<PAGE>
 
                                                                Exhibit (10)(vi)

                            Registration Statement

                           Supplemental Income Plan

                           Home Savings Bank, S.S.B.
                                      of
                           Albemarle, North Carolina


1.  Home Savings Bank, S.S.B.
    P.O. Box 489
    Albemarle, NC 28002-0489
    Employer Identification number:  56-0266500

3.  This Registration Statement is to declare that Home Savings Bank, S.S.B.
    maintains a Supplemental Income Plan solely for the purpose of providing
    deferred compensation for a select group of management.

4.  Home Savings Bank, S.S.B. in Albemarle, North Carolina currently maintains
    one such plan with two employees.

5.  Document attached to the Registration Statement.

                                 Home Savings Bank, S.S.B.


Date:    10-3-95                 By: /s/ Carl M. Hill
     ----------------------         ---------------------------------------
                                         President
<PAGE>
 
                         SUPPLEMENTAL INCOME AGREEMENT

          AGREEMENT entered into as of the 1st day of September, 1995 between
Home Savings Association, of Albemarle, North Carolina, a domestic Corporation
having its principal office in Albemarle, North Carolina (hereinafter referred
to as the Company) and Robert Ronald Swanner (hereinafter referred to as the
Employee).

                                  WITNESSETH:

          WHEREAS, the Employee has been an Employee of the Company since
4/22/74 and,

          WHEREAS, the value of the Employee is such that assurance of his
continued service is essential to the future growth and profits of the Company;
and,

          WHEREAS, the Company desires to retain the service of the Employee,
and realizes that if the Employee were to terminate his employment it would
suffer a substantial financial loss;

          NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

          1.  Remuneration: During the period of the Employee's employment with
the Company, the Company will pay the Employee for services to be rendered;

              A.  Cash amounts at rates and time mutually agreed upon and,

              B.  Additional amounts, payment of which will be deferred pursuant
                  to the terms hereinafter set forth.

          2.  Retirement Benefit: Upon the attainment of the Employee's 65th
birthday or, the Employee's actual later retirement after the Employee's actual
later retirement, the Company will commence to pay the Employee $15,000 annually
for a continuous period of 15 years. In the event that the Employee should die
after becoming entitled to receive said monthly installments but before any or
all of said installments have been paid, the Company will pay or will continue
to pay said installments to such beneficiary or beneficiaries as the Employee
has directed by filing with the Company a notice in writing. In the event of the
death of the last named beneficiary before all of the unpaid payments have been
made, the balance of any amount which remains unpaid at said death shall be
commuted on the basis of seven percent per annum compound interest and shall be
paid in a single sum to the executor or administrator of the estate of the last
named beneficiary to die. In the absence of such beneficiary designation, any
amount remaining unpaid at Employee's death shall be commuted on the basis of
seven percent per annum compound interest and shall be paid in a single sum to
the executor or administrator of the Employee's estate.
 
          3.  Death Benefit: Should the Employee die while in the employment of
the Company and prior to age 65 the Company (beginning at a date to be
determined by the Company but within six months from the date of such death)
will commence to pay $15,000 annually for a continuous period of 15 years to
such beneficiary or beneficiaries as the Employee has directed by filing with
<PAGE>
 
the Company a notice in writing. Irrespective of the above, however, if the
Employee dies as result of suicide within two years of the execution of this
agreement, no death benefit shall be payable. In the event that the Executive
should die after becoming entitled to receive said monthly installments but
before any or all of said installments have been paid, the Company will pay or
will continue to pay said installments to such beneficiary or beneficiaries as
the Executive has directed by filing with the Company a notice in writing. In
the event of the death of the last named beneficiary before all the unpaid
payments have been made, the balance of any amount which remains unpaid at said
death shall be commuted on the basis of seven percent per annum compound
interest and shall be paid in a single sum to the executor or administrator of
the estate of the last named beneficiary to die. In the absence of any such
beneficiary designation any amount remaining unpaid at the Employee's death
shall be commuted on the basis of seven percent per annum compound interest
shall be paid in a single sum to the executor or administrator of the Employee's
estate.

          4.  Termination of Employment: If the Employee terminates his
Employment before qualifying for retirement benefits as defined in section 2
above, for reasons other than death or disability, he or his beneficiary, as
applicable, shall be entitled at age 65, or his prior death, to a percentage of
the retirement benefits stated in Section 2 of this Agreement as determined by
the following table:

                                 PERCENTAGE OF RETIREMENT
                                 BENEFITS STATED IN SECTION 2
    DATE OF TERMINATION OF       OF THIS AGREEMENT TO WHICH
         EMPLOYMENT              THE EMPLOYEE IS ENTITLED
         ----------              ------------------------

         Prior to 09-30-95                  0%
         09-30-95                          100%

Irrespective of the above, however, should the employee's termination of
employment occur after any "Successor" to the company shall occur, the employee
shall be 100% vested in the retirement benefits stated in Section 2 of this
agreement. The term "Successor" shall include any person, firm, Company or other
business entity which at anytime, whether by merger, purchase or otherwise,
acquires all or substantially all of the Corporation's assets or business.

          5.  Disability:

          A.  If the Employee shall become disabled (as defined in Subsection B
              of this Section 5) prior to his retirement date while continuing
              to serve in the Employment of the Association, the Association
              shall commence to pay him the same benefit that would have been
              payable had the Employee's death occurred on the date of his
              disability. At the sole option of the Association, the balance of
              the monthly disability benefit installments to be paid to the
              Employee may be paid in a single lump sum payment based on the
              total balance of all payments due under this Section commuted on
              the basis of Seven Percent (7%) per annum compounded interest. The
              Association shall notify the retiring Employee of its decision to
              make a lump sum payment within thirty (30) days following its
              receipt of written notice of the Employee's retirement
<PAGE>
 
              from service. In the event that a Employee should die after
              becoming entitled to receive said monthly disability benefit
              installments but before any or all of said installments have been
              paid, the provisions of Section 3 above shall control the same as
              if the Employee had died while Employed. Any amounts already paid
              to the Employee under this Section shall reduce the death benefit
              to be paid under Section 3 above.

          B.  The Employee shall be considered disabled for the purpose of this
              Agreement if he is unable to perform the duties of his position
              for a continuous period of six (6) months or more. During such six
              (6) month period, that Employee must be under the regular care of
              a State licensed medical doctor (M.D.) or osteopathic physician
              (D.O.). For the purpose of this Section, or any other section
              relating to disability, if there is any dispute between the
              parties as to the Employee's physical or mental disability, the
              questions shall be settled by the opinion of a medical doctor or
              osteopathic physician licensed in the state in which this
              Agreement is signed and who is selected by the mutual consent of
              the parties to this Agreement or their representatives. If the
              parties cannot agree within ten (10) days after a written request
              for the designation of an examining physician is made by either
              party to the other, then the examining physician shall be
              designated by the then President of the Stanly County Medical
              Society. Certification of that physician as to the matter in
              dispute shall be final and binding upon the parties.

          6.  Forfeiture Provisions:

          A.  During the period the retirement benefit is payable to the
              Employee under Section 2 of this Agreement, the Employee shall not
              engage in business activities in Albemarle, North Carolina, which
              are in competition with the Company without first obtaining the
              written consent of the Company.

          B.  During the period the retirement payment is payable to the
              Employee under Section 1 of the Agreement, the Employee shall be
              available to render consulting services to the Association upon
              request by an officer of the Company, but such requests shall not
              be made more frequently than once each month, and shall not
              require a total time expenditure by the employee of more than one
              day per month. Any travel, lodging, food and other reasonable
              necessary expenses incurred by the Employee to perform this
              consulting service shall be paid by the association. The Employee
              shall not be considered to have breached this condition if he is
              unable to consult because of his mental or physical disability.

          C.  Payments of the retirement benefit under this Agreement may be
              terminated by the Company, if the Employee fails to comply with
              either of the conditions set forth in paragraph (A) and (B) of
              this Section 6.
<PAGE>
 
          7.  General Provisions:

          A.  Except as otherwise provided by this Agreement, it is agreed that
              neither the Employee, nor his beneficiary shall have any right to
              commute, sell, assign, transfer or otherwise convey the right to
              receive any payments hereunder, which payments and the right
              thereto are expressly declared to be nonassignable and
              nontransferable.

          B.  The benefits payable under this Agreement shall be independent of,
              and in addition to, any other employment agreements that may exist
              from time to time between the parties hereto, concerning any other
              compensation payable by the Company to the Employee whether as
              salary, bonus, or otherwise. This Agreement shall not be deemed to
              constitute a contract of employment between the parties hereto,
              not shall any provision hereof restrict the right of the Company
              to discharge the Employee or restrict the right of the Employee to
              terminate his employment.

          C.  The rights of the Employee under this Agreement and of any
              beneficiary of the Employee shall be solely those of an unsecured
              creditor of the Company. Any asset acquired by the Company in
              connection with the liabilities assumed by it hereunder, shall not
              be deemed to be held under any trust for the benefit of the
              Employee or his beneficiaries or to be considered security for the
              performances of the obligations of the Company but shall be, and
              remain, a general, unpledged, unrestricted asset of the Company.

          D.  The Company hereby reserves the right to accelerate the payments
              specified in Section 2, 3, 4 and 5 above without the consent of
              the employee, his estate, beneficiaries, or any other person
              claiming through or under him.

          E.  The Company agrees that it will not merge or consolidate with any
              other Company or organization, or permit its business activities
              to be taken over by any other organization unless and until the
              succeeding or continuing Company or other organization shall
              expressly assume the rights and obligations of the Company herein
              set forth. The Company further agrees that it will not cease its
              business activities or terminate its existence other than as
              heretofore set forth in this Section, without having made adequate
              provision for the fulfilling of its obligations hereunder.

          F.  This Agreement shall be binding upon and inure to the benefit of
              the parties, their respective legal representatives, and any
              "Successor" of the Company, which shall be deemed substituted for
              the Company under the terms of this Agreement. As used in this
              Agreement the term "Successor" shall include any person firm,
              Corporation or other business entity which at anytime, whether by
              merger purchase or otherwise, acquire all or substantially all of
              the Corporation's assets business.

          G.  This Agreement may be revoked or amended in whole or in part by a
              writing signed by both of the parties hereto.
<PAGE>
 
          H.  In the event the financial condition of the Bank deteriorates to
              the point that under applicable regulatory authority the continued
              payment of the amounts due under this Agreement would be
              considered imprudent, the Bank reserves the right and authority to
              modify or amend the terms of the Agreement as may be required in
              the best interest of the Bank.

          I.  This Agreement shall be subject to and construed under the laws of
              the State of North Carolina.

          IN WITNESS THEREOF, the Said Company has caused this Agreement to be
signed in its Corporate name by its duly authorized officer, and impresses with
its Corporate seal, attested by its secretary, and the said Employee has
hereunto set his hand and seal, all on the date and year first above written.


                                 Home Savings Bank, S.S.B.


                                 By: /s/ Carl M. Hill
                                    -----------------------------------------
                                         President
  

                                 /s/ Robert Ronald Swanner
                                 --------------------------------------------
                                       Robert Ronald Swanner

ATTEST:

 /s/ Sheila S. Barbee, Secretary
-----------------------------------------------

WITNESS:

 /s/ Sheila S. Barbee
-----------------------------------------------------
<PAGE>
 
                   ERISA CLAIMS PROCEDURE CLAIMS PROCEDURE.

          In accord with the Employee Retirement Income Security Act of 1974,
the following claims procedure is hereby adopted by the Company as the claims
procedure for this unfunded nonqualified deferred compensation plan; and, for
the purposes of implementing such claims procedure (but not for any other
purpose) Home Savings Bank, S.S.B. is hereby designated as the named fiduciary
and plan administrator of this plan:

          a.  Filing of a Claim for Benefits. A participant or beneficiary of
the plan shall make a claim for the benefits provided by delivering a written
request to the plan administrator.

          b.  Notification to Claimant of Decision. If a claim is wholly or
partially denied, notice of the decision, meeting the requirements of paragraph
c following shall be furnished to the claimant within a reasonable period of
time after receipt of the claim by the plan administrator.

          c.  Content of Notice. The plan administrator shall provide to every
claimant who is denied a claim for benefits written notice setting forth in a
manner calculated to be understood by the claimant, the following:

              (1) The specific reason or reasons for the denial;

              (2) Specific reference to pertinent plan provision on which the
                  denial is based.

              (3) A description of any additional material or information
                  necessary for the claimant to perfect the claim and an
                  explanation of why any such material or information is
                  necessary; and,

              (4) An explanation of the plan's claim review procedure set forth
                  in paragraphs d and e following.

          d.  Review Procedure. The purpose of the review procedure, set forth
in this paragraph and in paragraph e following, is to provide a procedure by
which a claimant under the plan may have a reasonable opportunity to appeal a
denial of a claim to the named fiduciary for a full and fair review. To
accomplish that purpose, the claimant or his duly authorized representative:

              (1) May request a review upon written application to the plan
                  administrator;

              (2) May review pertinent plan documents; and

              (3) May submit issues and comments in writing. A claimant (or his
                  duly authorized representative) shall request a review by
                  filing a written application for review with the plan
                  administrator at any time within sixty (60) days after receipt
                  by the claimant of written notice of the denial of his claim.

          e.  Decision on Review. The decision on review of a denied claim shall
be made in the following manner:

              (1) The decision on review shall be made by the plan
                  administrator, who may in his discretion hold a hearing on the
                  denied claim. The plan administrator shall
<PAGE>
 
                  make his decision promptly, and not later than sixty (60) days
                  after receipt of the request for review, unless special
                  circumstances (such as the need to hold a hearing require an
                  extension of time for processing, in which case a decision
                  shall be rendered as soon as possible, but not later than one
                  hundred twenty (120) days after receipt of the request for
                  review).

              (2) The decision on review shall be in writing and shall include
                  specific reasons for the decisions, written in a manner
                  calculated to be understood by the claimant, and specific
                  references to the pertinent plan provisions on which the
                  decision is based.
<PAGE>
 
                         BENEFICIARY DESIGNATION FORM

          As Beneficiary to receive any death benefits payable on my behalf from
Home Savings Bank, S.S.B., I designate the following:

 
  NAME              DATE OF BIRTH           ADDRESS              RELATIONSHIP

PRIMARY:

    Beth M. Swanner  10/13/49   1415 Northridge Drive, Albermarle, NC  Wife  
-------------------------------------------------------------------------------

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

-------------------------------------------------------------------------------
 
CONTINGENT, If Any:

 Mary Leslie Swanner   3/14/71  1415 Northridge Drive, Albermarle, NC Daughter  
-------------------------------------------------------------------------------
 Ashley Leigh Swanner  7/19/76  1415 Northridge Drive, Albermarle, NC Daughter
-------------------------------------------------------------------------------

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

Note: If more than one primary beneficiary is named, the benefit will be paid in
equal shares to those living. Should the contingent beneficiaries be eligible to
receive the benefits, such benefits will be paid in equal shares to such living
contingent beneficiaries.

Each amount payable after my death shall be paid exclusively to the Primary
Beneficiary if living at the time such payments become due. The right is
reserved to the Primary Beneficiary to change contingent beneficiaries after my
death. For the purposes of this agreement, the term "contingent beneficiaries"
shall include any beneficiary who is not receiving payments. A New contingent
beneficiary may be designated from time to time by filing at the Home Office of
the Company written notice thereof in such form as the Company may require. When
such notice is received at the Home Office, the change shall be effective on the
date the notice was signed, whether or not the Primary Beneficiary is living at
the time of the receipt, but without prejudice to the Company on account of any
payment made by it before receipt of the written notice at its Home Office.

Name of Spouse of not given above:
                                  ---------------------------------------------

/s/ Sheila S. Barbee                    /s/ Robert Ronald Swanner
-------------------------------         ---------------------------------------
      Witness                                 Signature of Employee

 9/26/96
--------------------------------
      Date

Note: The original should be retained by the Association, one copy by the
Employee and one copy resumed to Smith/Broadhurst, Inc.
<PAGE>
 
                            Registration Statement

                           Supplemental Income Plan

                           Home Savings Bank, S.S.B.
                                      of
                           Albemarle, North Carolina


1.  Home Savings Bank, S.S.B.
    P.O. Box 489
    Albemarle, NC 28002-0489
    Employer Identification number:  56-0266500

3.  This Registration Statement is to declare that Home Savings Bank, S.S.B.
    maintains a Supplemental Income Plan solely for the purpose of providing
    deferred compensation for a select group of management.

4.  Home Savings Bank, S.S.B. in Albemarle, North Carolina currently maintains
    one such plan with two employees.

5.  Document attached to the Registration Statement.

                                 Home Savings Bank, S.S.B.


Date:    10-3-95                 By: /s/ Carl M. Hill
     ---------------------           -------------------------------
                                         President
<PAGE>
 
                         SUPPLEMENTAL INCOME AGREEMENT

          AGREEMENT entered into as of the 1st day of September, 1995 between
Home Savings Association, of Albemarle, North Carolina, a domestic Corporation
having its principal office in Albemarle, North Carolina (hereinafter referred
to as the Company) and Carl Melvin Hill (hereinafter referred to as the
Employee).

                                  WITNESSETH:

          WHEREAS, the Employee has been an Employee of the Company since 5/1/57
and,

          WHEREAS, the value of the Employee is such that assurance of his
continued service is essential to the future growth and profits of the Company;
and,

          WHEREAS, the Company desires to retain the service of the Employee,
and realizes that if the Employee were to terminate his employment it would
suffer a substantial financial loss;

          NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:

          1.  Remuneration: During the period of the Employee's employment with
the Company, the Company will pay the Employee for services to be rendered;

              A. Cash amounts at rates and time mutually agreed upon and,

              B. Additional amounts, payment of which will be deferred pursuant
to the terms hereinafter set forth.

          2.  Retirement Benefit: Upon the attainment of the Employee's 65th
birthday or, the Employee's actual later retirement after the Employee's actual
later retirement, the Company will commence to pay the Employee $25,000 annually
for a continuous period of 15 years. In the event that the Employee should die
after becoming entitled to receive said monthly installments but before any or
all of said installments have been paid, the Company will pay or will continue
to pay said installments to such beneficiary or beneficiaries as the Employee
has directed by filing with the Company a notice in writing. In the event of the
death of the last named beneficiary before all of the unpaid payments have been
made, the balance of any amount which remains unpaid at said death shall be
commuted on the basis of seven percent per annum compound interest and shall be
paid in a single sum to the executor or administrator of the estate of the last
named beneficiary to die. In the absence of such beneficiary designation, any
amount remaining unpaid at Employee's death shall be commuted on the basis of
seven percent per annum compound interest and shall be paid in a single sum to
the executor or administrator of the Employee's estate.
 
          3.  Death Benefit: Should the Employee die while in the employment of
the Company and prior to age 65 the Company (beginning at a date to be
determined by the Company but within six months from the date of such death)
will commence to pay $25,000 annually for a continuous period of 15 years to
such beneficiary or beneficiaries as the Employee has directed by filing with
<PAGE>
 
the Company a notice in writing. Irrespective of the above, however, if the
Employee dies as result of suicide within two years of the execution of this
agreement, no death benefit shall be payable. In the event that the Executive
should die after becoming entitled to receive said monthly installments but
before any or all of said installments have been paid, the Company will pay or
will continue to pay said installments to such beneficiary or beneficiaries as
the Executive has directed by filing with the Company a notice in writing. In
the event of the death of the last named beneficiary before all the unpaid
payments have been made, the balance of any amount which remains unpaid at said
death shall be commuted on the basis of seven percent per annum compound
interest and shall be paid in a single sum to the executor or administrator of
the estate of the last named beneficiary to die. In the absence of any such
beneficiary designation any amount remaining unpaid at the Employee's death
shall be commuted on the basis of seven percent per annum compound interest
shall be paid in a single sum to the executor or administrator of the Employee's
estate.

          4.  Termination of Employment: If the Employee terminates his
Employment before qualifying for retirement benefits as defined in section 2
above, for reasons other than death or disability, he or his beneficiary, as
applicable, shall be entitled at age 65, or his prior death, to a percentage of
the retirement benefits stated in Section 2 of this Agreement as determined by
the following table:

                                 PERCENTAGE OF RETIREMENT
                                 BENEFITS STATED IN SECTION 2
 DATE OF TERMINATION OF          OF THIS AGREEMENT TO WHICH 
      EMPLOYMENT                 THE EMPLOYEE IS ENTITLED
      ----------                 ------------------------

      Prior to 09-30-95                    0%
      09-30-95                            100%

Irrespective of the above, however, should the employee's termination of
employment occur after any "Successor" to the company shall occur, the employee
shall be 100% vested in the retirement benefits stated in Section 2 of this
agreement. The term "Successor" shall include any person, firm, Company or other
business entity which at anytime, whether by merger, purchase or otherwise,
acquires all or substantially all of the Corporation's assets or business.

          5.  Disability:

          A.  If the Employee shall become disabled (as defined in Subsection B
              of this Section 5) prior to his retirement date while continuing
              to serve in the Employment of the Association, the Association
              shall commence to pay him the same benefit that would have been
              payable had the Employee's death occurred on the date of his
              disability. At the sole option of the Association, the balance of
              the monthly disability benefit installments to be paid to the
              Employee may be paid in a single lump sum payment based on the
              total balance of all payments due under this Section commuted on
              the basis of Seven Percent (7%) per annum compounded interest. The
              Association shall notify the retiring Employee of its decision to
              make a lump sum payment within thirty (30) days following its
              receipt of written notice of the Employee's retirement
<PAGE>
 
              from service. In the event that a Employee should die after
              becoming entitled to receive said monthly disability benefit
              installments but before any or all of said installments have been
              paid, the provisions of Section 3 above shall control the same as
              if the Employee had died while Employed. Any amounts already paid
              to the Employee under this Section shall reduce the death benefit
              to be paid under Section 3 above.

          B.  The Employee shall be considered disabled for the purpose of this
              Agreement if he is unable to perform the duties of his position
              for a continuous period of six (6) months or more. During such six
              (6) month period, that Employee must be under the regular care of
              a State licensed medical doctor (M.D.) or osteopathic physician
              (D.O.). For the purpose of this Section, or any other section
              relating to disability, if there is any dispute between the
              parties as to the Employee's physical or mental disability, the
              questions shall be settled by the opinion of a medical doctor or
              osteopathic physician licensed in the state in which this
              Agreement is signed and who is selected by the mutual consent of
              the parties to this Agreement or their representatives. If the
              parties cannot agree within ten (10) days after a written request
              for the designation of an examining physician is made by either
              party to the other, then the examining physician shall be
              designated by the then President of the Stanly County Medical
              Society. Certification of that physician as to the matter in
              dispute shall be final and binding upon the parties.

          6.  Forfeiture Provisions:

          A.  During the period the retirement benefit is payable to the
              Employee under Section 2 of this Agreement, the Employee shall not
              engage in business activities in Albemarle, North Carolina, which
              are in competition with the Company without first obtaining the
              written consent of the Company.

          B.  During the period the retirement payment is payable to the
              Employee under Section 1 of the Agreement, the Employee shall be
              available to render consulting services to the Association upon
              request by an officer of the Company, but such requests shall not
              be made more frequently than once each month, and shall not
              require a total time expenditure by the employee of more than one
              day per month. Any travel, lodging, food and other reasonable
              necessary expenses incurred by the Employee to perform this
              consulting service shall be paid by the association. The Employee
              shall not be considered to have breached this condition if he is
              unable to consult because of his mental or physical disability.

          C.  Payments of the retirement benefit under this Agreement may be
              terminated by the Company, if the Employee fails to comply with
              either of the conditions set forth in paragraph (A) and (B) of
              this Section 6. 
<PAGE>
 
          7.  General Provisions:

          A.  Except as otherwise provided by this Agreement, it is agreed that
              neither the Employee, nor his beneficiary shall have any right to
              commute, sell, assign, transfer or otherwise convey the right to
              receive any payments hereunder, which payments and the right
              thereto are expressly declared to be nonassignable and
              nontransferable.

          B.  The benefits payable under this Agreement shall be independent of,
              and in addition to, any other employment agreements that may exist
              from time to time between the parties hereto, concerning any other
              compensation payable by the Company to the Employee whether as
              salary, bonus, or otherwise. This Agreement shall not be deemed to
              constitute a contract of employment between the parties hereto,
              not shall any provision hereof restrict the right of the Company
              to discharge the Employee or restrict the right of the Employee to
              terminate his employment.

          C.  The rights of the Employee under this Agreement and of any
              beneficiary of the Employee shall be solely those of an unsecured
              creditor of the Company. Any asset acquired by the Company in
              connection with the liabilities assumed by it hereunder, shall not
              be deemed to be held under any trust for the benefit of the
              Employee or his beneficiaries or to be considered security for the
              performances of the obligations of the Company but shall be, and
              remain, a general, unpledged, unrestricted asset of the Company.

          D.  The Company hereby reserves the right to accelerate the payments
              specified in Section 2, 3, 4 and 5 above without the consent of
              the employee, his estate, beneficiaries, or any other person
              claiming through or under him.

          E.  The Company agrees that it will not merge or consolidate with any
              other Company or organization, or permit its business activities
              to be taken over by any other organization unless and until the
              succeeding or continuing Company or other organization shall
              expressly assume the rights and obligations of the Company herein
              set forth. The Company further agrees that it will not cease its
              business activities or terminate its existence other than as
              heretofore set forth in this Section, without having made adequate
              provision for the fulfilling of its obligations hereunder.

          F.  This Agreement shall be binding upon and inure to the benefit of
              the parties, their respective legal representatives, and any
              "Successor" of the Company, which shall be deemed substituted for
              the Company under the terms of this Agreement. As used in this
              Agreement the term "Successor" shall include any person firm,
              Corporation or other business entity which at anytime, whether by
              merger purchase or otherwise, acquire all or substantially all of
              the Corporation's assets business.

          G.  This Agreement may be revoked or amended in whole or in part by a
              writing signed by both of the parties hereto.
<PAGE>
 
          H.  In the event the financial condition of the Bank deteriorates to
              the point that under applicable regulatory authority the continued
              payment of the amounts due under this Agreement would be
              considered imprudent, the Bank reserves the right and authority to
              modify or amend the terms of the Agreement as may be required in
              the best interest of the Bank.

          I.  This Agreement shall be subject to and construed under the laws of
              the State of North Carolina.

          IN WITNESS THEREOF, the Said Company has caused this Agreement to be
signed in its Corporate name by its duly authorized officer, and impresses with
its Corporate seal, attested by its secretary, and the said Employee has
hereunto set his hand and seal, all on the date and year first above written.

                                 Home Savings Bank, S.S.B.


                                 By: /s/ Robert Ronald Swanner
                                    -----------------------------------
                                        (Executive Vice President)



                                    /s/ Carl Melvin Hill
                                    -----------------------------------     
                                        Carl Melvin Hill


ATTEST:

/s/ Sheila S. Barbee, Secretary
--------------------------------------

WITNESS:

/s/ Sheila S. Barbee
--------------------------------------
<PAGE>
 
                    ERISA CLAIMS PROCEDURE CLAIMS PROCEDURE.

          In accord with the Employee Retirement Income Security Act of 1974,
the following claims procedure is hereby adopted by the Company as the claims
procedure for this unfunded nonqualified deferred compensation plan; and, for
the purposes of implementing such claims procedure (but not for any other
purpose) Home Savings Bank, S.S.B. is hereby designated as the named fiduciary
and plan administrator of this plan:

          a.  Filing of a Claim for Benefits. A participant or beneficiary of
the plan shall make a claim for the benefits provided by delivering a written
request to the plan administrator.

          b.  Notification to Claimant of Decision. If a claim is wholly or
partially denied, notice of the decision, meeting the requirements of paragraph
c following shall be furnished to the claimant within a reasonable period of
time after receipt of the claim by the plan administrator.

          c.  Content of Notice. The plan administrator shall provide to every
claimant who is denied a claim for benefits written notice setting forth in a
manner calculated to be understood by the claimant, the following:

              (1) The specific reason or reasons for the denial;
              (2) Specific reference to pertinent plan provision on which the
                  denial is based.
              (3) A description of any additional material or information
                  necessary for the claimant to perfect the claim and an
                  explanation of why any such material or information is
                  necessary; and,
              (4) An explanation of the plan's claim review procedure set forth
                  in paragraphs d and e following.

          d.  Review Procedure. The purpose of the review procedure, set forth
in this paragraph and in paragraph e following, is to provide a procedure by
which a claimant under the plan may have a reasonable opportunity to appeal a
denial of a claim to the named fiduciary for a full and fair review. To
accomplish that purpose, the claimant or his duly authorized representative:

              (1) May request a review upon written
                  application to the plan administrator;
              (2) May review pertinent plan documents; and
              (3) May submit issues and comments in writing. A claimant (or his
                  duly authorized representative) shall request a review by
                  filing a written application for review with the plan
                  administrator at any time within sixty (60) days after receipt
                  by the claimant of written notice of the denial of his claim.

          e.  Decision on Review. The decision on review of a denied claim shall
be made in the following manner:

              (1) The decision on review shall be made by the plan
                  administrator, who may in his discretion hold a hearing on the
                  denied claim. The plan administrator shall
<PAGE>
 
                  make his decision promptly, and not later than sixty (60) days
                  after receipt of the request for review, unless special
                  circumstances (such as the need to hold a hearing require an
                  extension of time for processing, in which case a decision
                  shall be rendered as soon as possible, but not later than one
                  hundred twenty (120) days after receipt of the request for
                  review).

              (2) The decision on review shall be in writing and shall include
                  specific reasons for the decisions, written in a manner
                  calculated to be understood by the claimant, and specific
                  references to the pertinent plan provisions on which the
                  decision is based.
<PAGE>
 
                          BENEFICIARY DESIGNATION FORM

          As Beneficiary to receive any death benefits payable on my behalf from
Home Savings Bank, S.S.B., I designate the following:
 
NAME                DATE OF BIRTH         ADDRESS               RELATIONSHIP
PRIMARY:

 
Peggy B. Hill        12-10-27  1415 Melchor Rd. Albemarle, N C,       Wife
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONTINGENT, if any
Kenneth Melvin Hill   2-6-59   121 O Melchor Rd. Albemarle N.C.       Son
--------------------------------------------------------------------------------
Timothy Dale Hill     4-17-62  1207 Melchor Rd. Albemarle N. C.       Son
--------------------------------------------------------------------------------

Note: If more than one primary beneficiary is named, the benefit will be paid in
equal shares to those living. Should the contingent beneficiaries be eligible to
receive the benefits, such benefits will be paid in equal shares to such living
contingent beneficiaries.

Each amount payable after my death shall be paid exclusively to the Primary
Beneficiary if living at the time such payments become due. The right is
reserved to the Primary Beneficiary to change contingent beneficiaries after my
death. For the purposes of this agreement, the term "contingent beneficiaries"
shall include any beneficiary who is not receiving payments. A New contingent
beneficiary may be designated from time to time by filing at the Home Office of
the Company written notice thereof in such form as the Company may require. When
such notice is received at the Home Office, the change shall be effective on the
date the notice was signed, whether or not the Primary Beneficiary is living at
the time of the receipt, but without prejudice to the Company on account of any
payment made by it before receipt of the written notice at its Home Office.

Name of Spouse of not given above:______________________________________________


/s/ Sheila S. Barbee                      /s/ Carl M. Hill
--------------------------------          -------------------------------------
       Witness                                   Signature of Employee

 9/26/96
--------------------------------
        Date

Note: The original should be retained by the Association, one copy by the
Employee and one copy resumed to Smith/Broadhurst, Inc.