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 Directors. The Bank will provide the
Officer with the working facilities and staff customary for similar executives
and necessary for the Officer to perform his duties.

     8. Termination and Termination Pay. (a) The Officer's employment under this
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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 the Officer's 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 60 days' written notice to the Directors. Upon such
termination, the Officer shall be entitled to receive compensation through the
effective date of such termination.

     (c) The Directors may terminate the Officer's employment at any time, but
any termination by the Directors, other than termination for Cause, shall not
prejudice the Officer's right to compensation or other benefits under this
Agreement. The Bank shall provide written notice specifying the grounds for
termination for Cause. 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 or
moral turpitude, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or

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material breach of any provision of this Agreement. Notwithstanding such
termination, the obligations under Paragraph 6(c) shall survive any termination
of employment.

     (d) Subject to the Bank's obligations and the Officer's rights under (i)
Title I of the Americans with Disabilities Act, ss.504 of the Rehabilitation
Act, and the Family and Medical Leave Act, and to (ii) the vacation leave,
disability leave, sick leave and any other leave policies of the Bank, the
Officer's employment under this Agreement automatically shall be terminated in
the event the Officer becomes disabled during the term of this Agreement and it
is determined by the Bank that the Officer is unable to perform the essential
functions of the Officer's job under this Agreement for ninety (90) business
days or more during any 12-month period. Upon any such termination, the Officer
shall be entitled to receive any compensation the Officer shall have earned
prior to the date of termination but which remains unpaid, and shall be entitled
to any payments provided under any disability income plan of the Bank which is
applicable to the Officer.

     In the event of any disagreement between the Officer and the Bank as to
whether the Officer is physically or mentally incapacitated such as will result
in the termination of the Officer's employment pursuant to this Paragraph 8(d),
the question of such incapacity shall be submitted to an impartial physician
licensed to practice medicine in North Carolina for determination and who will
be selected by mutual agreement of the Officer and the Bank, or failing such
agreement, by two (2) physicians (one (1) of whom shall be selected by the Bank
and the other by the Officer), and such determination of the question of such
incapacity by such physician or physicians shall be final and binding on the
Officer and the Bank. The Bank shall pay the reasonable fees and expenses of
such physician or physicians in making any determination required under this
Paragraph 8(d).

     9. Additional Regulatory Requirements. Notwithstanding anything contained
        ----------------------------------
in this Agreement to the contrary, it is understood and agreed that the Bank (or
any of its successors in interest) shall not be required to make any payment or
take any action under this Agreement if:

     (a) such payment or action is prohibited by any governmental agency having
jurisdiction over the Bank (hereinafter referred to as "Regulatory Authority")
because the Bank is declared by such Regulatory Authority to be insolvent, in
default or operating in an unsafe or unsound manner; or,

     (b) in the reasonable opinion of counsel to the Bank, such payment or
action (i) would be prohibited by or would violate any provision of state or
federal law applicable to the Bank, including, without limitation, the Federal
Deposit Insurance Act as now in effect or hereafter amended, (ii) would be
prohibited by or would violate any applicable rules, regulations, orders or
statements of policy, whether now existing or hereafter promulgated, of any
Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory
Authority.

     10. Change in Control. (a) In the event of a termination of the Officer's
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employment in connection with, or within twenty-four (24) months after, a
"Change in Control" (as defined in Subparagraph (d) below) of the Bank other
than for Cause (as defined in Paragraph 8), the


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Officer shall be entitled to receive the amount set forth in Subparagraph (c)
below. Said sum shall be payable as provided in Subparagraph (e) below.

     (b) In addition to any rights the Officer might have to terminate this
Agreement contained in Paragraph 8, the Officer shall have the right to
terminate this Agreement upon the occurrence of any of the following events (the
"Termination Events") within twenty-four months following a Change in Control of
the Bank:

         (i) Officer is assigned any duties and/or responsibilities that, in
     Officer's reasonable determination, are inconsistent with or constitute a
     demotion or reduction in the Officer's position, duties, responsibilities
     or status as such existed at the time of the Change in Control or with his
     reporting responsibilities or titles with the Bank in effect at such time,
     regardless of Officer's resulting position; or

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

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

         (iv) Officer is transferred to a location which is an unreasonable
     distance from his current principal work location without the Officer's
     express written consent.

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

     (c) In the event that the Officer's employment is terminated pursuant to
this Paragraph 10, the Bank will be obligated to pay or cause to be paid to
Officer an amount equal to 2.99 times the Officer's "base amount" as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code").

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

         (i) After the effective date of this Agreement, any "person" (as such
     term is defined in Section 7(j)(8)(A) of the Change in Bank Control Act of
     1978), directly or indirectly, acquires beneficial ownership of voting
     stock, or acquires beneficial ownership of voting stock, or acquires
     irrevocable proxies or any combination of voting stock and irrevocable
     proxies, representing twenty-five percent (25%) or more of any class of
     voting securities of the Bank, or acquires control of, in any manner, the
     election of a majority of the Directors; or

         (ii) The Bank consolidates or merges with or into another corporation,
     association or entity, or is otherwise reorganized, where the Bank is not
     the surviving corporation in such transaction; or

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         (iii) All or substantially all of the assets of the Bank are sold or
     otherwise transferred to or are acquired by any other corporation,
     association or other person, entity or group.

Notwithstanding the other provisions of this Paragraph 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 Bank agree in writing
that the same shall not be treated as a Change in Control for purposes of this
Agreement.

     (e) Such amounts payable pursuant to this Paragraph 10 shall be paid, at
the option of the Officer, either in one lump sum or in thirty-six (36) equal
monthly payments following termination of Officer's employment.

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

     (g) It is the intent of the parties hereto that all payments made pursuant
to this Agreement be deductible by the Bank for federal income tax purposes and
not result in the imposition of an excise tax on the Officer. Notwithstanding
anything contained in this Agreement to the contrary, any payments to be made to
or for the benefit of the Officer which are deemed to be "parachute payments" as
that term is defined in Section 280G of the Code, shall be modified or reduced
to the extent deemed to be necessary by the Directors to avoid the imposition of
excise taxes on the Officer under Section 4999 of the Code or the disallowance
of a deduction to the Bank under Section 162 of the Code.

     (h) In the event any dispute shall arise between the Officer and the Bank
as to the terms or interpretation of this Agreement, including this Paragraph
10, whether instituted by formal legal proceedings or otherwise, including any
action taken by the Officer to enforce the terms of this Paragraph 10 or in
defending against any action taken by the Bank, the Bank shall reimburse the
Officer for all costs and expenses, proceedings or actions, 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 Bank which shall
acquire, directly or indirectly, by conversion, merger, purchase or otherwise,
all or substantially all of the assets of the Bank.

     (b) Since the 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 Bank.

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     12. Modification; Wavier; 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 Bank by such
officer as may be specifically designated by the Board of 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 amendment or
addition 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.

     15. Entire Agreement. This Agreement contains the entire agreement of the
         -----------------
parties with respect to the transactions described herein and supersedes any and
all other oral or written agreements between any of the parties hereto other
than those contained herein in writing.

                            [Signature page follows.]

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

                                     CRESCENT STATE BANK


                                     By:________________________
                                     Michael G. Carlton
                                     President and Chief Executive Officer

ATTEST:


-----------------------
Corporate Secretary

                                     OFFICER

                                     ---------------------------------[SEAL]

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

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