TRIANGLE BANCORP, INC.
                        1988 INCENTIVE STOCK OPTION PLAN

Triangle Bancorp, Inc., a bank holding company organized and existing under the
laws of the State of North Carolina (herein referred to as the "Company"),
hereby adopts the following Stock Option Plan (the "Plan") for certain
individuals performing services for the Company or any of its subsidiaries.

         1. Purpose. This Plan is intended to advance the interests of the
Company by allowing officers and other key employees of the Company or any of
its subsidiaries who have substantial responsibility for the direction and
management of the Company or any of its subsidiaries to acquire a proprietary
interest in the Company as an additional incentive to promote the Company's
success, and by encouraging such individuals to continue to provide their
services to the Company or any of its subsidiaries. These aims will be
effectuated by the granting of ceftin stock options issued under the Plan and
designated by file Committee (defined hereinafter) pursuant to Section 3(b)
hereof will qualify as Incentive Stock Options (hereinafter called "ISO's").
Under Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"), and the terms of the Plan shall be interpreted in accordance with this
intention. Options granted under this Plan are referred to hereinafter as
"Options".

         2. Plan. The Plan shall be administered by the Compensation Committee
(the "Committee") of the Board of Directors ("the Board") of the Company, which
shall consist of not less than three members. Subject to the provisions of the
Plan, the Committee shall have full authority, in its description, to (a)
determine the employees (from the class of employees eligible under Section 3
hereof to receive Options under the Plan) to whom Options shall be granted; (b)
determine the time or times at which Options shall be granted; (c) determine
tile option price of the shams subject to each Option, which price shall be not
less than the minimum specified in accordance with Section 5 hereof; (dj
determine (subject to Sections 7 and 9 hereof) the time or times when each
Option shall become exercisable and the duration of the exercise; and (e)
interpret the Plan and prescribe, ranend, and rescind rules and regulations
relating to it. The interpretation and construction of any provision of the Plan
by the Committee shall be final and conclusive. The Committee may consult with
counsel and other professional advisors, who may be counsel or advisors to the
Company, and shall not incur any liability for any action taken in good faith in
reliance upon the advice of such counsel or advisors.

         3. Eligibility. (a) Options may be granted by the Committee only to
persons who are officers or other key employees of the Company or a subsidiary
of the Company who perform services of major importance in the management,
operation, and development of the business of the Company or of any subsidiary
of the Company, and the Committee

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shall determine the number of shares to be allocated to each Option. In
determining the eligibility of an employee to receive an Option as well as in
determining the number of shares to be optioned to any individual, the Committee
shall consider the position and responsibilities of the individual being
considered, the nature and value to the Company of such individual's services
and accomplishments, the person's present and potential contributions to the
success of the Company, and such other factors as the Committee may deem
relevant. A person receiving an Option pursuant to this Plau shall sometimes be
referred to hereinafter as an "Optionee".

         (b) At the time each Option is granted to an employee under this Plan,
the Committee shall determine whether such Option is to be designated as an ISO.
No Option granted to any employee who at the time of such grant owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its subsidiaries may be designated as an ISO,
unless at the time of such grant the option price is fixed at not less than 110%
of the fair market value of the Shares (defined hereinafter) subject to the
Option, and exercise of such Option is prohibited by its terms after the
expiration of five years from the date such Option is to the Plan. There will be
reserved for use upon the exercise of Options to be granted from time to time
under the Plan (subject granted.

         (c) No individual ~haU be given tile uppmtuuity undm this Plait to
exclcise Options for Shares valued (at the time of the granting of the Option)
in excess of $100,000 in any calendar year, unless and except to the extent that
said Options shall have first become exercisable in a preceding year. No Option
shall be granted hereunder for the purchase of Shares in such a manner as would
cause the foregoing restriction to be violated.

         4. Shares of Stock Subject to the provisions of Section 6 hereof) an
aggregate of 860.244 Shares of the no pax value common stock (the "Shares") of
the Company, which, as the Committee shall from time to time determine, may be
in whole or in part either authorized but unissued Shares, or issued Shares
which sha~.l have been reacquired by the Company. Any Shares subject to an
Option under the Plan, which Option for any reason expires or is terminated
unexercised as to such Shares, may again be subjected to an Option under the
Plan.

         5. Option Price. The purchase Price under each Option issued shall be
determined by the Committee at the time the Option is granted, but in no event
shall such purchase price be less than 100% (110%, in the case of an ISO granted
to an employee described in Section 3 (b) hereof) of the fair market value of
the Company's Shares on the date of the grant. If the shares are traded in the
over-the-counter market, such fair market value shall be deemed to be the mean
between the asked and the bid prices on such day as reported by NASDAQ. If the
stock is traded on an exchange, such fair market value shall be deemed to be the
mean of the high and low prices at which it is quoted or traded on such day on
the exchange on which it generally has the greatest trading volume. In all
cases, any determination hereunder by the Committee as to the fair market value
of the

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Shares for which Options are granted shall be made in good faith and shall be
determinative t~r all purposes of this Plan.

         6. Adjustment for Dilution, Etc. In the event that there is (a) a
subdivision or consolidation of the Company's common stock or any other capital
adjustment of the Company's common stock, (b) the payment by the Company, of a
stock dividend, or (c) any other increase or decrease in the outstanding common
stock of the Company effected without receipt of consideration by the Company,
then the number of Shares then covered by each outstanding Option granted
hereunder shall be adjusted proportionately with no adjustment in the total
purchase price of the Shares then so covered by such Option, and the number of
Shares reserved for the purpose of the Plan shall be adjusted by the same
proportion. All such adjustments shall be made by the Committee, whose
determination upon the same shall be final and binding upon the Optionees. No
fractional Shares shall be issued and any fractional Shares resulting from the
computations pursuant to this Section 6 shall be eliminated from the respective
Option. No adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional Shares or other securities.

         7. Duration and Exercise of Options. (a) All Options issued under the
Plan shall be for such period as the Committee shall determine, but for not more
than ten years (five years, in the case of any employee described in Section
3(b) hereof) from the date of the grant thereof. The period of the Option, once
it is granted, may be reduced only as outlined in Section 9 hereof; provided,
however, that the Committee may, where the Company is involved in a merger,
consolidation, dissolution, or liquidation, accelerate the expiration date and
the dates on which any part of the Option may be exercisable for all the Shares
covered thereby, but the effectiveness of such acceleration, and the exercise of
the Option pursuant thereto in excess of the number of Shares for which it would
have been exercisable in the absence of such acceleration, shall be conditioned
upon the consummation of the merger, consolidation, dissolution, or liquidation.
Except as provided in Section 9 or subsection (b) below, no Option may be
exercised after termination of the Optionee's employment with the Company, and
in no event may an Option be exercised after the expiration of its term.

         (b) Except as otherwise modified by the Committee, or as otherwise
expressly provided for herein, Options granted under this Plan shall become
exercisable as they vest in accordance with this Section 7. An employee may,
within three months after termination of his employment, exercise his option
with respect to the vested portion of the Shares subject to the Option,
determined in accordance with and based on the whole number of years of the
Optionee's continued employment with the Company or any subsidiary of the
Company from the date the Option is granted through the date of Optionee%
termination of employment, determined in accordance with the ibllowing schedule:

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     Years of                        Percentage of
Continued Employment                 Shares Vested


         1                                33.33%
         2                                33.33%
         3                                33.33%

In the event an Optionee terminates employment within the three-year period
described above, all Shares not vested in accordance with the Schedule described
above shall be forfeited, and the Optionee shall have no right to exercise his
Option with respect to any such forfeited Shares. In each case, such limitations
shall be calculated, in the case of any resulting fraction, to the nearest low
whole number of Shares. Notwithstanding the foregoing, the Committee may, in its
sole discretion, (i) prescribe longer time periods and additional requirements
with respect to the exercise of an Option, (ii) different vesting schedules with
respect to any Option, and (iii) terminate in whole or in part such portion of
any Option as has not yet become exercisable at the time of termination of it
determines that the Optionee is not performing satisfactorily the duties to
which he was assigned on the date the Option was granted or duties of at least
equal responsibility. Except as provided herein or in Section 9 hereof, no
Option may be exercised unless the Optionee is at the time of such exercise in
the employ of the Company or of a subsidiary of the Company, and shall have been
continuously so employed since the grant of his Option. Absence or leave
approved by the management of the Company shall not be considered an
interruption of employment for any purpose under the Plan.

         (c) Subject to limitations contained herein as to the time for exercise
of an Option and the amount of Shares subject to such Option, and
notwithstanding subsection (b) above, each Option shall be exercisable in whole
or in part or in installments at such time or times and in such manner as the
Committee may prescribe and specify in granting the Option to the Optionee,
which manner may differ from the exercise periods otherwise prescribed in
subsection (b) above. No Shares shall be delivered pursuant to any exercise of
an Option until the requirements of such laws and regulations as may be deemed
by the Committee to be applicable to them have been satisfied, and further until
receipt by the Company of the full option price in cash for the Shares for which
an Option is exercised. In order to facilitate the accumulation of funds to
enable employees to exercise their Options, each Optionee shall have the right,
if he or she so elects, to direct the Company or subsidiary of the Company to
withhold from his or her compensation regular amounts to be applied toward the
exercise of the Options. Funds credited to the Stock Option accounts will be
under the control of the Company until applied to the payment of the option
price at the direction of the employee or returned to the employee in the event
the amount is not used for purchase of Shares under Option, and all funds
received or held by the Company under the Plan may be used for any corporate
purpose, and no interest shall be payable to the participant on account of any
amounts so held. Such amounts may be withdrawn by the employee at any time, in
whole or in part, for any reason.

<PAGE>
         (d) No Optionee or his legal representative, legatees, or distributees,
as the case may be, will be, or will be deemed to be, a holder of any Shares
subject to an Option unless and until certificates for such Shares are issued to
him or them under the terms of the Plan. Except as otherwise provided herein, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.

         (e) Notwithstanding the provisions of subsection 7(c), (i) the exercise
price of the Shares subject to the Option may be paid, at the discretion of the
Board, by the tender of Shares already owned by the Optionee, or through a
combination of cash and Shares, or through such other means that the Board
determines are consistent with the Plan's purpose and applicable law. No
fractional Shares will be issued or accepted;

                  (ii) the exercise price of the Shares subject to the Option
may be paid, at the discretion of the Board, on a "cashless" basis, by delivery
to the Company or its designated agent of an irrevocable written notice of
exercise form together with irrevocable instructions to a broker-dealer to sell
or margin a sufficient portion of the shares of stock and deliver the sale or
margin loans proceeds directly to the Company to pay the exercise price; and

                  (iii) with respect to the number of Shares under an Option
which exceed the $100,000 annual vesting limit referred to in subsection 3(c) or
which otherwise, through no decision of the Optionee, do not qualify as ISO
Shares, receipt of those Shares otherwise issuable by the Company upon exercise
of an Option by an Optionee may by deferred under a program of delayed receipt
adopted by the Board, which program shall contain such rules governing
eligibility to participate, timing of elections to defer, forms of distribution
of Shares and the like as the Board shall determine.

         8. '~ Each Option granted under this Plan shall be transferable only by
will or by the laws of descent and distribution and shall be exercisable, during
an Optionee's lifetime, only by the Optionee to whom the Option is granted.
Except as permitted by the preceding sentence, no Option granted under the Plan
or any of the rights and privileges thereby conferred shall be transferred,
assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise), and no such Option, right, or privilege shall be subject to
execution, attachment, or similar process. Upon any attempt so to transfer,
assign, pledge, hypothecate, or otherwise dispose of the Option or any right or
privilege conferred thereby, contrary to the provisions hereof, or upon the levy
of any attachment or similar process upon such Option, right, or privilege, the
Option and such rights and privileges shall immediately become null and void.

         9. Effect of Termination of Employment. Death. or Disability. (a)
Notwithstanding anything in this Plan to the contrary, in the event an
Optionee's employment shall be terminated by reason of the Optionee's retirement
at his Retirement Date (defined hereinafter), the Optionee shall have the right
to exercise such Option or Options held by him, to the extent that such Options
have not previously expired or been

<PAGE>
exercised, at any time within three months after such retirement; upon such
retirement, all Options held by such Optionee which have not been theretofore
exercised by him or otherwise expired shall be immediately exercisable in full,
notwithstanding Section 7(b) or (c) hereof.

         (b) In the event that an Optionee shall die while employed by the
Company or any subsidiary of the Company, or shall die within three months after
retirement on or after his Retirement Date, any Option or Options granted to him
under this Plan which have not previously expired or been exercised shall be
exercisable by the estate of the Optionee (or by any person who acquired such
Option by bequest or inheritance from the Optionee) in full notwithstanding
Section 7(b) or (c) hereof, any time within one year after the death of the
Optionee. Retkrences herein to the Optionee shall be deemed to include any
person entitled to exercise the Option after the death of the Optionee under the
terms of this Section 9(b).

         (c) In the event of an Optionee's termination of employment by reason
of the Optionee's disability, the Optionee shall have the right, notwithstanding
Section 7(b) or (c) hereof, to exercise all Options held by him to the extent
that such Options have not previously expired or been exercised, at any time
within one year after such termination; upon such disability, all Options held
by such Optionee which have not been theretofore exercised by him or otherwise
expired shall be immediately exercisable in full, notwithstanding Section 7(b)
or (c) hereof. The term "disability" shall, for the purposes of this Plan, be
defined in the same manner as such term is defined in Section 105(d)(4) of the
Code.

         (d) For the purposes of this Plan, "Retirement Date" shall mean, any
date an employee is otherwise entitled to retire under any of the Company's or
its subsidiaries' retirement plans, or if no such retirement plans exist, then
the date on which the Optionee attains age 65.

         10. Listing and Registration of Shares. Each Option shall be subject to
the requirement that if at any time the Committee shall determine, in its
description, that the listing, registration, or qualification of the Shares
covered thereby upon any securities exchange or any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Option
or the issue or purchase of Shares thereunder, such Option may not be exercised
in whole or in part unless and until such listing, registration, qualification,
consent, or approval shall have been effected or basined free of any conditions
not acceptable to the Committee. The Company shall not be required to issue or
deliver any certificate for Shares of its stock purchased upon the exercise of
any part of an Option before (i) the admission of such Shares to listing on any
stock exchange in which the stock of the Company may then be listed, (ii)
completion of any registration or other qualification of such govenmmntal
regulatory body that the Company shall, in its sole discretion, determine is
necessary or advisable, and (iii) the Committee shall have

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been advised by counsel that all applicable legal requirements have been
complied with and satisfied.

         11. Expiration and Termination of the Plan. Options may be granted
under the Plan at any time or from time to time so long as the total number of
Shares at any onc time optioned and/or purchased under this Plan does not exceed
460,244 Shares. The Plan may be abandoned or terminated at any time by the Board
except with respect to any Options then outstanding under the Plan. No Option
shall be granted pursuant to the Plan after ten years from effective date of the
Plan.

         12. Amendment of Plan. The Board may at any time and from time to time
modify and amend the Plan (including the form of any option agreement to be
executed pursuant hereto) in any respects; provided, however, that no such
amendment shall: (a) increase (except in accordance with Section 6 hereof) the
maximum number of Shares for which Options may be granted under the Plan either
in the aggregate or to any individual; (b) reduce (except in accordance with
Section 6 hereof) the minimum option prices which may be established under the
Plan; (c) extend the period or periods during which Options may be granted or
exercised; (d) change the provisions relating to the determination of
individuals to whom Options shall be granted and the number of Shares to be
covered by such Options; or (e) change the provisions relating to adjustments to
be made upon changes in capitalization. The termination or any modification or
amendment of the Plan shall not, without the consent if the Optionee, affect
such Optionee's rights under an Option theretofore granted to him.

         13. Applicability- of Plan to Outstanding Stock Optiolls. This Plan
shall not affect the terms and conditions of any non-qualified stock options
heretofore granted to any individual by the Company or any of its predecessors
under any other plan or agreement relating to non-qualified stock options, nor
shall it affect any of the rights of any individual to whom such a non-qualified
stock option was granted.

         14. iv Date f Plan. This Plan shall become effective upon adoption by
the Board, subject to approval by the shareholders of the Company (or any of its
predecessors). This Plan shall not become effective unless such shareholder
approval shall be obtained within twelve months before or after the adoption of
the Plan by the Board.

         15. Changt~ Control. In the event of a "change in control of the
Company, any option granted hereunder shall be deemed to be fully vested and
inunediately exercisable, entitling the Optionee to immediately exercise the
Option in full and to purchase, prior to the effective date of any "change in
control", the full number of Shares subject to such option which he or she
otherwise would have been entitled to purchase during the remaining term of such
option. The Committee shall give each Optionee at least thirty (3) days prior
written notice of any event giving rise to an immediate purchase right under
this Section 15.

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For purposes of this Section 15, the phrase "change-in-control means (1) any
"person" (as defined in Sections 13(d) and 14 (d) of the Securities Exchange Act
of t934 (the "Exchange Act") becoming the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the Company's outstanding
securities having the right to vote at the election of directors, or (ii) during
any period of two (2) consecutive years, a change in the majority of the Board
of Directors unless the election of each new Director was approved by at least
two-thirds of the Directors then still in office who are Directors at the
beginning of such two (2) year period ", or (iii) a merger, consolidation or
sale of all or substantially all of the assets of the Company in which the
Company is not the surviving institution, or (iv) the distribution of a proxy
statement soliciting proxies from shareholders of the Company by someone other
than the current management of the company, seeking shareholder approval of a
plan of reorganization, merger or consolidation of, the Company or similar
transaction with one or more corporations as result of which the outstanding
shares of the class of securities then subject to the plan of reorganization are
exchanged for or converted into cash or property or securities not issued by the
Company, or (v) a tender offer is made for twenty percent (20%) or more of the
voting securities of the Company.

* As amended by the Board of Directors on November 18, 1997.

* As amended by the Board of Directors on August 19, 1997.

* As amended by the Board of Directors on February 23, 1995.

* As amended by the Shareholders on May 23, 1995

* As amended By the Board of Directors Compensation Committee on January 25,
  1994.

* As amended by the Shareholders as of December 16, 1993.