Document:

<PAGE>

                                                                     Exhibit 4.4

                             PIEDMONT BANCORP, INC.
                                STOCK OPTION PLAN

      THIS IS THE PIEDMONT BANCORP, INC. STOCK OPTION PLAN ("Plan") of Piedmont
Bancorp, Inc. (the "Corporation"), a North Carolina corporation, with its
principal office in Hillsborough, Orange County, North Carolina, adopted by the
Board of Directors of the Corporation and effective upon the approval of the
Plan by a majority of the shareholders of the Corporation and the receipt of all
necessary regulatory approvals, or as soon as practicable thereafter, under
which options may be granted from time to time to eligible directors and
employees of the Corporation, Hillsborough Savings Bank, Inc., SSB (the "Bank")
and of any corporation or other entity of which either the Corporation or the
Bank owns, directly or indirectly, not less than fifty percent (50%) of any
class of equity securities (a "Subsidiary"), to purchase shares of common stock
of the Corporation ("Common Stock"), subject to the provisions set forth as
follows:

      1. PURPOSE. The purpose of this Plan is to aid the Corporation, the Bank
and any Subsidiary in attracting and retaining capable directors and employees
and to provide a long range incentive for directors and employees to remain in
the management of the Corporation, the Bank or any Subsidiary, to perform at
increasing levels of effectiveness and to acquire a permanent stake in the
Corporation with the interest and outlook of an owner. These objectives will be
promoted through the granting of options to acquire shares of Common Stock
pursuant to the terms of this Plan.

      2. ADMINISTRATION. The Plan shall be administered by the committee (the
"Committee"), who are three members of the Board of Directors of the Corporation
(the "Board") who are "disinterested persons" as described in Rule 16b-
3(c)(2)(i) of the Rules and Regulations under the Securities Act of 1934 (the
"Exchange Act"). Members of the Committee shall serve at the pleasure of the
Board. In the absence at any time of a duly appointed Committee, this Plan shall
be administered by those members of the Board who are "disinterested persons,"
and by the Board if there are less than three "disinterested persons."

<PAGE>

The Committee may designate any officers or employees of the Corporation, the
Bank or any Subsidiary to assist in the administration of the Plan and to
execute documents on behalf of the Committee and perform such other ministerial
duties as may be delegated to them by the Committee.

      Subject to the provisions of the Plan, the determinations or the
interpretation and construction of any provision of the Plan by the Committee
shall be final and conclusive upon all persons affected thereby. By way of
illustration and not of limitation, the Committee shall have the discretion (a)
to construe and interpret the Plan and all options granted hereunder and to
determine the terms and provisions (and amendments thereof) of the options
granted under the Plan (which need not be identical); (b) to define the terms
used in the Plan and in the options granted hereunder; (c) to prescribe, amend
and rescind the rules and regulations relating to the Plan; (d) to determine the
individuals to whom and the time or times at which such options shall be granted
(except for the options described in paragraph 5), the number of shares to be
subject to each option (except for the options described in paragraph 5), the
option price, and the determination of leaves of absence which may be granted to
participants without constituting a termination of their employment for the
purposes of the Plan; and (e) to make all other determinations necessary or
advisable for the administration of the Plan.

      It shall be in the discretion of the Committee to grant options which
qualify as "incentive stock options" (as that term is defined in Section 422 of
the Internal Revenue Code of 1986, as amended) or which do not qualify as
incentive stock options and which will be given tax treatment as "nonqualified
stock options" (herein referred to collectively as "options;" however, whenever
reference is specifically made only to "incentive stock options" or
"nonqualified stock options," such reference shall be deemed to be made to the
exclusion of the other). Any options granted which fail to satisfy the
requirements for incentive stock options shall become nonqualified stock
options.

      3. STOCK AVAILABLE FOR OPTIONS. The stock to be subject to options under
the Plan shall be authorized but unissued shares of Common Stock or, in the
discretion of the Committee, issued shares of Common Stock which have been
reacquired by the Corporation. The total number of shares of Common Stock for
which options may be granted under the Plan is the number of shares equal to ten
percent (10%) of the total number of shares of Common Stock issued by the
Corporation in connection with the conversion of the Bank from a North Carolina
mutual savings bank to a North Carolina stock savings bank on December 7, 1995
(the "Conversion"). Such number of shares is subject to any capital adjustments
as provided in Section 14. In the event that an option granted under the Plan is
forfeited, expires or is terminated unexercised as to any shares covered
thereby, such shares thereafter shall be available for the granting of options
under the Plan; however, if the forfeiture, expiration or termination date of an
option is beyond the term of existence of the Plan as described in Section 19,
then any shares covered by forfeited, unexercised or terminated options shall
not reactivate the existence of the Plan and therefore may not be available for
additional grants under the Plan. The Corporation, during the terms of the
Plan, will reserve and keep available a number of shares of Common Stock
sufficient to satisfy the requirements of the Plan. In the discretion of the
Committee and the Board, the shares of Common Stock necessary to be delivered to
satisfy exercised options may be from authorized and unissued shares of Common
Stock or may be purchased in the open market.

      4. ELIGIBILITY. Options shall be granted only to individuals who meet all
of the following eligibility requirements:

            (a) Such individual must be an employee or a member of the Board of
      Directors of the Corporation, the Bank or a Subsidiary. For this purpose,
      an individual shall be considered to be an "employee" only if there exists
      between the Corporation, the Bank or a Subsidiary and the individual the
      legal and bona fide relationship of employer and employee. In determining
      whether such relationship exists, the regulations of the United States
      Treasury Department relating to the determination of such relationship for
      the purpose of collection of income tax at the source on wages shall be
      applied.

            (b) Such individual must have such knowledge and experience in
      financial and business matters that he or she is capable of evaluating the
      merits and risks of the investment involved in the exercise of the
      options.

                                        2

<PAGE>

            (c) Such individual, being otherwise eligible under this Section 4,
      shall have been selected by the Committee as a person to whom an option
      shall be granted under the Plan or shall have been designated in paragraph
      5 hereof.

      In determining the directors and employees to whom options shall be
granted and the number of shares to be covered by each option, the Committee
shall take into account the nature of the services rendered by respective
directors and employees, their present and potential contributions to the
success of the Corporation, the Bank and any Subsidiary and such other factors
as the Committee shall deem relevant. A director or employee who has been
granted an option under the Plan may be granted an additional option or options
under the Plan if the Committee shall so determine.

      If, pursuant to the terms of the Plan, it is necessary that the percentage
of stock ownership of any individual be determined, stock ownership in the
Corporation or of a related corporation which is owned (directly or indirectly)
by or for such individual's brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants or by or for any corporation,
partnership, estate or trust of which such employee is a shareholder, partner or
beneficiary shall be considered as owned by such director or employee.

      5. INITIAL GRANTS. Subject to the provisions of this Plan, options shall
be awarded to the directors and employees as set forth on Exhibit A. Such
options shall be granted after the date the Plan is approved by a majority of
the Corporation's shareholders and by all necessary regulatory authorities and
execution by the optionee of a Stock Option Grant and Agreement (the "Option
Agreement") in the form attached hereto as Exhibit B as modified by the
Committee to the extent it deems such modification to be necessary or desirable.
Such options shall be granted with the intention that they will be nonqualified
or incentive stock options as denominated in the Option Agreement. Any option
granted with the intention that it will be an incentive stock option but which
fails to satisfy a requirement for incentive stock options shall continue to be
valid and shall be treated as a nonqualified stock option.

      6. OPTION PRICE.

            (a) The option price of each option granted under the Plan shall be
      not less than one hundred percent (100%) of the market value of the stock
      on the date of grant of the option. In the case of incentive stock options
      granted to a shareholder who owns stock possessing more than 10 percent
      (10%) of the total combined voting power of all classes of stock of the
      Corporation, the Bank or a Subsidiary (a "ten percent shareholder"), the
      option price of each option granted under the Plan shall not be less than
      one hundred and ten percent (110%) of the market value of the stock on the
      date of grant of the option. If the Common Stock is listed on a national
      securities exchange (including the NASDAQ National Market System) on the
      date in question, then the market value per share shall be not less than
      the average of the highest and lowest selling price on such exchange on
      such date, or if there were no sales on such date, then the market price
      per share shall be equal to the average between the bid and asked price on
      such date. If the Common Stock is traded otherwise than on a national
      securities exchange on the date in question, then the market price per
      share shall be equal to the average between the bid and asked price on
      such date, or, if there is no bid and asked

                                        3

<PAGE>

price on such date, then on the next prior business day on which there was a bid
and asked price. If no such bid and asked price is available, then the market
value per share shall be its fair market value as determined by the Committee,
in its sole and absolute discretion. The Committee shall maintain a written
record of its method of determining such value.

            (b) The option price shall be payable to the Corporation either (i)
      in cash or by check, bank draft or money order payable to the order of the
      Corporation, or (ii) at the discretion of the Committee, through the
      delivery of shares of the common stock of the Corporation owned by the
      optionee with a market value (determined in a manner consistent with (i)
      above) equal to the option price, or (iii) at the discretion of the
      Committee by a combination of (i) and (ii) above. No shares shall be
      delivered until full payment has been made. The Committee may not approve
      a reduction of such purchase price in any such option, or the cancellation
      of any such options and the regranting thereof to the same optionee at a
      lower purchase price, at a time when the market value of the shares is
      lower than it was when such option was granted.

      7. EXPIRATION OF OPTIONS. The Committee shall determine the expiration
date or dates of each option, but such expiration date shall be not later than
ten (10) years after the date such option is granted. In the event an incentive
stock option is granted to a ten percent shareholder, the expiration date or
dates of each option shall be not later than five (5) years after the date such
option is granted. The Committee, in its discretion, may extend the expiration
date or dates of an option after such date was originally set; however, such
expiration date may not exceed the maximum expiration date described in this
Section 7.

      8. TERMS AND CONDITIONS OF OPTIONS.

            (a) All options must be granted within ten (10) years of the
      Effective Date of this Plan as defined in Section 18.

            (b) The Committee may grant options which are intended to be
      incentive stock options and nonqualified stock options, either separately
      or jointly, to an eligible employee.

            (c) The grant of options shall be evidenced by a written instrument
      (an Option Agreement) containing terms and conditions established by the
      Committee consistent with the provisions of this Plan.

            (d) Not less than 100 shares may be purchased at any one time unless
      the number purchased is the total number at that time purchasable under
      the Plan.

            (e) The recipient of an option shall have no rights as a shareholder
      with respect to any shares covered by his option until payment in full by
      him for the shares being purchased. No adjustment shall be made for
      dividends (ordinary or extraordinary, whether in cash, securities or other
      property) or distributions or other rights for which the record date is
      prior to the date such stock is fully paid for, except as provided in
      Section 14.

                                        4

<PAGE>

            (f) The aggregate fair market value of the stock (determined as of
      the time the option is granted) with respect to which incentive stock
      options are exercisable for the first time by any participant during any
      calendar year (under all benefit plans of the Corporation, the Bank or any
      Subsidiary, if applicable) shall not exceed $100,000; provided, however,
      that such $100,000 limit of this subsection (f) shall not apply to the
      grant of nonqualified stock options. The Committee may grant options which
      are exercisable in excess of the foregoing limitations, in which case
      options granted which are exercisable in excess of such limitation shall
      be nonqualified stock options.

            (g) All stock obtained pursuant to an option which qualifies as an
      incentive stock option shall be held in escrow for a period which ends on
      the later of (i) two (2) years from the date of the granting of the option
      or (ii) one (1) year after the transfer of the stock pursuant to the
      exercise of the option. The stock shall be held by the Corporation or its
      designee. The employee who has exercised the option shall during such
      holding period have all rights of a shareholder, including but not limited
      to the rights to vote, receive dividends and sell the stock. The sole
      purpose of the escrow is to inform the Corporation of a disqualifying
      disposition of the stock within the meaning of Section 422 of the Internal
      Revenue Code of 1986, as amended, and it shall be administered solely for
      that purpose.

      9. EXERCISE OF OPTIONS.

            (a) An optionee receiving options by virtue of his position as a
      director must remain continuously a member of the Board of Directors of
      the Corporation, the Board of Directors of the Bank or the Board of
      Directors of one or more of the Subsidiaries from the date of the grant
      until the exercise of the option except as provided in Sections 10, 11 and
      12 of this Plan. An optionee receiving options by virtue of his position
      as an employee must at all times be employed by the Corporation, the Bank
      or a Subsidiary from the date of grant until the exercise of the options
      granted except as provided in Sections 10, 11 and 12. All options granted
      under the Plan shall be exercisable in annual installments in accordance
      with the following schedule:

            twenty percent (20%) of the shares beginning 1 year after the date
            of the grant of the options;

            twenty percent (20%) of the shares beginning 2 years after the date
            of the grant of the options;

            twenty percent (20%) of the shares beginning 3 years after the date
            of the grant of the options;

            twenty percent (20%) of the shares beginning 4 years after the date
            of the grant of the options; and

            twenty percent (20%) of the shares beginning 5 years after the date
            of the grant of the options.

                                        5

<PAGE>

      Notwithstanding the foregoing, options shall become exercisable with
      respect to all of the shares subject thereto upon the optionee's death or
      upon the optionee's disability within the meaning of Section 22(e)(3) of
      the Internal Revenue Code of 1986, as amended.

      The right to exercise options in annual installments shall be cumulative
      and any vested installments may be exercised, in whole or in part, at the
      election of the optionee. The exercise of any option must be evidenced by
      written notice to the Corporation that the optionee intends to exercise
      his option.

      In no event shall an option be deemed granted by the Corporation or
      exercisable by a recipient prior to the mutual execution by the
      Corporation and the recipient of an Option Agreement which comports with
      the requirements of Section 5 and Section 8(c).

            (b) The inability of the Corporation or Bank to obtain approval from
      any regulatory body or authority deemed by counsel to be necessary to the
      lawful issuance and sale of any shares of Common Stock hereunder shall
      relieve the Corporation and the Bank of any liability in respect of the
      non-issuance or sale of such shares. As a condition to the exercise of an
      option, the Corporation may require the person exercising the Option to
      make such representations and warranties as may be necessary to assure the
      availability of an exemption from the registration requirements of federal
      or state securities laws.

            (c) The Committee shall have the discretionary authority to impose
      in the Option Agreements such restrictions on shares of Common Stock as it
      may deem appropriate or desirable, including but not limited to the
      authority to impose a right of first refusal or to establish repurchase
      rights or both of these restrictions.

      10. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT - EXCEPT BY DISABILITY OR
DEATH. If any optionee receiving the grant of an option by virtue of his
position as a director ceases to be a director of at least one of the
Corporation, the Bank or any Subsidiary or if any optionee receiving the grant
of an option by virtue of his position as an employee ceases to be an employee
of at least one of the Corporation, the Bank and any Subsidiary for any reason
other than death or disability (as defined in paragraph 11), he may, (i) at any
time within three (3) months after his date of termination, but not later than
the date of expiration of the option, exercise any option designated in the
Option Agreement as an incentive stock option and (ii) at any time prior to the
date of expiration of the option, exercise any option designated in the Option
Agreement as a nonqualified stock option. However, in either such event the
optionee may exercise any option only to the extent it was vested and he or she
was entitled to exercise the option on the date of termination. Any options or
portions of options of terminated directors or employees not so exercised shall
terminate and be forfeited.

      11. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT - DISABILITY. If any
optionee receiving the grant of an option by virtue of his position as a
director ceases to be a director of at least one of the Corporation, the Bank or
any Subsidiary or if any employee receiving the grant of an option by virtue of
his position as an employee ceases to be employed by at least one of the
Corporation, the Bank and any Subsidiary due to his becoming disabled within the
meaning

                                        6

<PAGE>

of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, he may,
(i) at any time within 12 months after his date of termination, but not later
than the date of expiration of the option, exercise any option designated in the
Option Agreement as an incentive stock option with respect to all shares subject
thereto and (ii) at any time prior to the date of expiration of the option,
exercise any option designated in the Option Agreement as a nonqualified stock
option with respect to all shares subject thereto. Any portions of options of
terminated directors or employees not so exercised shall terminate.

      12. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT - DEATH. If an optionee
receiving the grant of an option by virtue of his position as a director dies
while a director of the Corporation, the Bank or any Subsidiary or if any
employee receiving the grant of an option by virtue of his position as an
employee dies while in the employment of the Corporation, the Bank or a
Subsidiary, the person or persons to whom the option is transferred by will or
by the laws of descent and distribution may exercise the option at any time
until the term of the option has expired, with respect to all shares subject
thereto, to the same extent and upon the same terms and conditions the optionee
would have been entitled to do so had he lived. Any options or portions of
options of deceased directors or employees not so exercised shall terminate.

      13. RESTRICTIONS ON TRANSFER. An option granted under this Plan may not be
transferred except by will or the laws of descent and distribution and, during
the lifetime of the optionee to whom it was granted, may be exercised only by
such optionee.

      14. CAPITAL ADJUSTMENTS AND OTHER CHANGES AFFECTING COMMON STOCK.

            (a) If the outstanding shares of Common Stock of the Corporation are
      increased, decreased, changed into or exchanged for a different number or
      kind of shares or other securities of the Corporation or another entity as
      a result of a recapitalization, reclassification, stock dividend, stock
      split, amendment to the Corporation's Certificate of Incorporation,
      reverse stock split, merger or consolidation, an appropriate adjustment
      shall be made in the number and/or kind of securities allocated to the
      options previously and subsequently granted under the Plan, without change
      in the aggregate purchase price applicable to the unexercised portion of
      the outstanding options but with a corresponding adjustment in the price
      for each share or other unit of any security covered by the options.

            (b) To the extent that the foregoing adjustments relate to
      particular stock or securities of the Corporation subject to option under
      this Plan, such adjustments shall be made by the Committee, whose
      determination in that respect shall be final and conclusive.

            (c) The grant of an option pursuant to this Plan shall not affect in
      any way the right or power of the Corporation to make adjustments,
      reclassifications, reorganizations or changes of its capital or business
      structure or to merge or to consolidate or to dissolve, liquidate or sell,
      or transfer all or any part of its business or assets.

                                        7

<PAGE>

            (d) No fractional shares of stock shall be issued under the Plan for
      any such adjustment.

            (e) Any adjustment made pursuant to this Section 14(a), shall be
      made in such manner as not to constitute a modification of any outstanding
      incentive stock options within the meaning of Section 424(h) of the
      Internal Revenue Code of 1986, as amended.

            (f) In the event the Corporation declares a special cash dividend or
      a return of capital in an amount per share which exceeds 10% of the market
      value of a share of Common Stock as of the date of declaration (with
      market value per share determined by the Committee pursuant to the method
      set forth in paragraph 6(a) hereof), the per share exercise price of all
      previously granted options which remain unexercised as of the date of such
      declaration shall be proportionately adjusted to give effect to such
      special cash dividend or return of capital as of the date of payment of
      such special cash dividend or return of capital; provided, however, that
      if such adjustment with respect to incentive stock options would be
      treated as a modification of outstanding incentive stock options with the
      effect that, for purposes of Sections 422 and 425(h) of the Internal
      Revenue Code of 1986, as amended, and the rules and regulations
      thereunder, new incentive stock options would be deemed to be granted,
      then, at the election of the Committee, no adjustment to the per share
      exercise price of outstanding incentive stock options shall be made. In
      addition, no such adjustment of the per share exercise price shall be made
      if applicable regulatory requirements prohibit such an adjustment.

      15. INVESTMENT PURPOSE. At the discretion of the Committee, any Option
Agreement may provide that the optionee shall, by accepting the option,
represent and agree, for himself and his transferees by will or the laws of
descent and distribution, that all shares of stock purchased upon the exercise
of the option will be acquired for investment and not for resale or
distribution, and that upon each exercise of any portion of an option, the
person entitled to exercise the same shall furnish evidence of such facts which
is satisfactory to the Corporation. Certificates for shares of stock acquired
under the Plan may be issued bearing such restrictive legends as the Corporation
and its counsel may deem necessary to ensure that the optionee is not an
"underwriter" within the meaning of the regulations of the Securities Exchange
Commission.

      16. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of Common Stock pursuant to options will be used for general corporate
purposes.

      17. NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall
impose no obligation upon the optionee to exercise such option.

      18. EFFECTIVE DATE OF PLAN. The Plan will become effective upon the
approval of the Plan by a majority of the shareholders of the Corporation as
required by regulations of the FDIC and the receipt of all necessary regulatory
approvals.

      19. TERM OF PLAN. Options may be granted pursuant to this Plan from time
to time within ten (10) years from the effective date of the Plan.

                                        8

<PAGE>

      20. TIME OF GRANTING OF OPTIONS. Nothing contained in the Plan or in any
resolution adopted or to be adopted by the Committee or the shareholders of the
Corporation and no action taken by the Committee shall constitute the granting
of any option hereunder. The granting of an option pursuant to the Plan shall
take place only when an Option Agreement shall have been duly executed and
delivered by and on behalf of the Corporation at the direction of the Committee.

      21. WITHHOLDING TAXES. Whenever the Corporation proposes or is required to
issue or transfer shares of stock under the Plan, the Corporation shall have the
right to require the optionee to remit to the Corporation an amount sufficient
to satisfy any Federal, state and/or local withholding tax requirements prior to
the issuance of any certificate or certificates for such shares. Alternatively,
the Corporation may issue or transfer such shares of stock net of the number of
shares sufficient to satisfy the withholding tax requirements. For withholding
tax purposes, the shares of stock shall be valued on the date the withholding
obligation is incurred.

      22. TERMINATION AND AMENDMENT. The Board may at any time alter, suspend,
terminate or discontinue the Plan, but may not, without the consent of the
holder of an option previously granted, make any alteration which would deprive
the optionee of his rights with respect thereto; provided, however, that
shareholder approval of certain amendments may be necessary if it is desirable
for the Plan to continue to satisfy the requirements of Rule 16b-3 of the
Securities Exchange Commission; and provided further, that in no event shall
this Plan be terminated at the time of or following any merger or consolidation
of the Corporation or the Bank, unless and until the surviving entity shall have
made provision for an equivalent benefit for all the then current option
holders. Notwithstanding anything herein to the contrary, the Board may not
amend Section 5 hereof or any other provisions of this Plan described in Rule
16b-3(c)(2)(ii)(A) of the regulations promulgated pursuant to the Exchange Act
more than once every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder.

      23. CAPTIONS AND HEADINGS; GENDER AND NUMBER. Captions and paragraph
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein, are not a part, and shall not serve as a basis
for interpretation or construction of, this Plan. As used herein, the masculine
gender shall include the feminine and neuter, and the singular number shall
include the plural, and vice versa, whenever such meanings are appropriate.

      24. EXCULPATION AND INDEMNIFICATION. In connection with this Plan, no
member of the Board, no member of the Board of Directors of the Bank, and no
member of the Board of Directors of any Subsidiary, and no member of the
Committee shall be personally liable for any act or omission to act, nor for any
mistake in judgment made in good faith, unless arising out of, or resulting
from, such person's own bad faith, willful misconduct or criminal acts. To the
extent permitted by applicable law and regulation, the Corporation shall
indemnify, defend and hold harmless the members of the Board, the members of the
Board of Directors of the Bank and the members of the Board of Directors of any
Subsidiary, and members of the Committee, and each other officer or employee of
the Bank, the Corporation or of any Subsidiary to whom any power or duty
relating to the administration or interpretation of this Plan may be assigned or
delegated, from and against any and all liabilities (including any amount paid
in settlement of a claim with the approval

                                        9

<PAGE>

of the Board), and any costs or expenses (including counsel fees) incurred by
such persons arising out of or as a result of, any act or omission to act, in
connection with the performance of such person's duties, responsibilities and
obligations under this Plan, other than such liabilities, costs, and expenses as
may arise out of, or result from the bad faith, willful misconduct or criminal
acts of such persons.

      25. GOVERNING LAW. Without regard to the principles of conflicts of laws,
the laws of the State of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this Plan.

      26. INSPECTION OF PLAN. A copy of this Plan, and any amendments thereto,
shall be maintained by the Secretary of the Corporation and shall be shown to
any proper person making inquiry about it.

      27. OTHER PROVISIONS. The Option Agreements authorized under this Plan
shall contain such other provisions not inconsistent with the foregoing,
including, without limitation, increased restrictions upon the exercise of
option, as the Committee may deem advisable.

                                       10
<PAGE>
                                    EXHIBIT A
                             (Intentionally Omitted)

                                    EXHIBIT B

                             PIEDMONT BANCORP, INC.
                                STOCK OPTION PLAN
                        STOCK OPTION GRANT AND AGREEMENT

      THIS STOCK OPTION GRANT AND AGREEMENT ("Agreement"), being made according
to and subject to the terms and conditions of the PIEDMONT BANCORP, INC. STOCK
OPTION PLAN ("Plan"), a copy of which is attached hereto as Annex A and is
hereby incorporated by reference and made a part of this Agreement, is herein
executed and effective the _______ day of _______________, _____, between
Piedmont Bancorp, Inc. (the "Corporation") and ____________________
("Optionee"):

      1. GRANT. As of the above date, the Corporation hereby grants: (i) an
incentive stock option (as that term is defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code")) to purchase ________ shares of
Common Stock of the Corporation to the Optionee at the price stated in this
Agreement; and/or (ii) a nonqualified stock option to purchase __________ shares
of Common Stock of the Corporation to the Optionee at the price stated in this
Agreement.

      The option(s) granted under this section and as described in this
Agreement is (are) in all respects subject to and conditioned by the terms,
definitions, and provisions of this Agreement and of the Plan. Capitalized terms
in this Agreement which are not otherwise defined but which are defined in the
Plan shall have the same meaning given to those terms in the Plan.

      2. PRICE. The option price is $_____________ for each share.

      3. EXERCISE OF OPTION. The option(s) granted under this Agreement shall be
exercisable pursuant to the terms and conditions of the Plan and as set forth
below:

      (a) Right to Exercise: There are no other terms and conditions imposed on
the Optionee's right to exercise his options other than those imposed in the
Plan, except as stated below:

<PAGE>

      (b) Annual Installments: Subject to the terms and conditions of the Plan,
the incentive stock options can be exercised in annual installments as follows:

          __________________ shares beginning on ______________, 19__

          __________________ shares beginning on ______________, 19__

          __________________ shares beginning on ______________, 19__

          __________________ shares beginning on ______________, 19__

          __________________ shares beginning on ______________, 19__

The nonqualified options can be exercised in annual installments as follows:

          __________________ shares beginning on _______________, 19__

          __________________ shares beginning on _______________, 19__

          __________________ shares beginning on _______________, 19__

          __________________ shares beginning on _______________, 19__

          __________________ shares beginning on _______________, 19__

The right to exercise the option(s) in annual installments shall be cumulative.
In addition, the option(s) shall be exercisable upon disability and death as set
forth in the Plan.

      (c) Method of Exercise: The options under this Agreement shall be
exercisable by a written notice to the Secretary of the Corporation which shall
include the following:

            (1) State the election to exercise the option, the number of shares
      in respect of which it is being exercised, the person in whose name the
      stock certificate or certificates for such shares of Common Stock is to be
      registered, his or her address, and social security number;

            (2) Contain any such representation and agreements as to Optionee's
      investment intent with respect to such shares of Common Stock as may be
      required by the Corporation;

            (3) Be signed by the person entitled to exercise the option and, if
      the option is being exercised by any person or persons other than the
      Optionee, be accompanied by proof, satisfactory to the Corporation, of the
      right of such person or persons to exercise the option in accordance with
      the Plan; and

            (4) Be accompanied by payment of the purchase price of any shares
      with respect to which the option is being exercised which payment shall be
      in form acceptable to the Committee pursuant to Section 6(b) of the Plan.

      (d) Representations and Warranties: In order to exercise an option, the
person exercising the option must make the representations and warranties to the
Corporation as may be required by any applicable law or regulation, or as may
otherwise be required pursuant to the Plan.

      (e) Approvals. In order for an option to be exercised, all filings and
approvals required by applicable law and regulations or pursuant to the Plan
must have been made and obtained.

      4. NON-TRANSFERABILITY OF OPTION. This option may not be transferred in
any manner otherwise than by will or the laws of descent and distribution and
may be exercised during the life of the Optionee only by him or her.

                                        2

<PAGE>

      5. INVESTMENT PURPOSE. This option may not be exercised if the issuance of
shares upon such exercise would constitute a violation of any applicable federal
or state securities law or other law or valid regulation.

      6. EXPIRATION OF OPTION. This option shall expire on _____________, _____.

      7. ESCROW. All stock purchased pursuant to an incentive stock option shall
be held in escrow for a period which ends on the later of (i) two (2) years from
the date of the granting of the option or (ii) one (1) year after the transfer
of the stock pursuant to the exercise of the option. The stock shall be held by
the Corporation or its designee. The optionee who has exercised the option shall
have all rights of a stockholder, including, but not limited to, the rights to
vote, receive dividends and sell the stock. The sole purpose of the escrow is to
inform the Corporation of a disqualifying disposition of the stock within the
meaning of Section 422 of the Code, and it shall be administered solely for this
purpose.

      8. RESOLUTION OF DISPUTES. Any dispute or disagreement which should arise
under, or as a result of, or in any way relate to, the interpretation,
construction, or application of this Agreement will be determined by the
Committee designated in Section 2 of the Plan. Any determination made by such
Committee shall be final, binding, and conclusive for all purposes.

      9. CONSTRUCTION CONTROLLED BY PLAN. The options evidenced hereby shall be
subject to all of the requirements, conditions and provisions of the Plan. This
Agreement shall be construed so as to be consistent with the Plan; and the
provisions of the Plan shall be deemed to be controlling in the event that any
provision should appear to be inconsistent therewith.

      10. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or part
thereof shall not be affected thereby and this Agreement shall continue to be
binding on the parties hereto as if such unenforceable, invalid or illegal
provision or part thereof had not been included herein.

      11. MODIFICATION OF AGREEMENT; WAIVER. This Agreement may be modified,
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto and only subject to the limitations set forth in the Plan. No waiver
hereunder shall constitute a waiver with respect to any subsequent occurrence or
other transaction hereunder or of any other provision.

      12. CAPTIONS AND HEADINGS; GENDER AND NUMBER. Captions and paragraph
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein, are not a part, and shall not serve as a basis
for interpretation or construction, of this Agreement. As used herein, the
masculine gender shall include the feminine and neuter, and the singular number
shall include the plural, and vice versa, whenever such meanings are
appropriate.

                                        3

<PAGE>

      13. GOVERNING LAW; VENUE AND JURISDICTION. Without regard to the
principles of conflicts of laws, the laws of the State of North Carolina shall
govern and control the validity, interpretation, performance, and enforcement of
this Agreement.

      14. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the Corporation, and its successors and assigns, and shall be
binding upon and inure to the benefit of the Optionee, and his or her heirs,
legatees, personal representative, executor, administrator and permitted
assigns.

      15. ENTIRE AGREEMENT. This Agreement and the Plan constitute and embody
the entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the matters
addressed herein.

      16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

      IN WITNESS WHEREOF, the parties have set their hands and seals the day and
year first above written.

ATTEST:                                    PIEDMONT BANCORP, INC.

------------------------------                  By:____________________________
(Corporate Seal)
                                                                 President

                                           OPTIONEE:

                                           ____________________________
(SEAL)

                                        4<PAGE>
                                                                     Exhibit 4.5

                              AMENDED AND RESTATED

                                SALEM TRUST BANK

                        1986 INCENTIVE STOCK OPTION PLAN

                            Effective January 9, 1986

                                SALEM TRUST BANK
                        1986 INCENTIVE STOCK OPTION PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page
<S>                                                                                                    <C>
Section 1.  Purpose                                                                                     1
Section 2.  Administration                                                                              1
Section 3.  Stock Available for Options                                                                 2
Section 4.  Nonqualified Options                                                                        3
Section 5   Eligibility                                                                                 3
Section 6.  Option Price                                                                                4
Section 7.  Expiration of Options                                                                       5
Section 8.  Terms and Conditions of Options                                                             6
Section 9.  Exercise of Options                                                                         7
Section 10. Termination of Employment -
            Except by Death or Retirement                                                               8
Section 11. Termination of Employment -
            Retirement                                                                                  8
Section 12. Termination of Employment -
            Death                                                                                       8
Section 13. Restrictions on Transfer                                                                    9
Section 14. Right of Repurchase by the Company                                                          9
Section 15. Capital Adjustments Affecting
            Common Stock                                                                                9
Section 16. Application of Funds                                                                       11
Section 17. No Obligation to Exercise Option                                                           11
Section 18. Term of Plan                                                                               11
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                    <C>
Section 19. Effective Date of Plan                                                                     12
Section 20. Time of Granting of Options                                                                12
Section 21. Termination and Amendment                                                                  12
Section 22. Other Provisions                                                                           12
</TABLE>

                              AMENDED AND RESTATED

                                SALEM TRUST BANK

                        1986 INCENTIVE STOCK OPTION PLAN

THIS IS THE 1986 INCENTIVE STOCK OPTION PLAN ("Plan") of SALEM TRUST BANK ("the
Bank"), a banking organization organized under the laws of the State of North
Carolina, with its principal office in Forsyth County, North Carolina, effective
January 9, 1985, under which options may be granted from time to time to
eligible employees of the Bank to purchase shares of common stock of the Bank,
subject to the provisions set forth as follows:

1. PURPOSE

      The purpose of this Plan is to aid the Bank in attracting capable
executives and to provide a long range inducement for key employees to remain in
the management of the Bank, to perform at increasing levels of effectiveness and
to acquire a permanent stake in the Bank with the interest and outlook of an
owner. These objectives will be promoted through the granting to key employees
of options to acquire shares of common stock of the Bank pursuant to the terms
of this Plan.

2. ADMINISTRATION

      The Plan shall be administered by a committee to be appointed from time to
time by the Board of Directors of the Bank (the "Committee"). If action is to be
taken by the Committee concerning the granting of options to any member of the
Committee or in any way affecting the options held by a Committee member, then
that interested Committee member shall abstain from voting on these issues.

      The Committee shall have full authority to award options, to interpret the
Plan, and to make such determinations as it deems appropriate for the
administration of the Plan, taking into consideration the recommendations of
management. The determinations or the interpretation and construction of any
provision of the Plan by the Committee shall be final and conclusive upon all
persons affected thereby.

      It shall be in the discretion of the Committee to grant options which
qualify as "incentive stock options" (as that term is defined in Section 422A of
the Internal Revenue Code of 1954, as amended) or which will be given tax
treatment as "nonqualified stock options" (herein referred to collectively as
"options"; however, whenever reference is specifically made only to

<PAGE>

"incentive stock options" or "nonqualified stock options," such reference shall
be deemed to be made to the exclusion of the other).

      Any action of the Committee with respect to the Plan shall be taken by a
majority vote at a meeting of the Committee or by written consent of all of the
members of the Committee without a meeting.

3. STOCK AVAILABLE FOR OPTIONS

      (a) The stock to be subject to options under the Plan shall be authorized
but unissued shares of common stock of the Bank or, in the discretion of the
Committee, issued shares which have been reacquired by the Bank. The total
amount of stock for which options may be granted under the Plan shall not exceed
159,523 shares. Such number of shares is subject to any capital adjustments as
provided in Section 14. In the event that an option granted under the Plan
expires or is terminated unexercised as to any shares covered thereby, such
shares thereafter shall be available for the granting of options under the Plan;
however, if the expiration or termination date of any option is beyond the term
of existence of the Plan as described in Section 16, then any shares covered by
unexercised - or terminated options shall not reactivate the existence of this
Plan and therefore may not be available for additional grants under the Plan.

      (b) No more then ten percent (10%) of the Bank's outstanding shares may be
committed to the Plan.

4. NONQUALIFIED OPTIONS

      All eligible employees, nonemployee directors and advisory directors of
the Bank may receive nonqualified stock options. Eligibility to receive
nonqualified options shall be established pursuant to Section 5 below. All
characteristics of the nonqualified options, including option prices, shall be
established as provided in the Plan.

5. ELIGIBILITY

      Options shall be granted only to individuals who meet the following
eligibility requirements:

      (a)   Except for grants of nonqualified stock options to directors and
      advisory directors, such individual must be an employee of the Bank. An
      individual shall be considered to be an "employee" only if there exists
      between the Bank and the individual the legal and bona fide relationship
      of employer and employee. In determining whether such relationship exists,
      the regulations of the United States Treasury Department relating to the
      determination of such

<PAGE>

      relationship for the purpose of collection of income tax at the source on
      wages shall be applied;

      (b) Except for grants of nonqualified stock options to directors and
      advisory directors, such employees must be "key employees" of the Bank.
      For this purpose, "key employees" shall be considered to be those
      employees who, in the judgment of the Committee, are in a position
      materially to affect the operations and profitability of the Bank by
      reason of the nature and extent of their duties and responsibilities.

      (c) Such individual must have such knowledge and experience in financial
      and business matters that he is capable of evaluating the merits and risks
      of the investment involved in the exercise of the options;

      (d) Such individual, being otherwise eligible under this Section 4,
      shall have been selected by the Committee as a person to whom an option
      shall be granted under the Plan;

      (e) Nonqualified options may be granted to (i) key employees as further
      defined in (a)and (b) above, (ii) directors of the Bank, and (iii)
      advisory directors of the Bank. Individuals who are not key employees of
      the Bank, will not be eligible to receive incentive stock options; and

      (f) In determining the individuals to whom options shall be granted and
      the number of shares to be covered by each option, the Committee shall
      take into account the nature of the services rendered by the respective
      individuals, their present and potential contributions to the success of
      the Bank and such other factors as the Committee shall deem relevant. An
      individual who has been granted an option under the Plan may be granted an
      additional option or options under the Plan if the Committee shall so
      determine.

      (g) No more than forty percent (40%) of the shares set aside for option
      pursuant to the Plan may be allocated to any one participant in the Plan.

6. OPTION PRICE

      (a) Except in the case where options are granted to an individual who owns
      stock possessing more than 10 percent (10%) of the total combined voting
      power of all classes of stock of the Bank or its subsidiary corporations
      ("ten percent shareholder"), the option price of each option granted under
      the Plan shall be not less than one hundred percent (100%) of the market
      value of the stock on the date of grant of the incentive stock option. In
      the case of incentive stock options granted to a ten percent

<PAGE>

      shareholder, the option price of each incentive stock option granted under
      the Plan shall not be less than one hundred ten percent (110%) of the
      market value of the stock on the date of grant of the incentive stock
      option. "Market value" shall be determined by the Committee in its
      discretion as of the time of the granting of each option upon the
      consideration by the Committee of such factors that it shall deem
      pertinent. By way of illustration and not of limitation, such factors may
      be (i) recent sales prices of the Bank's stock; (ii) recent results of the
      Bank's business operations; (iii) current book value and net worth; (iv)
      various financial ratios which the Committee may deem appropriate; (v)
      projections of the bank's future business operations and opportunities;
      and (vi) such other factors which may be relevant under applicable Federal
      tax laws and Internal Revenue Service rules and regulations. The option
      price is subject to any capital adjustment as provided in Section 14.

      (b) The option price for nonqualified stock options shall be established
      by the Committee in its discretion and shall not be less than the market
      value of the stock on date of grant.

      (c) The option price shall be payable to the Bank either (i) in cash or by
      check, bank draft or money order payable to the order of the Bank, or (ii)
      at the discretion of the Committee, through the delivery of shares of the
      common stock of the Bank owned by the optionee with a value equal to the
      option price, or (iii) at the discretion of the Committee by a combination
      of (i) and (ii) above. No shares shall be delivered until full payment has
      been made. The - Committee may not approve a reduction of such purchase
      price in any such option, or the cancellation of any such option and the
      regranting thereof to the same optionee at a lower purchase price, at a
      time when the market value of the shares is lower than it was when such
      option was granted.

7. EXPIRATION OF OPTIONS

      The Committee shall determine the expiration date or dates of each option,
but such expiration date shall be not later than ten (10) years after the date
an incentive stock option is granted or later than eleven (11) years after the
date a nonqualified stock option is granted. The Board, in its discretion, may
extend the expiration date or dates of an option after such date was originally
set; however, such expiration date may not exceed the maximum expiration date
described above.

8. TERMS AND CONDITIONS OF OPTIONS

      (a) All options must be granted within ten (10) years of the Effective
      Date of this Plan as provided in Section 18;

<PAGE>

      (b) The Committee may grant incentive stock options and nonqualified stock
      options, either separately or jointly, to an eligible employee;

      (c) The grant of options shall be evidenced by a written instrument
      containing terms and conditions established by the Committee consistent
      with the provisions of this Plan;

      (d) The Committee may grant an option or options to an optionee and
      stipulate that a portion of such option expires or becomes exercisable at
      a stated interval or that portions of such option expires or becomes
      exercisable at several stated intervals;

      (e) An optionee shall have no rights as a stockholder with respect to any
      shares covered by his option until payment in full by him for the shares
      being purchased. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether in cash, securities or other property) or
      distributions or other rights for which the record date is prior to the
      date such stock is fully paid for, except as provided in Section 13
      hereof; and

      (f) The aggregate fair market value (determined as of the time the option
      is granted) of the stock for which an optionee may be granted incentive
      stock options in any calendar year (including incentive stock options
      granted under all option plans of the Bank or any of its subsidiary
      corporations) shall not exceed $100,000 plus any unused limit carryover
      (as that term is defined in Section 422A of the Internal Revenue Code of
      1954, as amended) to such year; provided, however, that such $100,000
      limit of this subsection (f) shall not apply to the grant of nonqualified
      stock options.

9. EXERCISE OF OPTIONS

      (a) As to options granted to an employee, such optionee must have been
      continuously employed or remain in the employ of the Bank for such period
      of time prior to or from the date of grant before the right to exercise
      any part of the option granted to such employee will accrue as shall be
      determined by the Committee. Each option granted under the Plan shall be
      exercisable at such time or in such annual installments as may be
      determined by the Committee at the time of the grant. The right to
      exercise options in annual installments may be cumulative. Except as
      provided in Sections 10 and 11, no option may be exercised at any time
      unless the holder thereof is then an employee of the Bank. The exercise of
      any stock option must be evidenced by written notice to the Bank that the
      optionee intends to exercise his stock option. In no event shall an option
      granted pursuant to the terms of the Plan be exercised until

<PAGE>

      the Plan has been approved by the shareholders of the Bank and by the
      Commissioner of Banks of the State of North Carolina.

      (b) No option may be exercised and no shares may be acquired under the
      Plan prior to the timely filing by both the optionee and the Bank of all
      appropriate documents that may be required by applicable federal and state
      securities laws and state corporate laws.

      (c) No incentive stock options granted pursuant to the Plan may be
      exercised by an individual unless all incentive stock options granted to
      such individual pursuant to the Plan prior to the date of grant of the
      incentive stock options in question have been exercised in full or have
      expired by reason of lapse of time.

10. TERMINATION OF EMPLOYMENT - EXCEPT BY DEATH OR RETIREMENT

      If any optionee ceases to be employed by the Bank or ceases to be a
director or advisory director of the Bank for any reason other than his death,
disability retirement or normal retirement (age 65), his option shall
immediately terminate. Whether a leave of absence shall constitute a termination
of employment shall be determined by the Committee, whose decision shall be
final and conclusive.

11. TERMINATION OF EMPLOYMENT - RETIREMENT

      If any optionee ceases to be employed by the Bank due to his retirement
upon attaining normal retirement age (age 65), he may, at any time within three
(3) months after his date of retirement, but not later than the date of
expiration of the option, exercise the option to the extent the employee was
entitled to do so on his date of retirement. If any optionee ceases to be
employed by the Bank due to his becoming disabled, he may, at any time within
twelve (12) months after his date of retirement, but not later than the date of
expiration of the option, exercise the option to the same extent the employee
was entitled to do so on his date of retirement. Any options or portions of
options of retired optionees not so exercised shall terminate.

12. TERMINATION OF EMPLOYMENT - DEATH

      If any optionee dies while in the employment of the Bank, the person or
persons to whom the option is transferred by will or by the laws of descent and
distribution may exercise the same option to the same extent and upon the same
terms and conditions the optionee would have been entitled to do so had he lived
until the term of the option had expired. Any options or portions of options of
deceased optionees not so exercised shall terminate.

13. RESTRICTIONS ON TRANSFER

<PAGE>

      An option granted under this Plan may not be transferred except by will or
the laws of descent and distribution and, during the lifetime of the optionee to
whom it was granted, may be exercised only by such optionee.

14. RIGHT OF REPURCHASE BY THE BANK

      As to any option granted to an employee of the Bank, if an optionee
exercises any option pursuant to the Plan and ceases to be employed by the Bank
for any reason (other than death or retirement) during a period of one year
subsequent to the exercise of the option, then the Bank, or its appointee, shall
have the right for a period of 45 days after the date the optionee ceases to be
employed by the Bank to repurchase from the optionee the same number of shares
acquired by the optionee through the exercise of the option at the same price
the optionee paid for such shares.

      The above restriction as set forth in the Section 14 shall be included in
each option granted under this Plan, and in the discretion of the Committee, the
following legend may be placed on the stock certificate representing shares
transferred to optionees pursuant to the exercise of options under the Plan:

      These securities are subject to the Bank's right of repurchase contained
      in the Salem Trust Bank 1986 Incentive Stock Option Plan, effective
      January 9, 1986, at the option price stated in the optionee's Stock Option
      Grant and Agreement.

15. CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK

      (a) If the outstanding shares of the common stock of the Bank are
      increased, decreased, changed into or exchanged for a different number or
      kind of shares or securities of the Bank or shares of a different par
      value or without par value through reorganization, recapitalization,
      reclassification, stock dividend, stock split, amendment to the Bank's
      Articles of Incorporation or reverse stock split, an appropriate
      adjustment shall be made in the number and/or kind of securities allocated
      to the options previously and subsequently granted under the Plan, without
      change in the aggregate purchase price applicable to the unexercised
      portion of the outstanding options but with a corresponding adjustment in
      the price for each share or other unit of any security covered by the
      options.

      (b) Upon the effective date of the dissolution or liquidation of the Bank,
      or of a reorganization, merger or consolidation of the Bank with one or
      more corporations in which the Bank is not the surviving corporation
      ration, or of a transfer of substantially all the property or more than
      eighty percent (80%) of the then outstanding shares of the

<PAGE>

      Bank to another corporation, the Plan and any option previously granted
      hereunder shall terminate unless provision is made in writing in
      connection with such transaction for the continuance of the Plan and for
      the assumption of options theretofore granted, or the substitution for
      such options of new options covering the shares of a successor employer
      corporation, or of a parent or subsidiary thereof, with appropriate
      adjustments as to number and kind of shares and prices in which event the
      Plan and the options theretofore granted or the new options substituted
      therefor, shall continue in the manner and under the terms so provided. In
      the event of such dissolution, liquidation, reorganization, merger,
      consolidation, transfer of assets or transfer of shares, and if provision
      is not made in such transaction for the continuance of the Plan and for
      the assumption of options theretofore granted or for the substitution of
      such options or new options covering the shares of a successor employer
      corporation or a parent or subsidiary thereof, then such optionee under
      the Plan shall be entitled, prior to the effective date of any such
      transaction, to purchase the full number of shares under his option which
      he would otherwise have been entitled to purchase during the remaining
      term of such option.

      (c) To the extent that the foregoing adjustments relate to particular
      stock or securities of the Bank subject to option under this Plan, such
      adjustments shall be made by the Committee, whose determination in that
      respect shall be final and conclusive.

      (d) The grant of an option pursuant to this Plan shall not affect in any
      way the right or power of the Bank to make adjustments, reclassifications,
      reorganizations or changes of its capital or business structure or to
      merge or to consolidate or to dissolve, liquidate or sell, or transfer all
      or any part of its business or assets.

      (e) No fractional shares of stock shall be issued under the Plan for any
      such adjustment.

16. APPLICATION OF FUNDS

      The proceeds received by the Bank from the sale of common stock pursuant
to options will be used for general corporate purposes.

17. NO OBLIGATION TO EXERCISE OPTION

      The granting of an option shall impose no obligation upon the optionee to
exercise such option.

18. TERM OF PLAN

      Options may be granted pursuant to this Plan from time to time within a
period of ten (10) years from the date this Plan is approved by the Board of
Directors.

<PAGE>

19. EFFECTIVE DATE OF PLAN

      This Plan shall become effective January 9, 1986, following approval
thereof by the Board of Directors. Pursuant to federal tax law and North
Carolina banking law, the Board shall submit the Plan to the shareholders of the
Bank and the Commissioner of Banks for their respective approvals. No options
granted prior to receipt of such approvals shall be exercisable until both such
approvals shall have been obtained.

20. TIME OF GRANTING OF OPTIONS

      Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board or the shareholders of the Bank and no action taken by the
Board shall constitute the granting of any options hereunder. The granting of an
option pursuant to the Plan shall take place only when a written option
agreement shall have been duly executed and delivered by and on behalf of the
Bank.

21. TERMINATION AND AMENDMENT

      The Board may at any time alter, suspend, terminate or discontinue the
Plan, but may not, without the consent of the - holder of an option previously
granted, make any alteration which would deprive him of his rights with respect
thereto or, without the approval of the stockholders, make any alteration which
would (a) increase the number of aggregate shares subject to the option under
this Plan or decrease the minimum option price except as provided in Section 14;
or (b) extend the term of this Plan as provided in Section 18 or the maximum
period during which an option may be exercised as provided in Section 7.

22. OTHER PROVISIONS

      The option agreements authorized under this Plan shall contain such other
provisions not inconsistent with the foregoing, including, without limitation,
increased restrictions upon the exercise of the option, as the Board may deem
advisable.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]