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                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT

Insurer:                           Jefferson Pilot Life Insurance Company
                                   Mass Mutual Life Insurance Company

Policy Number:
                                   ---------

Bank:                              The East Carolina Bank

Insured:
                                   ------------------

Relationship of Insured to Bank:   Director

Trust:                             Rabbi Trust for the Executive Supplemental
                                   Retirement Plan Agreement, Director
                                   Supplemental Retirement Plan Agreement, and
                                   the Endorsement Method Split Dollar Plan
                                   Agreement

The respective rights and duties of the Bank and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:

I.   DEFINITIONS

     Refer to the policy contract for the definition of any terms in this
     Agreement that are not defined herein. If the definition of a term in the
     policy is inconsistent with the definition of a term in this Agreement,
     then the definition of the term as set forth in this Agreement shall
     supersede and replace the definition of the terms as set forth in the
     policy.

II.  POLICY TITLE AND OWNERSHIP

     Title and ownership shall reside in the Trustee for the Rabbi Trust for the
     Executive Supplemental Retirement Plan Agreement, Director Supplemental
     Retirement Plan Agreement, and the Endorsement Method Split Dollar Plan
     Agreement for its use and for the use of the Insured all in accordance with
     this Agreement. The Trustee at the direction of the Bank may, to the extent
     of the

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     Bank's interest, exercise the right to borrow or withdraw on the policy
     cash values. Where the Trustee at the direction of the Bank and the Insured
     (or assignee, with the consent of the Insured) mutually agree to exercise
     the right to increase the coverage under the subject policy, then, in such
     event, the rights, duties and benefits of the parties to such increased
     coverage shall continue to be subject to the terms of this Agreement.

III. BENEFICIARY DESIGNATION RIGHTS

     The Insured (or assignee) shall have the right and power to designate a
     beneficiary or beneficiaries to receive the Insured's share of the proceeds
     of the policy payable upon the death of the Insured, and to elect and
     change a payment option for such beneficiary, subject to any right or
     interest of the Bank or the Trust may have in such proceeds, as provided in
     this Agreement. Any such designation by the Insured shall be made in
     writing in the form attached hereto as Exhibit A and incorporated herein by
     reference. Any such designation or change therein shall be effective three
     (3) business days from delivery of said written notice by Insured to the
     Bank.

IV.  PREMIUM PAYMENT METHOD

     Subject to Subparagraph IX (B), the Bank or the Trustee at the direction of
     the Bank shall pay an amount equal to the planned premiums and any other
     premium payments that might become necessary to keep the policy in force.

V.   TAXABLE BENEFIT

     Annually the Insured will receive a taxable benefit equal to the value of
     the insurance protection as required by the Internal Revenue Service. The
     Bank or the Trustee at the direction of the Bank will report to the Insured
     the amount of imputed income each year on Form W-2 or its equivalent.

VI.  DIVISION OF DEATH PROCEEDS

     Subject to Paragraphs VII and IX herein, the division of the death proceeds
     of the policy is as follows:

     A.   At the time of the insured's death, should the Insured be serving on
          the Board of the Bank, retired from the Bank, or have had his or her
          service terminated from the Bank due to disability*, the Insured's
          beneficiary(ies), designated in accordance with Paragraph III or the
          Insured's estate if no beneficiary has been so designated, shall be
          entitled to an amount equal to eighty percent (80%) of the net-at-risk
          insurance portion of the proceeds. The net-at-risk insurance portion
          is the total proceeds less the cash value of the policy.

                                       2

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     B.   Should the Insured not be serving on the Board of the Bank at the time
          of his or her death for reasons other than disability* or retirement,
          the Insured's beneficiary(ies), designated in accordance with
          Paragraph III or the Insured's estate if no beneficiary has been so
          designated, shall be entitled to the percentage as set forth
          hereinbelow of the proceeds described in Subparagraph VI (A) above.

          Subsequent to one (1)       20% for each full year of service
          full year on the Board of   from the date of first service
          Directors of the Bank       to a maximum of 100%

          *Subject to the Bank's obligations and Insured's rights under Title I
          of the Americans with Disabilities Act and the Family and Medical
          Leave Act, if applicable, and any other applicable federal or state
          laws, for purposes of this Agreement, disability shall be defined as
          the Insured not being able to perform the duties of the Insured's own
          job and shall be as further defined in the Bank's long term disability
          policy in effect at the time of said disability. If no such policy
          exists at the time of the disability, then disability shall be defined
          as a physical or mental impairment of Insured which renders Insured
          incapable of performing Insured's normal and regular essential
          employment duties and which shall be medically determined to be of
          permanent duration as the same is construed for purposes of disability
          benefits under the federal Social Security laws and regulations.

     C.   The Bank shall be entitled to the remainder of such proceeds of the
          policy, including but not limited to the cash surrender value as
          provided in Paragraph VII herein.

     D.   The Bank and the Insured (or assignees) shall share in any interest
          due on the death proceeds on a pro rata basis as the proceeds due each
          respectively bears to the total proceeds, excluding any such interest.

VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY

     The Bank or the Trust, in the discretion of the Bank, shall at all times be
     entitled to an amount equal to the policy's cash value, as that term is
     defined in the policy contract, less any policy loans and unpaid interest
     or cash withdrawals previously incurred by the Bank or the Trustee at the
     direction of the Bank and any applicable surrender charges. Such cash value
     shall be determined as of the date of surrender or death as the case may
     be.

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VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

     In the event the policy involves an endowment or annuity element, the
     Bank's or the Trust's right and interest in any endowment proceeds or
     annuity benefits, on expiration of the deferment period, shall be
     determined under the provisions of this Agreement by regarding such
     endowment proceeds or the commuted value of such annuity benefits as the
     policy's cash value. Such endowment proceeds or annuity benefits shall be
     considered to be death proceeds for the purposes of division under this
     Agreement.

IX.  TERMINATION OF AGREEMENT

     This Agreement shall terminate upon the occurrence of any one of the
     following:

     A.   The Insured is terminated by the Bank with cause. The term "with
          cause" includes, but is not limited to, personal dishonesty,
          incompetence, willful material misconduct, breach of fiduciary duty,
          failure to perform the obligations of the Insured as stated herein,
          willful violation of any law, rule, or regulation (other than minor
          traffic infractions), or, any material breach of any provision of this
          agreement.

     B.   Surrender, lapse, or other termination of the Policy by the Bank.

     Upon such termination, the Insured (or assignee) shall have a fifteen (15)
     day option, which period shall begin to run on the date of termination of
     the policy, to receive from the Bank or the Trustee at the direction of the
     Bank an absolute assignment of the policy in consideration of a cash
     payment to the Bank or the Trustee at the direction of the Bank, whereupon
     this Agreement shall terminate. Such cash payment referred to hereinabove
     shall be the greater of:

     1)   The Bank's or the Trust's share of the cash value of the policy on the
          date of such assignment, as defined in this Agreement; or

     2)   The amount of the premiums which have been paid by the Bank or the
          Trustee at the direction of the Bank prior to the date of such
          assignment.

     If, within said fifteen (15) day period, the Insured fails to exercise said
     option, fails to procure the entire aforestated cash payment, or dies, then
     the option shall terminate and the Insured (or assignee) agrees that all of
     the Insured's right, interest and claim in the policy shall terminate as of
     the date of the termination of this Agreement.

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     The Insured expressly agrees that this Agreement shall constitute
     sufficient written notice to the Insured of the Insured's option to receive
     an absolute assignment of the policy as set forth herein.

     Except as provided above, this Agreement shall terminate upon distribution
     of the death benefit proceeds in accordance with Paragraph VI above.

X.   INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

     The Insured may not, without the written consent of the Bank or the Trustee
     at the direction of the Bank, assign to any individual, trust or other
     organization, any right, title or interest in the subject policy nor any
     rights, options, privileges or duties created under this Agreement.

XI.  AGREEMENT BINDING UPON THE PARTIES

     This Agreement shall bind the Insured and the Bank or the Trustee, their
     heirs, successors, personal representatives and assigns.

XII. ERISA PROVISIONS

     The following provisions are part of this Agreement and are intended to
     meet the requirements of the Employee Retirement Income Security Act of
     1974 ("ERISA"):

     A.   Named Fiduciary and Plan Administrator:
          --------------------------------------

          The "Named Fiduciary and Plan Administrator" of this Endorsement
          Method Split Dollar Agreement shall be The East Carolina Bank until
          its resignation or removal by the Board of Directors. As Named
          Fiduciary and Plan Administrator, the Bank or the Trustee at the
          direction of the Bank shall be responsible for the management,
          control, and administration of this Split Dollar Plan as established
          herein. The Named Fiduciary may delegate to others certain aspects of
          the management and operation responsibilities of the Plan, including
          the employment of advisors and the delegation of any ministerial
          duties to qualified individuals.

     B.   Funding Policy:
          --------------

          Subject to Subparagraph IX (B), the funding policy for this Split
          Dollar Plan shall be to maintain the subject policy in force by
          paying, when due, all premiums required.

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     C.   Basis of Payment of Benefits:
          ----------------------------

          Direct payment by the Insurer is the basis of payment of benefits
          under this Agreement, with those benefits in turn being based on the
          payment of premiums as provided in this Agreement.

     D.   Claim Procedures:
          ----------------

          Claim forms or claim information as to the subject policy can be
          obtained by contacting Benmark, Inc. (800-544-6079). When the Named
          Fiduciary has a claim which may be covered under the provisions
          described in the insurance policy, it should contact the office named
          above, and they will either complete a claim form and forward it to an
          authorized representative of the Insurer or advise the named Fiduciary
          what further requirements are necessary. The Insurer will evaluate and
          make a decision as to payment. If the claim is payable, a benefit
          check will be issued in accordance with the terms of this Agreement.

          In the event that a claim is not eligible under the policy, the
          Insurer will notify the Named Fiduciary of the denial pursuant to the
          requirements under the terms of the policy. If the Named Fiduciary is
          dissatisfied with the denial of the claim and wishes to contest such
          claim denial, they should contact the office named above and they will
          assist in making an inquiry to the Insurer. All objections to the
          Insurer's actions should be in writing and submitted to the office
          named above for transmittal to the Insurer.

     E.   Notices:
          -------

          All notices required or permitted to be given pursuant to this
          Agreement shall be in writing, unless otherwise specified, and shall
          be delivered personally, deposited in the United States mail,
          registered or certified and postage prepaid with return receipt
          requested, or deposited with a reputable overnight courier which
          provides a day and time stamped receipt, addressed to the Insured,
          Bank or Trustee, as applicable, at the address set forth herein or to
          such other address as hereafter may be furnished to the other parties
          in writing pursuant to this paragraph. All notices so given shall be
          deemed effective and received upon the earlier of (i) actual receipt,
          (ii) receipt and refusal; or (iii) five (5) days from (1) the postmark
          date, if deposited with the United States Postal Service, or (2) the
          date of deposit, if deposited with an overnight courier, unless
          otherwise provided herein.

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               Bank:      The East Carolina Bank
                          Hwy. 264
                          Engelhard, North Carolina 27824

               Trustee:   Thomas A. Nussbaum
                          Eastern Bank & Trust Co.
                          2 Adams Place, AP06
                          Quincy, MA 02169-7456

               Insured:
                          ----------------------------

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

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

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

XIII. GENDER

     Whenever in this Agreement words are used in the masculine or neuter
     gender, they shall be read and construed as in the masculine, feminine or
     neuter gender, whenever they should so apply.

XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

     The Insurer shall not be deemed a party to this Agreement, but will respect
     the rights of the parties as herein developed upon receiving an executed
     copy of this Agreement. Payment or other performance in accordance with the
     policy provisions shall fully discharge the Insurer from any and all
     liability.

XV.  CHANGE OF CONTROL

     Change of Control shall mean the direct or indirect acquisition by another
     person, firm or corporation, by merger, share exchange, consolidation,
     purchase or otherwise, all or substantially all of the assets or stock of
     the Bank or its parent company. Upon a Change of Control, if the Insured's
     service is subsequently terminated, except for cause, then the Insured
     shall be one hundred percent (100%) vested in the benefits promised in this
     Agreement and, therefore, upon the death of the Insured, the Insured's
     beneficiary(ies) (designated in accordance with Paragraph III) shall
     receive the death benefit provided herein as if the Insured had died while
     employed by the Bank (see Subparagraph VI [A]).

XVI. AMENDMENT OR REVOCATION

     It is agreed by and between the parties hereto that, during the lifetime of
     the Insured, this Agreement may be amended or revoked at any time or times,
     in whole or in part, by the mutual written consent of the Insured and the
     Bank.

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XVII. EFFECTIVE DATE

     The Effective Date of this Agreement shall be November 5, 2001.

XVIII. SEVERABILITY AND INTERPRETATION

     If a provision of this Agreement is held to be invalid or unenforceable,
     the remaining provisions shall nonetheless be enforceable according to
     their terms. Further, in the event that any provision is held to be over
     broad as written, such provision shall be deemed amended to narrow its
     application to the extent necessary to make the provision enforceable
     according to law and enforced as amended.

XIX. APPLICABLE LAW

     The validity and interpretation of this Agreement shall be governed by the
     laws of the State of North Carolina.

Executed at Engelhard, North Carolina this 22nd day of January, 2002.

                                            THE EAST CAROLINA BANK
                                            Engelhard, North Carolina


                                            By:
-----------------------------------            ---------------------------------
Witness                                                                    Title


-----------------------------------         ------------------------------------
Witness                                     Director

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                          BENEFICIARY DESIGNATION FORM
                      FOR LIFE INSURANCE ENDORSEMENT METHOD
                           SPLIT DOLLAR PLAN AGREEMENT

PRIMARY DESIGNATION:

         Name                       Address                    Relationship
         ----                       -------                    ------------


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SECONDARY (CONTINGENT) DESIGNATION:


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All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.


-------------------------                                              ---------
Director                                                               Date

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