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                                                                    EXHIBIT 10.4

NORTH CAROLINA

HYDE COUNTY

         THIS AGREEMENT made this the 1/st/ day of April, 1999, by and between
The East Carolina Bank, a North Carolina corporation ("ECB") and Gary M. Adams,
a resident of Dare County, North Carolina (the "Officer") WITNESSETH:

         WHEREAS the Officer has been working for ECB for a period of time;

         AND WHEREAS the parties hereto wish to formalize their arrangement as
set out herein;

         AND WHEREAS both parties fully understand the terms of this agreement
and stipulate that the same are just, fair, and equitable to both parties
hereto;

         NOW THEREFORE, the parties hereto agree as follows:

         1.   ECB hereby engages the employment of the Officer and the Officer
              hereby accepts such engagement of employment upon the terms and
              conditions as herein stated;

         2.   The Officer shall render such administrative, managerial, and
              other services to ECB, its parents, subsidiaries, and sister
              companies as are customarily performed by persons situated in a
              similar capacity as well as such other and additional duties and
              services as may be directed by the Board of Directors, the
              President, and all officers having authority senior to that of the
              Officer. The Officer shall perform his duties and responsibilities
              under this agreement in accordance with reasonable standards
              expected of employees with comparable organizations and the Bank's
              policies and procedures and as may be established by the Board of
              Directors of ECB and its designees. Because ECB is contracting for
              the unique and personal skills of the Officer, the Officer shall
              be precluded from assigning or delegating his rights and duties
              hereunder;

         3.   During the term of this agreement, ECB shall pay to the Officer
              for the services to be rendered by him for ECB a base salary in
              such amounts and at such intervals as may be commensurate with his
              duties and responsibilities hereunder as determined by the Board
              of Directors and its designees. In addition ECB will provide the
              Officer such additional incentives, compensations, bonuses, and
              other benefits as it may determine from time to time;

         4.   Either party shall have the absolute right to terminate this
              agreement at any time, without cause, upon giving the other party
              thirty (30) days prior written notice. ECB shall have the right,
              but not the obligation, to pay to

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              the Officer thirty (30) days salary in lieu of any notice to be
              given by it. ECB shall have the right to waive any notice to which
              it might be entitled hereunder and to immediately terminate the
              employment of the Officer without further payment at such time as
              the Officer gives ECB notice of his intention to terminate this
              agreement. ECB shall have the right to immediately terminate this
              agreement at any time with cause without further obligation to the
              Officer. The term "with cause" includes, but is not limited to,
              personal dishonesty, incompetence, willful material misconduct,
              breach of fiduciary duty, failure to perform the obligations of
              the Officer as stated herein, willful violation of any law, rule,
              or regulation (other than minor traffic infractions), or, any
              material breach of any provision of this agreement;

         5.   In the event of the involuntary termination of the Officer's
              employment without cause within ninety (90) days of any change of
              control of ECB or its parent company, or, in the event of a
              voluntary termination of the Officer's employment within ninety
              (90) days after any change of control of ECB under which the
              Officer shall have incurred a reduction of salary or in
              responsibilities, then the Officer shall be entitled to receive
              the greater of:

              a)  The severance payment offered by the corporation in such
                  notice of termination, or,

              b)  A lump sum equal to 150.00% of the average annual salary paid
                  to the Officer over the three prior 12 month periods, plus a
                  lump sum equal to 150.00% of the average annual cash bonuses
                  and cash incentives paid to the Officer over the three prior
                  12 month periods (exclusive of any stock options, stock
                  grants, or the exercise of any stock options), plus the
                  Officer will be carried on the medical insurance program (if
                  any) of the Corporation for 18 calendar months after such
                  termination.

The provisions of this P. 5 shall only be applicable to situations relating to a
change of control of ECB or its parent company. As used herein, the phrase
"change of control" shall mean the direct or indirect acquisition by another
person, firm, or corporation, by merger, share exchange, consolidation, purchase
or otherwise, of all or substantially all of the assets or stock of ECB or its
parent company;

         6.   The Officer agrees that he will devote his full efforts and entire
              business time to the performance of his duties and
              responsibilities under this agreement;

         7.   The Officer will hold in strict confidence, during the term of
              this agreement and at all times thereafter, all knowledge and
              information of a confidential nature with respect to the business
              of ECB, its parent company, its subsidiaries, and its sister
              corporations, received during the

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              term of his employment with ECB and will not disclose or make use
              of such information without the prior written consent of ECB;

         8.   The Officer stipulates that it would be difficult or impossible to
              ascertain the amount of monetary damages in the event of a breach
              by the Officer under the provisions of paragraphs 6 or 7 hereof.
              The Officer further stipulates that in the event of a breach of
              one or more of those two paragraphs injunctive relief enforcing
              the terms of the same, alone or together with additional forms of
              relief, is an appropriate remedy;

         9.   This agreement shall be governed in all respects, whether as to
              validity, construction, capacity, performance, or otherwise, by
              the laws of the State of North Carolina, and any action relating
              to or arising from this agreement shall be litigated only in the
              North Carolina General Court of Justice;

         10.  This agreement shall inure to the benefit of, and be binding upon,
              any corporate or other successor of ECB and its parent company
              which shall acquire, directly or indirectly by merger, share
              exchange, consolidation, purchase or otherwise, all or
              substantially all of the assets or stock of ECB or its parent
              company;

         11.  The employee stipulates that he has read this agreement and
              understands the same, and that he has been advised that he should
              consult independent counsel prior to executing this document;

         12.  No provision of this agreement can be modified, waived, or
              discharged unless such waiver, modification, or discharge has been
              agreed to in writing, signed by the Officer and on behalf of ECB
              by such person as has been specifically designated by the Board of
              Directors of ECB or its parent company. No waiver by either party
              hereto at any time of any breach by the other party hereto shall
              be deemed a waiver of the right for such other party to insist on
              the full compliance with this agreement at any future time. All
              prior negotiations, agreements, and discussions between the
              parties hereto are merged herein;

         13.  Where applicable, any obligations and duties of the Officer to ECB
              hereunder shall include a like obligation to ECB's parent company,
              its subsidiaries and its sister companies; and,

         14.  The provisions of this agreement shall be deemed severable and the
              invalidity or unenforceability of any provision shall not affect
              the validity or the enforceability of the other provisions hereof.

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         IN TESTIMONY WHEREOF, ECB has caused this instrument to be signed in
         its corporate name by its president by authority duly given by its
         Board of Directors and the Officer has hereunto set his hand and seal,
         the day and year first above written in duplicate originals, one of
         which is retained by each of the parties hereto.

                                           The East Carolina Bank

                                           By: /s/ Arthur H. Keeney, III
                                              --------------------------------
                                                  Arthur H. Keeney, III


                                                     /s/ Gary M. Adams
                                              --------------------------------
                                                        Gary M. Adams