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                                  EXHIBIT 10.2

                          MAIN STREET BANKSHARES, INC.

                        1998 INCENTIVE STOCK OPTION PLAN

         Main Street BankShares, Inc., a North Carolina corporation (the
"Corporation"), does herein set forth the terms of the its 1998 Incentive Stock
Option Plan (the "Plan") which was adopted by the Corporation's Board of
Directors (the "Board") subject to approval by the Corporation's shareholders,
as provided in Paragraph 21 hereof, and by the appropriate regulatory
authorities, as provided by law.

         1. PURPOSE OF THE PLAN. The purpose of this Plan is to provide for the
grant of Incentive Stock Options (an "Option" or "Options") qualifying for the
tax treatment afforded by Section 422 of the Internal Revenue Code of 1986, as
amended, to eligible officers and employees of the Corporation ("Eligible
Employees") who wish to invest in the Corporation's common stock, par value
$5.00 per share (the "Common Stock"). The Corporation believes that
participation in the ownership of the Corporation by Eligible Employees will be
to the mutual benefit of the Corporation and Eligible Employees. The existence
of this Plan will make it possible for the Corporation and any of its
subsidiaries to attract capable individuals to employment in key employee
positions.

         2. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by
the Compensation Committee of the Board (the "Committee"). The Committee shall
consist of at least three (3) members of the Board all of whom shall qualify as
disinterested persons as provided in Section 16(b), and the rules and
regulations promulgated thereunder, of the Securities Exchange Act of 1934, as
amended. The members of the Committee shall be appointed by the Board and shall
serve at the pleasure of the Board, which may remove members from, add members
to, or fill vacancies in the Committee.

                  (b) The Committee shall decide to whom Options shall be
granted under this Plan, the number of shares as to which Options shall be
granted, the Option Price (as hereinafter defined) for such shares and such
additional terms and conditions for such Options as the Committee deems
appropriate. The Committee shall interpret the Plan and prescribe, amend and
rescind any rules and regulations regarding the Plan. All interpretations and
constructions of the Plan by the Committee shall be final and conclusive.

                  (c) A majority of the Committee shall constitute a quorum and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved unanimously in writing by the Committee, shall be
considered as valid actions by the Committee.

                  (d) The Board and the Committee may designate any officers or
employees of the Corporation to assist in the administration of this Plan. The
Board and the Committee may authorize such individuals to execute documents on
its behalf and may delegate to them such other ministerial and limited
discretionary duties as the Board may deem fit.

         3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN. The number of shares of
Common Stock that shall be available initially for Options under this Plan is
One hundred thirty five thousand nine hundred and ninety seven (135,997),
subject to adjustment as provided in Paragraph 14 hereof. Common Stock subject
to Options which expire or terminate prior to exercise of the Options shall
lapse and such shares shall again be available for future grants of Options
under this Plan.

         4. ELIGIBILITY. Options under this Plan may be granted to any Eligible
Employee as determined by the Committee. An individual may hold more than one
Option under this or other plans adopted by the Corporation.

         5. GRANT OF OPTIONS. (a) The Committee may authorize the grant of
Options to certain current officers and employees of the Corporation. Such
Options shall be granted based upon the past service and the continued
participation of those individuals in the management of the Corporation.

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                  (b) Upon the forfeiture of an Option for whatever reason prior
to the expiration of the Option Period (as defined in Paragraph 9 hereof) the
shares of Common Stock covered by a forfeited Option shall be available for the
granting of additional Options to Eligible Employees during the remaining term
of this Plan upon such terms and conditions as may be determined by the
Committee. The number of additional Options to be granted to specific Eligible
Employees during the term of this Plan shall be determined by the Committee as
provided in Subparagraph 2(b) hereof.

         6. OPTION PRICE. (a) The price per share of each Option granted under
this Plan (the "Option Price") shall be determined by the Committee as of the
effective date of grant of such Option. In no event shall the Option Price be
less than 100% of the fair market value of the Common Stock on the date of
grant. If an Optionee (as hereinafter defined) at the time that an Option is
granted owns stock possessing more than ten (10%) of the total combined voting
power of all classes of stock of the Corporation, then the Option Price per
share of each Option granted under this Plan shall be no less than 110% of the
fair market value of the Common Stock on the date of grant and such Option shall
not be exercisable more than five (5) years from the date of grant. An Option
shall be considered as granted on the date that the Committee acts to grant such
Option or such later date as the Committee shall specify in an Option Agreement
(as hereafter defined).

                  (b)  The fair market value of a share of Common Stock shall be
determined as follows:

                  (i) If on the date as of which such determination is being
made, the Common Stock is admitted to trading on a securities exchange or
exchanges for which actual sale prices are regularly reported, or actual sale
prices are otherwise regularly published, the fair market value of a share of
Common Stock shall be deemed to be equal to the mean of the closing sale price
as reported on each of the five (5) trading days immediately preceding the date
as of which such determination is made; provided, however, that, if a closing
sale price is not reported for each of the five (5) trading days immediately
preceding the date as of which such determination is made, then the fair market
value shall be equal to the mean of the closing sale prices on those trading
days for which such price is available.

                  (ii) If on the date as of which such determination is made, no
such closing sale prices are reported, but quotations for the Common Stock are
regularly listed on the National Association of Securities Dealers Nasdaq system
or another comparable system, the fair market value of a share of Common Stock
shall be deemed to be equal to the mean of the average of the closing bid and
asked prices for such Common Stock quoted on such system on each of the five (5)
trading days preceding the date as of which such determination is made. If a
closing bid and asked price is not available for each of the five (5) trading
days, then the fair market value shall be equal to the mean of the average of
the closing bid and asked prices on those trading days during the five-day
period for which such prices are available.

                  (iii) If no such quotations are available, the fair market
value of a share of Common Stock shall be deemed to be the average of the
closing bid and asked prices furnished by a professional securities dealer
making a market in the Common Stock, as selected by the Committee, for the
trading date first preceding the date as of which such determination is made.

         If the Committee determines that the price as determined above does not
represent the fair market value of a share of Common Stock, the Committee may
then consider such other factors as it deems appropriate and then fix the fair
market value for the purposes of this Plan.

         7. PAYMENT OF OPTION PRICE. Payment for shares subject to an Option
must be made in cash.

         8. TERMS AND CONDITIONS OF GRANT OF OPTIONS. Each Option granted
pursuant to this Plan shall be evidenced by a written Incentive Stock Option
Agreement (the "Option Agreement") with each Eligible Employee (the "Optionee")
to whom an Option is granted. The Option Agreement shall be in such form as the
Committee shall adopt and may contain such terms and conditions as the Committee
may determine.

         9. OPTION PERIOD. Each Option Agreement shall set forth a period during
which such Option may be exercised (the "Option Period"); provided, however,
that the Option Period shall not exceed ten (10) years after the date

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of grant of such Option as specified in the Option Agreement.

         10. LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS. (a)
Notwithstanding any other provision of this Plan, no person shall be granted an
Option under this Plan which would cause such person's "annual vesting amount"
to exceed $100,000. With respect to any calendar year, a person's "annual
vesting amount" is the aggregate fair market value of stock subject to incentive
stock options which are first exercisable during such calendar year. The
aggregate fair market value of stock with respect to which incentive stock
options are first exercisable during any calendar year shall be determined by
taking into account all incentive stock options granted to such person under all
incentive stock options plans of the Corporation or of any of its parent or
subsidiary corporations.

                  (b) Notwithstanding any other provision of this Plan, no
person shall be granted an Option or Options under this Plan which would result
in the total number of shares granted to such Optionee to exceed 40% of the
shares allocated to this Plan, or, if greater, the maximum permitted by the
Commissioner of Banks of North Carolina (hereinafter the "Commissioner of
Banks").

         11. EXERCISE OF INCENTIVE STOCK OPTIONS. (a) An Option shall be
exercised by written notice to the Committee signed by an Optionee or by such
other person as may be entitled to exercise such Option. The written notice
shall state the number of shares with respect to which an Option is being
exercised and shall either be accompanied by the payment of the aggregate Option
Price for such shares or shall fix a date (not more than ten (10) business days
from the date of such notice) by which the payment of the aggregate Option Price
will be made. An Optionee shall not exercise an Option to purchase less than 100
shares, unless the Committee otherwise approves, or unless the partial exercise
is for the remaining share available under such Option.

                  (b) A certificate or certificates for the shares of Common
Stock purchased by the exercise of an Option shall be issued in the regular
course of business subsequent to the exercise of such Option and the payment
therefore. During the Option Period, no person entitled to exercise any Option
granted under this Plan shall have any of the rights or privileges of a
shareholder with respect to any shares of Common Stock issuable upon exercise of
such Option, until certificates representing such shares shall have been issued
and delivered and the individual's name entered as a shareholder of record on
the books of the Corporation for such shares.

         12. EFFECT OF TERMINATION OF EMPLOYMENT, RETIREMENT, DISABILITY OR
DEATH.

                  (a) In the event of the termination of employment of an
Optionee either by reason of (i) being Discharged for Cause or (ii) voluntary
separation on the part of such Optionee for a reason other than retirement or
disability, any Option or Options granted to the Optionee under this Plan, to
the extent not previously exercised or surrendered by the Optionee or expired,
shall immediately terminate. "Discharged for Cause" shall include termination at
the sole discretion of the Board because of such Optionee's personal dishonesty,
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), a
final cease and desist order, or material breach of any provision of any
employment agreement that such Optionee may have with the Corporation.

                  (b) In the event of the termination of employment of an
Optionee as a result of such Optionee's retirement, such Optionee shall have the
right to exercise any Option or Options granted to the Optionee under this Plan,
to the extent that they have not previously been exercised or surrendered by the
Optionee or expired, for a period of three (3) months after the date of
retirement, but in no event may any Option be exercised later than the end of
the Option Period provided in such Option Agreement in accordance with Paragraph
9 hereof. Notwithstanding any other provision contained herein, or in any Option
Agreement, upon retirement, any Option then held by an Optionee shall be
exercisable immediately in full. For purposes of this Plan, the term
"retirement" shall mean (i) termination of an Optionee's employment under
conditions which would constitute retirement under any tax qualified retirement
plan maintained by the Corporation or (ii) attaining age 65.

                  (c) In the event of the termination of employment of an
Optionee by reason of such Optionee's disability, such Optionee shall have the
right to exercise any Options held by the Optionee, to the extent that they

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previously have not been exercised or surrendered by the Optionee or expired,
notwithstanding any limitations placed on the exercise of such Options by this
Plan or an Option Agreement, immediately in full and at any time within twelve
(12) months after the last date on which such Optionee provides services as an
officer or an employee of the Corporation before being disabled, but in no event
may any Option be exercised later than the end of the Option Period provided in
the Option Agreement in accordance with Paragraph 9 hereof. For purposes of this
Plan, the term "disability" shall be defined in the same manner as such term is
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

                  (d) In the event that an Optionee should die while employed by
the Corporation, or within three (3) months after retirement, any Option or
Options granted to the Optionee under this Plan and not previously exercised or
surrendered by the Optionee or expired shall vest and shall be exercisable,
according to their respective terms, by the personal representative of such
Optionee or by any person or persons who acquired such Options by bequest or
inheritance from such Optionee, notwithstanding any limitations placed on the
exercise of such Options by this Plan or any Option Agreement, immediately in
full and at any time within twelve (12) months after the date of death of such
Optionee, but in no event may any Option be exercised later than the end of the
Option Period provided in such Option Agreement in accordance with Paragraph 9
hereof. Any references herein to an Optionee shall be deemed to include any
person entitled to exercise an Option under the terms of this Plan after the
death of such Optionee.

         13. EFFECT OF PLAN ON EMPLOYMENT STATUS.. The fact that the Committee
has granted an Option to an Optionee under this Plan shall not confer on such
Optionee any right to employment with the Corporation, or to a position as an
officer or an employee of the Corporation, nor shall it limit the right of the
Corporation to remove such Optionee from any position held by the Optionee or to
terminate the Optionee's employment at any time.


         14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; DISSOLUTION OR
LIQUIDATION.

                  (a) In the event of a change in the number of shares of the
Common Stock outstanding by reason of a stock dividend, stock split,
recapitalization, reorganization, merger, exchange of shares, or other similar
capital adjustment, prior to the termination of an Optionee's rights under this
Plan, equitable proportionate adjustments shall be made by the Committee in (i)
the number and kind of shares which remain available under this Plan and (ii)
the number, kind, and the Option Price of shares subject to unexercised Options
under this Plan. The adjustments to be made shall be determined by the Committee
and shall be consistent with such change or changes in the Corporation's total
number of outstanding shares; provided, however, that no adjustment shall change
the aggregate Option Price for the exercise of Options granted under this Plan.

                  (b) The grant of Options under this Plan shall not affect in
any way the right or power of the Corporation or its shareholders to make or
authorize any adjustment, recapitalization, reorganization, or other change in
the Corporation's capital structure or its business, or any merger of the
Corporation, or to issue bonds, debentures, preferred or other preference stock
ahead of or affecting the Common Stock or the rights thereof, or the dissolution
or liquidation of the Corporation, or any sale or transfer of all or any part of
the Corporation's assets or business.

                  (c) Upon the effective date of the dissolution or liquidation
of the Corporation, or of a reorganization or merger of the Corporation with one
or more other corporations in which the Corporation is not the surviving
corporation, or the transfer of all or substantially all of the assets or shares
of the Corporation to another person or entity, or a tender offer approved by
the Board (any such transaction being hereinafter referred to as an
"Acceleration Event"), this Plan and any Options granted hereunder shall
terminate unless provision is made in writing in connection with such
Acceleration Event for the continuance of this Plan and for the assumption of
Options granted hereunder, or the substitution for such Options of new options
for the shares of the successor corporation, or a parent or a subsidiary
thereof, with such appropriate adjustments, as may be determined or approved by
the Committee or the successor to the Corporation, to the number, kind and
Option Price of shares subject to such substituted options in which event this
Plan and Options granted hereunder, or the new options substituted therefore,
shall continue in the manner and under the terms so provided, but any vesting
periods or other restrictions on exercise that would otherwise apply shall no
longer be applicable. Upon the occurrence of any Acceleration Event in which
provision is not made for the continuance of this Plan and for the assumption of
Options granted hereunder, or the substitution for such Options of new options
for the

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shares of a successor corporation or a parent or a subsidiary thereof, each
Optionee to whom an Option has been granted under this Plan (or such person's
personal representative, the executor or administrator of such person's estate,
or any person who acquired the right to exercise such Option from such person by
bequest of inheritance) shall be entitled, prior the effective date of any
Acceleration Event, (i) to exercise, in whole or in part, the Optionee's rights
under any Option granted to the Optionee without any regard to any restrictions
on exercise that would otherwise apply, or (ii) to surrender any such Option to
the Corporation in exchange for receipt of cash equivalent to the amount by
which the fair market value of the shares of Common Stock such person would have
received had such person exercised the Option in full immediately prior to
consummation of such Acceleration Event exceeds the applicable aggregate Option
Price. To the extent that a person, pursuant to this Subparagraph 14(c), has a
right to exercise or surrender any Option on account of a Acceleration Event
which such person otherwise would not have had at that time, such right shall be
contingent upon the consummation of the Acceleration Event.

         15. NON-TRANSFERABILITY. Any Option granted under this Plan shall not
be assignable or transferable except, in the case of the death of an Optionee,
by will or by the laws of descent and distribution. In the event of the death of
an Optionee, the personal representative, the executor or the administrator of
such Optionee's estate, or the person or persons who acquired by bequest or
inheritance the rights to exercise such Option, may exercise or surrender any
Option or portion thereof to the extent not previously exercised or surrendered
by an Optionee or expired, in accordance with the terms of the Option Agreement,
prior to the expiration of the exercise period as specified in Subparagraph
12(d) hereof.

         16. TAX WITHHOLDING. The employer of a person granted an Option under
this Plan shall have the right to deduct or otherwise effect a withholding or
payment of any amount required by federal or state laws to be withheld or paid
with respect to the grant, exercise or surrender for cash of any Option or the
sale of stock acquired upon the exercise of an Option in order for the employer
to obtain a tax deduction otherwise available as a consequence of such grant,
exercise, surrender for cash, or sale, as the case may be.

         17. LISTING AND REGISTRATION OF OPTION SHARES. Any Option granted under
the Plan shall be subject to the requirement that if at any time the Committee
shall determine, in its sole discretion, that the listing, registration, or
qualification of the shares of Common Stock covered thereby upon any securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of such Option or the issuance or purchase of
shares thereunder, such Option may not be exercised in whole or in part unless
and until such listing, registration, or qualification consent, or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee.

         18. EXCULPATION AND INDEMNIFICATION. In connection with this Plan, no
member of the Committee shall be personally liable for any act or omission to
act in such person's capacity as a member of the Committee, nor for any mistake
in judgment made in good faith, unless arising out of, or resulting from, such
person's own bad faith, gross negligence, willful misconduct, or criminal acts.
To the extent permitted by applicable law and regulation, the Corporation shall
indemnify and hold harmless the members of the Committee, and each other officer
of employee of the Corporation to whom any duty or power relating to the
administration or interpretation of this Plan may be assigned or delegated, from
and against any and all liabilities (including any amount paid in settlement of
a claim with approval of the Board) and any costs or expense (including
reasonable counsel fees) incurred by such person arising out of, or as a result
of, such person's duties, responsibilities, and obligations under this Plan,
other than such liabilities, costs, and expenses as may arise out of, or result
from, the bad faith, gross negligence, willful misconduct, or criminal acts of
such persons.

         19. AMENDMENT AND MODIFICATION OF THE PLAN. The Board may at any time
and from time to time amend or modify this Plan in any respect; provided,
however, that no amendment or modification shall be made that increases the
total number of shares covered by this Plan or effects any change in the
categories of persons who may receive Options under this Plan or materially
increases the benefits accruing to Optionees under this Plan unless such change
is approved by the holders of two thirds of the shares of Common Stock. Any
amendment or modification of this Plan shall not materially reduce the benefits
under any Option theretofore granted to an Optionee under this Plan without

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the consent of such Optionee or the permitted transferee thereof.

         20. TERMINATION AND EXPIRATION OF THE PLAN. This Plan may be abandoned,
suspended, or terminated at any time by the Board; provided, however, that
abandonment, suspension, or termination of this Plan shall not affect any
Options then outstanding under this Plan. No Option shall be granted pursuant to
this Plan after ten (10) years from the effective date of this Plan as provided
in Paragraph 21 hereof.

         21. EFFECTIVE DATE; SHAREHOLDER APPROVAL. This Plan has been adopted by
the Board. This Plan shall not be effective until approved by the Commissioner
of Banks and by the holders of two thirds of the shares of Common Stock.

         22. CAPTIONS AND HEADINGS; GENDER AND NUMBER. Captions and paragraph
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein, are not a part hereof, and shall not serve as a
basis for interpretation or in construction of this Plan. As used herein, the
masculine gender shall include the feminine and neuter, the singular number the
plural, and vice versa, whenever such meanings are appropriate.

         23. EXPENSES OF ADMINISTRATION OF PLAN. All costs and expenses incurred
in the operation and administration of this Plan shall be borne by the
Corporation.

         24. GOVERNING LAW. Without regard to the principles of conflicts of
laws, the laws of the State of North Carolina shall govern and control the
validity, interpretation, performance, and enforcement of this Plan.

         25. INSPECTION OF PLAN. A copy of this Plan, and any amendments thereto
or modification thereof, shall be maintained by the Secretary of the Corporation
and shall be shown to any proper person making inquiry about it.





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