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                         SPECIAL TERMINATION AGREEMENT


     THIS AGREEMENT entered into as of June 21, 1999, by and between FIRST
COMMUNITY FINANCIAL CORPORATION, a North Carolina corporation (the "Holding
Company") and JUDY  L. PENNINGTON (the "Officer").

     WHEREAS, the Officer is employed by Community Savings Bank, Inc., a North
Carolina-chartered savings bank (the "Savings Bank") as its Vice President; and

     WHEREAS, the Savings Bank is the wholly-owned subsidiary of the Holding
Company; and

     WHEREAS, the services of the Officer, Officer's experience and knowledge of
the affairs of the Savings Bank, and Officer's reputation and contacts in the
industry are extremely valuable to the Savings Bank and the Holding Company; and

     WHEREAS, the Holding Company and the Savings Bank wish to attract and
retain such well-qualified executives and it is in the best interests of the
Holding Company and the Savings Bank and of the Officer to secure the continued
services of the Officer notwithstanding any change in control of the Savings
Bank or the Holding Company; and

     WHEREAS, the Holding Company considers the establishment and maintenance of
a sound and vital management to be part of its overall corporate strategy and to
be essential to protecting and enhancing the best interests of the Savings Bank,
the Holding Company and their shareholders; and

     WHEREAS, the parties desire to enter into this Agreement to provide the
Officer with security in the event of a change in control of the Savings Bank or
the Holding Company in order to ensure the continued loyalty of the Officer.

     NOW, THEREFORE, for and in consideration of the promises and mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable considerations, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby to agree as follows:
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1.   Term.  The initial term of this Agreement shall be for a period of two (2)
     ----
years commencing upon the date of execution of this Agreement.  On each
anniversary of the effective date of this Agreement, the term of this Agreement
shall automatically be extended for an additional one year period beyond the
then effective expiration date unless written notice from the Holding Company to
the Officer is received 90 days prior to an anniversary date advising the
Officer that this Agreement shall not be further extended; provided that the
Directors of the Holding Company shall review the Officer's performance annually
and make a specific determination pursuant to such review to renew this
Agreement prior to the 90 day notice period.  The Officer shall have rights and
benefits pursuant to this Agreement only if a Change in Control occurs during
the term of this Agreement.  In such event, the Officer shall have the rights
set forth below with respect to any termination of employment or "Termination
Event" (as defined below) even though the termination or Termination Event shall
occur after the expiration of the terms of this Agreement.

     1.   Change in Control.
          -----------------

          (a)  In the event of a termination of the Officer's employment in
     connection with, or within twenty-four (24) months after, a "Change in
     Control" (as defined in Subparagraph (e) below) of the Savings Bank or the
     Holding Company, for reasons other than for "cause" (as defined in
     Subparagraph (b) below), the Officer shall be entitled to receive the
     amount set forth in Subparagraph (d) below.  Said sum shall be payable as
     provided in Subparagraph (f) below.

          (b)  For purposes of this Agreement, termination for "cause" shall
     include termination because of the Officer's personal dishonesty,
     incompetence, willful misconduct, breach of fiduciary duty involving
     personal profit, intentional failure to perform stated duties, or willful
     violation of any law, rule, or regulation (other than traffic violations or
     similar offenses) or final cease-and-desist order.

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          (c)  The Officer shall have the right to terminate Officer's
     employment with the Savings Bank upon the occurrence of any of the
     following events (the "Termination Events") within twenty-four (24) months
     following a Change in Control of the Holding Company or the Savings Bank:

               (i) Officer is assigned any duties and/or responsibilities that
               are inconsistent with Officer's position, duties,
               responsibilities or status at the time of the Change in Control
               or with his reporting responsibilities or titles with the Savings
               Bank in effect at such time; or

               (ii) Officer's annual base salary rate is reduced below the
               annual amount in effect as of the effective date of a Change in
               Control or as the same shall have been increased from time to
               time following such effective date; or

               (iii) Officer's life insurance, medical or hospitalization
               insurance, disability insurance, stock option plans, stock
               purchase plans, deferred compensation plans, management retention
               plans, retirement plans or similar plans or benefits or other
               benefits being provided by the Savings Bank or the Holding
               Company to the Officer as of the effective date of the Change in
               Control are reduced in their level, scope or coverage, or any
               such insurance, plans or benefits are eliminated, unless such
               reduction or elimination applies proportionately to all salaried
               employees of the Savings Bank or the Holding Company who
               participated in such benefits prior to such Change in Control; or

               (iv) Officer is transferred to a location which is more than
               forty (40) miles distant from Officer's current principal work
               location, without the Officer's express written consent.

          A Termination Event shall be deemed to have occurred on the date such
     action or event is implemented or takes effect.


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<PAGE>

          (d) In the event that the Officer's employment is terminated as set
     forth in Paragraphs 2(a) or 2(c), the Holding Company will be obligated to
     pay or cause to be paid to Officer an amount equal to two (2.0) times the
     Officer's salary and bonuses from the Savings Bank and Holding Company for
     the most recently completed calendar year prior to such termination.

          (e) For the purposes of this Agreement, the term "Change in Control"
     shall mean: (i) a change in control of a nature that would be required to
     be reported in response to Item 1 of the Current Report on Form 8-K, as in
     effect on the date hereof, pursuant to Section 13 or 15(d) of the Exchange
     Act; (ii) such time as any "person" (as such term is used in Sections 13(d)
     and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Holding Company or Savings Bank representing 25 percent
     or more of the combined voting power of the outstanding Common Stock of the
     Holding Company or outstanding common stock of the Savings Bank, as
     applicable; or (iii) individuals who constitute the board of directors of
     the Holding Company or board of directors of the Savings Bank on the date
     hereof (the "Incumbent Board" and "Incumbent Savings Bank Board,"
     respectively) cease for any reason to constitute at least a majority
     thereof, provided that any person becoming a director subsequent to the
     date hereof whose election was approved by a vote of at least three-
     quarters of the directors comprising the Incumbent Board or Incumbent
     Savings Bank Board, as applicable, or whose nomination for election by the
     Holding Company's or Savings Bank's shareholders was approved by the
     Holding Company's or Savings Bank's board of directors or Nominating
     Committee, shall be considered as though he or she were a member of the
     Incumbent Board or Incumbent Savings Bank Board, as applicable; or (iv)
     either the Holding Company or the Savings Bank consolidates or merges with

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     or into another corporation, association or entity or is otherwise
     reorganized, where neither the Holding Company nor the Savings Bank,
     respectively, is the surviving corporation in such transaction or; or (v)
     all or substantially all of the assets of either the Holding Company or the
     Savings Bank are sold or otherwise transferred to or are acquired by any
     other entity or group.

          Notwithstanding the other provisions of this Paragraph 2, a
     transaction or event shall not be considered a Change in Control if, prior
     to the consummation of occurrence of such transaction or event, Officer and
     Holding Company agree in writing that the same shall not be treated as a
     Change in Control for purposes of this Agreement.  In addition, the Holding
     Company's acquisition of all of the stock of the Savings Bank and initial
     public offering in connection with the conversion of the Savings Bank from
     the mutual to the stock form of ownership shall not be considered a change
     in control.

          (f) Such amounts payable pursuant to this Paragraph 2 shall be paid,
     at the irrevocable option of the Officer, as follows:

     Participant's Initials
     ----------------------

     (i) /s/ JLP              Payment in a lump-sum.
         -------------------

     (ii) __________________  Payment in monthly installments over a fixed
                              reasonable period of time. Such payments shall
                              begin within thirty (30) days following the
                              calendar month in which the Officer terminates
                              employment with the Savings Bank.

          (g) Following a Termination Event which gives rise to the Officer's
     rights hereunder, the Officer shall have twelve (12) months from the date
     of occurrence of the Termination Event to terminate Officer's employment
     with the Savings Bank pursuant to this Paragraph 2.  Any such termination
     shall be deemed to have occurred only upon delivery to the Savings Bank (or
     to any successor corporation) of written notice of termination which
     describes the Change in

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      Control and Termination Event. If the Officer does not so terminate
      employment with the Savings Bank within such twelve (12) month period,
      Officer shall thereafter have no further rights hereunder with respect to
      that Termination Event, but shall retain rights, if any, hereunder with
      respect to any other Termination Event as to which such period has not
      expired.

          (h) It is the intent of the parties hereto that all payments made
     pursuant to this Agreement be deductible by the Holding Company for federal
     income tax purposes and not result in the imposition of an excise tax on
     the Officer.  Notwithstanding anything contained in this Agreement to the
     contrary, any payments to be made to or for the benefit of the Officer
     which are deemed to be "parachute payments" as that term is defined in
     Section 280G of the Code, shall be modified or reduced to the extent deemed
     to be necessary by the Holding Company's Board of Directors to avoid the
     imposition of excise taxes on the Officer under Section 4999 of the Code or
     the disallowance of a deduction to the Holding Company under Section
     280G(a) of the Code.

          (i) In the event any dispute shall arise between the Officer and the
     Holding Company as to the terms or interpretation of this Agreement,
     including this Paragraph 2, whether instituted by formal legal proceedings
     or otherwise, including any action taken by the Officer to enforce the
     terms of this Paragraph 2 or in defending against any action taken by the
     Holding Company, the Holding Company shall reimburse the Officer for all
     costs and expenses incurred in such proceedings or actions, including
     attorney's fees, in the event the Officer prevails in any such action.

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     2.   Successors and Assigns.  This Agreement shall inure to the benefit of
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and be binding upon any corporate or other successor of the Holding Company
which shall acquire, directly or indirectly, by conversion, merger,
consolidation, purchase or otherwise, all or substantially all of the assets of
the Holding Company.

     3.   Modification; Waiver; Amendments.  No provision of this Agreement may
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be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Officer and the Holding Company,
except as herein otherwise provided.  No waiver by either party hereto, at any
time, of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.  With the exception of Paragraph
2(f) of this Agreement which may not be amended, no amendments or additions to
this Agreement shall be binding unless in writing and signed by both parties,
except as herein otherwise provided.

     4.   Applicable Law.  This Agreement shall be governed in all respects
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whether as to validity, construction, capacity, performance or otherwise, by the
laws of North Carolina, except to the extent that federal law shall be deemed to
apply.

     5.   Severability.  The provisions of this Agreement shall be deemed
          ------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

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<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first hereinabove written.

                              FIRST COMMUNITY FINANCIAL
                              CORPORATION


(CORPORATE SEAL)
                               By: /s/ W. R. Gilliam
                                  -----------------------------------------
                                  __________ President
ATTEST:

/s/ Joseph C. Canada
--------------------------
______Secretary



                               /s/ Judy L. Pennington
                               ------------------------------------- (SEAL)
                               Judy L. Pennington

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