Document:

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                                                                   EXHIBIT 10.51

                               THIRD AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS THIRD AMENDMENT to Amended and Restated Credit Agreement (this
"Amendment") is entered into as of the 13th day of February, 2003, by and among
(a) Dominion Homes, Inc. (the "Company"), (b) the institutions from time to time
party to the Credit Agreement (as defined below) as lenders (individually, a
"Lender" and collectively, the "Lenders"), and (c) The Huntington National Bank
("Huntington") as issuing bank and as a Lender, and Huntington in its separate
capacity as administrative agent for the Lenders and the issuing bank (with its
successors in such capacity, the "Administrative Agent").

                                    RECITALS:

         A.   As of December 31, 2001, the Company, the Lenders, the
Administrative Agent, and Huntington, in its capacity as issuing bank, executed
a certain Amended and Restated Credit Agreement, which was amended by a certain
First Amendment to Amended and Restated Credit Agreement dated as of June 10,
2002, by a certain Consent Agreement dated as of August 29, 2002, and by a
certain Second Amendment to Amended and Restated Credit Agreement dated as of
December 31, 2002 (as so amended, and as amended, modified and supplemented from
time to time, collectively the "Credit Agreement"), setting forth the terms of
certain extensions of credit to the Company; and

         B.   As of December 31, 2001, the Company executed and delivered to the
Administrative Agent, inter alia, revolving credit notes in favor of the
Lenders, in the original aggregate principal sum of One Hundred Seventy Five
Million Dollars ($175,000,000) and a swing note in favor of Huntington in the
principal sum of $10,000,000, (hereinafter collectively, the "Notes"); and

         C.   In connection with the Credit Agreement and the Notes, the Company
and certain of its Subsidiaries executed and delivered to the Administrative
Agent a standby letter of credit reimbursement agreement, guaranty agreements,
certain other loan documents, consents, agreements, and instruments in
connection with the indebtedness referred to in the Credit Agreement (all of the
foregoing, together with the Notes and the Credit Agreement, are hereinafter
collectively referred to as the "Loan Documents"); and

         D.   The Company has requested that the Required Lenders and the
Administrative Agent amend and modify certain terms and covenants in the Credit
Agreement, and the Required Lenders and the Administrative Agent are willing to
do so upon the terms and conditions contained herein.

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         NOW, THEREFORE, in consideration of the mutual covenants, agreements
and promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto for
themselves and their successors and assigns do hereby agree, represent and
warrant as follows:

         1.   Definitions. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.

         2.   Section 8.8, "Acquisition of Capital Stock," of the Credit
Agreement is hereby amended to recite in its entirely as follows:

              8.8   Acquisition of Capital Stock.

                           The Company shall not redeem or acquire any of its
              own capital stock or any options or other interests in respect
              thereof having an aggregate value in excess of (i) $4,000,000 in
              any fiscal year or (ii) $7,000,000 in the aggregate on and after
              December 31, 2001; except (a) the purchase or redemption of
              capital stock in connection with a simultaneous sale of an
              equivalent or greater amount of capital stock for not less than
              the same aggregate purchase or redemption price, or (b) up to the
              aggregate amount of $1,000,000 in any fiscal year for the purchase
              of capital stock, options or other interests in respect thereto
              using funds escrowed pursuant to the Company's Amended and
              Restated Executive Deferred Compensation Plan or otherwise
              pursuant to any of the Company's management incentive plans. None
              of the Subsidiaries shall redeem or acquire any of its own capital
              stock..

         3.   Conditions of Effectiveness. All provisions of this Amendment
shall become effective as of February 13, 2003, upon satisfaction of all of the
following conditions precedent:

         (a)  The Administrative Agent shall have received nine duly executed
copies of this Amendment, and such other certificates, instruments, documents,
agreements, and opinions of counsel as may be required by the Administrative
Agent, each of which shall be in form and substance satisfactory to the
Administrative Agent and its counsel; and

         (b)  The Administrative Agent shall have received a fee in respect of
this Amendment in the amount of $87,500, which shall be shared by the Lenders on
a pro rata basis; and

         (c)  The representations contained in the immediately following
paragraph shall be true and accurate.

         4.   Representations. The Company represents and warrants that after
giving effect to this Amendment (a) each and every one of the representations
and warranties made by or on behalf of the Company in the Credit Agreement or
the Loan Documents is true and correct in all respects on and as of the date
hereof, except to the extent that any of such representations and warranties
related, by the expressed terms thereof, solely to a date prior hereto; (b) the
Company

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has duly and properly performed, complied with and observed each of its
covenants, agreements and obligations contained in the Credit Agreement and Loan
Documents; and (c) no event has occurred or is continuing, and no condition
exists which would constitute an Event of Default or a Potential Default.

         5.   Amendment to Credit Agreement. (a) Upon the effectiveness of this
  Amendment, each reference in the Credit Agreement to "Credit Agreement,"
  "Agreement," the prefix "herein," "hereof," or words of similar import, and
  each reference in the Loan Documents to the Credit Agreement, shall mean and
  be a reference to the Credit Agreement as amended hereby. (b) Except as
  modified herein, all of the representations, warranties, terms, covenants and
  conditions of the Credit Agreement, the Loan Documents and all other
  agreements executed in connection therewith shall remain as written originally
  and in full force and effect in accordance with their respective terms, and
  nothing herein shall affect, modify, limit or impair any of the rights and
  powers which the Lenders and the Administrative Agent may have thereunder. The
  amendment set forth herein shall be limited precisely as provided for herein,
  and shall not be deemed to be a waiver of, amendment of, consent to or
  modification of any of the rights of the Lenders or the Administrative Agent
  under or of any other term or provisions of the Credit Agreement, any Loan
  Document, or other agreement executed in connection therewith, or of any term
  or provision of any other instrument referred to therein or herein or of any
  transaction or future action on the part of the Company which would require
  the consent of the Lenders and the Administrative Agent, including, without
  limitation, waivers of Events of Default which may exist after giving effect
  hereto. The Company ratifies and confirms each term, provision, condition and
  covenant set forth in the Credit Agreement and the Loan Documents and
  acknowledges that the agreements set forth therein continue to be legal, valid
  and binding agreements, and enforceable in accordance with their respective
  terms.

         6.   Authority. The Company hereby represents and warrants to the
  Administrative Agent and the Lenders that (a) the Company has legal power and
  authority to execute and deliver the within Amendment; (b) the officer
  executing the within Amendment on behalf of the Company has been duly
  authorized to execute and deliver the same and bind the Company with respect
  to the provisions provided for herein; (c) the execution and delivery hereof
  by the Company and the performance and observance by the Company of the
  provisions hereof do not violate or conflict with the articles of
  incorporation or code of regulations of the Company or any law applicable to
  the Company or result in the breach of any provision of or constitute a
  default under any agreement, instrument or document binding upon or
  enforceable against the Company; and (d) this Amendment constitutes a valid
  and legally binding obligation upon the Company in every respect.

         7.   Counterparts. This Amendment may be executed in two or more
  counterparts, each of which, when so executed and delivered, shall be an
  original, but all of which together shall constitute one and the same
  document. Separate counterparts may be executed with the same effect as if all
  parties had executed the same counterparts.

         8.   Costs and Expenses. The Company agrees to pay on demand in
  accordance with the terms of the Credit Agreement all reasonable costs and
  expenses of the Administrative Agent in connection with the preparation,
  reproduction, execution and delivery of this Amendment and all other loan
  documents entered into in connection herewith, including the

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reasonable fees and out-of-pocket expenses of the Administrative Agent's counsel
with respect thereto.

         9.   Governing Law. This Amendment shall be governed by and construed
in accordance with the law of the State of Ohio.

             [The remainder of this page intentionally left blank.]

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              IN WITNESS WHEREOF, the Company, the Lenders and the
Administrative Agent have hereunto set their hands as of the date first set
forth above.

                            COMPANY:

                            DOMINION HOMES, INC.

                            By:  /s/ Peter J. O'Hanlon
                               -----------------------------------

                            Its:  Senior Vice President/Chief Financial Officer
                                  ---------------------------------------------

                            ADMINISTRATIVE AGENT:

                            THE HUNTINGTON NATIONAL BANK

                            By:  /s/ William R. Remias
                                 --------------------------------

                            Its: Vice President
                                 ---------------------------------

                            LENDERS:

                            THE HUNTINGTON NATIONAL BANK,
                            as Lender and Issuing Bank

                            By:  /s/ William R. Remias
                               ----------------------------------

                            Its: Vice President
                                ---------------------------------

                            BANK ONE, NATIONAL ASSOCIATION

                            By:  /s/ David A. DeVictor
                                 --------------------------------

                            Its: Vice President
                                 --------------------------------

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                            KEYBANK NATIONAL ASSOCIATION

                            By:  /s/ Robert L. Zelina
                               -----------------------------------

                            Its:  Vice President
                                ----------------------------------

                            NATIONAL CITY BANK

                            By:  /s/ Steven A. Smith
                               -----------------------------------

                            Its:  Senior Vice President
                                 ---------------------------------

                            COMERICA BANK

                            By:  /s/ Charles L. Weddell
                               -----------------------------------

                            Its:  Vice President
                                ----------------------------------

                            U.S. BANK N.A. fka Firstar Bank, N.A.

                            By:
                               -----------------------------------

                            Its:
                                ----------------------------------

                            THE PROVIDENT BANK

                            By:  /s/ Stephen S. Brooks
                               -----------------------------------

                            Its:  Senior Vice President
                                ----------------------------------

                            FIFTH THIRD BANK (CENTRAL OHIO)

                            By:  /s/ John K. Beardslee
                               -----------------------------------

                            Its:  Vice President
                                ----------------------------------

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                              CONSENT OF GUARANTORS

       Each of the undersigned, being a guarantor of the Company's indebtedness
to the Agent and the Lenders pursuant to certain guaranty agreements in favor of
the Agent with the Bank, hereby consents and agrees to be bound by the terms,
conditions and execution of the above Amendment and hereby further agrees that
its obligations shall be continuing as provided in said guaranty agreements and
said guaranty agreements shall remain as written originally and continue in full
force and effect in all respects.

                                       DOMINION HOMES OF KENTUCKY, LTD.

                                       By:  Dominion Homes of Kentucky GP, LLC,
                                            its general partner

                                       By:          /s/ Peter J. O'Hanlon
                                            -----------------------------------

                                       Its:         Vice President/Treasurer
                                            -----------------------------------

                                       DOMINION HOMES OF KENTUCKY GP, LLC

                                       By:          /s/ Peter J. O'Hanlon
                                            -----------------------------------

                                       Its:         Vice President/Treasurer
                                            -----------------------------------

                                       ALLIANCE TITLE AGENCY OF KENTUCKY, LLC

                                       By:          /s/ Peter J. O'Hanlon
                                            -----------------------------------

                                       Its:         Vice President/Treasurer
                                            -----------------------------------

                                       RESOLUTION PROPERTY COMPANY, LLC

                                       By:          /s/ Peter J. O'Hanlon
                                            -----------------------------------

                                       Its:         President
                                            -----------------------------------

                                       DOMINION HOMES REALTY, LLC

                                       By:          /s/ Peter J. O'Hanlon
                                            -----------------------------------

                                       Its:         Vice President/Treasurer
                                            -----------------------------------

                                        7<PAGE>

                                                                EXHIBIT 10 (iii)

                            EMPLOYMENT AND CHANGE OF
                                CONTROL AGREEMENT

     THIS EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT ("Agreement") is made and
entered into this 1st day of May 2002, by and among United Community Bancorp,
Hickory, North Carolina ("UCB"), and R. Steve Aaron ("Executive").

     WHEREAS, Executive is the President and Chief Executive Officer of UCB and
has held such positions since the organization of UCB; and

     WHEREAS, the expertise and experience of Executive, his knowledge of the
affairs of UCB and his relationships and reputation in the financial
institutions industry are extremely valuable to UCB; and

     WHEREAS, it is in the best interests of UCB and its shareholders to
maintain an experienced and sound executive management team to manage UCB and to
further UCB's overall strategies to protect and enhance the value of its
shareholders' investments; and

     WHEREAS, Executive is a party to that certain Employment and Change of
Control Agreement dated January 1, 1999 with Catawba Valley Bank, the
wholly-owned subsidiary of UCB, and it is the intention of the parties hereto
that this Agreement shall supersede and replace the January 1, 1999 Agreement
with Catawba Valley Bank which, after the effective date hereof, will be void
and of no further force and effect; and

     WHEREAS, UCB and Executive desire to enter into this Agreement to establish
the scope, terms and conditions of Executive's employment by UCB; and

     WHEREAS, UCB and Executive desire to enter into this Agreement also to
provide Executive with security in the event of a Change of Control of UCB and
to insure the continued loyalty of Executive during any such Change of Control
in order to maximize shareholder value as well as the continued safe and sound
operation of UCB.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     1. Effective Date. The effective time and date of this Agreement shall be
deemed to be 12:00:01 o'clock, a.m., on the date of its making set forth above
(the "Effective Date").

     2. Definitions. The following defined terms are defined in the referenced
Sections of this Agreement.

          TERM                               SECTION
          ----                               -------
          Accounting Firm                    Section 9(b)
          Additional Payment                 Section 9(a)
          Base Salary                        Section 6(a)

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          TERM                               SECTION
          ----                               -------
          Benefits Plans                     Section 6(c)
          Cause                              Section 7(b)
          Board                              Section 3
          Change of Control                  Section 8(b)
          Commissioner                       Section 14(d)
          Date of Termination                Section 7(f)
          Disability                         Section 7(a)
          Disability Effective Date          Section 7(a)
          Effective Date                     Section 1
          Excise Tax                         Section 9(a)
          FDIC                               Section 14(d)
          Group                              Section 8(b)
          Incumbent Directors                Section 8(b)
          Initial Termination Date           Section 4
          IRS                                Section 9(a)
          1934 Act                           Section 8(b)
          Notice of Termination              Section 7(e)
          Payment                            Section 9(a)
          Person                             Section 8(b)
          Term                               Section 4

     3. Employment. Executive will be employed as the President and Chief
Executive Officer of UCB. Executive's responsibilities, duties, prerogatives and
authority in such executive offices, and the clerical, administrative and other
support staff and office facilities provided to him, shall be those customary
for persons situated in a similar executive capacity. In his executive
capacities Executive shall report to the Board of Directors of UCB (the
"Board").

     4. Term. The initial term of employment under this Agreement will commence
on the Effective Date and will terminate at the beginning of the business day on
the third (3rd) anniversary of the Effective Date (the "Initial Termination
Date"). This Agreement will automatically renew on the Initial Termination Date,
and on each subsequent anniversary of the Initial Termination Date, for a term
of one year, provided, however, that within 90 days of any such renewal, the
Board of Directors shall review the Executive's performance and shall make a
specific determination pursuant to such review to permit the term to renew for
an additional year.

     5. Extent of Service. During the term of this Agreement, and excluding any
periods of vacation, sick or other leave to which Executive is entitled under
this Agreement, Executive agrees to devote such attention and time during normal
business hours to the business and affairs of UCB, and, to the extent necessary
to discharge the responsibilities assigned to Executive hereunder, to use
Executive's best efforts to perform faithfully and efficiently his
responsibilities and duties under this Agreement. During the term of this
Agreement it shall not be a violation of this Agreement for Executive to (i)
devote reasonable periods of time to charitable, trade association, community
and similar activities, and/or (ii) manage personal business interest and
investments, so long as such activities do not interfere with the performance of
Executive's responsibilities and duties under this Agreement.

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     6. Compensation and Benefits.

          (a) Base Salary. UCB will pay the Executive during the term of this
Agreement, as compensation for all services rendered by him to UCB, a Base
Salary in such amounts and at such intervals as continue to be commensurate with
his duties and responsibilities as President and Chief Executive Officer. The
Executive's initial Base Salary will be $192,000.00 per annum ("Base Salary").
The Executive's Base Salary may be increased from time to time to reflect the
duties of the Executive. In reviewing the Executive's Base Salary, the Board
will consider the overall performance of the Executive and the service of the
Executive rendered to UCB and its subsidiaries, as well as increases in the cost
of living and may also provide for performance or merit increases. Participation
in UCB's cash incentive, deferred compensation, stock option, stock purchase,
discretionary bonus, pension, life insurance and other employee benefit plans
and participation in any fringe benefits will not cause a reduction of the Base
Salary.

          (b) Management Incentives and Discretionary Bonuses. During the term
of this Agreement, the Executive shall be entitled, in an equitable manner based
on the terms of any bonus and incentive plans that have been approved, or may
from time to time be approved, by the Board, with all other key management
personnel of UCB, to such incentives and discretionary bonuses as may be
authorized, declared and paid by the Board to UCB's key management employees. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Executive's right to such incentives and discretionary bonuses when and
as declared by the Board.

          (c) Participation in Retirement and Employee Benefit Plans; Fringe
Benefits. The Executive shall be entitled to participate in any plan relating to
incentive and deferred compensation, stock options, stock purchase, pension,
thrift, profit-sharing, group life insurance, medical coverage, disability
coverage, education, or other retirement or employee benefit plans (hereafter,
collectively referred to as the "Benefit Plans"), that UCB has adopted, or may
from time to time adopt, for the benefit of its executive employees and for
employees generally, subject to the eligibility rules of such plans. The
Executive shall also be entitled to participate in any fringe benefits which are
now, or may be, or may become applicable to UCB's executive employees. Executive
will be entitled to such customary fringe benefits, vacation and sick leave as
are consistent with the normal practices and established policies of UCB, except
that the Board may, in its discretion, provide for more vacation and/or sick
leave than normal practice and policy of UCB.

          (d) Automobile. UCB shall provide Executive, for his personal and
business use, with an automobile mutually satisfactory to the Executive and the
Board. UCB shall assume the costs associated with ownership of such automobile,
provided, however, that Executive shall be responsible for expenses incurred
with his personal use of the automobile.

          (e) Reimbursement of Business Expenses. UCB shall reimburse the
Executive for all out-of-pocket reasonable and necessary business expenses which
the Executive may incur in connection with his service on behalf of UCB,
including the payment of reasonable expenses for attending annual and periodic
meetings of trade associations, and any other activities which are commensurate
with the duties and responsibilities to be performed by the

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Executive under this Agreement. In estimating base salaries and cash incentives
or bonuses, the Board will consider personal cash contributions and non-tax
deductible expenses that are normally expected of executive employees in the
financial institutions industry in a position commensurate with that of
Executive.

     7. Termination of Employment (Other Than In Connection With A Change of
Control).

          (a) Death or Disability. Executive's employment with UCB shall
terminate automatically upon Executive's death during the term of this
Agreement, and in which event the Executive's estate shall be entitled to
receive the compensation due the Executive through the last day of the calendar
month in which the Executive's death shall have occurred. If the Board
determines in good faith that the Disability of Executive has occurred during
the term of this Agreement (pursuant to the definition of Disability set forth
below) it may give to Executive written notice in accordance with Section 7(e)
and 15(g) of this Agreement of its intention to terminate Executive's
employment. In such event, Executive's employment with UCB shall terminate
effective on the 60th day after receipt of such written notice by Executive (the
"Disability Effective Date"), provided that, within such time, Executive shall
not have returned to full-time performance of his duties as Executive. For
purposes of this Agreement, "Disability" shall mean the absence of Executive
from his duties with UCB on a full-time basis for 180 consecutive business days
as a result of incapacity due to mental or physical illness or injury which is
determined to be total and permanent by a physician selected by the Board, or
the insurers of UCB and acceptable to Executive or his legal representative,
which acceptance shall not be unreasonably withheld, subject to (i) UCB's
obligations, and Executive's rights, under (A) the Americans With Disabilities
Act, 42 U.S.C. (S)(S)1210 et seq., and (B) the Family and Medical Leave Act, 29
U.S.C. (S)(S)2601 et seq. (and the regulations promulgated under the foregoing
Acts), and (ii) the exclusion from such 180 business day calculation of any
business days constituting vacation days and any business days which an employee
is permitted to be absent under the disability, sick or other leave policies of
UCB.

          (b) Cause. UCB may terminate Executive's employment with UCB for Cause
in which event the Executive shall have no right to receive compensation or
other benefits hereunder for any period after such termination for Cause. For
purposes of this Agreement, "Cause" shall mean termination of employment because
of the Executive's personal dishonesty, incompetence, willful material
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful material violation of any law, rule,
or regulation (other than traffic violations or other similar misdemeanor
offenses) or final cease-and-desist order, or a material breach of any provision
of this Agreement. For purposes of this provision, no act or failure to act on
the part of Executive shall be considered "willful" unless it is done, or
omitted to be done, by Executive in bad faith or without reasonable belief that
Executive's action or omission was in the best interests of UCB. Any act, or
failure to act, based upon authority given pursuant to resolutions duly adopted
by the Board or based upon the advice of counsel for UCB shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the interest of UCB.

          (c) Termination by UCB Other Than For Cause, Death or Disability.
Notwithstanding the foregoing, UCB may terminate the employment of the Executive
at any time

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during the term of this Agreement upon ninety (90) days prior written notice to
the Executive provided, however, that in the event of involuntary termination of
the Executive's employment under this Agreement, the Executive shall be entitled
to receive a lump sum equal to any accrued and awarded, but unpaid bonuses or
incentives earned in previous performance periods plus the present value of any
remaining Base Salary due throughout the remaining term of this Agreement
discounted at a rate of 7% per annum. UCB shall also carry the Executive's
medical and disability insurance, as well as any other benefits in which the
Executive participates, for a like period.

          (d) By Executive. The Executive's employment under this Agreement may
be terminated at any time by the Executive upon ninety (90) days prior written
notice to UCB. Upon such termination, the Executive shall be entitled to receive
the compensation and benefits payable to the Executive under this Agreement
through the Date of Termination.

          (e) Notice of Termination. Any termination by UCB for Disability or
Cause or by Executive shall be communicated by Notice of Termination to the
other party thereto given in accordance with Section 15(g) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 90 days after
the giving of such notice except as otherwise provided in Section 7(a)). The
failure by Executive or UCB to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Disability or Cause, or by
Executive of any fact or circumstance supporting his claim for payments
following a Change of Control Termination as set forth in Section 8(a) below,
shall not waive any right of Executive or UCB hereunder or preclude Executive or
UCB from asserting such fact or circumstance in enforcing Executive's or UCB's
rights hereunder.

          (f) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by UCB for Cause, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if Executive's employment is terminated by UCB other than for Cause,
Disability, death, or by Executive, ninety (90) days after the date of receipt
of the Notice of Termination, and (iii) if Executive's employment is terminated
by reason of death or Disability, the Date of Termination shall be the date of
death of Executive or the Disability Effective Date, as the case may be.

     8. Termination In Connection With a Change of Control.

          (a) Change of Control Termination. In the event that UCB terminates
the Executive's employment, other than for Cause or Disability in connection
with, or within twelve (12) months after, any Change of Control of UCB, or, in
the event of a voluntary termination of the Officer's employment in connection
with, or within twelve (12) months after any Change of Control of UCB under
which the Executive shall have incurred a reduction of compensation or a
reduction of responsibilities (irrespective of title) or shall have been
required to change his workplace location greater than 35 miles from Hickory,
North Carolina, from any full service

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banking office of UCB or any of its subsidiaries ("Change of Control
Termination"), then the Executive shall be entitled to receive the greater of
(i) the severance payment offered by UCB in such Notice of Termination, and (ii)
the following amounts:

          (i) a lump sum amount equal to 2.99 times the average annual salary
paid to the Executive over the previous three 12 month periods, plus

          (ii) a lump sum equal to 2.99 times the average annual cash bonuses
and incentives paid to the Executive over the previous three 12 month periods,
plus

          (iii) the Executive shall be carried on the medical and disability
programs of UCB for the remaining period of this Agreement from the Date of
Termination; provided, however, that if Executive becomes re-employed with
another employer and is eligible to receive substantially the same benefits
under the other employer's medical and disability programs as Executive would
receive under UCB's medical and disability programs, then the benefits hereunder
shall be secondary to those provided under such other employer's programs during
such applicable period of eligibility.

          (b) Definition of Change of Control. A Change of Control shall be
deemed to have occurred upon: (i) any "Person" or "Group" (as defined in or
pursuant to Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), but not including UCB, or any "employee benefit plan"
(as defined in or pursuant to the Employee Retirement Income Security Act of
1974, 29 U.S.C. (S)1002(3), and as used herein "Person" or "Group") becoming the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act) or otherwise
acquiring control, directly or indirectly, of securities of UCB representing
twenty-five percent (25%) or more of the voting power of UCB's then outstanding
securities; (ii) the acquisition by any Person or Group in any manner of the
ability to elect, or to control the election, of a majority of the directors of
UCB; (iii) the merger of UCB into another entity, the merger of any entity into
UCB or the acquisition of assets by UCB, in any such case with the result that
the beneficial owners of UCB's outstanding securities immediately prior to such
transaction do not beneficially own more than sixty percent (60%) of UCB's
outstanding securities after the consummation of such transaction; (iv) the sale
or other transfer of more than fifty percent (50%) of the assets of UCB to any
entity not controlled by UCB; (v) the consummation of any transaction by UCB
that results (A) in the majority of the Board after the consummation of such
transaction not being composed of Incumbent Directors, or (B) the beneficial
owners of UCB's outstanding securities immediately prior to the consummation of
such transaction not beneficially owning more than sixty percent (60%) of UCB's
outstanding securities after such transaction; or (vi) the occurrence of any
other event or circumstance which is not described in the foregoing provisions
of this Section 8(b) but which the Board determines affects control of UCB and
constitutes a Change of Control for purposes of this Agreement. The term
"Incumbent Director" shall mean any director who as of the Effective Date was a
member of the Board, or any individual becoming a member of the Board subsequent
to the Effective Date whose election by UCB shareholders was recommended by at
least two-thirds (2/3) of the then Incumbent Directors on the Board.

     Notwithstanding the foregoing, a Change of Control shall not include any
transaction to which Executive consents in a writing specifically noting this
provision of this Agreement.

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     9. Additional Payments.

          (a) Amount of Additional Payments. Anything in this Agreement
seemingly to the contrary notwithstanding, in the event it shall be determined
that any or the aggregate of all payments, distributions, accelerations of
vesting, awards and provisions of benefits of UCB to or for the benefit of the
Executive (whether paid or payable, distributed or distributable, accelerated,
awarded or provided pursuant to the terms of this Agreement or otherwise) (a
"Payment") would constitute an "excess parachute payment" within the meaning of
Section 280G of the Code and subject to the excise tax imposed by Section 4999
of the Code (the "Excise Tax"), then prior to the making of any Payment to the
Executive, a calculation shall be made of the amount of the Excise Tax and an
additional cash payment (the "Additional Payment") shall be promptly made to the
Executive in the sum of (i) the Excise Tax and (ii) the total of any Excise Tax
payable on the amounts specified in item (i) and this item (ii). In addition, if
it shall be determined at any time by reference to Internal Revenue Service
("IRS") regulations or rulings, as a consequence of IRS audits or assessments of
Executive (or in settlement thereof), by reference to the terms of the final
judgment of a court or other judicial body of competent jurisdiction or as a
result of other similar events requiring Executive to pay an Excise Tax or any
income or other excise tax on the amounts specified in this Section 9(a), that
an Additional Payment made was less than the sums specified in items (i) and
(ii) above, UCB promptly shall make a further cash payment to Executive in the
sum of (x) such deficit and (y) any Excise Tax on such further cash payment.

          (b) Determination of Excise Tax and Other Amounts. The determination
of whether an Excise Tax would be imposed, the amount of such Excise Tax, and
the calculation of the amounts referred to in Section 9(a) shall be made by
UCB's regular independent accounting firm or, at the election of Executive,
another nationally recognized independent accounting firm (either, the
"Accounting Firm") which shall provide detailed supporting analyses and
calculations. All fees and expenses of the Accounting Firm shall be borne solely
by UCB. Any determination by the Accounting Firm shall be binding upon UCB and
Executive.

     10. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by UCB and for which Executive may qualify, nor,
subject to Section 15(e), shall anything herein limit or otherwise affect such
rights as Executive may have under any contract or other agreement with UCB.
Amounts which are vested benefits or which Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or other
agreement with UCB at or subsequent to a Date of Termination shall be payable in
accordance with such plan, policy, practice or program or such contract or
agreement except as explicitly modified by this Agreement.

     11. Full Settlement. UCB's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which UCB may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under any of the provisions of
this Agreement; provided, however, that Executive's right to receive benefits

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<PAGE>

under the Bank's medical and disability programs to the extent that Executive
obtains other employment shall be limited as provided in Section 8(a)(iii).

     12. Covenants.

          (a) Covenant of Loyalty. During the term of this Agreement, the
Executive shall devote his full efforts and entire business time to the
performance of his duties and responsibilities under this Agreement.

          (b) Covenant Not to Compete. In consideration of employment of the
Executive by UCB during the term of this Agreement, and for a period of one (1)
year after termination, the Executive agrees that he will not, within any county
in which UCB, any financial institution subsidiary of UCB, or any subsidiary of
any such financial institution subsidiary, maintains offices, directly or
indirectly own, manage, operate, join, control or participate in the management,
operation or control of or be employed by or connected in any manner with any
business which competes with UCB or any of the other subsidiaries of UCB,
without the prior written consent of UCB; provided, however, that the provisions
of this section shall not apply in the event that the Executive's employment is
involuntarily terminated by UCB without Cause and no additional noncompetition
agreement is made as part of a separate severance agreement. Notwithstanding the
foregoing, the Executive shall be free, without such consent, to purchase or
hold as an investment or otherwise up to three percent (3%) of the outstanding
stock or other securities of any bank which has its securities publicly traded
on any national securities exchange or through an over-the-counter market.

          (c) Covenant Not to Disclose. The Executive will hold in strict
confidence, during the term of this Agreement and at all times thereafter, all
knowledge or information, of a confidential nature with respect to the business
of UCB and all subsidiaries of UCB received by the Executive during the term of
this Agreement and will not disclose or make use of such information without the
prior written consent of UCB.

          (d) Reasonableness of Scope and Duration. The parties hereto agree
that the covenants and agreements contained in this Section 12 are reasonable in
their time, territory and scope, and they intend that they be enforced, and no
party shall raise any issue of the reasonableness of time, territory or scope of
any such covenants in any proceeding to enforce any such covenants.

          (e) Enforceability. Executive agrees that monetary damages would not
be a sufficient remedy for any breach or threatened breach of the provisions of
this Section 12, and that in addition to all other rights and remedies available
to UCB, UCB shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach or threatened breach.

          (f) Separate Covenants and Severability. The covenants and agreements
contained in this Section 12 shall be construed as separate and independent
covenants. Should any part or provision of any such covenant or agreement be
held invalid, void or unenforceable in any court of competent jurisdiction, no
other part or provision of this Agreement shall be rendered invalid, void or
unenforceable by a court of competent jurisdiction as a result. If any

                                        8

<PAGE>

portion of the foregoing provisions is found to be invalid or unenforceable by a
court of competent jurisdiction unless modified, it is the intent of the parties
that the otherwise invalid or unreasonable term shall be reformed, or a new
enforceable term provided, so as to most closely effectuate the provisions as is
validly possible.

     13. Assignment and Successors.

          (a) Executive. This Agreement is personal to Executive and without the
prior written consent of UCB shall not be assignable by Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive's legal representatives.

          (b) UCB. This Agreement shall inure to the benefit of and be binding
upon UCB and its respective successors and assigns. UCB will require any
successor to it (whether direct or indirect, by stock or asset purchase, merger,
consolidation or otherwise) to all or substantially all of its business or more
than fifty percent (50%) of its assets to assume expressly and agree to perform
this Agreement in the same manner and to the same extent it would be required to
perform it if no such succession had taken place. As used in this Agreement,
"UCB" shall mean UCB as hereinbefore defined and any successor to its respective
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

     14. Regulatory Intervention. Notwithstanding anything in this Agreement to
the contrary, the obligations of UCB under this Agreement are subject to the
following terms and conditions:

          (a) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of UCB's affairs by a notice served under Section
8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. (S)1818(e)(3)
and (g)(1)), UCB's obligations hereunder, as applicable, shall be suspended as
of the date of service unless stayed by appropriate proceedings. If the changes
in the notice are dismissed, all of UCB's obligations, as applicable, which were
suspended, shall be reinstated.

          (b) If Executive is removed and/or permanently prohibited from
participating in the conduct of UCB's affairs by an order issued under Section
8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. (S)1818(e)(4)
and (g)(1)), all obligations of UCB, as applicable, under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
parties shall not be affected.

          (c) If UCB is in default (as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act (12 U.S.C. (S)1813(x)(1)), all obligations of UCB under
this Agreement shall terminate as of the date of default, but any vested rights
of Executive shall not be affected.

          (d) All obligations of UCB under this Agreement shall be terminated,
except to the extent determined that continuation of the Agreement is necessary
for the continued operation of UCB, if so ordered by the North Carolina
Commissioner of Banks (the "Commissioner") at the time the Federal Deposit
Insurance Corporation ("FDIC") enters into an

                                        9

<PAGE>

agreement to provide assistance to or on behalf of UCB under the authority
contained in Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C
(S)1823(c)), or if so ordered by the Commissioner at the time the FDIC approves
a supervisory merger to resolve problems related to operation of UCB or when UCB
is determined by the Commissioner to be in an unsafe or unsound condition. Any
rights of Executive that shall have vested under this Agreement shall not be
affected by such action.

          (e) With regard to the provisions of this Section 14(a) through (d):

               (i)  UCB agrees to use its best efforts to oppose any such notice
                    of charges as to which there are reasonable defenses;

               (ii) In the event the notice of charges is dismissed or otherwise
                    resolved in a manner that will permit UCB to resume their
                    obligations to pay compensation hereunder, UCB will promptly
                    make such payment hereunder; and

               (iii) During any period of suspension under Section 14(a), the
                    vested rights of Executive shall not be affected except to
                    the extent precluded by such notice.

          (f) UCB's obligations to provide compensation or other benefits to
Executive under this Agreement shall be terminated or limited to the extent
required by the provisions of any final regulation or order of the FDIC
promulgated under Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C.
(S)1828(k)) limiting or prohibiting any "golden parachute payment" as defined
therein, but only to the extent that the compensation or payments to be provided
by UCB under this Agreement are so prohibited or limited.

     15. Miscellaneous.

          (a) No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and except as provided in Sections 8(a)(iii), no such payment shall
be offset or reduced by the amount of any compensation or benefits provided to
Executive in any subsequent employment.

          (b) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.

          (c) Severability. If any provision or covenant, of any part thereof,
of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.

                                       10

<PAGE>

          (d) Other Agents. Nothing in this Agreement is to be interpreted as
limiting UCB from employing other personnel on such terms and conditions as may
be satisfactory to it.

          (e) Entire Agreement. Except as provided herein, this Agreement
contains the entire agreement between UCB and Executive, with respect to the
subject matter hereof and supersedes and invalidates any previous employment and
severance agreements or contracts with Executive. No representatives,
inducements, promises or agreements, oral or otherwise, which are not embodied
herein, shall be of any force and effect.

          (f) Governing Law. Except to the extent preempted by federal law, the
laws of the State of North Carolina shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

          (g) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given on delivery, if delivered, or three (3) days after mailing, if
mailed first class, certified mail, postage prepaid:

          To UCB:

          United Community Bancorp
          1039 Second Street, N.E.
          Hickory, North Carolina 28601
          Attn: Chairman of the Board

          To Executive:

          R. Steve Aaron
          1740 10th Street Court N.W.
          Hickory, North Carolina 28601-1734

Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

          (h) Amendment and Modifications. This Agreement may be amended or
modified only by a writing signed by all parties hereto, which makes specific
reference to this Agreement.

                                       11

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment and Change of Control Agreement as of the date first above
written.

                                       UNITED COMMUNITY BANCORP

                                       By:
                                           -------------------------------------
                                           David E. Cline, Chairman of the Board

                                       EXECUTIVE:

                                           -------------------------------------
                                           R. Steve Aaron, President and
                                           Chief Executive Officer

                                       12

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