Document:

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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made as of the 30th day of March, by and among SUN
BANK, N.A. (Proposed) (the "Bank"), a proposed national bank; SUN BANCSHARES,
INC., a bank holding company incorporated under the laws of the State of South
Carolina (the "Company") (collectively, the Bank and the Company are referred to
hereinafter as the "Employer"), and THOMAS BOUCHETTE, a resident of the State of
South Carolina (the "Executive").

                                    RECITALS:

         The Employer desires to employ the Executive as President and Chief
Executive Officer of the Bank and the President of the Company and the Executive
desires to accept such employment.

         In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:

          THIS AGREEMENT CONTAINS A BINDING, IRREVOCABLE AGREEMENT TO
         ARBITRATE AND IS SUBJECT TO ARBITRATION PURSUANT TO TITLE 15,
          CHAPTER 48 (UNIFORM ARBITRATION ACT) OF THE CODE OF LAWS OF
                                 SOUTH CAROLINA

1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:

   1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.

   1.2 "AFFILIATE" shall mean any business entity which controls the Company, is
controlled by or is under common control with the Company.

   1.3 "AREA" shall mean the geographic area within the boundaries of Horry and
Georgetown Counties, South Carolina. It is the express intent of the parties
that the Area as defined herein is the area where the Executive performs or
performed services on behalf of the Employer under this Agreement as of, or
within a reasonable time prior to, the termination of the Executive's employment
hereunder.

   1.4 "BUSINESS OF THE EMPLOYER" shall mean the business conducted by the
Employer, which is the business of commercial banking.

   1.5 "CAUSE" shall mean:

       1.5.1 With respect to termination by the Employer:

             (a) A material breach of the terms of this Agreement by the
     Executive, including, without limitation, failure by the Executive to
     perform his duties and

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     responsibilities in the manner and to the extent required under this
     Agreement, which remains uncured after the expiration of thirty (30) days
     following the delivery of written notice of such breach to the Executive by
     Employer. Such notice shall (i) specifically identify the duties that the
     Board of Directors of either the Company or the Bank believes the Executive
     has failed to perform, (ii) state the facts upon which such Board of
     Directors made such determination, and (iii) be approved by a resolution
     passed by two-thirds (2/3) of the directors then in office;

             (b) Conduct by the Executive that amounts to fraud, dishonesty or
     willful misconduct in the performance of his duties and responsibilities
     hereunder;

             (c) Arrest for, charged in relation to (by criminal information,
     indictment or otherwise), or conviction of the Executive during the Term of
     this Agreement of a crime involving breach of trust or moral turpitude;

             (d) Conduct by the Executive that amounts to gross and willful
     insubordination or inattention to his duties and responsibilities
     hereunder; or

             (e) Conduct by the Executive that results in removal from his
     position as an officer or executive of Employer pursuant to a written order
     by any regulatory agency with authority or jurisdiction over Employer.

       1.5.2 With respect to termination by the Executive, a material diminution
   in the powers, responsibilities or duties of the Executive hereunder or a
   material breach of the terms of this Agreement by Employer, which remains
   uncured after the expiration of thirty (30) days following the delivery of
   written notice of such breach to Employer by the Executive.

   1.6 "CHANGE OF CONTROL" means any one of the following events:

             (a) the acquisition by any person or persons acting in concert of
     the then outstanding voting securities of either the Bank or the Company,
     if, after the transaction, the acquiring person (or persons) owns, controls
     or holds with power to vote fifty percent (50%) or more of any class of
     voting securities of either the Bank or the Company, as the case may be;

             (b) within any twelve-month period (beginning on or after the
     Effective Date) the persons who were directors of either the Bank or the
     Company immediately before the beginning of such twelve-month period (the
     "Incumbent Directors") shall cease to constitute at least a majority of
     such board of directors; provided that any director who was not a director
     as of the Effective Date shall be deemed to be an Incumbent Director if
     that director were elected to such board of directors by, or on the
     recommendation of or with the approval of, at least two-thirds of the
     directors who then qualified as Incumbent Directors; and provided further
     that no director whose initial assumption of office is in connection with
     an actual or threatened election contest (as such terms are used in Rule
     14a-11 of Regulation 14A promulgated under the Securities

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     Exchange Act of 1934) relating to the election of directors shall be deemed
     to be an Incumbent Director;

             (c) a reorganization, merger or consolidation, with respect to
     which persons who were the stockholders of the Bank or the Company, as the
     case may be, immediately prior to such reorganization, merger or
     consolidation do not, immediately thereafter, own more than fifty percent
     (50%) of the combined voting power entitled to vote in the election of
     directors of the reorganized, merged or consolidated company's then
     outstanding voting securities; or

             (d) the sale, transfer or assignment of all or substantially all of
     the assets of the Company and its subsidiaries to any third party.

   1.7 "COMPANY INFORMATION" means Confidential Information and Trade Secrets.

   1.8 "CONFIDENTIAL INFORMATION" means data and information relating to the
business of the Bank or the Company (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of which the
Executive became aware as a consequence of or through the Executive's
relationship to the Employer and which has value to the Employer and is not
generally known to its competitors. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the public by the
Employer (except where such public disclosure has been made by the Executive
without authorization) or that has been independently developed and disclosed by
others, or that otherwise enters the public domain through lawful means.

   1.9 "DISABILITY" shall mean the inability of the Executive to perform each of
his material duties under this Agreement for the duration of the short-term
disability period under the Employer's policy then in effect as certified by a
physician chosen by the Employer and reasonably acceptable to the Executive.

   1.10 "EFFECTIVE DATE" shall mean the date that the Securities and Exchange
Commission declares the Company's Registration Statement for its initial public
offering of common stock effective.

   1.11 "INITIAL TERM" shall mean that period of time commencing on January 1,
2000 (the "Beginning Date") and running until the earlier of the close of
business on the last business day immediately preceding the third anniversary of
the Beginning Date or any termination of employment of the Executive under this
Agreement as provided for in Section 3.

   1.12 "TERM" shall mean the Initial Term and all subsequent renewal periods.

   1.13 "TRADE SECRETS" means Employer information including, but not limited
to, technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which:

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             (a) derives economic value, actual or potential, from not being
     generally known to, and not being readily ascertainable by proper means by,
     other persons who can obtain economic value from its disclosure or use; and

             (b) is the subject of efforts that are reasonable under the
     circumstances to maintain its secrecy.

2. DUTIES.

   2.1 POSITION. The Executive is employed initially as President and Chief
Executive Officer of the Bank and the President of the Company, subject to the
direction of the Board of Directors of the Bank or the Company or its
designee(s), shall perform and discharge well and faithfully the duties which
may be assigned to him from time to time by the Bank or the Company in
connection with the conduct of its business. The duties and responsibilities of
the Executive are set forth on Exhibit A attached hereto.

   2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Executive pursuant to Section 2.1 hereof, the
Executive shall:

             (a) devote substantially all of his time, energy and skill during
     regular business hours to the performance of the duties of his employment
     (reasonable vacations and reasonable absences due to illness excepted) and
     faithfully and industriously perform such duties;

             (b) diligently follow and implement all reasonable and lawful
     management policies and decisions communicated to him by the Board of
     Directors of either the Bank or the Company; and

             (c) timely prepare and forward to the Board of Directors of either
     the Bank or the Company all reports and accountings as may be requested of
     the Executive.

   2.3 PERMITTED ACTIVITIES. The Executive shall devote his entire business
time, attention and energies to the Business of the Employer and shall not
during the Term be engaged (whether or not during normal business hours) in any
other business or professional activity, whether or not such activity is pursued
for gain, profit or other pecuniary advantage; but this shall not be construed
as preventing the Executive from:

             (a) investing his personal assets in businesses which (subject to
     clause (b) below) are not in competition with the Business of the Employer
     and which will not require any services on the part of the Executive in
     their operation or affairs and in which his participation is solely that of
     an investor;

             (b) purchasing securities in any corporation whose securities are
     regularly traded provided that such purchase shall not result in him
     collectively owning beneficially at any time five percent (5%) or more of
     the equity securities of any business in competition with the Business of
     the Employer; and

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             (c) participating in civic and professional affairs and
     organizations and conferences, preparing or publishing papers or books or
     teaching so long as the Board of Directors of either the Bank or the
     Company approves of such activities prior to the Executive's engaging in
     them.

3. TERM AND TERMINATION.

   3.1 TERM. This Agreement shall remain in effect for the Initial Term. At the
end of the Initial Term and at the end of each twelve-month extension thereof,
this Agreement shall automatically be extended for a successive twelve-month
period unless either party gives written notice to the other of its intent not
to extend this Agreement with such written notice to be given not less than
sixty (60) days prior to the end of the Initial Term or such twelve-month
period. In the event such notice of non-extension is properly given, this
Agreement shall terminate at the end of the remaining term then in effect.

   3.2 TERMINATION. During the Term, the employment of the Executive under this
Agreement may be terminated only as follows:

       3.2.1 By the Employer:

             (a) In the event that the Bank fails to receive its regulatory
     charter, or the Company fails to raise the necessary capital required to
     open the Bank, and should the Company's or the Bank's Board of Directors
     decide to forgo future efforts to open the Bank, in which event the
     Employer shall be required to continue to meet its obligation to the
     Executive under Section 4.1 for six (6) months.

             (b) For Cause, upon written notice to the Executive pursuant to
     Section 1.5.1 hereof, where the notice has been approved by a resolution
     passed by two-thirds of the directors of either the Bank or the Company
     then in office in which event the Employer shall have no further obligation
     to the Executive except for the payment of any amounts due and owing under
     Section 4 on the effective date of termination;

             (c) Without Cause at any time, provided that the Bank shall give
     the Executive thirty (30) days' prior written notice of its intent to
     terminate, in which event the Employer shall be required to continue to
     meet its obligations to the Executive under Section 4.1 for a period equal
     to the lesser of (i) six (6) months following the termination or (ii) the
     remaining Term of the Agreement; or

             (d) Upon the Disability of Executive at any time, provided that the
     Employer shall give the Executive thirty (30) days' prior written notice of
     its intent to terminate, in which event, the Employer shall be required to
     continue to meet its obligations under Section 4.1 for six (6) months
     following the termination or until the Executive begins receiving payments
     under the Company's long-term disability policy, whichever occurs first.

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       3.2.2 By the Executive:

             (a) For Cause, in which event the Employer shall be required to
     continue to meet its obligations under Section 4.1 for a period equal to
     the lesser of (i) six (6) months following the termination or (ii) the
     remaining Term of the Agreement; or

             (b) Without Cause or upon the Disability of the Executive, provided
     that the Executive shall give the Employer sixty (60) days' prior written
     notice of his intent to terminate, in which event the Employer shall have
     no further obligation to the Executive except future payment of any amounts
     due and owing under Section 4 on the effective date of the termination.

       3.2.3 At any time upon mutual, written agreement of the parties, in which
    event the Employer shall have no further obligation to the Executive except
    for the payment of any amounts due and owing under Section 4 of this
    Agreement on the effective date of termination unless otherwise set forth in
    the written agreement.

       3.2.4 Notwithstanding anything in this Agreement to the contrary, the
    Term shall end automatically upon the Executive's death, in which event the
    Employer shall have no further obligation to the Executive except for the
    payment of any amounts due and owing under Section 4 on the effective date
    of termination.

   3.3 CHANGE OF CONTROL. If the Executive terminates his employment with the
Employer under this Agreement for Cause or the Employer terminates Executive's
employment without Cause within six (6) months following a Change of Control,
the Executive, or in the event of his subsequent death, his designated
beneficiaries or his estate, as the case may be, shall receive, as liquidated
damages, in lieu of all other claims, a severance payment equal to one (1) times
the Executives then current Base Salary, to be paid in full on the last day of
the month following the date of termination. In no event shall the payment(s)
described in this Section 3.3 exceed the amount permitted by Section 280G of the
Internal Revenue Code, as amended (the "Code"). Therefore, if the aggregate
present value (determined as of the date of the Change of Control in accordance
with the provisions of Section 280G of the Code) of both the severance payment
and all other payments to the Executive in the nature of compensation which are
contingent on a change in ownership or effective control of the Bank or the
Company or in the ownership of a substantial portion of the assets of the Bank
or the Company (the "Aggregate Severance") would result in a "parachute
payment," as defined under Section 280G of the Code, then the Aggregate
Severance shall not be greater than an amount equal to 2.99 multiplied by
Executive's "base amount" for the "base period, " as those terms are defined
under Section 280G. In the event the Aggregate Severance is required to be
reduced pursuant to this Section 3.3, the Executive shall be entitled to
determine which portions of the Aggregate Severance are to be reduced so that
the Aggregate Severance satisfies the limit set forth in the preceding sentence.
Notwithstanding any provision in this Agreement, if the Executive may exercise
his right to terminate employment under this Section 3.3 or under Section
3.2.2(a), the Executive may choose which provision shall be applicable.

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   3.4 EFFECT OF TERMINATION. Termination of the employment of the Executive
pursuant to Section 3.2 or Section 3.3 shall be without prejudice to any right
or claim which may have previously accrued to either the Employer or the
Executive hereunder and shall not terminate, alter, supersede or otherwise
affect the terms and covenants and the rights and duties prescribed in this
Agreement.

4. COMPENSATION. The Executive shall receive the following salary and the
benefits described in Exhibit B, attached hereto and made a part hereof:

   4.1 BASE SALARY. During the Initial Term, the Executive shall be compensated
at a base rate of $7,000 per month until the opening of the Bank and $8,000 per
month after the opening of the Bank (the "Base Salary"). The Executive's Base
Salary shall be reviewed by the Board of Directors of the Bank and the Company
at least annually, and the Executive shall be entitled to receive annually an
increase in such amount, if any, as may be determined by the Board of Directors
based on its evaluation of Executive's performance. Base Salary shall be payable
in accordance with the Employer's normal payroll practices.

   4.2 INCENTIVE COMPENSATION.

             (a) The Executive shall be entitled to annual bonus compensation,
     if any, in accordance with the terms specified in Exhibit B attached
     hereto.

             (b) The Executive shall also be entitled to a cash bonus of $10,000
     payable immediately upon the opening of the Bank.

   4.3 STOCK OPTIONS. As of the Effective Date, the Company will have
established a stock incentive plan and will grant to the Executive pursuant to
such stock incentive plan an incentive stock option to purchase, at a per share
purchase price equal to $10.00, five percent (5%) of the number of shares of the
Company's common stock. The option generally will become vested and exercisable
in 20% increments, commencing on the first anniversary of the option grant date
and continuing for the next four successive anniversaries until the option is
fully vested and exercisable. The option shall expire generally upon the earlier
of ninety (90) days following termination of employment or upon the tenth
anniversary of the option grant date. The incentive stock option will be issued
by the Employer pursuant to the Company's stock incentive plan and subject to
the terms of a related stock option agreement.

   4.4 HEALTH INSURANCE.

             (a) The Employer shall reimburse the Executive for the cost of
     premium payments paid by the Executive for the Executive's current health
     insurance covering the Executive and the members of his immediate family:

                (i)  until such time as the Company adopts a health insurance
     plan for employees of the Company and the Bank; or

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                (ii) until the Company and the Bank abandon their organizational
     efforts or for twelve (12) months after the Beginning Date, whichever
     occurs first.

             (b) In the event of termination by the Executive For Cause (Section
     3.2.3(a)) or following a Change of Control (Section 3.3), the Employer
     shall reimburse Executive for the cost of premium payments paid by the
     Executive to continue his then existing health insurance as provided by the
     Employer for a period of six (6) months following the date of termination
     of employment.

             (c) In the event of a termination by the Employer Without Cause
     (Section 3.2.1(c)), the Employer shall reimburse the Executive for the cost
     of premium payments paid by the Executive to continue his then existing
     health insurance as provided by Employer for a period of twelve (12) months
     following the date of termination of employment.

   4.5 AUTOMOBILE. Beginning as of the Effective Date, the Employer will provide
the Executive with an automobile to be used by the Executive for business and
personal purposes. The make and model of the automobile shall be determined by
the Employer with a value not to exceed $25,000. The Employer will pay expenses
associated with the operation, maintenance, repair and insurance for the
automobile. In addition, the automobile shall be made available by the Executive
for use by other employees of the Bank on a reasonable basis during normal
business hours of the Bank.

   4.6 BUSINESS EXPENSES; MEMBERSHIPS. The Employer specifically agrees to
reimburse the Executive for:

             (a) reasonable and necessary business (including travel) expenses
     incurred by him in the performance of his duties hereunder not to exceed
     $1,000 per month, unless otherwise approved by the Board of Directors of
     either the Bank or the Company; and

             (b) beginning as of the Effective Date, the dues and business
     related expenditures, including initiation fees, associated with membership
     in a single country club and a single civic association both as selected by
     the Executive and in professional associations which are commensurate with
     his position; provided, however, that the Executive shall, as a condition
     of reimbursement, submit verification of the nature and amount of such
     expenses in accordance with reimbursement policies from time to time
     adopted by the Employer and in sufficient detail to comply with rules and
     regulations promulgated by the Internal Revenue Service. In the event that
     membership in the country club selected by the Executive requires the
     purchase of an equity interest in such club, the Company or the Bank shall
     be the owner of the equity interest and the Executive shall be the
     designated member pursuant to such equity interest during the Term of this
     Agreement.

   4.7 VACATION. On a non-cumulative basis, the Executive shall be entitled to
four (4) weeks of vacation in each successive twelve-month period during the
Term, during which his compensation shall be paid in full.

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   4.8 LIFE INSURANCE. During the Term of this Agreement, the Employer will
provide the Executive with term life insurance coverage providing a death
benefit of not less than $300,000, payable to such beneficiary or beneficiaries
as the Executive may designate.

   4.9 BENEFITS. In addition to the benefits specifically described in this
Agreement, the Executive shall be entitled to such benefits as may be available
from time to time to executives of the Bank similarly situated to the Executive.
All such benefits shall be awarded and administered in accordance with the
Bank's standard policies and practices. Such benefits may include, by way of
example only, profit-sharing plans, retirement or investment funds, dental,
health, life and disability insurance benefits and such other benefits as the
Bank deems appropriate.

   4.10 WITHHOLDING. The Employer may deduct from each payment of compensation
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.

5. COMPANY INFORMATION.

   5.1 OWNERSHIP OF COMPANY INFORMATION. All Company Information received or
developed by the Executive while employed by the Employer will remain the sole
and exclusive property of the Employer.

   5.2 OBLIGATIONS OF THE EXECUTIVE. The Executive agrees:

             (a) to hold Company Information in strictest confidence;

             (b) not to use, duplicate, reproduce, distribute, disclose or
     otherwise disseminate Company Information or any physical embodiments of
     Company Information; and

             (c) in any event, not to take any action causing or fail to take
     any action necessary in order to prevent any Company Information from
     losing its character or ceasing to qualify as Confidential Information or a
     Trade Secret.

In the event that the Executive is required by law to disclose any Company
Information, the Executive will not make such disclosure unless (and then only
to the extent that) the Executive has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written notice
is given to the Company when the Executive becomes aware that such disclosure
has been requested and is required by law. This Section 5 shall survive for a
period of twelve (12) months following termination of this Agreement for any
reason with respect to Confidential Information, and shall survive termination
of this Agreement for any reason for so long as is permitted by applicable law,
with respect to Trade Secrets.

   5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Employer, and
in any event upon termination of his employment with the Employer, the Executive
will promptly deliver to the Employer all property belonging to the Employer,
including, without limitation, all Company Information then in his possession or
control.

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6. NON-COMPETITION. The Executive agrees that during his employment by the Bank
hereunder and, in the event of his termination:

   -  by the Employer For Cause pursuant to Section 3.2.1(b),
   -  by the Executive Without Cause pursuant to Section 3.2.2(b), or
   -  by the Executive in connection with a Change of Control pursuant to
      Section 3.3,

for a period of twelve (12) months thereafter, he will not (except on behalf of
or with the prior written consent of the Employer), within the Area, either
directly or indirectly, on his own behalf or in the service or on behalf of
others, as an executive employee or in any other capacity which involves duties
and responsibilities similar to those undertaken for the Employer (including as
an organizer or proposed executive officer of a new financial institution),
engage in any business which is the same as or essentially the same as the
Business of the Employer.

7. NON-SOLICITATION OF CUSTOMERS. The Executive agrees that during his
employment by the Employer hereunder and, in the event of his termination:

   -  by the Employer For Cause pursuant to Section 3.2.1(b),
   -  by the Executive Without Cause pursuant to Section 3.2.2(b), or
   -  by the Executive in connection with a Change of Control pursuant to
      Section 3.3,

for a period of twelve (12) months thereafter, he will not (except on behalf of
or with the prior written consent of the Employer), within the Area, on his own
behalf or in the service or on behalf of others, solicit, divert or appropriate
or attempt to solicit, divert or appropriate, any business from any of the
Employer's customers, including actively sought prospective customers, with whom
the Executive has or had material contact during the last two (2) years of his
employment, for purposes of providing products or services that are competitive
with those provided by the Bank.

8. NON-SOLICITATION OF EMPLOYEES. The Executive agrees that during his
employment by the Employer hereunder and, in the event of his termination:

   -  by the Employer For Cause pursuant to Section 3.2.1(b),
   -  by the Executive Without Cause pursuant to Section 3.2.2(b), or
   -  by the Executive in connection with a Change of Control pursuant to
      Section 3.3,

for a period of twelve (12) months thereafter, he will not, within the Area, on
his own behalf or in the service or on behalf of others, solicit, recruit or
hire away or attempt to solicit, recruit or hire away, any employee of the
Employer or its Affiliates, whether or not:

   -  such employee is a full-time employee or a temporary employee of the
      Employer or its Affiliates,
   -  such employment is pursuant to written agreement, and
   -  such employment is for a determined period or is at will.

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9. REMEDIES. The Executive agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Employer, and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Executive agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Executive
agree that all remedies available to the Employer or the Executive, as
applicable, shall be cumulative.

10. SEVERABILITY. The parties agree that each of the provisions included in this
Agreement is separate, distinct and severable from the other provisions of this
Agreement and that the invalidity or unenforceability of any Agreement provision
shall not affect the validity or enforceability of any other provision of this
Agreement. Further, if any provision of this Agreement is ruled invalid or
unenforceable by a court of competent jurisdiction because of a conflict between
the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with and valid and enforceable under
the law or public policy.

11. NO SET-OFF BY THE EXECUTIVE. The existence of any claim, demand, action or
cause of action by the Executive against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.

12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand or overnight courier, in which event the notice shall be deemed effective
when delivered. All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:

                  (i)      If to the Employer, to it at:

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                  (ii)     If to the Executive, to him at:

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13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party to this Agreement.

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14. WAIVER. A waiver by one party to this Agreement of any breach of this
Agreement by the other party to this Agreement shall not be effective unless in
writing, and no waiver shall operate or be construed as a waiver of the same or
another breach on a subsequent occasion.

15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Georgetown County or the federal court for the
District of South Carolina. The Employer and the Executive agree to share
equally the fees and expenses associated with the arbitration proceedings.

16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys' fees,
incurred by the prevailing party in connection with such litigation, and the
other party shall pay such costs and expenses to the prevailing party promptly
upon demand by the prevailing party.

17. APPLICABLE LAW. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of South Carolina.

18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.

19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in this Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Bank or the
Executive unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.

20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.

21. SURVIVAL. The obligations of the Executive pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Executive hereunder
for the period designated under each of those respective sections.

22. JOINT AND SEVERAL. The obligations of the Bank and the Company to Executive
hereunder shall be joint and several.

                                       12

<PAGE>   13

         IN WITNESS WHEREOF, the Employer and the Executive have executed and
delivered this Agreement as of the date first shown above.

                                         THE BANK:

                                         SUN BANK, N.A. (PROPOSED)

                                         By: /s/ Dalton B. Floyd, Jr.
                                            -----------------------------------
                                         Print Name: Dalton B. Floyd, Jr.
                                                    ---------------------------
                                         Title: Chairman of the Board
                                               --------------------------------

                                         THE COMPANY:

                                         SUN BANCSHARES, INC.

                                         By: /s/ Dalton B. Floyd, Jr.
                                            -----------------------------------
                                         Print Name: Dalton B. Floyd, Jr.
                                                    ---------------------------
                                         Title: Chief Executive Officer
                                               --------------------------------

                                         THE EXECUTIVE:

                                         THOMAS BOUCHETTE

                                         /s/ Thomas Bouchette
                                         --------------------------------------

                                       13

<PAGE>   14

                                    EXHIBIT A

                         INITIAL DUTIES OF THE EXECUTIVE

The initial duties of the Executive shall include, in addition to any other
duties assigned the Executive by the Board of Directors of the Bank or the
Company or their respective designees, the following:

   -  Foster a corporate culture that promotes ethical practices, encourages
      individual integrity, fulfills social responsibility, and is conducive to
      attracting, retaining and motivating a diverse group of top-quality
      employees at all levels.

   -  Work with the Board of Directors to develop a long-term strategy for the
      Company that creates shareholder value.

   -  Develop and recommend to the Board annual business plans and budgets that
      support the Company's long-term strategy.

   -  Manage the day-to-day business affairs of the Company appropriately.

   -  Use best efforts to achieve the Company's financial and operating goals
      and objectives.

   -  Use best efforts to improve the quality and value of the products and
      services provided by the Company.

   -  Use best efforts to ensure that the Company maintains a satisfactory
      competitive position within its industry.

   -  Develop an effective management team and an active plan for its
      development and succession, and make recommendations to the Board
      regarding hiring, firing and compensation.

   -  Implement major corporate policies.

<PAGE>   15

                                    EXHIBIT B

         Within ninety (90) days following the end of each calendar year of the
Employer's operations, the Employer shall pay the Executive a cash bonus equal
to five percent (5%) of the Employer's consolidated pre-tax earnings for that
calendar year, but, in no event, shall such bonus amount exceed an amount equal
to one-hundred percent (100%) of Executive's Base Salary for the calendar year
for which the bonus is paid. Notwithstanding the foregoing, the bonus payments
contemplated by this Exhibit B shall not become due and payable until the Board
of Directors of the Bank has determined, according to reasonable safety and
soundness standards, that:

   -  The Bank is and after the payment of any bonus will continue to be "well
      capitalized" under the capital adequacy guidelines issued by its primary
      banking regulator;

   -  The Bank is not subject to any regulatory actions (i.e., a Memorandum of
      Understanding or Cease and Desist Order);

   -  The Capital, Management, Asset, and Liquidity components of the Bank's
      CAMELS rating are "2" or better and the Bank receives an overall CAMELS
      rating of "2" or better from its primary banking regulator;

   -  The Bank's loan loss reserve is adequate and loan portfolio quality is
      satisfactory based on the board of directors review of (1) the most recent
      report of exam of the Bank's primary banking regulator; (2) the audit
      report of the Company's independent auditors for the calendar year then
      ended; and (3) any other internally prepared credit review(s) that the
      board of directors deem necessary and appropriate; and

   -  The overall financial condition of the Bank, including asset quality, is
      satisfactory and will not be adversely affected by the payment of any
      bonus. The overall financial condition shall be presumed to be
      unsatisfactory if the Bank's average loans past due greater than 90 days
      as a percent of total average loans (the "Past Due Ratio") for the
      calendar year then ended exceeds the average Past Due Ratio for the Bank's
      pier group by greater than 0.25%.<PAGE>   1
                                                                   EXHIBIT 10.5

                              SUN BANCSHARES, INC.
                           2000 STOCK INCENTIVE PLAN

<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                      PAGE
                                                                                      ----

<S>                                                                                   <C>
SECTION 1  DEFINITIONS................................................................   1

   1.1   Definitions..................................................................   1

SECTION 2  THE STOCK INCENTIVE PLAN...................................................   4

   2.1   Purpose of the Plan..........................................................   4
   2.2   Stock Subject to the Plan....................................................   4
   2.3   Administration of the Plan...................................................   4
   2.4   Eligibility and Limits.......................................................   5

SECTION 3  TERMS OF STOCK INCENTIVES..................................................   5

   3.1   General Terms and Conditions.................................................   5
   3.2   Terms and Conditions of Options..............................................   6
      (a)   Option Price..............................................................   7
      (b)   Option Term...............................................................   7
      (c)   Payment...................................................................   7
      (d)   Conditions to the Exercise of an Option...................................   8
      (e)   Termination of Incentive Stock Option.....................................   8
      (f)   Special Provisions for Certain Substitute Options.........................   8
   3.3   Treatment of Awards Upon Termination of Service..............................   8

SECTION 4  RESTRICTIONS ON STOCK......................................................   9

   4.1   Escrow of Shares.............................................................   9
   4.2   Restrictions on Transfer.....................................................   9

SECTION 5  GENERAL PROVISIONS.........................................................   9

   5.1   Withholding..................................................................   9
   5.2   Changes in Capitalization; Merger; Liquidation..............................   10
   5.3   Cash Awards.................................................................   10
   5.4   Compliance with Code........................................................   11
   5.5   Right to Terminate Service..................................................   11
   5.6   Restrictions on Delivery and Sale of Shares; Legends........................   11
   5.7   Non-Alienation of Benefits..................................................   11
   5.8   Termination and Amendment of the Plan.......................................   12
   5.9   Stockholder Approval........................................................   12
   5.10  Choice of Law...............................................................   11
</TABLE>

<PAGE>   3

                              SUN BANCSHARES, INC.
                           2000 STOCK INCENTIVE PLAN

                             SECTION 1 DEFINITIONS

         1.1      Definitions. Whenever used herein, the masculine pronoun shall
be deemed to include the feminine, and the singular to include the plural,
unless the context clearly indicates otherwise, and the following capitalized
words and phrases are used herein with the meaning thereafter ascribed:

                  (a)   "Bank" means SunBank, N.A., a national bank.

                  (b)   "Board of Directors" means the board of directors of the
Company.

                  (c)   "Cause" has the same meaning as provided in the
employment agreement between the Participant and the Company or affiliate(s) on
the date of Termination of Service, or if no such definition or employment
agreement exists, "Cause" means conduct amounting to (1) fraud or dishonesty
against the Company or affiliate(s), (2) Participant's willful misconduct,
repeated refusal to follow the reasonable directions of the Board of Directors
or knowing violation of law in the course of performance of the duties of
Participant's service with the Company or affiliate(s), (3) repeated absences
from work without a reasonable excuse, (4) repeated intoxication with alcohol
or drugs while on the Company or affiliate(s)' premises during regular business
hours, (5) a conviction or plea of guilty or nolo contendere to a felony or a
crime involving dishonesty, or (6) a breach or violation of the terms of any
agreement to which Participant and the Company or affiliate(s) are party.

                  (d)   "Change in  Control"  means any one of the following
events which may occur after the date the Stock Incentive is granted:

                        (1)   the  acquisition  by any  person or persons
acting in concert of the then outstanding voting securities of either the Bank
or the Company, if, after the transaction, the acquiring person (or persons)
owns, controls or holds with power to vote fifty percent (50%) or more of any
class of voting securities of either the Bank or the Company, as the case may
be;

                        (2)   within any twelve-month period the persons who
were directors of either the Bank or the Company immediately before the
beginning of such twelve-month period (the "Incumbent Directors") shall cease
to constitute at least a majority of such board of directors; provided that any
director who was not a director as of the beginning of such twelve-month period
shall be deemed to be an Incumbent Director if that director were elected to
such board of directors by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as Incumbent
Directors; and provided further that no director whose initial assumption of
office is in connection with an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934) relating to the election of directors shall be
deemed to be an Incumbent Director;

<PAGE>   4

                        (3)   a reorganization, merger or consolidation, with
respect to which persons who were the stockholders of either the Bank or the
Company, as the case may be, immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities; or

                        (4)   the sale, transfer or assignment of all or
substantially all of the assets of the Company and its subsidiaries to any
third party.

                  (e)   "Company" means Sun Bancshares, Inc., a corporation
organized under the laws of the State of South Carolina as a bank holding
company.

                  (f)   "Code" means the Internal Revenue Code of 1986, as
amended.

                  (g)   "Committee" means the committee appointed by the Board
of Directors to administer the Plan pursuant to Plan Section 2.3.

                  (h)   "Disability" has the same meaning as provided in the
long-term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or affiliate for the Participant. If no long-term
disability plan or policy was ever maintained on behalf of the Participant or,
if the determination of Disability relates to an Incentive Stock Option,
Disability shall mean that condition described in Code Section 22(e)(3), as
amended from time to time. In the event of a dispute, the determination of
Disability shall be made by the Board of Directors and shall be supported by
advice of a physician competent in the area to which such Disability relates.

                  (i)   "Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.

                  (j)   "Fair Market Value" refers to the determination of value
of a share of Stock. If the Stock is actively traded on any national securities
exchange or any Nasdaq quotation or market system, Fair Market Value shall mean
the closing price at which sales of Stock shall have been sold on the most
recent trading date immediately prior to the date of determination, as reported
by any such exchange or system selected by the Committee on which the shares of
Stock are then traded. If the shares of Stock are not actively traded on any
such exchange or system, Fair Market Value shall mean the arithmetic mean of
the bid and asked prices for the shares of Stock on the most recent trading
date within a reasonable period prior to the determination date as reported by
such exchange or system. If there are no bid and asked prices within a
reasonable period or if the shares of Stock are not traded on any exchange or
system as of the determination date, Fair Market Value shall mean the fair
market value of a share of Stock as determined by the Committee taking into
account such facts and circumstances deemed to be material by the Committee to
the value of the Stock in the hands of the Participant; provided that, for
purposes of granting awards other than Incentive Stock Options, Fair Market
Value of a share of Stock may be determined by the Committee by reference to
the average market value determined over a period certain or as of specified
dates, to a tender offer price for

                                       2
<PAGE>   5

the shares of Stock (if settlement of an award is triggered by such an event)
or to any other reasonable measure of fair market value and provided further
that, for purposes of granting Incentive Stock Options, Fair Market Value of a
share of Stock shall be determined in accordance with the valuation principles
described in the regulations promulgated under Code Section 422.

                  (k)   "Incentive Stock Option" means an incentive stock
option, as defined in Code Section 422, described in Plan Section 3.2.

                  (l)   "Non-Qualified Stock Option" means a stock option,
other than an option qualifying as an Incentive Stock Option, described in Plan
Section 3.2.

                  (m)   "Option" means a Non-Qualified Stock Option or an
Incentive Stock Option.

                  (n)   "Over 10% Owner" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Parents or
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).

                  (o)   "Parent" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, with respect
to Incentive Stock Options, at the time of granting of the Incentive Stock
Option, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in the chain.

                  (p)   "Participant" means an individual who receives a Stock
Incentive hereunder.

                  (q)   "Plan" means the Sun Bancshares, Inc. 2000 Stock
Incentive Plan.

                  (r)   "Stock" means the Company's common stock, $1.00 par
value per share.

                  (s)   "Stock Incentive Agreement" means an agreement between
the Company and a Participant or other documentation evidencing an award of a
Stock Incentive.

                  (t)   "Stock Incentives" means, collectively, Incentive Stock
Options and Non-Qualified Stock Options.

                  (u)   "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if,
with respect to Incentive Stock Options, at the time of the granting of the
Incentive Stock Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.

                                       3
<PAGE>   6

                  (v)   "Termination of Service" means the termination of the
service relationship, whether employment or otherwise, between a Participant
and the Company and any affiliates, regardless of the fact that severance or
similar payments are made to the Participant for any reason, including, but not
by way of limitation, a termination by resignation, discharge, death,
Disability or retirement. The Committee shall, in its absolute discretion,
determine the effect of all matters and questions relating to Termination of
Service, including, but not by way of limitation, the question of whether a
leave of absence constitutes a Termination of Service, or whether a Termination
of Service is for Cause.

                       SECTION 2 THE STOCK INCENTIVE PLAN

         2.1      Purpose of the Plan. The Plan is intended to (a) provide
incentives to officers, employees, directors and organizers of the Company and
affiliates to stimulate their efforts toward the continued success of the
Company and to operate and manage the business in a manner that will provide
for the long-term growth and profitability of the Company; (b) encourage stock
ownership by officers, employees, directors and organizers by providing them
with a means to acquire a proprietary interest in the Company by acquiring
shares of Stock; and (c) provide a means of obtaining and rewarding key
personnel.

         2.2      Stock Subject to the Plan. Subject to adjustment in accordance
with Section 5.2, 100,000 shares of Stock (the "Maximum Plan Shares") are
hereby reserved exclusively for issuance pursuant to Stock Incentives. At such
time as the Company becomes subject to Section 16 of the Exchange Act, at no
time shall the Company have outstanding Stock Incentives subject to Section 16
of the Exchange Act and shares of Stock issued in respect of Stock Incentives
in excess of the Maximum Plan Shares. The shares of Stock attributable to the
nonvested, unpaid, unexercised, unconverted or otherwise unsettled portion of
any Stock Incentive that is forfeited or cancelled or expires or terminates for
any reason without becoming vested, paid, exercised, converted or otherwise
settled in full will again be available for purposes of the Plan.

         2.3      Administration of the Plan. The Plan shall be administered by
the Committee. The members of the Committee shall consist solely of at least
two members of the Board of Directors who are both "outside directors" as
defined in Treasury Regulations ss.1.162-27(e) as promulgated by the Internal
Revenue Service and "non-employee directors" as defined in Rule 16b-3(b)(3) as
promulgated under the Exchange Act. The Committee shall have full authority in
its discretion to determine the officers, employees, directors and organizers
of the Company or its affiliates to whom Stock Incentives shall be granted and
the terms and provisions of Stock Incentives subject to the Plan. Subject to
the provisions of the Plan, the Committee shall have full and conclusive
authority to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Stock Incentive Agreements and to make all other determinations
necessary or advisable for the proper administration of the Plan. The
Committee's determinations under the Plan need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, awards
under the Plan (whether or not such persons are similarly situated). The
Committee's decisions shall be final and binding on all Participants. Each
member of the Committee shall serve at the discretion of the Board of Directors
and the Board of Directors may from time to time remove

                                       4
<PAGE>   7

members from or add members to the Committee. Vacancies on the Committee shall
be filled by the Board of Directors.

         The Committee shall select one of its members as chairman and shall
hold meetings at the times and in the places as it may deem advisable. Acts
approved by a majority of the Committee in a meeting at which a quorum is
present, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be the valid acts of the Committee.

         2.4      Eligibility and Limits. Stock Incentives may be granted only
to officers, employees, directors and organizers of the Company or any
affiliate; provided, however, that an Incentive Stock Option may only be
granted to an employee of the Company or any Subsidiary. In the case of
Incentive Stock Options, the aggregate Fair Market Value (determined as of the
date an Incentive Stock Option is granted) of stock with respect to which stock
options intended to meet the requirements of Code Section 422 become
exercisable for the first time by an individual during any calendar year under
all plans of the Company and its Parents and Subsidiaries shall not exceed
$100,000; provided further, that if the limitation is exceeded, the Incentive
Stock Option(s) which cause the limitation to be exceeded shall be treated as
Non-Qualified Stock Option(s). Pursuant to Section 162(m) of the Code and the
regulations thereunder, for compensation to be treated as qualified performance
based compensation, the maximum number of shares of Stock with respect to which
Options may be granted during any one year period to any employee may not
exceed 75,000, subject to adjustment in accordance with Section 5.2. In
applying this limitation, if a Stock Incentive, or any portion thereof, granted
to an employee is cancelled or repriced for any reason, then the shares of
Stock attributable to such cancellation or repricing either shall continue to
be counted as an outstanding grant or shall be counted as a new grant, as the
case may be, against the affected employee's 75,000 limit for the appropriate
fiscal year.

                      SECTION 3 TERMS OF STOCK INCENTIVES

         3.1      General Terms and Conditions.

                  (a)   The number of shares of Stock as to which a Stock
Incentive shall be granted shall be determined by the Committee in its sole
discretion, subject to the provisions of Section 2.2, as to the total number of
shares available for grants under the Plan. If a Stock Incentive Agreement so
provides, a Participant may be granted a new Option to purchase a number of
shares of Stock equal to the number of previously owned shares of Stock
tendered in payment of the Exercise Price (as defined below) for each share of
Stock purchased pursuant to the terms of the Stock Incentive Agreement.

                  (b)   Each Stock Incentive shall be evidenced by a Stock
Incentive Agreement in such form and containing such terms, conditions and
restrictions as the Committee may determine is appropriate. Each Stock
Incentive Agreement shall be subject to the terms of the Plan and any provision
in a Stock Incentive Agreement that is inconsistent with the Plan shall be null
and void.

                                       5
<PAGE>   8

                  (c)   The date a Stock Incentive is granted shall be the date
on which the Committee has approved the terms of, and satisfaction of any
conditions applicable to, the grant of the Stock Incentive and has determined
the recipient of the Stock Incentive and the number of shares covered by the
Stock Incentive and has taken all such other action necessary to complete the
grant of the Stock Incentive.

                  (d)   The Committee may provide in any Stock Incentive
Agreement (or subsequent to the award of a Stock Incentive but prior to its
expiration or cancellation, as the case may be) that, in the event of a Change
in Control, the Stock Incentive shall or may be cashed out on the basis of any
price not greater than the highest price paid for a share of Stock in any
transaction reported by any market or system selected by the Committee on which
the shares of Stock are then actively traded during a specified period
immediately preceding or including the date of the Change in Control or offered
for a share of Stock in any tender offer occurring during a specified period
immediately preceding or including the date the tender offer commences;
provided that, in no case shall any such specified period exceed three (3)
months (the "Change in Control Price"). For purposes of this Subsection,
Options shall be cashed out on the basis of the excess, if any, of the Change
in Control Price (but not more than the Fair Market Value of the Stock on the
date of the cash-out in the case of Incentive Stock Options) over the Exercise
Price with or without regard to whether the Option may otherwise be exercisable
only in part.

                  (e)   Any Stock Incentive may be granted in connection with
all or any portion of a previously or contemporaneously granted Stock
Incentive. Exercise or vesting of a Stock Incentive granted in connection with
another Stock Incentive may result in a pro rata surrender or cancellation of
any related Stock Incentive, as specified in the applicable Stock Incentive
Agreement.

                  (f)   Unless otherwise permitted by the Committee with respect
to Non-Qualified Stock Options, Stock Incentives shall not be transferable or
assignable except by will or by the laws of descent and distribution and shall
be exercisable, during the Participant's lifetime, only by the Participant; in
the event of the Disability of the Participant, by the legal representative of
the Participant; or in the event of the death of the Participant, by the
personal representative of the Participant's estate or if no personal
representative has been appointed, by the successor in interest determined
under the Participant's will.

                  (g)   No Stock Incentive shall have a term that extends beyond
the tenth anniversary of the date the Stock Incentive was granted.

         3.2      Terms and Conditions of Options. Each Option granted under the
Plan shall be evidenced by a Stock Incentive Agreement. At the time any Option
is granted, the Committee shall determine whether the Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be
clearly identified as to its status as an Incentive Stock Option or a
Non-Qualified Stock Option. At the time any Incentive Stock Option is
exercised, the Company shall be entitled to place a legend on the certificates
representing the shares of Stock purchased pursuant to the Option to clearly
identify them as shares of Stock purchased upon exercise of an Incentive Stock
Option. An Incentive Stock Option may only be granted within

                                       6
<PAGE>   9

ten (10) years from the earlier of the date the Plan is adopted by the Board of
Directors or approved by the Company's stockholders. All Options shall provide
that the primary Federal regulator of the Bank may require Participant to
exercise an Option in whole or in part if the capital of the Bank falls below
minimum requirements and shall further provide that, if the Participant fails
to so exercise any such portion of the Option, that portion of the Option shall
be forfeited.

                  (a)   Option Price. Subject to adjustment in accordance with
Section 5.2 and the other provisions of this Section 3.2, the exercise price
(the "Exercise Price") per share of Stock purchasable under any Option shall be
as set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an Incentive Stock Option to a Participant who is not an Over 10%
Owner, the Exercise Price per share shall not be less than the Fair Market
Value on the date the Option is granted. With respect to each grant of an
Incentive Stock Option to a Participant who is an Over 10% Owner, the Exercise
Price shall not be less than 110% of the Fair Market Value on the date the
Option is granted. With respect to each grant of a Non-Qualified Stock Option,
the Exercise Price per share shall be no less than the Fair Market Value.

                  (b)   Option Term. The term of an Option shall be as specified
in the applicable Stock Incentive Agreement; provided, however that any
Incentive Stock Option granted to a Participant who is not an Over 10% Owner
shall not be exercisable after the expiration of ten (10) years after the date
the Option is granted and any Incentive Stock Option granted to an Over 10%
Owner shall not be exercisable after the expiration of five (5) years after the
date the Option is granted.

                  (c)   Payment. Payment for all shares of Stock purchased
pursuant to the exercise of an Option shall be made in any form or manner
authorized by the Committee in the Stock Incentive Agreement or by amendment
thereto, including, but not limited to, cash or, if the Stock Incentive
Agreement provides, (1) by delivery to the Company of a number of shares of
Stock which have been owned by the holder for at least six (6) months prior to
the date of exercise having an aggregate Fair Market Value of not less than the
product of the Exercise Price multiplied by the number of shares the
Participant intends to purchase upon exercise of the Option on the date of
delivery; (2) in a cashless exercise through a broker; or (3) by having a
number of shares of Stock withheld, the Fair Market Value of which as of the
date of exercise is sufficient to satisfy the Exercise Price. In its
discretion, the Committee also may authorize (at the time an Option is granted
or thereafter) Company financing to assist the Participant as to payment of the
Exercise Price on such terms as may be offered by the Committee in its
discretion. Payment shall be made at the time that the Option or any part
thereof is exercised, and no shares shall be issued or delivered upon exercise
of an Option until full payment has been made by the Participant. The holder of
an Option, as such, shall have none of the rights of a stockholder.

                  (d)   Conditions to the Exercise of an Option. Each Option
granted under the Plan shall be exercisable by whom, at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee shall specify in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the time or times at which
such

                                       7
<PAGE>   10

Option may be exercised in whole or in part, including, without limitation,
upon a Change in Control and may permit the Participant or any other designated
person to exercise the Option, or any portion thereof, for all or part of the
remaining Option term notwithstanding any provision of the Stock Incentive
Agreement to the contrary. Notwithstanding the foregoing, no Option granted
prior to the third anniversary of the date the Plan is adopted by the Board of
Directors shall contain provisions which allow the Option to become vested and
exercisable at a rate faster than in equal, annual one-third increments
commencing with the first anniversary of the Option's grant date.

                  (e)   Termination of Incentive Stock Option. With respect to
an Incentive Stock Option, in the event of the Termination of Service of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Service;
provided, however, that in the case of a holder whose Termination of Service is
due to death or Disability, one (1) year may be substituted for such three (3)
month period. For purposes of this Subsection (e), Termination of Service of
the Participant shall not be deemed to have occurred if the Participant is
employed by another corporation (or a parent or subsidiary corporation of such
other corporation) which has assumed the Incentive Stock Option of the
Participant in a transaction to which Code Section 424(a) is applicable.

                  (f)   Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such
other terms and conditions as the Committee may prescribe to cause such
substitute Option to contain as nearly as possible the same terms and
conditions (including the applicable vesting and termination provisions) as
those contained in the previously issued option being replaced thereby.

         3.3      Treatment of Awards Upon Termination of Service. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who suffers a Termination of Service may be cancelled, accelerated,
paid or continued, as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine. The portion of any
award exercisable in the event of continuation or the amount of any payment due
under a continued award may be adjusted by the Committee to reflect the
Participant's period of service from the date of grant through the date of the
Participant's Termination of Service or such other factors as the Committee
determines are relevant to its decision to continue the award.

                        SECTION 4 RESTRICTIONS ON STOCK

         4.1      Escrow of Shares. Any certificates representing the shares of
Stock issued under the Plan shall be issued in the Participant's name, but, if
the Stock Incentive Agreement so provides, the shares of Stock shall be held by
a custodian designated by the Committee (the "Custodian"). Each applicable
Stock Incentive Agreement providing for transfer of shares of

                                       8
<PAGE>   11

Stock to the Custodian shall appoint the Custodian as the attorney-in-fact for
the Participant for the term specified in the applicable Stock Incentive
Agreement, with full power and authority in the Participant's name, place and
stead to transfer, assign and convey to the Company any shares of Stock held by
the Custodian for such Participant, if the Participant forfeits the shares
under the terms of the applicable Stock Incentive Agreement. During the period
that the Custodian holds the shares subject to this Section, the Participant
shall be entitled to all rights, except as provided in the applicable Stock
Incentive Agreement, applicable to shares of Stock not so held. Any dividends
declared on shares of Stock held by the Custodian shall, as the Committee may
provide in the applicable Stock Incentive Agreement, be paid directly to the
Participant or, in the alternative, be retained by the Custodian until the
expiration of the term specified in the applicable Stock Incentive Agreement
and shall then be delivered, together with any proceeds, with the shares of
Stock to the Participant or to the Company, as applicable.

         4.2      Restrictions on Transfer. The Participant shall not have the
right to make or permit to exist any Disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the applicable Stock
Incentive Agreement. Any Disposition of the shares of Stock issued under the
Plan by the Participant not made in accordance with the Plan or the applicable
Stock Incentive Agreement shall be void. The Company shall not recognize, or
have the duty to recognize, any Disposition not made in accordance with the
Plan and the applicable Stock Incentive Agreement, and the shares so
transferred shall continue to be bound by the Plan and the applicable Stock
Incentive Agreement.

                          SECTION 5 GENERAL PROVISIONS

         5.1      Withholding. The Company shall deduct from all cash
distributions under the Plan any taxes required to be withheld by federal,
state or local government. Whenever the Company proposes or is required to
issue or transfer shares of Stock under the Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. A Participant may
pay the withholding tax in cash, by tendering shares of Stock which have been
owned by the holder for at least six (6) months prior to the date of exercise
or, if the applicable Stock Incentive Agreement provides, a Participant may
elect to have the number of shares of Stock he is to receive reduced by the
smallest number of whole shares of Stock which, when multiplied by the Fair
Market Value of the shares of Stock determined as of the Tax Date (defined
below), is sufficient to satisfy federal, state and local, if any, withholding
taxes arising from exercise or payment of a Stock Incentive (a "Withholding
Election"). A Participant may make a Withholding Election only if both of the
following conditions are met:

                  (a)   The Withholding Election must be made on or prior to the
date on which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed notice
of Withholding Election as prescribed by the Committee; and

                  (b)   Any Withholding Election made will be irrevocable;
however, the Committee may, in its sole discretion, disapprove and give no
effect to the Withholding Election.

                                       9
<PAGE>   12

         5.2      Changes in Capitalization; Merger; Liquidation.

                  (a)   The number of shares of Stock reserved for the grant of
Options and the number of shares of Stock reserved for issuance upon the
exercise or payment, as applicable, of each outstanding Option, and the
Exercise Price of each outstanding Option shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Stock resulting from
a subdivision or combination of shares or the payment of an ordinary stock
dividend in shares of Stock to holders of outstanding shares of Stock or any
other increase or decrease in the number of shares of Stock outstanding
effected without receipt of consideration by the Company.

                  (b)   In the event of any merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the
corporate structure of the Company or its Stock or tender offer for shares of
Stock, the Committee, in its sole discretion, may make such adjustments with
respect to awards and take such other action as it deems necessary or
appropriate to reflect or in anticipation of such merger, consolidation,
extraordinary dividend (including a spin-off), reorganization, other change in
corporate structure or tender offer, including, without limitation, the
substitution of new awards, the termination or adjustment of outstanding
awards, the acceleration of awards or the removal of restrictions on
outstanding awards, all as may be provided in the applicable Stock Incentive
Agreement or, if not expressly addressed therein, as the Committee subsequently
may determine in the event of any such merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the
corporate structure of the Company or its Stock or tender offer for shares of
Stock. Any adjustment pursuant to this Section 5.2 may provide, in the
Committee's discretion, for the elimination without payment therefor of any
fractional shares that might otherwise become subject to any Stock Incentive.

                  (c)   The existence of the Plan and the Stock Incentives
granted pursuant to the Plan shall not affect in any way the right or power of
the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other corporate act or proceeding.

         5.3      Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of a Stock Incentive the right to receive, at
such times and in such amounts as determined by the Committee in its
discretion, a cash amount which is intended to reimburse such person for all or
a portion of the federal, state and local income taxes imposed upon such person
as a consequence of the receipt of the Stock Incentive or the exercise of
rights thereunder.

         5.4      Compliance with Code. All Incentive Stock Options to be
granted hereunder are intended to comply with Code Section 422, and all
provisions of the Plan and all Incentive Stock Options granted hereunder shall
be construed in such manner as to effectuate that intent.

                                      10
<PAGE>   13

         5.5      Right to Terminate Service. Nothing in the Plan or in any
Stock Incentive Agreement shall confer upon any Participant the right to
continue as an officer, employee, director or organizer of the Company or
affect the right of the Company to terminate the Participant's service at any
time.

         5.6      Restrictions on Delivery and Sale of Shares; Legends. Each
Stock Incentive is subject to the condition that if at any time the Committee,
in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Stock Incentive or the
purchase or delivery of shares thereunder, the delivery of any or all shares
pursuant to such Stock Incentive may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of Stock purchasable or
otherwise deliverable under Stock Incentives then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any
other delivery of Stock pursuant to a Stock Incentive, that the Participant or
other recipient of a Stock Incentive represent, in writing, that the shares
received pursuant to the Stock Incentive are being acquired for investment and
not with a view to distribution and agree that the shares will not be disposed
of except pursuant to an effective registration statement, unless the Company
shall have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may include on certificates representing shares
delivered pursuant to a Stock Incentive such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.

         5.7      Non-alienation of Benefits. Other than as specifically
provided with regard to the death of a Participant, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall be
void. No such benefit shall, prior to receipt by the Participant, be in any
manner liable for or subject to the debts, contracts, liabilities, engagements
or torts of the Participant.

         5.8      Termination and Amendment of the Plan. The Board of Directors
at any time may amend or terminate the Plan without stockholder approval;
provided, however, that the Board of Directors may condition any amendment on
the approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws. No such
termination or amendment without the consent of the holder of a Stock Incentive
shall adversely affect the rights of the Participant under such Stock
Incentive.

         5.9      Stockholder Approval. The Plan must be submitted to the
stockholders of the Company for their approval within twelve (12) months before
or after the adoption of the Plan by the Board of Directors. If such approval
is not obtained, any Stock Incentive granted hereunder will be void.

         5.10     Choice of Law. The laws of the State of South Carolina shall
govern the Plan, to the extent not preempted by federal law.

                                      11
<PAGE>   14

         IN WITNESS WHEREOF, the Company has caused this Plan to be executed as
of this ___ day of ___________________, 2000.

                                                     SUN BANCSHARES, INC.

                                                     By:
                                                        -----------------------
                                                     Title:
                                                           --------------------
ATTEST:

-------------------------------
Secretary

         [SEAL]

                                      12

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