EXHIBIT 10.4(b)


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EMPLOYEE STOCK OWNERSHIP PLAN     |               AMENDMENT NO. 1            |
             OF                   |                                          |
     WAKE FOREST FEDERAL          | DOCUMENT:               TPW/WA01/3126266 |
 SAVINGS & LOAN ASSOCIATION       | DRAFT DATE:                     04/02/02 |
                                  |                                          |
 Adopted on December 6, 1995      | BOARD OF DIRECTORS                       |
  Effective on April 3, 1996      | APPROVAL DATE:           APRIL 15, 2002  |
                                  |                          --------------  |
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                                    AMENDMENT
                                    ---------

1.      Section 1.3 - Section 1.3 shall be amended, effective as of January 1,
        2001, to replace subsection 1.3(d) and add a subsection 1.3(e) as
        follows:

                (d)  a cafeteria plan described in section 125 of the Code; or

                (e)  a qualified transportation fringe benefits plan described
                     in section 132(f) of the Code.

2.      Section 1.27 - Section 1.27 shall be amended, effective as of January 1,
        1997, to read in its entirety as follows:

        SECTION 1.27 HIGHLY COMPENSATED EMPLOYEE means, for any Plan Year, an
        Employee who:

                (a) at any time during such Plan Year or the immediately
                preceding Plan Year was a Five Percent Owner; or

                (b) during the immediately preceding Plan Year received Total
                Compensation for such Plan Year in excess of $80,000 (or such
                higher amount as may be permitted under section 414(q) of the
                Code) and, if the Employer so elects, is a member of the group
                consisting of the top 20% of Employees when ranked on the basis
                of Total Compensation paid to Employees during such Plan Year.

                The determination of who is a Highly Compensated Employee will
                be made in accordance with section 414(q) of the Code and the
                regulations thereunder. The Employer has not elected to use the
                top 20% election mentioned in subparagraph (ii)(B) of this
                section. For purposes of Plan Years beginning prior to January
                1, 1997, any person who is a Family Member of a Five Percent
                Owner or one of the ten Highly Compensated Employees with the
                highest Total Compensation for a Plan Year shall not be treated
                as a separate person for such Plan Year, and any Total
                Compensation or Allocation Compensation paid to such person for
                such Plan Year, as well as his share of allocations of
                contributions or Shares under this Plan, shall be attributed to
                the Five Percent Owner or Highly Compensated Employee.


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3.      Section 1.50 - Section 1.50 shall be amended, effective as of January 1,
        1998 by replacing the last three sentences thereof with the following:

        Each Employee's Total Compensation shall include any amounts by which
        the Employee's compensation paid by the Employer or any Affiliated
        Employer has been reduced pursuant to a compensation reduction agreement
        under the terms of any qualified cash or deferred arrangement described
        in section 401(k) of the Code, any salary reduction simplified employee
        pension plan described in section 408(k) of the Code, any tax deferred
        annuity plan described in section 403(b) of the Code, any cafeteria plan
        described in section 125 of the Code and any salary reduction
        contributions under any qualified transportation fringe benefit plan
        described in section 132(f) of the Code. In no event, however, shall an
        Employee's Total Compensation for any calendar year include any
        compensation in excess of the amount permitted under section 401(a)(17)
        of the Code. In addition, for Limitation Years after 1997, each
        Employee's Total Compensation shall include any amounts by which the
        Employee's compensation paid by the Employer or any Affiliated Employer
        has been reduced pursuant to a compensation reduction agreement under
        the terms of any plan described in section 457 of the Code.

4.      Section 3.4 - A new Section 3.4 shall be added effective as of January
        1, 1996 to read in its entirety as follows:

                SECTION 3.4  ADJUSTMENTS TO PERIOD OF ELIGIBILITY SERVICE.
                               --------------------------------------------

                The Period of Service of an Employee who returns to the
        employment of the Employer or any Affiliated Employer following a
        separation from service shall include his Period of Service prior to
        such separation from service, and such an Employee shall be readmitted
        to participation immediately upon his return to service if he is then
        an Eligible Employee.

5.      Section 3.5 - A new Section 3.5 shall be added effective as of January
        1, 1996 to read in its entirety as follows:

                SECTION 3.5  FAMILY AND MEDICAL LEAVE.
                             ------------------------

                In the event of absence for a period recognized a family and
        medical leave under the federal Family and Medical Leave Act of 1992,
        the period of such absence shall be recognized for purposes of vesting
        and eligibility to participate to the full extent required by law.

6.      Section 3.6 - A new Section 3.6 shall be added effective as of January
        1, 1996 to read in its entirety as follows:

                SECTION 3.6  SERVICE WITH UNIFORMED FORCES.
                             -----------------------------

                Periods of service with the uniformed forces of the United
         States shall be treated in the manner required pursuant to section
         414(u) of the Code.


<PAGE>


7.      Section 7.4 - A new Section 7.4 shall be added effective as of January
        1, 1996 to read in its entirety as follows:

                SECTION 7.4  RETROACTIVE CONTRIBUTIONS FOR RETURNING VETERANS.
                             ------------------------------------------------

                Notwithstanding anything in the Plan to the contrary, to the
        extent required by section 414(u) of the Code, in the event of the
        reemployment, on or after December 12, 1994, by the Employer of a
        Participant with statutory reemployment rights following a period of
        service in the uniformed services of the United States, such person
        shall be eligible for retroactive benefit contributions or allocations
        under the Plan computed as though he or she had continued working for
        an Employer during the period of uniformed service.

8.      Section 8.1 - Section 8.1 shall be amended, effective as of January 1,
        1997, to delete the last sentence thereof in its entirety.

9.      Section 8.2 - Section 8.2 shall be amended, effective as of January 1,
        2000, by deleting the last sentence of subsection 8.2(c)(i) and by
        amending subsection 8.2(b) to read in its entirety as follows:

                "(b) In the case of a Participant who may be entitled to
        benefits under any qualified defined benefit plan (whether or not
        terminated) now in effect or ever maintained by the Employer, such
        Participant's Annual Additions under this Plan shall, in addition to
        the limitations provided under section 8.2(a), be further limited so
        that for any Limitation Year beginning prior to December 31, 1999, the
        sum of the Participant's Defined Contribution Plan Fraction plus his
        Defined Benefit Plan Fraction does not exceed 1.0 for any Limitation
        Year; provided, that this limitation shall only apply if and to the
        extent that the benefits under the Employer's Retirement Plan or any
        other defined contribution plan are not limited so that such sum is not
        exceeded. In the case of a Participant who is entitled to contributions
        under any other qualified defined contribution plan maintained by the
        Employer, such Participant's Annual Additions under such other plan or
        plans shall be limited to the extent necessary so that total Annual
        Additions under all such plans and this Plan do not exceed the
        limitations under this Article VIII before any limitation is applied
        under this Plan. In the event that this Section 8.2 conflicts with such
        other qualified defined benefit or qualified defined contribution plan
        or plans, the Plan Administrator shall determine under which plan the
        Annual Additions or benefits shall be limited."

10.     Section 8.2 - Subparagraph 8.2(c)(i)(A) shall be amended, effective as
        of January 1, 2001, to read in its entirety as follows:

                (A)   all contributions by the Employer (including contributions
        made under a salary reduction agreement pursuant to sections 401(k),
        408(k) or 403(b) of the Code) under any qualified defined contribution
        plan or simplified employee pension (other than this Plan) maintained
        by the Employer, as well as the Participant's allocable share, if any,
        of any forfeitures under such plans as well as all amounts allocated to
        an individual medical benefit account, as defined in section 415(l)(2)
        of the Code, which is part of a pension or annuity plan maintained by
        the Employer; plus


<PAGE>

11.     Section 8.2 - Subparagraph 8.2(c)(vi) shall be amended, effective as of
        January 1, 1996, to read in its entirety as follows:

                (vi)  Maximum Permissible Amount: The maximum Annual Addition
        that may be contributed or allocated to a Participant's Account under
        the Plan for any Limitation Year shall not exceed the lesser of: (a)
        $30,000, as adjusted under Section 415(d) of the Code or (b) 25% of the
        Participant's Total Compensation for the Limitation Year. The
        compensation limitation referred to in (b) shall not apply to any
        contribution for medical benefits (within the meaning of section 401(h)
        of the Code) which is otherwise treated as an Annual Addition under
        Section 415(l)(1) of the Code.

12.     Section 9.3 - Section 9.3 shall be amended, effective as of January 1,
        2001, to read in its entirety as follows:

                      Upon the termination of employment of a Participant or
                Former Participant for any reason other than death or
                Disability, that portion of the balance credited to his Account
                which is not vested at the date of such termination shall be
                forfeited upon the earliest of (a) full distribution of the
                vested portion of the Account or (b) the fifth anniversary
                following the date of re-employment. The proceeds of such
                forfeited amounts, reduced by any amounts required to be
                credited because of re-employment pursuant to section 9.4, shall
                be treated as Forfeitures and shall be disposed of as provided
                in section 9.5. If no portion of the balance credited to an
                Account of a Participant or Former Participant is vested as of
                the date of his termination of employment, a distribution of $0,
                representing full distribution of the Account, shall be deemed
                to have been made to the Participant or Former Participant on
                such date.

13.     Section 9.4 - Section 9.4 shall be amended, effective as of January 1,
        2001, to read in its entirety as follows:

                      If an Employee forfeited any amount of the balance
                credited to his Account upon his termination of employment, and
                is re-employed by any Affiliated Employer prior to the
                occurrence of a Period of Severance of five years, then:

                      (i) an amount equal to the Fair Market Value of the Shares
                forfeited, determined as of the date of forfeiture; and

                      (ii) the amount credited to his General Investment Account
                that was forfeited, determined as of the date of forfeiture;

                shall be credited back to his Account; provided, however, that
                the Employee repays the amount distributed to him from his
                Account as a result of such termination no later than the
                fifth anniversary of his re-employment or the


<PAGE>

                end of the fifth Plan Year to begin after such distribution,
                whichever is earlier. Such amounts to be re-credited shall be
                obtained from the proceeds of the forfeited amounts redeemed
                pursuant to section 9.3 during the Plan Year in which the
                repayment is made, unless such proceeds are insufficient, in
                which case the Employee's Employer shall make an additional
                contribution in the amount of such deficiency. For purposes of
                this section 9.4, a Participant or Former Participant who
                received a distribution of $0, shall be deemed to have made
                repayment on the date of re-employment with an Employer.

14.     Section 13.3 - Section 13.3(a)(i) shall be amended, effective as of
        January 1, 2001, by adding a new sentence at the end thereof to read as
        follows:

                If an Account of a Participant or Former Participant does not
                contain any vested amounts as of the date of his termination
                of employment with all Affiliated Employers, a distribution of
                $0, representing full distribution of the Account, shall be
                deemed to have been made to the Participant or Former
                Participant on such date.

15.     Section 13.4 - Effective as of January 1, 1998, the Plan shall be
        amended by adding the following to the end of Section 13.4:

                (c) If an Employee terminates service, and the value of the
        Employee's vested Account balance is not greater than $5,000, the
        Employee will receive a distribution of the value of the entire vested
        portion of such Account balance and the nonvested portion will be
        treated as a Forfeiture. If an Employee would have received a
        distribution under the preceding sentence but for the fact that the
        Employee's vested Account balance exceeded $5,000 when the Employee
        terminated Service and if at a later time such Account balance is
        reduced such that it is not greater than $5,000, the Employee will
        receive a distribution of such Account balance and the nonvested
        portion will be treated as a Forfeiture. For purposes, of this section,
        if the value of an Employee's vested Account balance is zero, the
        Employee shall be deemed to have received a distribution of such vested
        Account balance.

16.     Section 13.5 - Section 13.5(a) of the Plan shall be amended, effective
        as of January 1, 1997, to read in its entirety as follows:

        (a)     Required minimum distributions of a Participant's or Former
        Participant's Account shall commence no later than:

        (i)     if the Participant or Former Participant is not a Five Percent
                Owner at any time during the Plan Year ending in the calendar
                year in which he attains age 70 1/2, the later of (A) the
                calendar year in which he attains or attained age 70 1/2 or (B)
                the calendar year in which he terminates employment with the
                Employer; or

<PAGE>

         (ii)   if the Participant or Former Participant is or was a Five
                Percent Owner at any time during the Plan Year ending in the
                calendar year in which he attains age 70 1/2, the later of (A)
                the calendar year in which he attains age 70 1/2 or (B) the
                calendar year in which he first becomes a Five Percent Owner.

17.     Section 16.6 - Section 16.6 shall be amended, effective as of January 1,
        1998, to read in its entirety as follows:

                SECTION 16.6  REQUIRED AGGREGATION GROUP.
                              --------------------------

                For purposes of this Article XVI, a Required Aggregation Group
        shall consist of (a) this Plan; (b) any other qualified plans currently
        maintained (or previously maintained and terminated within the five year
        period ending on the Determination Date) by the Employer and any
        Affiliated Employers that cover Key Employees; and (c) any other
        qualified plans currently maintained (or previously maintained and
        terminated within the five year period ending on the Determination Date)
        by the Employer and any Affiliated Employers that cover Key Employees
        that are required to be aggregated for purposes of satisfying the
        requirements of sections 401(a)(4) or 410(b) of the Code.

18.     Section 17.8 - Section 17.8 shall be amended, effective as of January 1,
        1997, by replacing the phrase "of a type historically performed by
        employees in the business field" with the phrase "performed under the
        primary direction or control."

19.     Article XVIII - Effective as of June 1, 2002, a new Article XVIII shall
        be added to read in its entirety as follows:


                                     ARTICLE XVIII
                                     -------------

                             TERMINATION ON CHANGE IN CONTROL
                             --------------------------------

               SECTION 18.1  REPAYMENT OF LOAN.
                             -----------------

               Notwithstanding any other provision of the Plan, upon the
        occurrence of a Change in Control, the Committee shall direct the
        Trustee to sell a sufficient number of Shares to repay any outstanding
        Share Acquisition Loan, all remaining Shares which had been unallocated
        (or the proceeds from the sale thereof, if applicable) shall be
        allocated among the accounts of all individuals with undistributed
        Account balances on the effective date of such Change in Control. Such
        allocation of Shares or proceeds shall be in proportion to the balance
        credited to their Accounts immediately prior to such allocation.


<PAGE>

               SECTION 18.2  PLAN TERMINATION AFTER CHANGE IN CONTROL
                             ----------------------------------------

               After repayment of the loan and allocation of shares or proceeds
        as provided in section 18.1, the Plan shall be terminated and all
        amounts shall be distributed as soon as practicable.

               SECTION 18.3  AMENDMENT OF ARTICLE XVIII
                             --------------------------

               Article XVIII of the Plan may not be amended after a Change in
        Control of the Employer unless required by the Internal Revenue Service
        as a condition to the continued treatment of the Plan as a tax-qualified
        plan under section 401(a) of the Code.

               IN WITNESS WHEREOF, this Amendment has been executed by the
        undersigned officer of Wake Forest Federal Savings & Loan Association
        pursuant to authority given by resolution of the Board of Directors.



                                    WAKE FOREST FEDERAL
                                    SAVINGS & LOAN ASSOCIATION



                                    By /s/ Robert C. White
                                       -----------------------------------------
                                    Name:  Robert C. White
                                    Title: President and Chief Executive Officer