Document:

Exhibit 10(h)

                                  PEOPLES BANK
                     DIRECTORS' AND OFFICERS' DEFERRAL PLAN

By  a  vote  of the Peoples Bank Board of Directors, (hereinafter referred to as
the,  "Bank")  on  the 18th  day of December, 2001, the Bank has established the
Peoples  Bank Directors' and Officers' Deferral Plan (hereinafter referred to as
the, "Benefit Plan") to allow eligible Directors and Officers the opportunity to
participate  in  the  Plan and defer all or a portion of their fees or salary in
accordance  therewith;

     It  is  the  intent  of  the  Bank  that this Benefit Plan be considered an
unfunded  arrangement  maintained  primarily  to provide supplemental retirement
benefits,  and to be considered a non-qualified benefit plan for purposes of the
Employee  Retirement  Security  Act  of  1974,  as  amended  ("ERISA").

I.   ELIGIBILITY

     Those  individuals  selected  by  the  Board of Directors and designated in
     resolutions  of  the  Board  and members of the Board of Directors shall be
     eligible to become a participant in this Benefit Plan (hereinafter referred
     to  as  the,  "Participant").

II.  FEES  AND  COMPENSATION

     The  fees covered under this Benefit Plan shall be any and all amounts paid
     to  the  Participant  for  the  Participant's  services,  including but not
     limited  to annual fees, meeting fees, and committee fees. Participants may
     elect  to  defer  no  more  than  one  hundred  percent  (100%) of fees and
     compensation.  The  deferred  fees covered under this Benefit Plan shall be
     credited  to  the  Participant  subject  to  the  election  requirement  of
     Subparagraph  III  (A)  hereinbelow.

III. DEFERRED  COMPENSATION

     A.   Election  of  Participant's  Deferred  Compensation:
          ----------------------------------------------------

          The  Participant  shall at the same time as entering this Benefit Plan
          file  a  written  statement with the Bank notifying the Bank as to the
          percent  (%)  or  dollar amount of fees and compensation as defined in
          Paragraph  II  that  are to be deferred and the actual investments [as
          defined  in  Subparagraph  VI  (G)]  (hereinafter  referred to as the,
          "Election  Form"). A copy of the said Election Form is attached hereto
          and  marked  as  Exhibit  "A-1".  The  election  to  defer  fees  and
          compensation may only be

<PAGE>
          made  for  fees and compensation not yet earned as of the date of said
          election.  Signed  written statements filed under this section, unless
          modified  or  revoked,  shall  be  valid for all succeeding years. Any
          modification  or  revocation  of a signed written statement must be in
          writing,  made one (1) year prior to receiving benefits hereunder, and
          shall be effective for calendar years succeeding the year in which the
          modification  or  revocation  is  made.

     B.   Payment  of  Participant's  Deferred  Compensation:
          --------------------------------------------------

          At  all  times,  the  Participant  shall be one hundred percent (100%)
          vested  in the Participant's Deferred Compensation Account [as defined
          in  Subparagraph  IV  (A)(i)].  Payment  of the Participant's Deferred
          Account  balance shall commence on the first day of the calendar month
          following  the  end  of  the  Participant's  term  of  office  due  to
          resignation,  removal,  failure  to  be  re-elected,  retirement,  or
          hardship  as  further  set  forth  hereinbelow, and shall continue, if
          applicable,  as  set  forth  in  the  Participant's  Election  Form.

          (i)  Retirement:  Retirement  age  for Directors and Officers shall be
               ----------
               age  seventy  (70)  or  such  other  date  as the Participant may
               actually  retire.

          (ii) Early  Withdrawal:  The Bank shall permit early withdrawals under
               -----------------
               certain  circumstances. The Participant may submit an application
               for an in-service early withdrawal to the Board of Directors. If,
               in  the  discretion of the Board, the Participant is permitted to
               take  an  early  withdrawal, the Board shall cause the Trustee to
               pay  an  in-service  distribution  to  such  Participant from the
               Participant's  Account.  Such  distribution  shall  be  paid in a
               single-sum  cash  payment  as  soon as administratively feasible,
               after  the  Board determines that the Participant is permitted to
               take  an  early  withdrawal.  The  amount of such single-sum cash
               payment  shall  be  limited to the amount reasonably necessary to
               meet the Participant's requirements resulting from any reason for
               an  early  withdrawal.

     C.   Investment  of  Participant's  Deferred  Compensation:
          ------------------------------------------------------

          The  Participant  shall at the same time as entering this Benefit Plan
          notifying  the  Bank  on  the  Election  Form as to the percent (%) of
          deferred  compensation  that  is  to  be  allocated  among the "actual
          investment"  choices  as  defined  in  Subparagraph VI (G) herein. The
          Participant  may  make  changes  to  the  allocation  of their "actual
          investments"  quarterly.

     D.   Bank  Contributions:
          -------------------

          The Bank may make matching or other contributions to this Benefit Plan
          for the benefit of the Participant from time to time at the discretion
          of  the  Bank.  The  Participant  shall  be one hundred percent (100%)
          vested  in  the  Bank's  Contributions

<PAGE>
          hereunder.

     E.   Payment  of  Bank's  Contributions:
          ----------------------------------

          The  vested amounts in the Participant's Deferred Compensation Account
          attributed  to  bank  contributions shall be paid under the same terms
          and  conditions  as payment of the Participant's deferred compensation
          [Subparagraph  III  (B)].

     F.   Investment  of  Bank's  Contribution  to  the  Participant's  Deferred
          ----------------------------------------------------------------------
          Compensation  Account:
          ---------------------

          The  Bank's  contribution  to  the Participant's Deferred Compensation
          Account, if any, shall be invested under the same terms and conditions
          as  the  investment  of  the  Participant's  Deferred  Compensation
          [Subparagraph  III  (C)].

IV.  PARTICIPANT'S  DEFERRED  COMPENSATION  ACCOUNT
     AND  RABBI  TRUST

     A.   Rabbi  Trust:
          ------------

          The  Bank shall establish a Rabbi Trust for the Benefit Plan. The Bank
          shall  pay all deferral amounts and matching contributions, if any, to
          the  Rabbi  Trust.  Said  Trustee  shall  make  actual investments and
          payments  in  accordance  with  this  Benefit  Plan.

          (i)  Participant's  Deferred  Compensation  Account:
               ----------------------------------------------

               The  Trustee shall establish and maintain an account on behalf of
               each  Participant. A Participant's Account shall be credited with
               (i) the amount of Fees and Compensation the Participant elects to
               defer  under the Election Form, (ii) other Bank Contributions, if
               any,  and  (iii)  earnings or losses attributable to the Account.
               Each Account of a Participant shall be maintained until the value
               thereof  has been distributed to or on behalf of such Participant
               or  the Participant's beneficiary(ies). The value of said account
               shall  be  calculated  quarterly.

V.   DEATH  OF  DIRECTOR

     A.   Prior  to  Commencement  of  Payments:
          -------------------------------------

          In  the event of the death of the Participant prior to commencement of
          payments,  within  thirty (30) days after the Participant's death, the
          Participant's  Deferred Compensation Account balance as of the date of
          death  shall  be  paid as set forth in the Election Form, or in a lump
          sum,  at the discretion of the Bank, to such individual or individuals
          as  the  Participant may have designated in writing and filed with the

<PAGE>
          Bank.  In  the event no designation is made, the Participant's account
          balance  shall  be  paid  as  set  forth  herein to the duly qualified
          executor  or  administrator  of  the  Participant's  estate.

     B.   Subsequent  to  Commencement  of  Payments:
          ------------------------------------------

          In  the  event  of  the death of the Participant after commencement of
          payments  but  prior to the Participant receiving all payments due the
          Participant under this Benefit Plan, within thirty (30) days after the
          Participant's  death,  the  remaining  Deferred  Compensation  Account
          balance  as  of  the  date  of death shall be paid as set forth in the
          Election  Form,  or  in  a lump sum, at the discretion of the Bank, to
          such  individual or individuals as the Participant may have designated
          in  writing  and  filed  with the Bank. In the event no designation is
          made,  the  Participant's  account  balance shall be paid as set forth
          herein  to  the  duly  qualified  executor  or  administrator  of  the
          Participant's  estate.

VI.  MISCELLANEOUS

     A.   Amendment  or  Revocation:
          -------------------------

          It  is  understood  that, during the lifetime of the Participant, this
          Benefit  Plan may be amended or revoked at any time or times, in whole
          or  in  part,  by  the  mutual written consent of the Participant, the
          Bank,  and  the  Trustee.

     B.   Gender:
          ------

          Whenever  in  this  Benefit  Plan  words  are used in the masculine or
          neuter  gender,  they shall be read and construed as in the masculine,
          feminine  or  neuter  gender,  whenever  they  should  so  apply.

     C.   Effect  on  Other  Bank  Benefit  Plans:
          ---------------------------------------

          Nothing  contained  in this Benefit Plan shall affect the right of the
          Participant  to  participate  in  or  be  covered  by any qualified or
          non-qualified  pension,  profit-sharing,  group,  bonus  or  other
          supplemental  compensation  or fringe benefit plan constituting a part
          of  the  Bank's  existing  or  future  compensation  structure.

     D.   Headings:
          --------

          Headings  and  subheadings  in  this  Benefit  Plan  are  inserted for
          reference  and convenience only and shall not be deemed a part of this
          Benefit  Plan.

<PAGE>
     E.   Partial  Invalidity:
          -------------------

          If any term, provision, covenant, or condition of this Benefit Plan is
          determined  by  an  arbitrator  or  a court, as the case may be, to be
          invalid,  void,  or unenforceable, such determination shall not render
          any  other  term,  provision, covenant, or condition invalid, void, or
          unenforceable,  and  this  Benefit Plan shall remain in full force and
          effect  notwithstanding  such  partial  invalidity.

     F.   Continuation  as  Participant:
          ------------------------------

          Neither  this Benefit Plan nor the payments of any benefits thereunder
          shall  be  construed  as  giving  to  the  Participant any right to be
          retained  as  a  member  of  the  Board  of  Directors  of  the  Bank.

     G.   Actual  Investments:
          -------------------

          Each  Participant will be allowed to select from a restricted list the
          funds  to  be  used  to determine the "investment allocation" of their
          Deferred  Compensation  Account.  The  performance  of  the  deemed
          investments will be used to determine the earnings or losses to credit
          to  the  Participant's  Deferred Compensation Account. The Participant
          will  be  allowed  to  change  their  investment allocation quarterly.

VII.  CHANGE  OF  CONTROL

          The  Participant  shall  be  one  hundred percent (100%) vested in all
          benefits  provided  in  this  Benefit Plan upon a Change of Control. A
          Change  of  Control  shall be as defined in Subsection XIII (d) in the
          Rabbi  Trust  for  the  Peoples Bank Directors' and Officers' Deferral
          Plan.

VIII. ADMINISTRATION  AND  CLAIMS

     A.   Plan  Administrator:
          -------------------

          The  Plan Administrator of this Benefit Plan shall be the Peoples Bank
          until  its resignation or removal by the Board. As Plan Administrator,
          the  Peoples  Bank  shall  be  responsible  for  the  management  and
          administration  of  this  Benefit  Plan.  The  Plan  Administrator may
          delegate  to  others  certain  aspects of the management and operation
          responsibilities  of  this  Benefit  Plan  including the employment of
          advisors  and  the  delegation  of  ministerial  duties  to  qualified
          individuals.

     B.   Claims  Procedure  and  Arbitration:
          -----------------------------------

          In  the  event  a dispute arises over benefits under this Benefit Plan
          and  benefits are not paid to the Participant (or to the Participant's
          beneficiary(ies)  in  the  case  of  the

<PAGE>
          Participant's  death)  and  such  claimants  feel they are entitled to
          receive  such  benefits, then a written claim must be made to the Plan
          Administrator  named  above  within  sixty  (60)  days  from  the date
          payments  are refused. The Plan Administrator shall review the written
          claim  and  if  the  claim  is denied, in whole or in part, they shall
          provide in writing within sixty (60) days of receipt of such claim the
          specific  reasons for such denial, reference to the provisions of this
          Benefit  Plan  upon  which  the  denial  is  based  and any additional
          material  or  information necessary to perfect the claim. Such written
          notice  shall  further  indicate  the  additional steps to be taken by
          claimants  if a further review of the claim denial is desired. A claim
          shall  be  deemed  denied  if the Plan Administrator fails to take any
          action  within  the  aforesaid  sixty-day  period.

          If  claimants  desire  a  second  review  they  shall  notify the Plan
          Administrator  in  writing  within  sixty (60) days of the first claim
          denial.  Claimants  may  review  This  Benefit  Plan  or any documents
          relating  thereto  and  submit  any written issues and comments it may
          feel  appropriate.  In  their  sole discretion, the Plan Administrator
          shall  then  review  the  second  claim and provide a written decision
          within  sixty  (60) days of receipt of such claim. This decision shall
          likewise state the specific reasons for the decision and shall include
          reference  to  specific provisions of this Benefit Plan upon which the
          decision  is  based.

          If  claimants  continue  to dispute the benefit denial, then claimants
          may  submit  the  dispute  to an Arbitrator for final arbitration. The
          Arbitrator  shall  be selected by mutual agreement of the Bank and the
          claimants. The Arbitrator shall operate under any generally recognized
          set of arbitration rules. The parties hereto agree that they and their
          heirs, personal representatives, successors and assigns shall be bound
          by  the  decision  of  such Arbitrator with respect to any controversy
          properly  submitted  to  it  for  determination.

                                             PEOPLES  BANK
                                             Newton,  North  Carolina

                                             By: /s/ Robert C. Abernethy
                                             ------------------------------
                                             Chairman of the Board

<PAGE>Exhibit 10(i)

                              RABBI TRUST FOR THE
                                  PEOPLES BANK
                     DIRECTORS' AND OFFICERS' DEFERRAL PLAN

                                  CBIZ/BENMARK
                        1100 CIRCLE 75 PARKWAY, SUITE 300
                             ATLANTA, GEORGIA 30339
                            TELEPHONE: (770) 952-1529
                            FACSIMILE: (770) 952-8029

<PAGE>
                          RABBI TRUST FOR PEOPLES BANK
                     DIRECTORS' AND OFFICERS' DEFERRAL PLAN

     This  Trust  Agreement effective as of the 6th day of December, 2001 by and
between Peoples Bank having its principal place of business in North Carolina or
any  successor corporation (hereinafter referred to as the, "Bank"), and Eastern
Bank  & Trust Co., a banking corporation with its principal place of business in
Massachusetts  (hereinafter  referred  to  as  the,  "Trustee").

                              W I T N E S S E T H:

     WHEREAS,  Bank  has  adopted  a  non-qualified  deferred  compensation plan
(hereinafter  referred  to  as  the, "Benefit Plan"), such Benefit Plan has been
made  effective  as  of  the  1st  day  of  January,  2002  and  constitutes  a
non-qualified  deferred compensation plan, a copy of which is attached hereto as
Exhibit  "A",  fully  incorporated  herein by reference, and made a part hereof.

     WHEREAS,  Bank  hereby  establishes  this Trust (hereinafter referred to as
the,  "Trust") and to contribute to the Trust assets that shall be held therein,
subject  to the claims of bank's creditors in the event of Bank's Insolvency, as
herein defined, until paid to Benefit Plan participants, and their beneficiaries
in  such  manner  and  at  such  times  as  specified  in  the  Benefit  Plan;

     WHEREAS,  it  is  the  intention  of  the  parties  that  this  Trust shall
constitute  an  unfunded  arrangement  and  shall  not  affect the status of the
Benefit  Plan  as  an  unfunded  plan,  maintained  primarily for the purpose of
providing  deferred  compensation  for  a  select  group of management or highly
compensated  Directors  and  Officers,  for  purposes of Title I of the Employee
Retirement  Income  Security  Act  of  1974  ("ERISA"),  as  amended;

     WHEREAS,  it  is  the  intention of Bank to make contributions to the Trust
pursuant  to the Benefit Plan (hereinafter referred to as the, "Contributions");

     NOW,  THEREFORE,  the  parties do hereby establish the Trust and agree that
the  Trust  shall  be  comprised,  held  and  disposed  of  as  follows:

                                        2
<PAGE>
                                    SECTION I
                             ESTABLISHMENT OF TRUST

     (a)     This trust is hereby established as the Rabbi Trust for Peoples
Bank Directors' and Officers' Deferral Plan.

     (b)     Bank shall deposit, from time to time, the Contributions with
Trustee in trust, which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.

     (c)     The Trust hereby established shall be irrevocable, but may be
amended as provided under (and only as provided under) Section XII.

     (d)     The Trust is intended to be a grantor trust, of which Bank is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

     (e)     The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Bank and shall be used exclusively for
the uses and purposes of Benefit Plan participants and general creditors as
herein set forth.  Benefit Plan participants and their beneficiaries shall have
no preferred claim on, or any beneficial ownership interest in, any assets of
the Trust.  Any rights created under the Benefit Plan and this Trust Agreement
shall be mere unsecured contractual rights of Benefit Plan participants and
their beneficiaries against the Trust.  Any assets held by the Trust will be
subject to the claims of Bank's general creditors under federal and state law in
the event of Insolvency, as defined in Section III (a) herein.

     (f)     The Trustee shall be accountable for all property and Contributions
received, but the Trustee shall have no duty to see that the Contributions are
received pursuant to the Benefit Plan, nor shall the Trustee be obligated to
enforce or collect any Contribution from the Bank.  Notwithstanding the
foregoing, in the event of a Change in Control, the Trustee shall have the right
to monitor, enforce and/or collect any Contributions due and owing from the Bank
or to give notice of any default in making Contributions to any person.

     (g)     The Trustee may not return to the Bank any excess assets that
remain in the Trust.

                                        3
<PAGE>
                                   SECTION II
              PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

     (a)     The Plan Participant shall deliver to the Bank a deferral and
election form, in accordance with the terms of the Benefit Plan, that directs
the deferrals, investments and payments of the Participant's Deferred
Compensation Account.  The Bank shall make Contributions to the Trust in
accordance with said deferral and election form, and the Trustee shall make
investments and payments accordingly.  A true and correct copy of said Peoples
Bank Directors' Deferral Plan Deferral and Payment Election Form is attached
hereto, marked Exhibit "A-1", and fully incorporated herein by reference.
Notwithstanding anything herein to the contrary, the Bank shall have the sole
discretion to direct the investments of the Rabbi Trust and shall direct the
Trustee accordingly.

     (b)     In accordance with said deferral and election form, the Bank shall
deliver to Trustee a schedule (the, "Payment Schedule") that indicates the
amounts payable in respect of each Benefit Plan participant (and his or her
beneficiaries), that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Benefit Plan), and the time
of commencement for payment of such amounts.  The Trustee shall make payments in
accordance with said Payment Schedule.

     (c)     The Trustee shall, in accordance with the written instructions of
the Bank, withhold and report any federal, state or local taxes that may be
required to be withheld and reported with respect to the payment of benefits
pursuant to the terms of the Benefit Plan and shall pay amounts withheld to the
appropriate taxing authorities. In addition, the Trustee shall be authorized to
pay any federal, state or local taxes to any government body that presents a tax
deficiency notice to the Trustee with respect to income or assets of the Trust.
The Bank shall deliver to the Trustee each year a schedule which specifies the
amount of taxes to be withheld, if any, with respect to benefit payments to be
made hereunder.  Trustee shall be entitled to rely conclusively on the written
instructions of Bank as to all tax reporting and withholding requirements.

                                        4
<PAGE>
     (d)     The  entitlement  of  a  Benefit  Plan  participant  or  his or her
beneficiaries to benefits under the Benefit Plan shall be determined by the Bank
or  such  party (other than the Trustee) as it shall designate under the Benefit
Plan, and any claim for such benefits shall be considered and reviewed under the
procedures  set  out  in  the  Benefit  Plan.

                                  SECTION III
                  TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
                    TRUST BENEFICIARY WHEN BANK IS INSOLVENT

     (a)     Trustee  shall  cease  payment  of  benefits  to  Benefit  Plan
participants  and  their  beneficiaries  if the Bank is Insolvent. Bank shall be
considered  "Insolvent"  for purposes of this Trust Agreement if (i) Bank states
to  it in writing that it is unable to pay its debts as they become due, or (ii)
Bank  is  subject  to  a  pending proceeding as a debtor under the United States
Bankruptcy  Code.

     (b)     At  all  times during the continuance of this Trust, as provided in
Section  I (e) hereof, the principal and income of the Trust shall be subject to
claims  of  general  creditors  of Bank under federal and state law as set forth
below.

          (1)     The Board of Directors and the Chief Executive Officer of Bank
shall  have  the  duty  to  inform Trustee in writing of Bank's Insolvency. If a
person claiming to be a creditor of Bank alleges in writing to Trustee that Bank
has  become  Insolvent,  Trustee  shall determine whether Bank is Insolvent and,
pending  such  determination,  Trustee  shall discontinue payment of benefits to
Benefit  Plan  participants  or  their  beneficiaries.

                                        5
<PAGE>
          (2)     Unless  trustee has  actual knowledge of Bank's Insolvency, or
has  received  notice  from  Bank or a person claiming to be a creditor alleging
that  Bank  is  Insolvent, Trustee shall have no duty to inquire whether Bank is
Insolvent.  Trustee  may  in  all events rely on such evidence concerning Bank's
solvency  as  may  be  furnished  to  Trustee  and  that provides Trustee with a
reasonable  basis for making a determination concerning Bank's solvency. Trustee
shall  have  no liability for any payments to Benefit Plan participants or their
beneficiaries  after  the  occurrence  of  an Insolvency but prior to its actual
knowledge  thereof.

          (3)     If at  any time Trustee has determined that Bank is Insolvent,
Trustee  shall  discontinue  payments  to  Benefit  Plan  participants  or their
beneficiaries  and  shall hold the assets of the Trust for the benefit of Bank's
general creditors. Nothing in this Trust Agreement shall in any way diminish any
rights  of  Benefit  Plan  participants  or  their beneficiaries to pursue their
rights  as  general  creditors  of  bank  with respect to benefits due under the
Benefit  Plan  or  otherwise.

          (4)     Trustee  shall  resume the payment of benefits to Benefit Plan
participants  or  their  beneficiaries  in  accordance  with  Section II of this
Agreement  only  after Trustee has determined that Bank is not (or is no longer)
Insolvent.

     (c)     Provided  that there are sufficient assets, if Trustee discontinues
the  payment  of  benefits from the Trust pursuant to Section III (b) hereof and
subsequently  resumes  such  payments,  the  first  payment  following  such
discontinuance shall include the aggregate amount of all payments due to Benefit
Plan participants or their beneficiaries under the terms of the Benefit Plan for
the  period  of  such  discontinuance, less the aggregate amount of any payments
made  to Benefit Plan participants or their beneficiaries by Bank in lieu of the
payments  provided  for  hereunder  during  any  such  period of discontinuance.

                                        6
<PAGE>
                                   SECTION IV
                                PAYMENTS TO BANK

      The  Trustee  may  not return to the Bank any excess assets that remain in
the  Trust.  If  there  are any assets remaining in the Trust after all required
distributions  are  made,  the  excess assets shall be distributed in a pro rata
share  based  on  account  balance to each participant participating in the Plan
within  the  twelve  (12)  months  prior  to  Plan  termination.

                                    SECTION V
               TRUSTEE'S POWERS AND PARTICIPANT DIRECTED ACCOUNTS

     (a)     In accordance with the terms of the Benefit Plan, the Bank may
allow each participant to control and direct the investments of the
participant's accounts.  If participant directed accounts are allowed, the Bank
may select a diversified group of investments to offer to the participants.  All
investment direction shall be made in writing by the participant to the Bank.
The Trustee shall not be liable for any loss, or by any reason of any breach,
which results from the participant's controlling and directing investments in
his account and shall not be under any duty to advise a participant or
beneficiary with respect to any investment.  Each participant shall be informed
of his right to direct the investment of his account and of the procedures
regarding directed investments.  If such participant does not elect an
investment method, the Trustee shall invest the participant's accounts as
directed by the Bank.

     (b)     Subject to the foregoing, Trustee shall have the following powers
and authority in the administration of the assets of the Trust, in addition to
those vested in it elsewhere in this Trust Agreement or by law:

          (i)     Subject to investment direction issued by Bank or the
participant, to invest and reinvest the assets of the Trust, without distinction
between principal and income, in any kind of property, real, personal or mixed,
tangible or intangible, and in any kind of investment, security or obligation
suitable for the investment of Trust assets, including federal, state and
municipal tax-free obligations and other tax-free investment vehicles, insurance
policies and

                                        7
<PAGE>
annuity contracts, and any common trust fund, group trust, pooled fund, or other
commingled investment fund maintained by the Trustee or any other bank or entity
for trust investment purposes in which the Trust is eligible to invest and the
provisions governing such fund shall be part of the Trust Agreement as though
fully restated herein;

          (ii)     To purchase, and maintain as owner, a life insurance policy
or policies with respect to participants; provided; however; that the Trustee
shall not be required to purchase or take any action under a life insurance
policy or policies with respect to participants unless directed to do so by the
Bank, which shall designate the face amount of said policy or policies, the
terms of the policy or policies and the insurance company;

          (iii)     To sell for cash or on credit, to grant options, convert,
redeem, exchange for other securities or other property, or otherwise to dispose
of, any security or other property at any time held except that the Trustee
shall have no right or obligation to take any action with respect to any
insurance contract or policy unless so directed by the Bank;

          (iv)     At the direction of the Bank, to settle, compromise or submit
to arbitration, any claims, debts or damages, due to or owning to or from the
Trust, to commence or defend suits or legal proceedings and to represent the
Trust in all suits or legal proceedings provided, however, the Trustee shall not
be expected or required to undertake any of the foregoing unless there are
sufficient assets in the Trust with which to do so, or the Trustee has received
assurances by a party to this Trust, satisfactory to the Trustee, of the payment
or reimbursement of the expenses connected therewith;

          (v)     To exercise any conversion privilege (other than conversion
privileges with respect to any insurance policy, which shall be exercised only
upon direction of the Bank, and/or subscription right available in connection
with securities or other property at any time held, to oppose or to consent to
the reorganization, consolidation, merger or readjustment of the finances of any
corporation, bank or association or to the sale, mortgage, pledge or lease of
the property of any corporation, bank or association any of the securities of
which may at any time be held and to do any act with reference thereto,
including the exercise of options, making of agreement or subscription, which
may be deemed necessary or advisable in connection therewith, and to hold and
retain any securities or other properties so acquired;

                                        8
<PAGE>
          (vi)     To hold cash uninvested for a reasonable period of time under
the circumstances without liability for interest, pending investment thereof or
the payment of expenses or making distributions therewith;

          (vii)     To form corporations and to create trusts to hold title to
any securities or other property, all upon such terms and conditions as may be
deemed advisable;

          (viii)     To employ suitable agents and counsel and to pay their
reasonable expenses and compensation;

          (ix)     To register any securities held hereunder in the name of the
Trustee or in the name of a nominee with or without the addition of words
indicating that such securities are held in a fiduciary capacity and to hold any
securities in bearer form and to combine certificates representing such
securities with certificates of the same issue held by Trustee in other
fiduciary or representative capacities, or to deposit securities in any
qualified central depository where such securities may be held in bulk in the
name of the nominee of such depository with securities deposited by other
depositors, or deposit securities issued by the United States Government, or any
agency or instrumentality's thereof, with a Federal Reserve Bank;

          (x)     To make, execute and deliver, as Trustee, any and all
conveyances, contracts, waivers, releases or other instruments in writing
necessary or proper for the accomplishment of any of the foregoing powers;

          (xi)     To have any and all other powers or authority, under the laws
of the state in which the Trustee's principal executive offices are located,
relevant  to performance in the capacity as Trustee; and

          (xii)     To settle, compromise or submit to arbitration, any claims,
debts or damages, due or owing to or from the Trust, to commence or     defend
suits or legal proceedings and to represent the Trust in all suits or legal
proceedings; provided, however, the Trustee shall not be expected or required to
undertake any of the foregoing unless there are sufficient assets in the Trust
with which to do so, or the Trustee has received assurances by a party to this
Trust, satisfactory to the Trustee, of the payment or reimbursement of the
expenses connected therewith.

                                        9
<PAGE>
                                   SECTION VI
                              DISPOSITION OF INCOME

     During  the  term  of  this Trust, all income received by the Trust, net of
distribu-tions,  expenses  and  taxes,  shall  be  accumulated  and  reinvested.

                                  SECTION VII
                              ACCOUNTING BY TRUSTEE

     Trustee  shall  keep  accurate  and  detailed  records  of all investments,
receipts,  disbursements,  and  all  other  transactions  required  to  be made,
including  such specific records as shall be agreed upon in writing between Bank
and  Trustee.  Trustee  shall retain CBIZ/Benmark or such other administrator as
the Bank may direct to provide these services. Within ninety (90) days following
the  close of each calendar year and within sixty (60) days after the removal or
resignation  of  Trustee, Trustee shall deliver to Bank a written account of its
administration of the Trust during such year or during the period from the close
of  the  last preceding year to the date of such removal or resignation, setting
forth  all  investments, receipts, disbursements and other transactions effected
by  it,  including a description of all securities and investments purchased and
sold  with the cost or net proceeds of such purchases or sales (accrued interest
paid or receivable being shown separately), and showing all cash, securities and
other  property  held  in the Trust at the end of each year or as of the date of
such  removal  or  resignation,  as  the  case  may  be.

                                  SECTION VIII
                            RESPONSIBILITY OF TRUSTEE

     (a)     Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such

                                       10
<PAGE>
matters would use in the conduct of an enterprise of a like character and with
like aims, provided, however, that Trustee shall incur no liability to any
person for any action taken pursuant to a direction, request or approval given
by Bank which is contemplated by, and in conformity with, the terms of the
Benefit Plan or this Trust and is given in writing by Bank. In the event of a
dispute between Bank and a party, Trustee may apply at the expense of the Trust
to a court of competent jurisdiction (located in Massachusetts, if possible) to
resolve the dispute.

     (b)     Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of the duties or obligations hereunder.

     (c)     Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is acquired or held at the
direction of Bank as an asset of the Trust, Trustee shall have no power to name
a beneficiary of the policy other than the Trust, to assign the policy other
than to a successor Trustee, or to loan any person (including Bank) the proceeds
of any borrowing against such policy.

     (d)     Notwithstanding any powers granted to Trustee pursuant to this
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

     (e)     Trustee shall be entitled to conclusively rely upon written notice,
direction, instruction, certificate or other communication believed by it to be
genuine and to be signed by the proper person or persons.

     (d)     Nothing contained in this Trust Agreement shall require Trustee to
risk or expend its own funds in the performance of its duties hereunder. In the
acceptance and performance of its duties hereunder, Trustee acts solely as
Trustee of the Trust and not in its individual capacity, and all persons, other
than Bank, having any claim against Trustee related to this Trust Agreement or
the actions or agreements of Trustee contemplated hereby shall look solely to
the Trustee for the payment or satisfaction thereof, except to the extent that
Trustee has engaged in

                                       11
<PAGE>
willful misconduct or gross negligence, or Trustee has willfully breached its
obligation under this Trust Agreement.

     (g)     Trustee shall not be responsible for determining whether a Change
in Control (as hereinafter defined) has occurred. Bank will notify Trustee of
the occurrence of a Change in Control, and Trustee shall be entitled to rely
conclusively upon such notification for all purposes of a Change in Control
hereunder without any liability or further duty with respect thereto.

     (h)     Any amendment or amendments that are or may be made to the Benefit
Plan shall not increase the Trustee's duties hereunder without the express
written consent of the Trustee.

                                   SECTION IX
                      COMPENSATION AND EXPENSES OF TRUSTEE

     Bank shall pay all administrative and Trustee's fees and expenses. If not
paid by Bank, the fees and expenses shall be paid from the Trust.

                                    SECTION X
                       RESIGNATION AND REMOVAL OF TRUSTEE

     (a)     Trustee may resign at any time by written notice to Bank, which
shall be effective sixty (60) days after receipt of such notice unless Bank and
Trustee agree otherwise, whether or not a successor has been appointed and
qualifies. Trustee shall pay or deliver property to the successor Trustee or
Bank (in further trust, pending the appointment of a successor) as the case may
be, at the end of such period.

     (b)     Trustee may be removed by Bank on sixty (60) days notice to Trustee
or upon shorter notice accepted by Trustee.  A successor Trustee may be removed
by Bank on ninety (90) days notice to such successor Trustee or upon shorter
notice accepted by the successor Trustee.

     (c)(1)  If, at the time of a Change in Control (as defined herein), the
then acting Trustee is an individual or entity, not independent of the Bank, the
Board of Directors of the Bank, as in existence immediately prior to the Change
in Control, shall designate an independent third party

                                       12
<PAGE>
with corporate trustee powers to act as successor Trustee and upon such
appointment, the Trustee acting prior to such Change in Control shall resign.
The successor Trustee appointed by the Board of Directors may not be removed by
the Bank for two (2) years following the date of such Change in Control.

         (2)     If, at the time of a Change in Control (as defined herein), the
Trustee is, other than serving as Trustee hereunder, an independent party with
respect to the Bank, Trustee may not be removed by Bank for the two (2) years
following the date of such a Change in Control. Such Trustee also may not be
removed by Bank in anticipation of a Change in Control.

     (d)     If Trustee resigns at any time following a Change in Control, or if
Trustee is removed by Bank at any time following the expiration of the two (2)
year period (as described in Subpart (c) above) following a Change in Control,
the President of the Bank, as in existence immediately prior to a Change in
Control, shall select a successor Trustee in accordance with the provisions of
XI (a) hereof and such selection shall be made on or before the effective date
of Trustee's resignation or removal. In all other instances of resignation or
removal, Bank shall select a successor Trustee in accordance with the provisions
of XI (a) hereof, with such selection being made on or before the effective date
of Trustee's resignation or removal.

     (e)     Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be promptly transferred to the
successor Trustee, in accordance with sub-section (a) hereof.

     (f)     If Trustee resigns or is removed under paragraph (a), (b), or (d)
of this Section X, a successor shall be appointed in accordance with Section XI
hereof, with such selection being made on or before the effective date of
resignation or removal. If no such appointment has been made, Bank or Trustee
(as applicable) may apply to a court of competent jurisdiction for appointment
of a successor or for instructions.  Should the Trustee be required to apply to
a court of competent jurisdiction for such purpose, all expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

                                   SECTION XI
                            APPOINTMENT OF SUCCESSOR

                                       13
<PAGE>
     (a)     If Trustee resigns or is removed pursuant to the provisions of
Section X hereof, Bank may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, to serve as successor Trustee hereunder.  The appointment of a
successor Trustee shall be effective when accepted in writing by the new
trustee. The new Trustee shall have all of the rights and powers of the former
Trustee, including ownership rights in the Trust assets.  The former Trustee
shall execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.

     (b)     The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections VII and VIII hereof.  The successor Trustee shall not be responsible
for and Bank shall indemnify and defend the successor trustee from any claim or
liability resulting from any action or inaction of any prior Trustee from any
other past event, or any condition existing at the time it becomes successor
Trustee.

                                       14
<PAGE>
                                  SECTION XII
                            AMENDMENT OR TERMINATION

     (a)     This Trust Agreement may be amended by a written instrument
executed by Trustee and Bank.  Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Benefit Plan or shall make the Trust
revocable.

     (b)     The Trust shall not terminate until Benefit Plan participants and
their beneficiaries are no longer entitled to any benefits pursuant to the terms
of the Benefit Plan. Upon termination of the Trust any assets remaining in the
Trust shall be distributed as directed in Section IV herein, but in no event
shall any assets be returned to the Bank.  Notwithstanding the foregoing, if at
any time prior to the termination of the Trust pursuant to the provisions set
forth herein, the Trust has distributed its entire corpus, the Trust shall
terminate unless within sixty (60) days of notification to the Bank by trustee
that all assets of the Trust have been distributed, the Bank makes additional
contributions to the Trust for purposes of paying the benefits set forth herein.

     (c)     All assets in the Trust at termination shall, after payment of all
amounts due to Trustee and all fees, taxes, expenses chargeable to the Trust, be
distributed as directed in Section IV herein, but in no event shall any assets
be returned to the Bank.

     (d)     Section(s) I (one), II (two), VI (six), X (ten) and XII (twelve) of
this Trust Agreement may not be amended by Bank (i) in anticipation of or (ii)
for two (2) years following a Change of Control, as defined herein.

                                  SECTION XIII
                                  MISCELLANEOUS

     (a)     Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

     (b)     Benefits payable to Benefit Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged,

                                       15
<PAGE>
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.

     (c)     This Trust Agreement shall be governed by and constructed in
accordance with the laws of the Commonwealth of Massachusetts.  Nothing in this
Trust Agreement shall be construed to subject the Trust to the Employee
Retirement Income Security Act of 1974, as amended.

     (d)     For purposes of this Trust, Change in Control shall mean any one of
the following with respect to (i) the Bank or any successor thereto:

               (i)     any merger, consolidation or reorganization where the
Bank that is the participant's employer (or that the participant is a director
of) is not the consolidated or surviving entity;

               (2)     any acquisition of more than fifty percent (50%) of the
stock of the Bank that is the participant's employer (or that the participant is
a director of) by a third party or parties;

               (3)     any transfer of all or substantially all of the assets of
the Bank that is the participant's employer (or that the participant is a
director of) to a third party or parties; or

               (4)     Any conversion from a mutually owned Bank to stock
ownership.

     (e)     The Bank shall be required to notify the Trustee of a Change in
Control or imminent Change in Control (for these purposes, a Change in Control
shall be imminent if it shall occur within sixty (60) days from the date of said
notice).  The Trustee shall not be charged with actual knowledge of a Change in
Control until it has received notice, in writing, of such Change in Control or
imminent Change in Control.

     (f)     Every direction or notice authorized hereunder shall be deemed
delivered to the Bank or the Trustee as the case may be:

               (i)     on the date it is personally delivered to the Bank or the
Trustee at its respective principal executive offices, or

               (ii)     three (3) business days after it is sent by registered
or certified mail, postage prepaid, addressed to the Bank, the Trustee or the
Benefits Determiner at such principal executive offices.

                                       16
<PAGE>
     (g)     The Trustee shall be fully protected in relying upon a
certification of an authorized representative of the Bank with respect to any
instruction, direction or approval of the Bank required or permitted hereunder,
and protected also in relying upon the certification until a subsequent
certification is filed with the Trustee.  The Trustee shall be fully protected
in acting upon any instrument, certificate, or paper believed by it to be
genuine and to be signed or presented by the proper person or persons, and the
Trustee shall be under no duty to make any investigation or inquiry as to any
statement contained in any such writing, but may accept the same as conclusive
evidence of the trust and accuracy contained therein.

     (h)     Communications under this Agreement shall be in writing and shall
be sent to the following addresses:

               Trustee:     Thomas A. Nussbaum
                            Eastern Bank & Trust Co.
                            2 Adams Place, AP06
                            Quincy, MA  02169-7456

               Bank:        Peoples Bank
                            218 S. Main Avenue
                            Newton, North Carolina 28658-0467

               Benefits     CBIZ/Benmark
               Determiner:  1100 Circle 75 Parkway, Suite 300
                            Atlanta, Georgia  30339

                                       17
<PAGE>
      (i)     This Trust Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall together constitute only one agreement.

                                  SECTION XIV
                                 EFFECTIVE DATE

          The effective date of this Trust Agreement shall be the 6th day of
December, 2001.

     IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.

ATTEST:                                 PEOPLES BANK

                                        By:    /s/  Tony W. Wolfe
------------------------                   ------------------------------------

------------------------                   ------------------------------------
                                                        (Title)

ATTEST:                                 EASTERN BANK & TRUST CO.

  /s/  Debbie Entrekin                  By:   /s/  Thomas A. Hussbaum
------------------------                   ------------------------------------
                                                       (Trustee)

------------------------

                                       18
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]