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                                                                     EXHIBIT 4.1

                         FAMOUS DAVE'S OF AMERICA, INC.

                         1997 EMPLOYEE STOCK OPTION PLAN
                        (as amended through May 22, 2002)

         1. Purpose. The purpose of the 1997 Employee Stock Option Plan (the
"Plan") of Famous Dave's of America, Inc. (the "Company") is to increase
shareholder value and to advance the interests of the Company by attracting,
retaining and motivating employees of the Company by furnishing opportunities to
purchase or receive shares of Common Stock, $.01 par value, of the Company
("Common Stock") pursuant to the Plan.

         2. Administration. The Plan shall be administered by the stock option
committee (the "Committee') of the Board of Directors of the Company. The
Committee shall consist of not less than two directors of the Company and shall
be appointed from time to time by the Board of Directors of the Company. The
Board of Directors of the Company may from time to time appoint members of the
Committee in substitution for, or in addition to, members previously appointed,
and may fill vacancies, however caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of the Committee's
members shall constitute a quorum. All action of the Committee shall be taken by
the majority of its members. Any action may be taken by a written instrument
signed by majority of the members and actions so taken shall be fully effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary, shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable. The Committee shall have complete authority to award Incentives under
the Plan, to interpret the Plan, and to make any other determination which it
believes necessary and advisable for the proper administration of the Plan. The
Committee's decisions and matters relating to the Plan shall be final and
conclusive on the Company and its participants.

         3. Eligible Employees. Employees of the Company (excluding officers and
directors of the Company) shall become eligible to receive Incentives under the
Plan when designated by the Committee. Employees may be designated individually
or by groups or categories (for example, by pay grade) as the Committee deems
appropriate. Participation by others and any performance objectives relating to
others may be approved by groups or categories (for example, by pay grade) and
authority to designate participants who are not officers and to set or modify
such targets may be delegated.

         4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (section 6); (b) stock appreciation rights ("SARs')
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); and
(e) performance shares (section 9).

         5. Shares Subject to the Plan.

                  5.1. Number of Shares. Subject to adjustment as provided in
         Section 10.6, the number of shares of Common Stock which may be issued
         under the Plan shall not exceed 800,000 shares of Common Stock.

                  5.2. Cancellation. To the extent that cash in lieu of shares
         of Common Stock is delivered upon the exercise of a SAR pursuant to
         Section 7.4, the Company shall be deemed, for purposes of applying the
         limitation on the number of shares, to have issued the greater of the
         number of shares of Common Stock which it was entitled to issue upon
         such exercise or on the exercise of any related option. In the event
         that a stock option or SAR granted hereunder expires or is terminated
         or canceled unexercised as to any shares of Common Stock, such shares
         may again be issued under the Plan either pursuant to stock options,
         SARs or otherwise. In the event that shares of Common Stock are issued
         as restricted stock or pursuant to a stock award and thereafter are
         forfeited or reacquired by the Company pursuant to rights reserved upon
         issuance thereof, such forfeited and reacquired shares may again be
         issued under the Plan, either as restricted stock, pursuant to stock
         awards or otherwise. The Committee may also determine to cancel, and
         agree to the cancellation of, stock options in order to make a
         participant eligible for the grant of a stock option at a lower price
         than the option to be canceled.

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                  5.3. Type of Common Stock. Common Stock issued under the Plan
         in connection with stock options, SARs, performance shares, restricted
         stock or stock awards, may be authorized and unissued shares.

         6. Stock Options. A stock option is a right to purchase shares of
Common Stock from the Company. Each stock option granted by the Committee under
this Plan shall be subject to the following terms and conditions:

                  6.1. Price. The option price per share shall be determined by
         the Committee, subject to adjustment under Section 10.6.

                  6.2. Number. The number of shares of Common Stock subject to
         the option shall be determined by the Committee, subject to adjustment
         as provided in Section 10.6. The number of shares of Common Stock
         subject to a stock option shall be reduced in the same proportion that
         the holder thereof exercises a SAR if any SAR is granted in conjunction
         with or related to the stock option.

                  6.3. Duration and Time for Exercise. Subject to earlier
         termination as provided in Section 10.4, the term of each stock option
         shall be determined by the Committee but shall not exceed ten years and
         one day from the date of grant. Each stock option shall become
         exercisable at such time or times during its term as shall be
         determined by the Committee at the time of grant. No stock option may
         be exercised during the first six months of its term. Except as
         provided by the preceding sentence, the Committee may accelerate the
         exercisability of any stock option. Subject to the foregoing and with
         the approval of the Committee, all or any part of the shares of Common
         Stock with respect to which the right to purchase has accrued may be
         purchased by the Company at the time of such accrual or at any time or
         times thereafter during the term of the option.

                  6.4. Manner of Exercise. A stock option may be exercised, in
         whole or in part, by giving written notice to the Company, specifying
         the number of shares of Common Stock to be purchased and accompanied by
         the full purchase price for such shares. The option price shall be
         payable in United States dollars upon exercise of the option and may be
         paid by cash; uncertified or certified check; bank draft; by delivery
         of shares of Common Stock in payment of all or any part of the option
         price, which shares shall be valued for this purpose at the Fair Market
         Value on the date such option is exercised; by instructing the Company
         to withhold from the shares of Common Stock issuable upon exercise of
         the stock option shares of Common Stock in payment of all or any part
         of the option price, which shares shall be valued for this purpose at
         the Fair Market Value or in such other manner as may be authorized from
         time to time by the Committee. Prior to the issuance of shares of
         Common Stock upon the exercise of a stock option, a participant shall
         have no rights as a shareholder.

                  6.5. Incentive Stock Options. Notwithstanding anything in the
         Plan to the contrary, the following additional provisions shall apply
         to the grant of stock options which are intended to qualify as
         Incentive Stock Options (as such term is defined in Section 422 of the
         Internal Revenue Code of 1986, as amended):

                           (a) The aggregate Fair Market Value (determined as of
                  the time the option is granted) of the shares of Common Stock
                  with respect to which Incentive Stock Options are exercisable
                  for the first time by any participant during any calendar year
                  (under all of the Company's plans) shall not exceed $100,000.

                           (b) Any Incentive Stock Option certificate authorized
                  under the Plan shall contain such other provisions as the
                  Committee shall deem advisable, but shall in all events be
                  consistent with and contain all provisions required in order
                  to qualify the options as Incentive Stock Options.

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                           (c) All Incentive Stock Options must be granted
                  within ten years from the earlier of the date on which this
                  Plan was adopted by Board of Directors or the date this Plan
                  was approved by the shareholders.

                           (d) Unless sooner exercised, all Incentive Stock
                  Options shall expire no later than 10 years after the date of
                  grant.

                           (e) The option price for Incentive Stock Options
                  shall be not less than the Fair Market Value of the Common
                  Stock subject to the option on the date of grant.

                           (f) No Incentive Stock Options shall be granted to
                  any participant who, at the time such option is granted, would
                  own (within the meaning of Section 422 of the Code) stock
                  possessing more than 10% of the total combined voting power of
                  all classes of stock of the employer corporation or of its
                  parent or subsidiary corporation.

         7. Stock Appreciation Rights. A SAR is a right to receive, without
payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 7.4. A SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under this Plan shall be subject to the following terms and
conditions:

                  7.1. Number. Each SAR granted to any participant shall relate
         to such number of shares of Common Stock as shall be determined by the
         Committee, subject to adjustment as provided in Section 10.6. In the
         case of an SAR granted with respect to a stock option, the number of
         shares of Common Stock to which the SAR pertains shall be reduced in
         the same proportion that the holder of the option exercises the related
         stock option.

                  7.2. Duration. Subject to earlier termination as provided in
         Section 10.4, the term of each SAR shall be determined by the Committee
         but shall not exceed ten years and one day from the date of grant.
         Unless otherwise provided by the Committee, each SAR shall become
         exercisable at such time or times, to such extent and upon such
         conditions as the stock option, if any, to which it relates is
         exercisable. No SAR may be exercised during the first twelve months of
         its term. Except as provided in the preceding sentence, the Committee
         may in its discretion accelerate the exercisability of any SAR.

                  7.3. Exercise. A SAR may be exercised, in whole or in part, by
         giving written notice to the Company, specifying the number of SARs
         which the holder wishes to exercise. Upon receipt of such written
         notice, the Company shall, within 90 days thereafter, deliver to the
         exercising holder certificates for the shares of Common Stock or cash
         or both, as determined by the Committee, to which the holder is
         entitled pursuant to Section 7.4.

                  7.4. Payment. Subject to the right of the Committee to deliver
         cash in lieu of shares of Common Stock, the number of shares of Common
         Stock which shall be issuable upon the exercise of a SAR shall be
         determined by dividing:

                           (a) the number of shares of Common Stock as to which
                  the SAR is exercised multiplied by the amount of the
                  appreciation in such shares (for this purpose, the
                  "appreciation" shall be the amount by which the Fair Market
                  Value of the shares of Common Stock subject to the SAR on the
                  exercise date exceeds (1) in the case of a SAR related to a
                  stock option, the purchase price of the shares of Common Stock
                  under the stock option or (2) in the case of a SAR granted

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                  alone, without reference to a related stock option, an amount
                  which shall be determined by the Committee at the time of
                  grant, subject to adjustment under Section 10.6); by (b) the
                  Fair Market Value of a share of Common Stock on the exercise
                  date.

                  In lieu of issuing shares of Common Stock upon the exercise of
         a SAR, the Committee may elect to pay the holder of the SAR cash equal
         to the Fair Market Value on the exercise date of any or all of the
         shares which would otherwise be issuable. No fractional shares of
         Common Stock shall be issued upon the exercise of a SAR; instead, the
         holder of the SAR shall be entitled to receive a cash adjustment equal
         to the same fraction of the Fair Market Value of a share of Common
         Stock on the exercise date or to purchase the portion necessary to make
         a whole share at its Fair Market Value on the date of exercise.

         8. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by
applicable law for the issuance of a share of Common Stock) and subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:

                  8.1. Number of Shares. The number of shares to be transferred
         or sold by the Company to a participant pursuant to a stock award or as
         restricted stock shall be determined by the Committee.

                  8.2. Sale Price. The Committee shall determine the price, if
         any, at which shares of restricted stock shall be sold to a
         participant, which may vary from time to time and among participants
         and which may be below the Fair Market Value of such shares of Common
         Stock at the date of sale.

                  8.3. Restrictions. All shares of restricted stock transferred
         or sold hereunder shall be subject to such restrictions as the
         Committee may determine, including, without limitation any or all of
         the following:

                           (a) a prohibition against the sale, transfer, pledge
                  or other encumbrance of the shares of restricted stock, such
                  prohibition to lapse at such time or times as the Committee
                  shall determine (whether in annual or more frequent
                  installments, at the time of the death, disability or
                  retirement of the holder of such shares, or otherwise);

                           (b) a requirement that the holder of shares of
                  restricted stock forfeit, or (in the case of shares sold to a
                  participant) resell back to the Company at his cost, all or a
                  part of such shares in the event of termination of his
                  employment during any period in which such shares are subject
                  to restrictions;

                           (c) such other conditions or restrictions as the
                  Committee may deem advisable.

                  8.4. Escrow. In order to enforce the restrictions imposed by
         the Committee pursuant to Section 8.3, the participant receiving
         restricted stock shall enter into an agreement with the Company setting
         forth the conditions of the grant. Shares of restricted stock shall be
         registered in the name of the participant and deposited, together with
         a stock power endorsed in blank, with the Company. Each such
         certificate shall bear a legend in substantially the following form:

                  The transferability of this certificate and the shares of
                  Common Stock represented by it are subject to the terms and
                  conditions (including conditions of forfeiture) contained in
                  the 1997 Employee Stock Option Plan of Famous Dave's of
                  America, Inc. (the

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                  "Company"), and an agreement entered into between the
                  registered owner and the Company. A copy of the Plan and the
                  agreement is on file in the office of the secretary of the
                  Company.

                  8.5. End of Restrictions. Subject to Section 10.5, at the end
         of any time period during which the shares of restricted stock are
         subject to forfeiture and restrictions on transfer, such shares will be
         delivered free of all restrictions to the participant or to the
         participant's legal representative, beneficiary or heir.

                  8.6. Shareholder. Subject to the terms and conditions of the
         Plan, each participant receiving restricted stock shall have all the
         rights of a shareholder with respect to shares of stock during any
         period in which such shares are subject to forfeiture and restrictions
         on transfer, including without limitation, the right to vote such
         shares. Dividends paid in cash or property other than Common Stock with
         respect to shares of restricted stock shall be paid to the participant
         currently.

         9. Performance Shares. A performance share consists of an award which
shall be paid in shares of Common Stock, as described below. The grant of
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

                  9.1. Performance Objectives. Each performance share will be
         subject to performance objectives for the Company or one of its
         operating units to be achieved by the end of a specified period. The
         number of performance shares granted shall be determined by the
         Committee and may be subject to such terms and conditions, as the
         Committee shall determine. If the performance objectives are achieved,
         each participant will be paid in shares of Common Stock or cash. If
         such objectives are not met, each grant of performance shares may
         provide for lesser payments in accordance with formulas established in
         the award.

                  9.2. Not Shareholder. The grant of performance shares to a
         participant shall not create any rights in such participant as a
         shareholder of the Company, until the payment of shares of Common Stock
         with respect to an award.

                  9.3. No Adjustments. No adjustment shall be made in
         performance shares granted on account of cash dividends which may be
         paid or other rights which may be issued to the holders of Common Stock
         prior to the end of any period for which performance objectives were
         established.

                  9.4. Expiration of Performance Share. If any participant's
         employment with the Company is terminated for any reason other than
         normal retirement, death or disability prior to the achievement of the
         participant's stated performance objectives, all the participants
         rights on the performance shares shall expire and terminate unless
         otherwise determined by the Committee. In the event of termination of
         employment by reason of death, disability, or normal retirement, the
         Committee, in its own discretion may determine what portions, if any,
         of the performance shares should be paid to the participant.

         10. General.

                  10.1. Effective Date. The Plan will become effective on June
         24, 1997.

                  10.2. Duration. The Plan shall remain in effect until all
         Incentives granted under the Plan have either been satisfied by the
         issuance of shares of Common Stock or the payment of cash or been
         terminated under the terms of the Plan and all restrictions imposed on
         shares of Common Stock in connection with their issuance under the Plan
         have lapsed. No Incentives may be granted under the Plan after the
         tenth anniversary of the date the Plan is approved by the shareholders
         of the Company.

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                  10.3. Non-transferability of Incentives. No stock option, SAR,
         restricted stock or performance award may be transferred, pledged or
         assigned by the holder thereof (except, in the event of the holder's
         death, by will or the laws of descent and distribution to the limited
         extent provided in the Plan or in the Incentive) and the Company shall
         not be required to recognize any attempted assignment of such rights by
         any participant. During a participant's lifetime, an Incentive may be
         exercised only by him or by his guardian or legal representative.

                  10.4. Effect of Termination of Employment or Death. In the
         event that a participant ceases to be an employee of the Company for
         any reason, including death, any Incentives may be exercised or shall
         expire at such times as may be determined by the Committee.

                  10.5. Additional Condition. Notwithstanding anything in this
         Plan to the contrary: (a) the Company may, if it shall determine it
         necessary or desirable for any reason, at the time of award of any
         Incentive or the issuance of any shares of Common Stock pursuant to any
         Incentive, require the recipient of the Incentive, as a condition to
         the receipt thereof or to the receipt of shares of Common Stock issued
         pursuant thereto, to deliver to the Company a written representation of
         present intention to acquire the Incentive or the shares of Common
         Stock issued pursuant thereto for his own account for investment and
         not for distribution; and (b) if at any time the Company further
         determines, in its sole discretion, that the listing, registration or
         qualification (or any updating of any such document) of any Incentive
         or the shares of Common Stock issuable pursuant thereto is necessary on
         any securities exchange or under any federal or state securities or
         blue sky law, or that the consent or approval of any governmental
         regulatory body is necessary or desirable as a condition of, or in
         connection with the award of any Incentive, the issuance of shares of
         Common Stock pursuant thereto, or the removal of any restrictions
         imposed on such shares, such Incentive shall not be awarded or such
         shares of Common Stock shall not be issued or such restrictions shall
         not be removed, as the case may be, in whole or in part, unless such
         listing, registration, qualification, consent or approval shall have
         been effected or obtained free of any conditions not acceptable to the
         Company.

                  10.6. Adjustment. In the event of any merger, consolidation or
         reorganization of the Company with any other corporation or
         corporations, there shall be substituted for each of the shares of
         Common Stock then subject to the Plan, including shares subject to
         restrictions, options, or achievement of performance share objectives,
         the number and kind of shares of stock or other securities to which the
         holders of the shares of Common Stock will be entitled pursuant to the
         transaction. In the event of any recapitalization, stock dividend,
         stock split, combination of shares or other change in the Common Stock,
         the number of shares of Common Stock then subject to the Plan,
         including shares subject to restrictions, options or achievements of
         performance shares, shall be adjusted in proportion to the change in
         outstanding shares of Common Stock. In the event of any such
         adjustments, the purchase price of any option, the performance
         objectives of any Incentive, and the shares of Common Stock issuable
         pursuant to any Incentive shall be adjusted as and to the extent
         appropriate, in the discretion of the Committee, to provide
         participants with the same relative rights before and after such
         adjustment.

                  10.7. Incentive Plans and Agreements. Except in the case of
         stock awards or cash awards, the terms of each Incentive shall be
         stated in a plan or agreement approved by the Committee. The Committee
         may also determine to enter into agreements with holders of options to
         reclassify or convert certain outstanding options, within the terms of
         the Plan, as Incentive Stock Options or as non-statutory stock options
         and in order to eliminate SARs with respect to all or part of such
         options and any other previously issued options.

<PAGE>

                  10.8. Withholding.

                           (a) The Company shall have the right to withhold from
                  any payments made under the Plan or to collect as a condition
                  of payment, any taxes required by law to be withheld. At any
                  time when a participant is required to pay to the Company an
                  amount required to be withheld under applicable income tax
                  laws in connection with a distribution of Common Stock or upon
                  exercise of an option or SAR, the participant may satisfy this
                  obligation in whole or in part by electing (the "Election") to
                  have the Company withhold from the distribution shares of
                  Common Stock having a value up to the amount required to be
                  withheld. The value of the shares to be withheld shall be
                  based on the Fair Market Value of the Common Stock on the date
                  that the amount of tax to be withheld shall be determined
                  ("Tax Date").

                           (b) Each Election must be made prior to the Tax Date.
                  The Committee may disapprove of any Election, may suspend or
                  terminate the right to make Elections, or may provide with
                  respect to any Incentive that the right to make Elections
                  shall not apply to such Incentive. An Election is irrevocable.

                  10.9. No Continued Employment or Right to Corporate Assets. No
         participant under the Plan shall have any right, because of his or her
         participation, to continue in the employ of the Company for any period
         of time or to any right to continue his or her present or any other
         rate of compensation. Nothing contained in the Plan shall be construed
         as giving an employee, the employee's beneficiaries or any other person
         any equity or interests of any kind in the assets of the Company or
         creating a trust of any kind or a fiduciary relationship of any kind
         between the Company and any such person.

                  10.10. Deferral Permitted. Payment of cash or distribution of
         any shares of Common Stock to which a participant is entitled under any
         Incentive shall be made as provided in the Incentive. Payment may be
         deferred at the option of the participant if provided in the Incentive.

                  10.11. Amendment of the Plan. The Board may amend or
         discontinue the Plan at any time. However, no such amendment or
         discontinuance shall, subject to adjustment under Section 10.6, (a)
         change or impair, without the consent of the recipient, an Incentive
         previously granted, (b) increase the maximum number of shares of Common
         Stock which may be issued to all participants under the Plan, (c)
         change or expand the types of Incentives that may be granted under the
         Plan, (d) change the class of persons eligible to receive Incentives
         under the Plan, or (e) materially increase the benefits accruing to
         participants under the Plan.

                  10.12 Immediate Acceleration of Incentives. Notwithstanding
         any provision in this Plan or in any Incentive to the contrary, (a) the
         restriction on all shares of restricted stock award shall lapse
         immediately, (b) all outstanding options and SARs will become
         exercisable immediately, and (c) all performance shares shall be deemed
         to be met and payment made immediately. If any of the following events
         occur unless otherwise determined by the Board of Directors and a
         majority of the Continuing Directors (as defined below):

                           (1) any person or group of persons becomes the
                  beneficial owner of 30% or more of any equity security of the
                  Company entitled to vote for the election of directors;

                           (2) a majority of the members of the Board of
                  Directors of the Company is replaced within the period of less
                  than two years by directors not nominated and approved by the
                  Board of Directors; or

                           (3) the shareholders of the Company approve an
                  agreement to merge or consolidate with or into another
                  corporation or an agreement to sell or otherwise dispose of

<PAGE>

                  all or substantially all of the Company's assets (including a
                  plan of liquidation).

                  For purposes of this Section 10.12, beneficial ownership by a
         person or group of persons shall be determined in accordance with
         Regulation 13D (or any similar successor regulation) promulgated by the
         Securities and Exchange Commission pursuant to the 1934 Act. Beneficial
         ownership of more than 30% of an equity security may be established by
         any reasonable method, but shall be presumed conclusively as to any
         person who files a Schedule 13D report with the Securities and Exchange
         Commission reporting such ownership. If the restrictions and
         forfeitability periods are eliminated by reason of provision (1), the
         limitations of this Plan shall not become applicable again should the
         person cease to own 30% or more of any equity security of the Company.

                  For purposes of this Section 10.12, "Continuing Directors" are
         directors (a) who were in office prior to the time of any of provisions
         (1), (2) or (3) occurred or any person publicly announced an intention
         to acquire 20% or more of any equity security of the Company, (b)
         directors in office for a period of more than two years, and (c)
         directors nominated and approved by the Continuing Directors.

         10.13. Definition of Fair Market Value. For purposes of this Plan, the
"Fair Market Value" of a share of Common Stock at a specified date shall, unless
otherwise expressly provided in this Plan, be the amount which the Committee
determines in good faith to be 100% of the fair market value of such a share as
of the date in question; provided, however, that notwithstanding the foregoing,
if such shares are listed on a U.S. securities exchange or are quoted on the
NASDAQ National Market System or NASDAQ Small-Cap Stock Market ("NASDAQ"), then
Fair Market Value shall be determined by reference to the last sale price of a
share of Common Stock on such U.S. securities exchange or NASDAQ on the
applicable date. If such U.S. securities exchange or NASDAQ is closed for
trading on such date, or if the Common Stock does not trade on such date, then
the last sale price used shall be the one on the date the Common Stock last
traded on such U.S. securities exchange or NASDAQ.<PAGE>

                                                                    EXHIBIT 10.2

                       SOUTHERN COMMUNITY BANCSHARES, INC.

                        2001 INCENTIVE STOCK OPTION PLAN
                                       FOR
                                  KEY EMPLOYEES

I.       DEFINITIONS

         a.       "Company" - Southern Community Bancshares, Inc.

         b.       "Code" - Internal Revenue Code of 1986, as amended.

         c.       "Committee" - the Compensation Committee of the Board of
                  Directors.

         d.       "Common Stock" - common voting stock of the Company.

         e.       "Board" - voting members of the Board of Directors of the
                  Company.

         f.       "Option" - right to purchase shares of Common Stock in
                  accordance with the terms hereof.

         g.       "Option Agreement" - formal agreement for each grant with
                  specific terms and conditions not inconsistent with this Plan.

         h.       "Optionee"- an eligible person under Section 5 below who has
                  been granted options under this Plan.

         i.       "Plan"- Southern Community Bancshares, Inc. 2001 Incentive
                  Stock Option Plan.

2.       PURPOSE

         The purposes of the Plan are: (i) to assist the Company in securing and
         retaining key employees of outstanding ability by making it possible to
         offer them an increased incentive to join or continue in the service of
         the Company; and (ii) to increase the key employees' efforts for the
         Company's welfare by participating in the ownership and growth of the
         Company. The Options granted under the Plan are intended to be
         "Incentive Stock Options" within the meaning of Section 422 of the
         Code.

3.       SHARES SUBJECT TO THE PLAN

         Subject to adjustments pursuant to the provisions of Section 14, there
         shall be authorized and reserved for issuance upon the exercise of
         Options to be granted under the Plan, twenty-six thousand one hundred
         sixty-seven (26,167) shares of Common Stock.

4.       ADMINISTRATION

         The Committee whose members shall not be participants in the Plan will
         have complete authority to interpret the Plan, make grants, and
         determine terms and conditions within the context of the Plan.

5.       ELIGIBILITY

         The following persons are eligible to receive Options under the Plan:
         Full-time key employees of the Company who are selected by the
         Committee from time to time and who, in the opinion of the Committee,
         have contributed in the past or who may be expected to contribute
         materially in the future to the successful performance of the Company.

6.       GRANTING OF OPTIONS; OPTION EXERCISE PRICE

         All Options granted under the Plan are intended to be "Incentive Stock
         Options" within the meaning of Section 422 of the Code and shall be
         evidenced by an Option Agreement. The Board, upon recommendation of the
         Committee, may grant Options to full-time key employees of the Company
         as desirable. Any Option granted hereunder shall have a per share
         option exercise price at least equal to the

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         fair market value of a share of the Common Stock on the date of the
         grant. The Option exercise price shall be subject to adjustments in
         accordance with the provisions of Section 14 herein.

7.       TERM OF OPTION

         Subject to the provisions of Section 9 herein, the period during which
         each Option may be exercised shall be fixed by the Committee at the
         time such Option is granted, but such period shall expire not later
         than ten years from the date the Option is granted.

8.       MANNER OF EXERCISE

         The Options shall be exercised by written notice, delivered to the
         Secretary of the Company and signed by the Optionee or his or her
         successors stating the number of shares with respect to which the
         Option is being exercised. Payment in full of the Option price of the
         said shares must be made at the time of exercise, and payment may be
         made in cash or shares of the Common Stock previously held by the
         Optionee or a combination. Payment in shares may be made with shares
         received upon the exercise or partial exercise of an Option, whether or
         not involving a series of exercises or partial exercises and whether or
         not share certificates for such shares surrendered have been delivered
         to the Optionee. Shares surrendered in payment of the Option price
         shall be valued at the fair market value as of the date of the
         exercise.

9.       TERMINATION OF OPTIONS

         All unexercised Options will terminate upon (i) the lapse by their
         terms, (ii) immediately upon the termination of the Optionee's
         employment with the Company, except by reason of death, retirement or
         disability, or (iii) ninety (90) days after the termination of the
         Optionee's employment with the Company because of death, disability or
         retirement. During such 90-day period, all unexercised Options may be
         exercised by the Optionee or his legal representative in the event of
         death or mental disability.

10.      LIMITATIONS

         Options shall not be granted to any individual pursuant to this Plan,
         the effect of which would be to permit such person to first exercise
         Options, in any calendar year, for the purchase of shares having a fair
         market value in excess of $100,000 (determined at the time of the grant
         of the Options). Optionee may exercise options for the purchase of
         shares valued in excess of $100,000 (determined at the time of grant of
         the Options) in a calendar year, but only if the right to exercise such
         Options shall have first become available in prior calendar years.

         No Optionee owning more than ten percent (10%) of the combined voting
         power of all classes of stock of the Company then outstanding may
         purchase Common Stock under this Plan for less than one hundred ten
         percent (110%) of its fair market value on the date of grant nor may
         any Option granted to such a person be exercisable on a date later than
         five (5) years from the date of grant.

11.      NONTRANSFERABILITY OF OPTIONS; RESTRICTIONS ON ISSUANCE OF COMMON STOCK

         Options granted under this Plan are nontransferable except by will or
         by the laws of descent and distribution. No shares shall be delivered
         pursuant to any exercise of an Option until the requirements of such
         laws and regulations, as may be deemed by the Board to be applicable to
         them, are satisfied and until payment in full as described in Section 6
         of the Option price is received by the Company.

12.      RIGHTS OF OPTIONEE

         An Optionee will have no rights as a shareholder until a stock
         certificate for the Common Stock is issued. Nothing in the Plan, in any
         Option Agreement or resulting stock ownership, will give to an Optionee
         any right to continuation of employment.

                                       2

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13.      OTHER TERMS AND CONDITIONS

         Any Option granted hereunder shall contain additional terms which are
         not inconsistent with the terms of this Plan, as the Board or the
         Committee deems necessary or desirable, provided that any such Option
         shall qualify as an "Incentive Stock Option" within the meaning of
         Section 422 of the Code.

14.      CAPITAL ADJUSTMENTS AFFECTING STOCK

         In the event of a capital adjustment resulting from a stock dividend,
         stock split, reorganization, merger, consolidation, or a combination or
         exchange of shares, the number of shares of stock subject to this Plan
         and the number of shares under any Option granted hereunder shall be
         adjusted consistent with such capital adjustment. The price of any
         share under Option shall be adjusted so that there will be no change in
         the aggregate purchase price payable upon the exercise of any such
         Option. The granting of an Option pursuant to this Plan shall not
         affect in any way the right or power of the Company to make
         adjustments, reorganizations, reclassifications, or changes of its
         capital or business structure or to merge, consolidate, dissolve,
         liquidate or sell or transfer all or any part of its business or
         assets.

         After any merger, consolidation or reorganization of any form involving
         the Company as a party thereto involving any exchange, conversion,
         adjustment or other modification of the outstanding shares of the
         Company's Common Stock, each Optionee at the time of such
         reorganization shall, at no additional cost, be entitled, upon any
         exercise of his or her Option, to receive, in lieu of the number of
         shares as to which such option shall then be so exercised, the number
         and class of shares of stock or other securities or such other property
         to which such Optionee would have been entitled pursuant to the terms
         of the agreement of merger or consolidation, if at the time of such
         merger or consolidation, such Optionee had been a holder of record of a
         number of shares of the Common Stock of the Company equal to the number
         of shares as to which such Option shall then be so exercised.
         Comparable rights shall accrue to each Optionee in the event of
         successive mergers or consolidations of the character described above.

         The foregoing adjustments and the manner of their application will be
         in the sole discretion of the Committee to determine.

         Anything contained herein to the contrary notwithstanding, upon the
         dissolution or liquidation of the Company each Option granted under the
         Plan shall terminate.

15.      AMENDMENTS, SUSPENSION OR TERMINATION OF THE PLAN

         The Board of the Company shall have the right, at any time, to amend,
         suspend or terminate the Plan; provided, however, no amendments shall
         be made in the Plan without the approval of the stockholders of the
         Company which:

                           (a) Increase the total number of shares for which
                  Options may be granted under this Plan for all key employees
                  except as provided in Section 14.

                           (b) Change the minimum purchase price for the
                  optioned shares except as provided in Section 14.

                           (c) Materially affect outstanding Options or any
                  unexercised rights thereunder except as provided in Section
                  14.

                           (d) Extend the option period provided in Section 7.

                           (e) Extend the termination date of the Plan.

                                       3

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16.      EFFECTIVE DATE

         The Plan shall take effect on the date that it is approved by the
         shareholders of the Company. Unless an earlier termination date is
         specified under Section 9 above, this Plan shall terminate on the date
         which is ten years following its effective date. No Options may be
         granted under the Plan after its termination date, but any Option
         granted prior thereto may be exercised in accordance with its terms.
         The Plan and all Options granted pursuant to it are subject to all
         laws, approvals, requirements and regulations of any governmental
         authority which may be applicable thereto and, notwithstanding any
         provisions of the Plan or Option Agreement, the holder of an Option
         shall not be entitled to exercise his or her Option nor shall the
         Company be obligated to issue any shares to the holder if such exercise
         or issuance shall constitute a violation by the holder or the Company
         of any provisions of any such approval requirements, law or
         regulations.

17.      REGULATION

         The Company's regulators may direct the Company to require plan
         participants to exercise or forfeit their stock rights if the Company's
         capital falls below the minimum requirements, as determined by the
         regulators.

                                       4

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