<PAGE>

                                 EXHIBIT 3(ii)


                             AMENDED AND RESTATED

                                    BYLAWS

                                      OF

                            CAROLINA FINCORP, INC.



                                   ARTICLE I

                                    OFFICES
                                    -------

     Section 1.  Principal Office.  The principal office of the corporation
                 ----------------
shall be located at such place as the Board of Directors may fix from time to
time.

     Section 2.  Registered Office.  The registered office of the corporation
                 -----------------
required by law to be maintained in the State of North Carolina may be, but need
not be, identical with the principal office.

     Section 3.  Other Offices.  The corporation may have offices at such other
                 -------------
places, either within or without the State of North Carolina, as the Board of
Directors may designate or as the affairs of the corporation may require from
time to time.


                                  ARTICLE II

                           MEETINGS OF SHAREHOLDERS
                           ------------------------

     Section 1.  Place of Meetings.  All meetings of shareholders shall be held
                 -----------------
at the principal office of the corporation, or at such other place, either
within or without the State of North Carolina, as shall in each case be (i)
fixed by the Chief Executive Officer, the President, the Chairman of the Board,
or the Board of Directors and designated in the notice of the meeting or (ii)
agreed upon by a majority of the shareholders entitled to vote at the meeting.

     Section 2.  Annual Meetings.  The annual meeting of shareholders shall be
                 ---------------
held during the first five (5) calendar months following the end of the
corporation's fiscal year, on any day (except Saturday, Sunday, or a legal
holiday) during that period as shall be determined by the Board of Directors,
for the purpose of electing directors of the corporation and for the transaction
of such other business as may be properly brought before the meeting.
<PAGE>

     Section 3.  Substitute Annual Meeting.  If the annual meeting shall not be
                 -------------------------
held within the time designated by these Bylaws, a substitute annual meeting may
be called in accordance with the provisions of Section 4 of this Article II. A
meeting so called shall be designated and treated for all purposes as the annual
meeting.

     Section 4.  Special Meetings.  Special meetings of the shareholders may be
                 ----------------
called at any time by the Chief Executive Officer, the President, the Chairman
of the Board of Directors or the Board of Directors.

     Section 5.  Notice of Meetings.  Written notice stating the date, time, and
                 ------------------
place of the meeting shall be given not less than ten (10) nor more than sixty
(60) days before the date of any shareholders' meeting, either by personal
delivery, or by mail by or at the direction of the Chief Executive Officer, the
President, the Chairman of the Board of Directors or the Board of Directors, to
each shareholder entitled to vote at such meeting, provided that such notice
must be given to all shareholders with respect to any meeting at which a merger
or share exchange is to be considered and in such other instances as required by
law. If mailed, such notice shall be deemed to be effective when deposited in
the United States mail, correctly addressed to the shareholder at the
shareholder's address as it appears on the current record of shareholders of the
corporation, with postage thereon prepaid.

     In the case of a special meeting, the notice of meeting shall include a
description of the purpose or purposes for which the meeting is called; but, in
the case of an annual or substitute annual meeting, the notice of meeting need
not include a description of the purpose or purposes for which the meeting is
called unless such a description is required by the provisions of Chapter 55 of
the North Carolina General Statutes.

     When a meeting is adjourned to a different date, time or place, notice need
not be given of the new date, time or place if the new date, time or place is
announced at the meeting before adjournment and if a new record date is not
fixed for the adjourned meeting. If a new record date is fixed for the adjourned
meeting (which must be done if the new date is more than 120 days after the date
of the original meeting), notice of the adjourned meeting must be given as
provided in this Section 5 to persons who are shareholders as of the new record
date.

     Section 6.  Waiver of Notice.  Any shareholder may waive notice of any
                 ----------------
meeting before or after the meeting. The waiver must be in writing, signed by
the shareholder, and delivered to the corporation for inclusion in the minutes
or filing with the corporate records. A shareholder's attendance, in person or
by proxy, at a meeting (i) waives objection to lack of notice or defective
notice of the meeting, unless the shareholder or his proxy at the beginning of
the meeting objects to holding the meeting or transacting business at the
meeting, and (ii) waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder or his proxy objects to considering the matter
before it is voted upon.

                                       2
<PAGE>

     Section 7.  Shareholders' List.  Before each meeting of shareholders, the
                 ------------------
Secretary of the corporation shall prepare an alphabetical list of the
shareholders entitled to notice of such meeting. The list shall be arranged by
voting group (and within each voting group by class or series of shares) and
show the address of and number of shares held by each shareholder. The list
shall be kept on file at the principal office of the corporation, or at a place
identified in the meeting notice in the city where the meeting will be held, for
the period beginning two (2) business days after notice of the meeting is given
and continuing through the meeting, and shall be available for inspection by any
shareholder, his agent or attorney, at any time during regular business hours.
The list shall also be available at the meeting and shall be subject to
inspection by any shareholder, his agent or attorney, at any time during the
meeting or any adjournment thereof.

     Section 8.  Fixing Record Date.  The Board of Directors may fix a date
                 ------------------
selected by them as the record date for one (1) or more voting groups in order
to determine the shareholders entitled to notice of a shareholders' meeting, to
vote, or to take any other action. Such record date may not be more than seventy
(70) days before the meeting or action requiring a determination of
shareholders. A determination of shareholders entitled to notice of or to vote
at a shareholders' meeting is effective for any adjournment of the meeting
unless the Board of Directors fixes a new record date for the adjourned meeting,
which it must do if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting.

     If no record date is fixed by the Board of Directors for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
the close of business on the day before the first notice of the meeting is
delivered to shareholders shall be the record date for such determination of
shareholders.

     Section 9.  Voting Groups.  All shares of one (1) or more classes or series
                 -------------
that, under the Articles of Incorporation or the North Carolina Business
Corporation Act, are entitled to vote and be counted together collectively on a
matter at a meeting of shareholders constitute a voting group. All shares
entitled by the Articles of Incorporation or the North Carolina Business
Corporation Act to vote generally on a matter are for that purpose a single
voting group. Classes or series of shares shall not be entitled to vote
separately by voting group unless expressly authorized by the Articles of
Incorporation or specifically required by law.

     Section 10. Quorum.  Shares entitled to vote as a separate voting group
                 ------
may take action on a matter at the meeting only if a quorum of those shares
exists. A majority of the votes entitled to be cast on the matter by the voting
group constitutes a quorum of that voting group for action on that matter.

     Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.

                                       3
<PAGE>

     In the absence of a quorum at the opening of any meeting of shareholders,
such meeting may be adjourned from time to time by the vote of a majority of the
votes cast on the motion to adjourn; and, subject to the provisions of Section 5
of this Article II, at any adjourned meeting any business may be transacted that
might have been transacted at the original meeting if a quorum exists with
respect to the matter proposed.

     Section 11. Proxies.  Shares may be voted either in person or by one (1)
                 -------
or more proxies authorized by a written appointment of proxy signed by the
shareholder or by his duly authorized attorney in fact. An appointment of proxy
is valid for eleven months from the date of its execution, unless a different
period is expressly provided in the appointment form.

     Section 12. Voting of Shares.  Subject to the provisions of the Articles
                 ----------------
of Incorporation, each outstanding share shall be entitled to one (1) vote on
each matter voted on at a meeting of shareholders.

     Except in the election of directors as governed by the provisions of
Section 4 of Article III, if a quorum exists, action on a matter by a voting
group is approved if the votes cast within the voting group favoring the action
exceed the votes cast opposing the action, unless a greater vote is required by
law or the Articles of Incorporation or these Bylaws.

     Absent special circumstances, shares of the corporation are not entitled to
vote if they are owned, directly or indirectly, by a second corporation in which
the corporation owns, directly or indirectly, a majority of the shares entitled
to vote for directors of the second corporation; provided that this provision
does not limit the power of the corporation or such second corporation to vote
shares held by it in a fiduciary capacity.


                                  ARTICLE III

                              BOARD OF DIRECTORS
                              ------------------

     Section 1.  General Powers.  All corporate powers shall be exercised by or
                 --------------
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, the Board of Directors.

     Section 2.  Number and Qualification.  The number of directors of the
                 ------------------------
corporation shall not be less than five (5) nor more than fifteen (15), with the
exact number to be fixed from time to time by the Board of Directors.

     Section 3.  Nominations.  At any meeting of shareholders at which directors
                 -----------
are to be elected, nominations for election to the Board of Directors may be
made by the Board of Directors or, subject to the conditions described below, by
any holder of shares entitled to be voted at that meeting in the election of the
directors. To be eligible for consideration at the meeting of shareholders, all

                                       4
<PAGE>

nominations, other than those made by the Board of Directors, shall be in
writing and must be delivered to the Secretary of the Corporation not less than
fifty (50) days nor more than ninety (90) days prior to the meeting at which
such nominations will be made; provided, however, that if less than sixty (60)
days notice of such meeting is given to the shareholders, such nominations must
be delivered to the Secretary of the Corporation not later than the close of the
business on the tenth (10th) day following the day on which notice of such
meeting was mailed.

     Section 4.  Election.  Except as provided in Section 7 of this Article III,
                 --------
the directors shall be elected at the annual meeting of shareholders. Those
persons who receive the highest number of votes at a meeting at which a quorum
is present shall be deemed to have been elected.

     Section 5.  Terms of Directors.  Each initial director shall hold office
                 ------------------
until the earliest of the first shareholders' meeting at which directors are
elected, or until such director's death, resignation, or removal.

     At all times that the number of directors is less than nine (9), each
director shall be elected to a term ending as of the next succeeding annual
meeting of shareholders or until his or her earlier death, resignation,
retirement, removal or disqualification or until his or her successor shall be
elected and shall qualify.

     In the first election of directors that the total number of directors is
nine (9) or more, the directors shall be divided into three (3) classes, as
nearly equal as possible in number as may be, to serve in the first instance for
terms of one (1), two (2) and three (3) years, respectively, from the date such
class of directors takes office or until their earlier death, resignation,
retirement, removal or disqualification or until their successors shall be
elected and shall qualify, and thereafter the successors in each class of
directors shall be elected for terms of three (3) years or until their earlier
death, resignation, retirement, removal, or disqualification or until their
successors shall be elected and shall qualify. In the event of any increase or
decrease in the number of directors at a time that the directors are so
classified, the additional or eliminated directorships shall be classified or
chosen so that all classes of directors shall remain or become as nearly equal
as possible in number.

     Notwithstanding the provisions of this Section 5, a decrease in the number
of directors does not shorten an incumbent director's term. Despite the
expiration of a director's term, such director shall continue to serve until a
successor shall be elected and qualified or until there is a decrease in the
number of directors.

     Section 6.  Removal.  Any director may be removed from office at any time,
                 -------
only for cause, by a vote of the shareholders if the number of votes cast to
remove such director exceeds the number of votes cast not to remove him. If a
director is elected by a voting group of shareholders, only the shareholders of
that voting group may participate in the vote to remove him. A director may not
be removed by the shareholders at a meeting unless the notice of that meeting
states that the purpose, or one (1) of the purposes, of the meeting is removal
of the director. If any directors are so removed, new directors may be elected
at the same meeting.

                                       5
<PAGE>

     Section 7.  Vacancies.  Any vacancy occurring in the Board of Directors,
                 ---------
including without limitation a vacancy resulting from an increase in the number
of directors or from the failure by the shareholders to elect the full
authorized number of directors, may be filled by the Board of Directors. If the
directors remaining in office do not constitute a quorum, the directors may fill
the vacancy by the affirmative vote of a majority of the remaining directors or
by the sole remaining director. If the vacant office was held by a director
elected by voting group, only the remaining director or directors elected by
that voting group or the holders of shares of that voting group are entitled to
fill the vacancy. A director elected to fill a vacancy shall be elected to serve
the remaining term of the director replaced, or if a director is not elected to
replace a previously elected director, the new director shall be elected to
serve until the next shareholders' meeting at which directors are elected.

     Section 8.  Chairman of the Board of Directors.  There may be a Chairman of
                 ----------------------------------
the Board of Directors elected by the directors from their number at any meeting
of the Board of Directors. The Chairman shall serve in such position at the
pleasure of the Board of Directors. The Chairman shall preside at all meetings
of the Board of Directors and shareholders, serve as a member of any executive
committee of the Board of Directors, and perform such other duties as may be
directed by the Board of Directors.

     Section 9.  Compensation.  The Board of Directors may provide for the
                 ------------
compensation of directors for their services as such and for the payment or
reimbursement of any or all expenses incurred by them in connection with such
services.

     Section 10. Age Limitation for Non-Employee Directors.  A person who is 70
                 -----------------------------------------
years of age or older and who is not an employee of the corporation or an
employee of a subsidiary of the corporation shall not be eligible for election,
re-election, appointment or re-appointment to the Board of Directors; provided,
however, that this age limitation shall not apply to any person serving on the
initial board of directors of the corporation as set forth in the Articles of
Incorporation of the corporation.


                                  ARTICLE IV

                     MEETINGS AND COMMITTEES OF DIRECTORS
                     ------------------------------------

     Section 1.  Regular Meetings.  A regular meeting of the Board of Directors
                 ----------------
shall be held immediately after, and at the same place as, the annual meeting of
shareholders. In addition, the Board of Directors may provide, by resolution,
the time and place, either within or without the State of North Carolina, for
the holding of additional regular meetings.

     Section 2.  Special Meetings.  Special meetings of the Board of Directors
                 ----------------
may be called by or at the request of the Chairman of the Board or the President
if such officer is also a director, or by any three (3) or more directors. Such
a meeting may be held either within or without the State of North Carolina, as
fixed by the person or persons calling the meeting.

                                       6
<PAGE>

     Section 3.  Notice of Meetings.  Regular meetings of the Board of Directors
                 ------------------
may be held without notice. The person or persons calling a special meeting of
the Board of Directors shall, at least two (2) days before the meeting, give or
cause to be given notice thereof by any usual means of communication. Such
notice need not specify the purpose for which the meeting is called. Any duly
convened regular or special meeting may be adjourned by the directors to a later
time without further notice.

     Section 4.  Waiver of Notice.  Any director may waive notice of any meeting
                 ----------------
before or after the meeting. The waiver must be in writing, signed by the
director entitled to the notice, and be delivered to the corporation for
inclusion in the minutes or for filing with the corporate records. A director's
attendance at or participation in a meeting waives any required notice of such
meeting unless the director at the beginning of the meeting, or promptly upon
arrival, objects to holding the meeting or to transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.

     Section 5.  Quorum.  Unless the Articles of Incorporation or these Bylaws
                 ------
provide otherwise, a majority of the number of directors fixed by or pursuant to
these Bylaws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, or if no number is so fixed, a majority of
the number of directors in office immediately before the meeting begins shall
constitute a quorum.

     Section 6.  Manner of Acting.  Except as otherwise provided in the Articles
                 ----------------
of Incorporation or these Bylaws, including Section 9 of this Article IV, the
affirmative vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.

     Section 7.  Presumption of Assent.  A director who is present at a meeting
                 ---------------------
of the Board of Directors or a committee of the Board of Directors when
corporate action is taken is deemed to have assented to the action taken unless
(i) he objects at the beginning of the meeting, or promptly upon his arrival, to
holding it or to transacting business at the meeting, or (ii) his dissent or
abstention from the action taken is entered in the minutes of the meeting, or
(iii) he files written notice of his dissent or abstention with the presiding
officer of the meeting before its adjournment or with the corporation
immediately after the adjournment of the meeting. Such right of dissent or
abstention is not available to a director who votes in favor of the action
taken.

     Section 8.  Action Without Meeting.  Action required or permitted to be
                 ----------------------
taken at a meeting of the Board of Directors may be taken without a meeting if
the action is taken by all members of the Board of Directors. The action must be
evidenced by one (1) or more written consents signed by each director before or
after such action, describing the action taken, and included in the minutes or
filed with the corporate records.

     Section 9.  Committees of the Board of Directors.  The Board of Directors
                 ------------------------------------
may create such committees of the Board of Directors as it shall consider
appropriate, including without limitation those committees specifically provided
for in these Bylaws. The creation of a committee of the

                                       7
<PAGE>

Board of Directors and appointment of members to it must by approved by the
greater of (i) a majority of the number of directors in office when the action
is taken or (ii) the number of directors required to take action pursuant to
Section 6 of this Article IV. Each committee of the Board of Directors must have
two (2) or more members and, to the extent authorized by law, shall have such
duties and authority as may be described in these Bylaws or otherwise specified
by the Board of Directors. Each committee member shall serve at the pleasure of
the Board of Directors. The provisions in these Bylaws governing meetings,
actions without meeting and other requirements of the Board of Directors shall
also apply to any committees of the Board of Directors established pursuant to
these Bylaws.

     Section 10. Executive Committee.  There may be a standing committee of the
                 -------------------
Board of Directors to be known as the Executive Committee and consisting of not
fewer than three (3) directors, one (1) of whom shall be the Chairman of the
Board of Directors and one (1) of whom shall be the President of the
corporation, if such officer is also a director.

     Section 11. Audit Committee.  There may be a standing committee of the
                 ---------------
Board of Directors to be known as the Audit Committee and consisting of not
fewer than three (3) directors. The Audit Committee shall supervise examination
of the assets and the liabilities and the internal audit program of the
corporation and its subsidiaries, cause outside audits to be performed on the
financial statements of the corporation, and shall make periodic reports to the
Board of Directors.


                                   ARTICLE V

                                   OFFICERS
                                   --------

     Section 1.  Officers of the Corporation.  The officers of the corporation
                 ---------------------------
shall consist of a President, a Secretary, a Treasurer, and such Vice Presidents
or other officers (including assistant officers) as may from time to time be
appointed by or under the authority of the Board of Directors. Any two (2) or
more offices may be held by the same person, but no officer may act in more than
one (1) capacity where action of two (2) or more officers is required.

     Section 2.  Appointment and Term.  The officers of the corporation shall be
                 --------------------
appointed by the Board of Directors or by a duly appointed officer authorized by
the Board of Directors to appoint one (1) or more officers. Each officer shall
hold office until his death, resignation, retirement, removal, disqualification,
or his successor shall have been appointed.

     Section 3.  Compensation of Officers.  The compensation of all officers of
                 ------------------------
the corporation shall be fixed by or under the authority of the Board of
Directors, and no officer shall serve the corporation in any other capacity and
receive compensation therefor unless such additional compensation shall be duly
authorized. The appointment of an officer does not itself create contract
rights.

                                       8
<PAGE>

     Section 4.  Removal.  Any officer may be removed by the Board of Directors
                 -------
at any time with or without cause; but such removal shall not itself affect the
officer's contract rights, if any, with the corporation except to the extent, if
any, specified in any such contract.

     Section 5.  Resignation.  An officer may resign at any time by
                 -----------
communicating his resignation to the corporation, orally or in writing. A
resignation is effective when communicated unless it specifies in writing a
later effective date. If a resignation is made effective at a later date that is
accepted by the corporation, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date. An officer's resignation does not
affect the corporation's contract rights, if any, with the officer except to the
extent, if any, specified in any such contract.

     Section 6.  Bonds.  The Board of Directors may by resolution require any
                 -----
officer, agent, or employee of the corporation to give bond to the corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of his respective office or position, and to comply with such other conditions
as may from time to time be required by the Board of Directors.

     Section 7.  President.  The President shall be the principal executive
                 ---------
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall sign, with the Secretary, an Assistant
Secretary, or any other proper officer of the corporation thereunto authorized
by the Board of Directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed, and in general he shall
perform all duties incident to the office of the President and such other duties
as may be prescribed by the Board of Directors from time to time. The President
shall be entitled to attend all regular and special meetings and meetings of
committees of the Board of Directors. If the President of the corporation is
also a director of the corporation, he shall serve as a member of the Executive
Committee.

     Section 8.  Vice Presidents.  In the absence of the President or in the
                 ---------------
event of his death, inability or refusal to act, the Vice Presidents, unless
otherwise determined by the Board of Directors, shall perform the duties of the
President, and when so acting shall have all the powers of and be subject to all
the restrictions upon the President. Any Vice President (or Assistant Vice
President) may sign, with the Secretary, an Assistant Secretary, or any other
proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation and any other instruments
which may be signed by the President, and shall perform such other duties as
from time to time may be prescribed by the President or Board of Directors.

     Section 9.  Secretary.  The Secretary shall: (i) keep the minutes of the
                 ---------
meetings of shareholders, of the Board of Directors, and of all committees of
the Board of Directors, in one or more books provided for that purpose; (ii) see
that all notices are duly given in accordance with the

                                       9
<PAGE>

provisions of these Bylaws or as required by law; (iii) maintain and
authenticate the records of the corporation and be custodian of the seal of the
corporation and see that the seal of the corporation is affixed to all documents
the execution of which on behalf of the corporation under its seal is duly
authorized; (iv) sign with the President or a Vice President, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (v) maintain or cause to be maintained,
and have general charge of, the stock transfer books of the corporation; (vi)
prepare or cause to be prepared shareholder lists prior to each meeting of
shareholders as required by law; (vii) attest the signature or certify the
incumbency or signature of any officer of the corporation; and (viii) in general
perform all duties incident to the office of secretary and such other duties as
from time to time may be prescribed by the President or by the Board of
Directors.

     Section 10. Treasurer.  The Treasurer shall be, and may be designated as
                 ---------
such as, the corporation's Chief Financial Officer, and shall: (i) have charge
and custody of and be responsible for all funds and securities of the
corporation; receive and give receipts for moneys due and payable to the
corporation from any source whatsoever, and deposit all such moneys in the name
of the corporation in such depositories as shall be selected in accordance with
the provisions of Section 4 of Article VI of these Bylaws; (ii) maintain, or
cause to be maintained, appropriate accounting records as required by law; (iii)
prepare, or cause to be prepared, annual financial statements of the corporation
that include a balance sheet as of the end of the fiscal year and income and
cash flow statement for that year, which statements, or a written notice of
their availability, shall be mailed to each shareholder within 120 days after
the end of such fiscal year; and (iv) in general perform all of the duties
incident to the office of treasurer and such other duties as from time to time
may be prescribed by the President or by the Board of Directors.

     Section 11. Assistant Officers.  In the absence of a duly appointed
                 ------------------
officer of the corporation, or in the event of his death, inability or refusal
to act, any person appointed by the Board of Directors and designated by title
as an assistant to that officer, unless otherwise determined by the Board of
Directors, may perform the duties of, and when so acting shall have all the
powers of and be subject to all the restrictions upon, that officer. Such
assistant officers shall perform such other duties as from time to time may be
prescribed by the President or by the Board of Directors.


                                  ARTICLE VI

                    CONTRACTS, LOANS, CHECKS, AND DEPOSITS
                    --------------------------------------

     Section 1.  Contracts.  The Board of Directors may authorize any officer or
                 ---------
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. Also, the Board
of Directors may limit, condition, restrict or deny such authority to any
officer or officers, or any agent or agents.

                                      10
<PAGE>

     Section 2.  Loans.  No loans shall be contracted on behalf of the
                 -----
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by the Board of Directors. Such authority may be general or confined
to specific instances.

     Section 3.  Checks and Drafts.  All checks, drafts, or other orders for the
                 -----------------
payment of money, issued in the name of the corporation, shall be signed by such
officer or officers, agent or agents of the corporation and in such manner as
shall from time to time be determined by the Board of Directors.

     Section 4.  Deposits.  All funds of the corporation not otherwise employed
                 --------
shall be deposited from time to time to the credit of the corporation in such
depositories as may be selected by or under the authority of the Board of
Directors.


                                  ARTICLE VII

                           SHARES AND THEIR TRANSFER
                           -------------------------

     Section 1.  Certificate For Shares.  The Board of Directors may authorize
                 ----------------------
the issuance of some or all of the shares of the corporation's classes or series
without issuing certificates to represent such shares. If shares are represented
by certificates, the certificates shall be in such form as required by law and
as determined by the Board of Directors. Certificates shall be signed, either
manually or in facsimile, by the President or a Vice President, and by the
Secretary or Treasurer or an Assistant Secretary or an Assistant Treasurer. All
certificates for shares shall be consecutively numbered or otherwise identified
and entered into the stock transfer books of the corporation. When shares are
represented by certificates, the corporation shall issue and deliver, to each
shareholder to whom such shares have been issued or transferred, certificates
representing the shares owned by him. When shares are not represented by
certificates, then within a reasonable time after the issuance or transfer of
such shares, the corporation shall send the shareholder to whom such shares have
been issued or transferred a written statement of the information required by
law to be on certificates.

     Section 2.  Stock Transfer Books.  The corporation shall keep or cause to
                 --------------------
be kept a book or set of books, to be known as the stock transfer books of the
corporation, containing the name of each shareholder of record, together with
such shareholder's address and the number and class or series of shares held by
him. Transfers of shares of the corporation shall be made only on the stock
transfer books of the corporation (i) by the holder of record thereof or by his
legal representative, who shall provide proper evidence of authority to
transfer; (ii) by his attorney authorized to effect such transfer by power of
attorney duly executed and filed with the Secretary; and (iii) on surrender for
cancellation of the certificate for such shares (if the shares are represented
by certificates).

     Section 3.  Lost Certificates.  The Board of Directors may direct a new
                 -----------------
certificate to be issued in place of any certificate theretofore issued by the
corporation claimed to have been lost or destroyed, upon receipt of an affidavit
of such fact from the person claiming the certificate to have

                                      11
<PAGE>

been lost or destroyed. When authorizing such issue of a new certificate, the
Board of Directors shall require that the owner of such lost or destroyed
certificate, or his legal representative, give the corporation a bond in such
sum and with such surety or other security as the Board of Directors may direct
as indemnity against any claims that may be made against the corporation with
respect to the certificate claimed to have been lost or destroyed, except where
the Board of Directors by resolution finds that in the judgment of the Board of
Directors the circumstances justify omission of a bond.

     Section 4.  Distribution or Share Dividend Record Date. The Board of
                 ------------------------------------------
Directors may fix a date as the record date for determining shareholders
entitled to a distribution or share dividend. If no record date is fixed by the
Board of Directors for such determination, it is the date the Board of Directors
authorizes the distribution or share dividend.

     Section 5.  Holder of Record.  Except as otherwise required by law, the
                 ----------------
corporation may treat the person in whose name the shares stand of record on its
books as the absolute owner of the shares and the person exclusively entitled to
receive notification and distributions, to vote, and to otherwise exercise the
rights, powers, and privileges of ownership of such shares.

     Section 6.  Shares Held by Nominees.  The corporation shall recognize the
                 -----------------------
beneficial owner of shares registered in the name of the nominee as the owner
and shareholder of such shares for certain purposes if the nominee in whose name
such shares are registered files with the Secretary a written certificate in a
form prescribed by the corporation, signed by the nominee, indicating the
following: (i) the name, address, and taxpayer identification number of the
nominee; (ii) the name, address, and taxpayer identification number of the
beneficial owner; (iii) the number and class or series of shares registered in
the name of the nominee as to which the beneficial owner shall be recognized as
the shareholder; and (iv) the purposes for which the beneficial owner shall be
recognized as the shareholder.

     The purposes for which the corporation shall recognize the beneficial owner
as the shareholder may include the following: (i) receiving notice of, voting
at, and otherwise participating in shareholders' meetings; (ii) executing
consents with respect to the shares; (iii) exercising dissenters' rights under
the North Carolina Business Corporation Act; (iv) receiving distributions and
share dividends with respect to the shares; (v) exercising inspection rights;
(vi) receiving reports, financial statements, proxy statements, and other
communications from the corporation; (vii) making any demand upon the
corporation required or permitted by law; and (viii) exercising any other rights
or receiving any other benefits of a shareholder with respect to the shares.

     The certificate shall be effective ten (10) business days after its receipt
by the corporation and until it is changed by the nominee, unless the
certificate specifies a later effective time or an earlier termination date.

     If the certificate affects less than all of the shares registered in the
name of the nominee, the corporation may require the shares affected by the
certificate to be registered separately on the books of the corporation and be
represented by a share certificate that bears a conspicuous legend stating

                                      12
<PAGE>

that there is a nominee certificate in effect with respect to the shares
represented by that share certificate.

                                      13
<PAGE>

                                 ARTICLE VIII

                              GENERAL PROVISIONS
                              ------------------

     Section 1.  Distributions.  The Board of Directors may from time to time
                 -------------
authorize, and the corporation may grant, distributions and share dividends to
its shareholders pursuant to law and subject to any provisions with respect
thereto in its Articles of Incorporation.

     Section 2.  Seal.  The corporate seal of the corporation shall consist of
                 ----
two concentric circles between which is the name of the corporation and in the
center of which is inscribed SEAL; and such seal, as impressed or affixed on the
margin hereof, is hereby adopted as the corporate seal of the corporation.

     Section 3.  Fiscal Year.  The fiscal year of the corporation shall be fixed
                 -----------
by the Board of Directors.

     Section 4.  Amendments.  Except as otherwise provided in the Articles of
                 ----------
Incorporation or by law, these Bylaws may be amended or repealed and new Bylaws
may be adopted by the Board of Directors.

     No Bylaw adopted, amended, or repealed by the shareholders shall be
readopted, amended, or repealed by the Board of Directors, unless the Articles
of Incorporation or a Bylaw adopted by the shareholders authorizes the Board of
Directors to adopt, amend, or repeal that particular Bylaw or the Bylaws
generally.

     Section 5.  Definitions.  Unless the context otherwise requires, terms used
                 -----------
in these Bylaws shall have the meanings assigned to them in the North Carolina
Business Corporation Act to the extent defined therein.


                                  ARTICLE IX

                                INDEMNIFICATION
                                ---------------

     In addition to any indemnification required or permitted by law, and except
as otherwise provided in these Bylaws, any person who at any time serves or has
served as a director, officer, employee or agent of the corporation and any such
person who serves or has served at the request of the corporation as a director,
officer, employee, partner, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, shall have a right to be
indemnified by the corporation to the full extent allowed by applicable law
against liability and litigation expense arising out of such status or
activities in such capacity. "Liability and litigation expense" shall include
costs and expenses of litigation (including reasonable attorneys' fees),
judgments, fines and amounts paid in settlement which are actually and

                                      14
<PAGE>

reasonably incurred in connection with or as a consequence of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including appeals.

     Promptly after the final disposition or termination of any matter which
involves liability or litigation expense as described above or at such earlier
time as it sees fit, the corporation shall determine whether any person
described in this Article IX is entitled to indemnification thereunder. Such
determination shall be limited to the following issues: (i) whether the persons
to be indemnified are persons described in this Article IX, (ii) whether the
liability or litigation expense incurred arose out of the status or activities
of such persons as described in this Article IX, (iii) whether liability was
actually incurred and/or litigation expense was actually and reasonably
incurred, and (iv) whether the indemnification requested is permitted by
applicable law. Such determination shall be made by a majority vote of directors
who were not parties to the action, suit or proceeding (or, in connection with
"threatened" actions, suits or proceedings, who were not "threatened parties").
If at least two such disinterested directors are not obtainable, or, even if
obtainable, if at least half of the number of disinterested directors so direct,
such determination shall be made by independent legal counsel in written
opinion.

     Litigation expense incurred by a person described in this Article IX in
connection with a matter described in this Article IX may be paid by the
corporation in advance of the final disposition or termination of such matter,
if the corporation receives an undertaking, dated, in writing and signed by the
person to be indemnified, to repay all such sums unless such person is
ultimately determined to be entitled to be indemnified by the corporation as
provided in this Article IX. Requests for payments in advance of final
disposition or termination shall be submitted in writing unless this requirement
is waived by the corporation.

     Notwithstanding the foregoing, no advance payment shall be made as to any
payment or portion of a payment for which the determination is made that the
person requesting payment will not be entitled to indemnification. Such
determination may be made only by a majority vote of disinterested directors or
by independent legal counsel as next provided. If there are not at least two
disinterested directors, the notice of all requests for advance payment shall be
delivered for review to independent legal counsel for the corporation. Such
counsel shall have the authority to disapprove any advance payment or portion of
a payment for which it appears that the person requesting payment will not be
entitled to indemnification.

     The corporation shall not be obligated to indemnify persons described in
this Article IX for any amounts paid in settlement unless the corporation
consents in writing to the settlement. The corporation shall not unreasonably
withhold its consent to proposed settlements. The corporation's consent to a
proposed settlement shall not constitute an agreement by the corporation that
any person is entitled to indemnification thereunder. The corporation may waive
the requirement of this section for its written consent as fairness and equity
may require.

     A person described in this Article IX may apply to the corporation in
writing for indemnification or advance expenses. Such applications shall be
addressed to the Secretary or, in

                                      15
<PAGE>

the absence of the Secretary, to any officer of the corporation. The corporation
shall respond in writing to such applications as follows: to a request for
indemnity under this Article IX, within ninety days after receipt of the
application; to a request for advance expenses under this Article IX, within
fifteen days after receipt of the application.

     If any action is necessary or appropriate to authorize the corporation to
pay the indemnification required by these Bylaws, the Board of Directors shall
take such action, including (i) making a good faith evaluation of the
indemnification request, (ii) giving notice to, and obtaining approval by, the
shareholders of the corporation, and (iii) taking any other action.

     The right to indemnification or advance expenses provided herein shall be
enforceable in any court of competent jurisdiction. A legal action may be
commenced if a claim for indemnity or advance expenses is denied in whole or in
part, or upon the expiration of the time periods provided above. In any such
action, if the claimant establishes the right to indemnification, he or she
shall also have the right to be indemnified against the litigation expense
(including, without limitation, reasonable attorneys' fees) of such action.

     As provided by N.C. Gen. Stat.(S)55-8-57, the corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or who is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, or as a trustee or administrator under an employee benefit plan,
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the corporation
has the power to indemnify him against such liability.

     The right to indemnification provided herein shall not be deemed exclusive
of any other rights to which any persons seeking indemnity may be entitled apart
from the provisions of this bylaw, except there shall be no right to
indemnification as to any liability or litigation expense for which such person
is entitled to receive payment under any insurance policy other than a
directors' and officers' liability insurance policy maintained by the
corporation. Such right inures to the benefit of the heirs and legal
representatives of any persons entitled to such right. Any person who at any
time after the adoption of this bylaw serves or has served in any status or
capacity described in this Article IX shall be deemed to be doing or to have
done so in reliance upon, and as consideration for, the right of indemnification
provided herein. Any repeal or modification hereof shall not affect any rights
or obligations then existing. The right provided herein shall not apply as to
persons serving institutions which are hereafter merged into or combined with
the corporation, except after the effective date of such merger or combination
and only as to status and activities after such date.

     If this Article or any portion hereof shall be invalidated on any ground by
any court or agency of competent jurisdiction, then the corporation shall
nevertheless indemnify each person described in this Article IX to the full
extent permitted by the portion of this Article that is not invalidated and also
to the full extent (not exceeding the benefits described herein) permitted or
required by other applicable law.

                                      26
<PAGE>

     Adopted this the 30th day of June, 1999.

                                           __________________________________
                                           Secretary

                                      17