<PAGE>
 
                             EXECUTIVE INCOME PLAN
                             ---------------------


                            Description of Benefits

                                      For:


                                JOHN W. BULLARD



                                 DEATH BENEFIT
                                 -------------

$100,000 to the family if death occurs before retirement.  Death Benefit is
income tax-free and may be estate tax-free.



                               DISABILITY BENEFIT
                               ------------------

$10,000 per year of disability income payable upon permanent disability until
retirement age 65 is reached.



                               RETIREMENT BENEFIT
                               ------------------

$10,000 per year of retirement income payable at age 65 for 10 years to the
executive and/or the family.  Continues to beneficiary if death occurs.
<PAGE>
 
                                EXECUTIVE INCOME

                             DEFERRED COMPENSATION

                                   INCLUDING

                  PAYMENT OF DISABILITY INCOME POLICY PREMIUMS



     AGREEMENT, made and entered into this 1st day of January, 1992 by and
between Richmond Federal Savings Bank, an association duly organized and
existing under the laws of the State of North Carolina, and having its usual
place of business at 115 South Lawrence Street, Rockingham, North Carolina,
(hereinafter sometimes called the "Association"), and John W. Bullard currently
residing at Laurinburg, North Carolina, (hereinafter called "Executive").


     WITNESSED THAT:


     WHEREAS, the Executive is presently employed by the Association in the
position of Vice-President; Mortgage Lending, in which capacity his services
have contributed to the successful operation of the Association and the
Association and its Directors believe it is in the best interest of the
Association to retain the services of the Executive; and

     WHEREAS, the Executive desires to enter into this agreement with the
Association under which, in consideration of services rendered and to be
rendered by him to the Association, it will agree to make certain payments to
him in the event of his retirement while in the employment of the Association
and will pay premiums on a disability income policy to be owned by the Executive
which will provide him with a monthly benefit in the event of his disability as
defined in the disability policy, all subject to the terms and conditions
hereof; and

     WHEREAS, the Directors of the Association have concluded and agreed that it
is in the best interest of the Association to enter into this agreement with the
Executive;

     NOW, THEREFORE, in the consideration of the premises, and the services
rendered and to be rendered to the Association by the Executive, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Association and the Executive hereby mutually covenant and agree as follows:
<PAGE>
 
                                   ARTICLE I
                    Retirement of Executive Following Age 65
                    ----------------------------------------

     1.01  The Association agrees that the Executive may retire from the active
and daily services of the Association on the day which is one day prior to the
first day of the month in which the Executive has his sixty-fifth (65th)
birthday.  It is understood and agreed that with the consent of the directors of
the Association, the Executive may remain in the active and full-time employment
of  the Association after his sixty-fifth (65th) birthday, and that the word
"retirement" as used in this agreement shall refer to the actual retirement of
the Executive, and that no benefit shall be paid the Executive under this
agreement until his actual retirement from regular full-time employment in this
Association, unless the Executive and the Association shall otherwise, mutually
agree in writing.

     1.02  The Association agrees that commencing on the first payment date (as
defined in Section 5.02) after the date of the Executive's retirement, and on
each payment date thereafter for the term of this agreement, it will make
monthly retirement payments in the amount provided in Article V hereof.  The
Association agrees to continue to make such monthly payments to the Executive
during his life for ten (10) years and until the Executive shall have received
one hundred, twenty, (120) monthly payments; subject, however, to the conditions
and limitations provided  for and set forth hereinbelow.


                                   ARTICLE II
                            Death During Retirement
                            -----------------------

     2.01  The Association agrees that if the Executive shall retire but shall
die before receiving any or all of the said monthly payments, as provided in
Section 1.02, it will continue to make such monthly retirement payments to the
designated beneficiary of the Executive who shall be living and entitled to
receive such payments on the then current monthly payment date.  If the
Executive retires, and dies after the expiration of said 120 month period,  no
further payments shall be due or payable by the Association under this
agreement.

     2.02  As long as this Agreement is in force, the Executive shall be
entitled to specify, in accordance with the procedures set forth in Section
12.01, the beneficiary or beneficiaries of any payments remaining to be paid
under this agreement at the time of his death.


                                  ARTICLE III
                  Payment of Disability Income Policy Premiums
                  --------------------------------------------

     3.01(a)  The Association has caused SMA Life Assurance Company's
("Insurer") Sickness and Accident Disability Income Policy #S633,855 ("Policy")
insuring the Executive to be in effect, the Association will pay the premiums
that may be required to keep the Policy in force.

     3.01(b)  A claim for benefits under the Policy shall be made directly with
the Insurer as provided in the Claims Procedure in Article VII of this
agreement. It shall be the Executive's
<PAGE>
 
responsibility to submit doctor's statements or any other supporting
documentation or information requested by the Insurer at any time as to such
Executive's disability.  Proof of continued disability must be furnished by the
Executive upon request by the Insurer.

     3.01(c)  The Executive agrees that he shall rely solely and exclusively on
said policy to provide the disability benefit provided under this Article III
without recourse against the Association. The parties agree that the Insurer's
decision regarding the Executive's entitlement or continued entitlement to
disability benefits under said policy shall be binding and conclusive as between
the parties to the Agreement.

     3.01(d)  It is the intention of the parties to this Agreement:

          (1)   That the benefits payable to the Executive under the provisions
of this Article III shall qualify as amounts received under an accident and
health plan meeting the requirements of Section 105 of the Internal Revenue Code
of 1954, as amended; and

          (2)   That the Payment of premiums for the disability policy by the
Association shall qualify as contribution by an employer to an accident and
health plan under Section 106 of the said Internal Revenue Code.

     3.01(e)  For purposes of determining the Executive's eligibility for
retirement benefits under Article I of the Agreement, the Executive shall be
deemed to be in the "active and daily service" of the Association for the entire
period that he is disabled within the meaning of the disability income policy
including any elimination period contained therein.


                                   ARTICLE IV
                           Termination of Employment
                           -------------------------


     4.01  If the Executive voluntarily terminates service with the Association,
or if he is discharged from employment with the Association prior to normal
retirement age and such discharge is not for cause, he shall have a vested
interest in the accrued retirement benefit as set forth in Sections 4.02 and
4.03.

     4.02  If the Executive is discharged for dishonesty, fraud, gross neglect
of duties, intentional damage to the property of the Association or the
intentional performance of any act that is materially adverse to the interest of
the Association or for other due cause as determined by the Directors of the
Association prior to his attaining age 65, he shall have no vested interest in
the retirement benefit set forth in Section 4.03 and 5.02(a).

     4.03  Vesting shall be based on a full year of service with the Association
from the date of participation.  There shall be no vesting until completion of
three (3) full years of service at which time the vesting percentage shall be
20.  Thereafter, and for each additional one full year of service,
<PAGE>
 
the vesting percentage shall increase by 20 except that at age 65 the vesting
percentage will be 100. The vesting percentage shall not be greater than 100.
There shall be no vesting for a partial year of service.  All vested percentage
shall be a percentage of the accrued retirement benefit and will be paid
starting at the executive's normal retirement date in 120 monthly installments.

     4.04  Monthly payments shall be made on the first business day of each
calendar month until the employee or his beneficiary has received one hundred,
twenty (120) monthly payments. However, at the discretion of the Board of
Directors, the Association may elect to pay the present value of any monthly
payments due under this agreement in a lump sum to the employee or to his
beneficiary.  The prime rate in effect at that time shall be used in determining
the present value of the payments.

     If monthly payments are elected by the Association under this section, the
Board of Directors in its discretion, may elect to commence the payments either
on the first day of the thirteenth month after termination, or at age 65 of the
employee.

     If the employer decides to defer payments to age 65 and the participant
should become deceased, the employer shall pay the beneficiary or estate the
present value.

     Any benefits the employee would have been entitled to receive had he lived
shall be payable to the employee's beneficiary.


                                   ARTICLE V
                           Amount of Monthly Payments
                           --------------------------

     5.01(a)  The amount of each monthly retirement payment to be made by the
Association from its own funds and by its own check to the Executive or
Executive's beneficiary,  as provided for in Section 1.02 shall be eight
hundred, thirty-three and thirty-three cents ($833.33).

     5.01(b)  If the monthly payments are payable by the company under Section
1.02, (concerning retirement), or Article II, (concerning death during
retirement), the amount of each monthly payment shall be determined as of the
employees actual retirement date in the following manner:

           1.   If monthly payments are payable under Section 1.02, the amount
                of each monthly payment shall be eight hundred, thirty-three and
                thirty-three cents ($833.33).

           2.   If monthly payments are payable to the employee's beneficiary
                under Section 2.01, the amount of each monthly payment shall be
                the same as that which would have been paid to the employee had
                he lived.

           3.   If monthly payments are payable by the Company under Section
                4.02 (concerning termination of employment without cause) the
                amount of each
<PAGE>
 
                monthly payment shall be based on a percentage of the Employee's
                accrued benefit determined as of the date of termination.

     5.02  Monthly retirement benefits shall commence on the first business day
following the date of the Executive's retirement, and thereafter shall be made
on the first business day of each succeeding calendar month.

     5.02(a)  For purposes of Article IV, the accrued benefit shall be the
result obtained under the following formula.  The annual benefit of $10,000
shall be multiplied by a fraction, the denominator of which shall be 65 minus
the Employee's age when he first became a participant in the plan and the
numerator of which shall be the number of full years of service with the
Association. The resulting figure shall then be multiplied by the vesting
percentage to arrive at the annual retirement benefit.  The employee's age shall
be his age at his last birthday immediately prior to his becoming a participant
in the plan.  There shall be no credit given for a partial year of service.
Payments shall be made on a monthly basis; the annual benefit shall be divided
by 12 for this purpose.  However, the Board of Directors in its discretion may
elect to pay the present value of these payments in a lump sum as provided in
Section 4.04.


                                   ARTICLE VI
            Employee Retirement Income Security Act of 1974 (ERISA)
            ------------------------------------------------------ 

     6.01  For the purpose of ERISA, the Association will be the "Named
Fiduciary" and "Plan Administrator" of the plan for which this agreement is
hereby designated the written plan instrument.

     6.02  The Association's Board of Directors may authorize a person or group
of persons to fulfill the responsibilities of the Association as Plan
Administrator.  The Named Fiduciary or the Plan Administrator may employ others
to render advice with regard to its responsibility under the Plan.  The Named
Fiduciary may also allocate fiduciary responsibilities to others and may
exercise any other powers necessary for the discharge of its duties to the
extent not in conflict with ERISA.


                                  ARTICLE VII
                                Claims Procedure
                                ----------------

     7.01  The following Claims Procedure shall control the determination of
benefit payments under this plan:

           (a)  Filing of a Claim for Benefits

                Any insured, beneficiary or other individual ("Claimant")
                entitled to benefits under the Plan or under a policy will file
                a claim request with the Plan Administrator with respect to
                retirement benefits under the plan and with the Insurer with
                respect to disability income policy. The Plan Administrator
                will, upon written request of a claimant, make available copies
                of any claim forms
<PAGE>
 
                or instructions provided by the Insurer or advise the Claimant
                where copies of such forms or instructions may be obtained.

           (b)  Denial of Claim

                A Claim for Benefits under the Plan will be denied if the
                Association determines that the claimant is not entitled to
                receive benefits under the Plan. Notice of a denial shall be
                furnished to the Claimant within a reasonable period of time
                after receipt of the Claim for Benefits by the Plan
                Administrator.

           (c)  Content of Notice

                The Plan Administrator shall provide within ninety (90) days 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 provisions on which
                      the denial is based;

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

                (4)   An explanation of the Plan's Claim Review Procedure as set
                      forth below.

                (d)   Review Procedure

                      The purpose of the Review Procedure is to provide a method
                      by which a Claimant 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 require a review upon written application to the
                            Named Fiduciary;

                      (2)   May review pertinent Plan documents; and

                      (3)   May submit issues and comments in writing.

                      A claimant (or their duly authorized representative) shall
                      request a review by filing a written application for
                      review with the Named Fiduciary at any time
<PAGE>
 
                      within sixty (60) days after receipt by the Claimant of
                      written notice of the denial of the claim.

                 (e)  Decision on Review

                      A decision on review of a denied claim shall be made in
                      the following manner:

                      (1)   The decision on review shall be made by the Named
                            Fiduciary, who may in his discretion hold a hearing
                            on the denied claim. Such decision shall be made
                            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 and 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 upon which the decision is based.


                                  ARTICLE VIII
                             Financing of Benefits
                             ---------------------

     8.01  All retirement benefits and policy premiums under the plan shall be
provided out of the general assets of the Association at the time such benefits
are to be made.  The parties agree that the Association is under no obligation
to set aside funds in advance of the time for payment, or to otherwise provide
security for its obligations under this Agreement.

     8.02  Retirement payments for the Plan shall be made out of the general
assets of the Association upon submission and approval of a Claim for Benefits
made pursuant to the Claims Procedure established as required by ERISA, and set
forth above.


                                   ARTICLE IX
                                 Governing Laws
                                 --------------

     9.01  This Agreement shall be governed by and  construed in accordance with
the laws of North Carolina, where it is made and to be performed.  It sets forth
the entire  agreement between the parties concerning the subject matter thereof,
and any amendment or discharge shall be made only in writing.  This Agreement
shall bind and benefit the parties and their legal representatives and
successors.
<PAGE>
 
                                   ARTICLE X
                          Not a Contract of Employment
                          ----------------------------

     10.01  This Agreement shall not be deemed to constitute a contract of
employment between the parties, nor shall any provision restrict the right of
the Association to discharge the Executive.


                                   ARTICLE XI
                            Amendment or Termination
                            ------------------------

     11.01  No beneficiary under this Agreement shall obtain any vested right to
have this agreement continued in force, and it may be amended or modified in
whole or in part by the Executive and the Association in writing at any time
without the consent of said beneficiary.


                                  ARTICLE XII
                               Further provisions
                               ------------------

     12.01  The term "beneficiary" as used herein shall mean any person or
trust, or combination thereof, last designated by the Executive  in writing and
filed with the Association by the Executive during his lifetime upon a
Nomination of Beneficiary form provided by the Association.  Any such
designation or designations of beneficiary shall be revocable at any time or
times without the consent of any beneficiary, whether now living or born
thereafter, by written designations of beneficiaries made by the Executive and
similarly filed by him with the Association during his lifetime.  In the absence
of or failure of designated beneficiaries, the executor(s) or administrator(s)
of the Executive shall be his beneficiary.

     12.02  It is agreed that neither the Executive nor any beneficiary
hereunder 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, and in
the event of any attempted assigned or transfer, this Agreement shall terminate
and the Association shall have no further liability hereunder.

     12.03  The Association agrees that it will not merge or consolidate with
another Association or organization, or permit its business activities to be
taken over by any other organization unless and until the succeeding or
continuing Association or other organization shall expressly assume the rights
and obligations or the Association herein set forth.

     12.04  This agreement shall be executed in duplicate, each copy of which
when so executed and delivered shall be an original, but both copies shall,
together, constitute one and the same instrument.
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have set their hands and seals this
22nd day of January, 1992.



                                        /s/ John W. Bullard
                                       -------------------------------
                                       John W. Bullard, Executive


                                       RICHMOND FEDERAL SAVINGS BANK


                                       By : /s/ R. Larry Campbell
                                           -------------------------------
                                           President



ATTEST:


 /s/ J. Martin Page
-------------------------------
Secretary



WITNESS:

 /s/ Karen M. Rickett
-------------------------------

 /s/ Angela U. Ammons
-------------------------------
<PAGE>
 
                                EXECUTIVE INCOME
                             SPLIT DOLLAR AGREEMENT


     AGREEMENT, made and entered into this 1st day of January, 1992 by and
between Richmond Federal Savings Bank, an Association duly organized and
existing under the laws of the State of North Carolina, and having its usual
place of business at 115 South Lawrence Street, Rockingham, North Carolina,
(hereinafter sometimes called "Association"). and John W. Bullard currently
residing at Laurinburg, North Carolina (hereinafter called "Executive").

     WITNESSETH THAT:

     WHEREAS, the Executive is presently employed by the Association in the
position of Vice-President; Mortgage Lending, in which capacity his services
have contributed to the successful operation of the Association, and the
Association and its Directors believe it is in the best interest of the
Association to retain the services of the Executive; and

     WHEREAS, the Association is desirous of assisting the Executive in paying
for a pre-retirement life insurance benefit; and

     WHEREAS, the Association has determined that this insurance can best be
provided under a "split dollar" arrangement and the Association has applied for
Insurance Policy No. L542,689 (the "policy") issued by SMA Life Assurance
Company (the "Insurer") in the face amount of $125,000 on the Executive's life;
and

     WHEREAS, the Association and the Executive agree to make said insurance
policy subject to this split dollar agreement.

     NOW, THEREFORE, consideration of the premises, and the services to be
rendered to the Association by the Executive, and for other good and valuable
consideration, receipt of which is hereby acknowledged,  the Association and the
Executive hereby mutually covenant and agree as follows:


                                   ARTICLE I
                   Policy Ownership and Dividend Application
                   -----------------------------------------

1.01 The Policy has been issued to the Association as the owner thereof.  The
Association will have and may exercise all ownership rights in the policy except
as provided hereafter:


      (a)   As long as this Agreement is in force, the Executive shall be
entitled to specify in writing to the Association, the beneficiary or
beneficiaries and the mode of payment thereto of an amount of death benefit
proceeds payable under the policy equal to $100,000. The Association agrees that
upon receipt of such written request, it will immediately take such action as is
necessary
<PAGE>
 
to evidence any such change in the Executive's desired beneficiary designation
which change shall become effective as provided in the policy;

      (b)   The Association will not, without the written consent of the
Executive, assign its rights in the policy other than for purposes of obtaining
a loan against the policy provided in paragraph (c) below;

      (c)   The Association will have the right (i) to borrow from the Insurer
and to secure that loan by the policy for any purpose including, but not limited
to, borrowing for the purpose of paying premiums without giving notice to the
employee, and (ii) to make partial withdrawals of the policy surrender value;
provided, however, that if the exercise of such rights would reduce the death
benefit payable to the Executive's beneficiary pursuant to Section 3.01(a), then
such rights shall be exercisable by the Association only with the written
consent of the Executive.

1.02  Except as provided in paragraph 1.01 above, the Association agrees with
the Executive that so long as this agreement is in force, it will not exercise
any rights under the policy which will compromise or reduce the death benefit
payable to the Executive's beneficiary.

1.03  Dividends payable under the policy, if any, will be applied as provided in
the application of the policy.

1.04  As between the Executive and the Association, this agreement shall take
precedence over any provisions of the policy (including any riders, amendments
and attachments thereto) in case of a conflict between the terms of the policy
and this agreement.


                                   ARTICLE II
                              Payment of Premiums
                              -------------------

2.01  As long as this agreement is in force, the Executive and the Association
agree to share in the payment of the premiums on said policy of insurance in
such amounts and in the manner set forth below:

      (a)   Unless paragraph (b) applies, the Executive's share of the annual
premium shall be that portion of the annual premium due on the policy that is
equal to the amount of the economic benefit that would be taxable to the
Executive but for the payment by the Executive of such amount based upon an
amount of insurance protection equal to the Executive's death benefit specified
in Article 1.  The Association shall pay the balance of each such annual
premium.

      (b)   If the policy is a flexible premium contract such that premiums may
be varied as to the amount and timing of premium payments, then the Executive
shall be required to make an annual premium contribution in an amount determined
in accordance with paragraph (a) above, beginning on the policy issue date and
continuing thereafter on the anniversary of such date. The Association shall pay
premiums at such times and in such amounts as it may determine in its sole
discretion.
<PAGE>
 
2.02  The amount of economic benefit that would be taxable to the Executive
shall be computed in accordance with the Insurer's current published rate per
$1000 of insurance protection for Individual 1-year term life insurance
available to all standard risks as provided in Revenue Ruling 66-110, 1966-1
C.B.12.

2.03  In order to facilitate the payment of premiums on the policy, it is agreed
that the Association in the first policy year, and in each year thereafter and
as long as this agreement is in force, shall forward the total amount of
premium then currently due and payable on the policy directly to the Insurer
and, immediately thereafter, it shall indicate in the appropriate Association
records that the annual sum payable by the Executive as provided for above in
Section 2.01, shall be added to his annual salary or compensation.


                                  ARTICLE III
                             Beneficiary Provisions
                             ----------------------

3.01  If the Executive dies while this agreement is in force, the policy death
benefit shall be divided as follows:

      (a)   An amount equal to $100,000 shall be paid to the beneficiary or
beneficiaries then specified by the Executive as provided in Section 1.01 (a),
above but subject to the provisions of Section 1.01 (c).

      (b)   The balance of said policy death benefit, if any shall be paid to
the Association.

3.02  It is agreed by the parties hereto that no beneficiary shall have any
right to reimbursement or contribution from the estate of the Executive or from
the Association with respect to the amount collected by this Association under
said policy.

3.03  If the Executive shall die while this agreement is in force, the
Association agrees to take such action as may be necessary to obtain payment
from the insurer of the amounts payable under said policy to the beneficiaries
designated therein.


                                   ARTICLE IV
                            Termination of Agreement
                            ------------------------

4.01  This agreement shall automatically terminate upon the happening of any of
the following events:

      (a)   The Executive's termination of employment voluntarily, or his
discharge for any reason prior to death. The Executive's total disability shall
not be considered a termination of employment. Total disability shall have the
same meaning as under the waiver of premium rider acquired or available with the
policy.
<PAGE>
 
      (b)   Express termination of this agreement by either the Association or
the Executive at any time upon 30 days written notice to the other.

      (c)   On the day prior to the date of the Executive's retirement, which
retirement date shall be the day prior to the first day of the month in which
the insured has his sixty-fifth (65th) birthday. It is understood and agreed
that with the consent of the Directors of the Association, the Executive may
remain in the active and full-time employment after the above stated retirement
date, and the retirement date as used in this agreement shall refer to the
actual retirement date of the Executive. The retirement date shall be specified
on a Policy Contract Change Form provided by the Insurer.

      (d)   Death of the Executive, subject, however to the provisions of
Article III.

      (e)   Lapse or termination of the Policy.

4.02  Upon termination of this agreement under Section 4.01 (a), (b), or (c),
the Association shall become sole owner of the policy unless otherwise agreed by
the parties.


                                   ARTICLE V
                                 Reorganization
                                 --------------

5.01  The Association agrees that it will not merge or consolidate with another
corporation or organization, or permit its business activities to be taken over
by any other organization unless and until the succeeding or continuing
corporation or other organization shall expressly assume the rights and
obligations of the Association herein set forth.


                                   ARTICLE VI
                                 Governing Laws
                                 --------------

6.01  This agreement shall be governed by and construed in accordance with the
laws of North Carolina, where it is made and to be performed.  It sets forth the
entire agreement between the parties concerning the subject matter thereof, and
any amendment shall be made only in writing.  This Agreement shall bind and
benefit the parties and their legal representatives and successors.


                                  ARTICLE VII
                          Not a Contract of Employment
                          ----------------------------

7.01  This Agreement shall not be deemed to constitute a contract of employment
between the parties, nor shall any provisions restrict the right of the
Association to discharge the Executive.
<PAGE>
 
                                 ARTICLE VIII
           Employment Retirement Income Security Act of 1984 (ERISA)
           -------------------------------------------------------- 

8.01  For the purposes of ERISA, the Association shall be the "Named Fiduciary"
and "Plan Administrator" of the split dollar life insurance plan for which this
agreement is hereby designated the written plan instrument.

8.02  The Association's Board of Directors may authorize a person or group of
persons to fulfill the responsibilities of the Association as Plan
Administrator.  The named Fiduciary or the Plan Administrator may employ others
to render advice with regard to its responsibility under the Plan. The Named
Fiduciary may also allocate fiduciary responsibilities to others and may
exercise any other powers necessary for the discharge of its duties to the
extent not in conflict with ERISA.


                                   ARTICLE IX
                                Claims Procedure
                                ----------------

9.01  The following Claims Procedures shall control the determination of benefit
payments under this Plan:

      (a)   Any insured, beneficiary or other individual ("claimant") entitled
to benefits under the plan or under the policy shall file a claim request with
the Plan Administrator with respect to benefits under the Plan and with the
Insurer with respect to benefits under the policy.  The Plan Administrator
shall, upon written request of a claimant, make available copies of any claim
forms or instructions provided by the Insurer or advise the Claimant where
copies of such forms or instructions may be obtained.

      (b)   Denial of Claim

            A Claim for Benefits under the Plan shall be denied if the
Association determines that the claimant is not entitled to receive benefits
under the Plan. Notice of the denial shall be furnished to the Claimant within a
reasonable period of time after receipt of the Claim for Benefits by the Plan
Administrator. In the case of benefits which are provided under the policy, the
initial decision on the claims shall be made by the Insurer.

      (c)   Content of Notice

            The Plan Administrator shall provide within ninety (90) days 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 provisions on which the
denial is based;
<PAGE>
 
            3.   A description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary; and

            4.   An explanation of the Plan's Claim Review Procedure as set
forth below.

      (d)   Review Procedure

      The purpose of the Review Procedure is to provide a method by which a
Claimant 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 require a review upon written application to the Named
Fiduciary;

            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 Named Fiduciary at any time
within sixty (60) days after receipt by the Claimant of written notice of the
denial of his claim.

      (e)   Decision of Review

      A decision on review of a denied claim shall be made in the following
manner:

            1.   The decision on review shall be made by the Named Fiduciary,
                 who may in his discretion hold a hearing on the denied claim.
                 Such decision shall be made 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 and 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 decision, written in a manner
                 calculated to be understood by the Claimant, and specific
                 references to the pertinent Plan provisions upon which the
                 decision is based.
<PAGE>
 
                                   ARTICLE X
                                   Amendment
                                   ---------

10.01  No beneficiary under the policy shall obtain any vested right to have
this agreement continued in force and it may be amended or modified in whole or
in part by the Executive and the Association in writing at any time without the
consent of said beneficiary.

       IN WITNESS WHEREOF, the parties hereto have set their hands and seals
this 22nd day of January, 1992.


                                  /s/ John W. Bullard
                                 ------------------------------------------
                                 John W. Bullard, Executive


                                 RICHMOND FEDERAL SAVINGS BANK


                                 By:  /s/ R. Larry Campbell
                                     --------------------------------------
                                     President



ATTEST:


 /s/ J. Martin Page
---------------------------------
Secretary



WITNESS:

 /s/ Karen M. Rickett
---------------------------------

 /s/ Angela U. Ammons
---------------------------------