Document:

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                                                                   Exhibit 10.11

                               FIRST WESTERN BANK
                       1999 NONSTATUTORY STOCK OPTION PLAN

         First Western Bank, a North Carolina corporation (the "Corporation"),
does herein set forth the terms of its 1999 Nonstatutory Stock Option Plan (the
"Plan"), which was adopted by the Board of Directors (the "Board") of the
Corporation subject to approval by the Corporation's shareholders as provided in
Paragraph 19 hereof, and by the appropriate regulatory authorities, as provided
by law.

         1. Purpose of this Plan. The purpose of this Plan is to provide for the
grant of Nonstatutory Stock Options (the "Options" or singularly, "Option") to
employees and directors of the Corporation who wish to invest in the
Corporation's common stock, par value $5.00 per share (the "Common Stock"). The
Board believes the existence of this Plan will make it possible for the
Corporation to attract capable individuals to serve with the Corporation or any
of its subsidiaries and on the Board.

         2. Administration of this Plan.

                  (a) This Plan shall be administered by the Board. The Board
         shall have full power and authority to construe, interpret and
         administer this Plan. All actions, decisions, determinations, or
         interpretations of the Board shall be final, conclusive, and binding
         upon all parties.

                  (b) The Board may designate any officers or employees of the
         Corporation to assist in the administration of this Plan. The Board may
         authorize such individuals to execute documents on its behalf and may
         delegate to them such other ministerial and limited discretionary
         duties as the Board may see fit.

         3. Shares of Common Stock Subject to this Plan. The number of shares of
Common Stock that shall be available initially for Options under this Plan is
seventy-eight thousand, one hundred thirty-seven (78,137), subject to adjustment
as provided in Paragraph 12. Common Stock subject to Options which expire or
terminate prior to exercise of the Options shall lapse and such shares shall
again be available for future grants of Options under this Plan.

         4. Eligibility.

                  (a) Options under this Plan may be granted to any employee or
         director as determined by the Board. An individual may hold more than
         one Option under this or other plans adopted by the Corporation.

                  (b) Upon the forfeiture of an Option for whatever reason prior
         to the expiration of the Option Period (as defined in Paragraph 8
         hereof) the shares of Common Stock covered by a forfeited Option shall
         be available for the granting of additional Options during the
         remaining term of this Plan upon such terms and conditions and to such
         Optionees (as defined below) as may be determined by the Board.

         5. Option Price.

                  (a) The price per share of each Option granted under this Plan
         (the "Option Price") shall be determined by the Board as of the
         effective date of grant of such Option. In no event shall such Option
         Price be less than 100% of the fair market value of the Common Stock on
         the date of the grant. An Option shall be considered as granted on the
         later of

                           (i) the date the Board acts to grant such Option, or

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                           (ii) such later date as the Board shall specify in an
                  Option Agreement (as hereinafter defined).

                  (b) The fair market value of a share of Common Stock shall be
         determined as follows:

                           (i) If on the date as of which such determination is
                  being made, the Common Stock is admitted to trading on a
                  securities exchange or exchanges for which actual sale prices
                  are regularly reported, or actual sale prices are otherwise
                  regularly published, the fair market value of a share of the
                  Common Stock shall be deemed to be equal to the mean of the
                  closing sale price as reported for each of the five (5)
                  trading days immediately preceding the date as of which such
                  determination is made; provided, however, that, if a closing
                  sale price is not reported for each of the five (5) trading
                  days immediately preceding the date as of which such
                  determination is made, then the fair market value shall be
                  equal to the mean of the closing sale prices on those trading
                  days for which such price is available.

                           (ii) If on the date as of which such determination is
                  made, no such closing sale prices are reported, but quotations
                  for the Common Stock are regularly listed on the National
                  Association of Securities Dealers Nasdaq system or another
                  comparable system, the fair market value of a share of Common
                  Stock shall be deemed to be equal to the mean of the average
                  of the closing bid and asked prices for the Common Stock
                  quoted on such system on each of the five (5) trading days
                  preceding the date as of which such determination is made. If
                  a closing bid and asked price is not available for each of the
                  five (5) trading days, then the fair market value shall be
                  equal to the mean of the average of the closing bid and asked
                  prices on those trading days during the five-day period for
                  which such prices are available.

                           (iii) If no such quotations are available, the fair
                  market value of a share of Common Stock shall be deemed to be
                  the average of the closing bid and asked prices furnished by a
                  professional securities dealer making a market in such shares,
                  as selected by the Board, for the trading date first preceding
                  the date as of which such determination is made.

         If the Board determines that the price as determined above does not
represent the fair market value of a share of Common Stock, the Board may then
consider such other factors as it deems appropriate and then fix the fair market
value for the purposes of this Plan.

         6. Payment of Option Price. Payment for shares subject to an Option
must be made in cash.

         7. Terms and Conditions of Grant of Options.

                  (a) Each Option granted pursuant to this Plan shall be
         evidenced by a written Nonstatutory Stock Option Agreement (the "Option
         Agreement") with each employee or director to whom an Option is granted
         (the "Optionee"). The Option Agreement shall be in the form the Board
         shall adopt and may contain such terms and conditions as the Board may
         determine.

                  (b) Notwithstanding any other provision of this Plan, no
         person shall be granted an Option or Options under this Plan which
         would result in the total number of shares granted to such Optionee to
         exceed 40% of the shares allocated to this Plan, or, if greater, the
         maximum permitted by the Commissioner of Banks of North Carolina (the
         "Commissioner of Banks").

         8. Option Period. Each Option Agreement shall set forth a period during
which such Option may be exercised (the "Option Period")' provided, however,
that the Option Period shall not exceed ten (10) years after the date of grant
of such Option as specified in an Option Agreement.

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         9. Exercise of Options.

                  (a) An Option shall be exercised by written notice to the
         Board signed by an Optionee or by such other person an may be entitled
         to exercise such Option or to surrender such Option. The written notice
         shall state the number of shares with respect to which an Option is
         being exercised and shall either be accompanied by the payment of the
         aggregate Option Price for such shares or shall fix a date (not more
         than ten (10) business days after the date of such notice) by which the
         payment of the aggregate Option Price will be made. An Optionee shall
         not exercise an Option to purchase less than 100 shares, unless the
         Board otherwise approves or unless the partial exercise is for the
         remaining shares available under such Option.

                  (b) A certificate or certificates for the shares of Common
         Stock purchased by the exercise of an Option shall be issued in the
         regular course of business following the receipt of the notice of
         exercise of such Option and the payment therefor. During the Option
         Period, no person entitled to exercise any Option granted under this
         Plan shall have any of the rights or privileges of a shareholder with
         respect to any shares of the Common Stock issuable upon exercise of
         such Option, until certificates representing such shares shall have
         been issued and delivered and the individual's name entered as a
         shareholder of record on the books of the Corporation for such shares.

         10. Effect of Leaving the Corporation or Death.

                  (a) In the event that an Optionee terminates the relationship
         with the Corporation for any reason other than retirement, disability,
         or death, any Option granted to the Optionee under this Plan, to the
         extent not previously exercised or surrendered by the Optionee or
         expired, shall immediately terminate.

                  (b) In the event of an Optionee's retirement, such Optionee
         shall have the right to exercise an Option granted under this Plan, to
         the extent that it has not previously been exercised or surrendered by
         the Optionee or expired, for such period of time as may be determined
         by the Board and specified in the Option Agreement, but in no event may
         any Option be exercised later than the end of the Option Period
         provided in the Option Agreement in accordance with Paragraph 8 hereof.
         Notwithstanding any other provision contained this Plan, or in any
         Option Agreement, upon retirement, any Option then held by an Optionee
         shall be exercisable immediately in full. For purposes of this Plan,
         the term "retirement" for a Director shall mean termination of a
         Director's membership on the Board

                           (i) at any time after attaining age 65 with the
                  approval of the Board; or

                           (ii) at the election of the Director, at any time
                  after not less than five (5) years service as a member of the
                  Board.

                  (c) In the event of an Optionee's disability, such Optionee
         shall have the right to exercise an Option granted under this Plan, to
         the extent that it has not previously been exercised or surrendered by
         the Optionee or expired, for such period of time as may be determined
         by the Board and specified in the Option Agreement, but in no event may
         any Option be exercised later than the end of the Option Period
         provided in the Option Agreement in accordance with Paragraph 8 hereof.
         Notwithstanding any other provision contained this Plan, or in any
         Option Agreement, upon an Optionee's disability, any Option then held
         by the Optionee shall be exercisable immediately in full. For purposes
         of this Plan, the term "disability" shall be defined as may be
         determined by the Board.

                  (d) In the event that an Optionee should die while serving on
         the Board or as an employee during the Option Period, an Option granted
         under this Plan, to the extent that it has not previously been
         exercised or surrendered by the Optionee or expired, shall vest and
         shall be exercisable, in accordance with the terms of the Option
         Agreement, by the personal representative of such Optionee, the
         executor or administrator of such Optionee's estate, or by any person
         or persons who acquired such Option by bequest or inheritance from such
         optionee, notwithstanding any limitations placed on the exercise of
         such Option by this Plan or the Option Agreement, for such period of
         time as may be determined by the Board and specified

<PAGE>

         in the Option Agreement, but in no event may any Option be exercised
         later than the end of the Option Period provided in the Option
         Agreement in accordance with Paragraph 8 hereof. In no event may an
         Option be exercised later than the end of the Option Period provided in
         the Option Agreement in accordance with Paragraph 8 hereof. Any
         references herein to an Optionee shall be deemed to include any person
         entitled to exercise an Option after the death of such Optionee under
         the terms of this Plan.

         11. Effect of Plan on Status with Corporation. The fact that an
Optionee has been granted an Option under this Plan shall not confer on such
Optionee any right to continued service on the Board, nor shall it limit the
right of the Corporation to remove such Optionee from service with the
Corporation at any time.

         12. Adjustment Upon Changes in Capitalization; Dissolution or
Liquidation.

                  (a) In the event of a change in the number of shares of Common
         Stock outstanding by reason of a stock dividend, stock split,
         recapitalization, reorganization, merger, exchange of shares, or other
         similar capital adjustment prior to the termination of an Optionee's
         rights under this Plan, equitable proportionate adjustments shall be
         made by the Board in (i) the number and kind of shares which remain
         available under this Plan and (ii) the number, kind, and the Option
         Price of shares subject to the unexercised portion of an Option under
         this Plan. The adjustments to be made shall be determined by the Board
         and shall be consistent with such change or changes in the
         Corporation's total number of outstanding shares; provided, however,
         that no adjustment shall change the aggregate Option Price for the
         exercise of Options granted under this Plan.

                  (b) The grant of Options under this Plan shall not affect in
         any way the right or power of the Corporation or its shareholders to
         make or authorize any adjustment, recapitalization, reorganization, or
         other change in the Corporation's capital structure or its business, or
         any merger or consolidation of the Corporation, or to issue bonds,
         debentures, preferred or other preference stock ahead of or affecting
         the Common Stock or the rights thereof, or the dissolution or
         liquidation of the Corporation, or any sale or transfer of all or any
         part of the Corporation's assets or business.

                  (c) Upon the effective date of the dissolution or liquidation
         of the Corporation, or of a reorganization, merger, or consolidation of
         the Corporation with one or more other corporations in which the
         Corporation is not the surviving corporation, or the transfer of all or
         substantially all of the assets or shares of the Corporation to another
         person or entity, or a tender offer approved by the Board (any such
         transaction being hereinafter referred to as an "Acceleration Event"),
         this Plan and any Options granted hereunder shall terminate unless
         provision is made in writing in connection with such Acceleration Event
         for the continuance of this Plan and for the assumption of Options
         granted hereunder, or the substitution for such Options of new options
         for the shares of the successor corporation, or a parent or a
         subsidiary thereof, with such appropriate adjustments as may be
         determined or approved by the Board, or the successor to the
         Corporation, to the number, kind and Option Price of shares subject to
         such substituted options. In such event, this Plan and Options granted
         hereunder, or the new options substituted therefore, shall continue in
         the manner and under the terms so provided, but any vesting periods or
         other restrictions on exercise that would otherwise apply shall no
         longer be applicable. Upon the occurrence of any Acceleration Event in
         which provision is not made for the continuance of this Plan and for
         the assumption of Options granted hereunder, or the substitution for
         such Options of new options for the shares of a successor corporation
         or a parent or a subsidiary thereof, each Optionee to whom an Option
         has been granted under this Plan (or such person's personal
         representative, the executor or administrator of such person's estate,
         or any person who acquired the right to exercise such Option from such
         person by bequest or inheritance) shall be entitled, prior to the
         effective date of the Acceleration Event, (i) to exercise, in whole or
         in part, the Optionee's rights under any Option granted to the Optionee
         without any regard to any restrictions on exercise that would otherwise
         apply, or (ii) to surrender any such Option to the Corporation in
         exchange for receipt of cash equivalent to the amount by which the fair
         market value of the shares of Common Stock such person would have
         received had such person exercised the Option in full immediately prior
         to consummation of the Acceleration Event exceeds the applicable
         aggregate Option Price. To the extent that a person, pursuant to this
         Subparagraph

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         12(c) has a right to exercise or surrender any Option on account of an
         Acceleration Event which such person otherwise would not have had at
         that time, such right shall be contingent upon the consummation of the
         Acceleration Event.

         13. Non-Transferability. An Option granted under this Plan shall not be
assignable or transferable except, in the event of the death of an Optionee, by
will or by the laws of descent and distribution. In the event of the death of an
Optionee, his personal representative, the executor or the administrator of such
Optionee's estate, or the person or persons who acquired by bequest or
inheritance the rights to exercise or to surrender such Options, may exercise or
surrender any Option or portion thereof to the extend not previously exercisable
or surrendered by an Optionee or expired, in accordance with the terms of the
Option Agreement, prior to the expiration of the exercise period as specified in
Subparagraph 10(d) hereof.

         14. Tax Withholding. The Corporation shall have the right to deduct or
otherwise effect a withholding or payment of any amount required by federal or
state laws to be withheld or paid with respect to the grant, exercise or
surrender for cash of any Option or the sale of stock acquired upon the exercise
of an Option in order for the Corporation or any of its subsidiaries to obtain a
tax deduction otherwise available as a consequence of such grant, exercise,
surrender for cash, or sale, as the case may be.

         15. Listing and Registration of Option Shares. Any Option granted under
this Plan shall be subject to the requirement that if at any time the Board
shall determine, in its sole discretion, that the listing, registration, or
qualification of the shares covered thereby upon any securities exchange or
under any state or federal law or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the issuance or purchase of shares
thereunder, such Option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the Board.

         16. Exculpation and Indemnification. In connection with this Plan, no
member of the Board shall be personally liable for any act or omission to act in
such person's capacity as a member of the Board, nor for any mistake in judgment
made in good faith, unless arising out of, or resulting from, such person's own
bad faith, gross negligence, willful misconduct, or criminal acts. To the extent
permitted by applicable law and regulation, the Corporation shall indemnify and
hold harmless the members of the Board, and each other officer or employee of
the Corporation to whom any duty or power 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 of the Board) and any costs or expenses (including reasonable 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, gross
negligence, willful misconduct, or criminal acts of such persons.

         17. Amendment and Modification of this Plan. The Board may at any time,
and from time to time, amend or modify this Plan in any respect; provided,
however, that no amendment or modification shall be made that increases the
total number of shares covered by this Plan or effects any change in the
category of persons who may receive Options under this Plan or materially
increases the benefits accruing to Optionees under this Plan unless such change
is approved by the holders of two thirds of the outstanding shares of the Common
Stock. Any amendment or modification of this Plan shall not materially reduce
the benefits under any Option therefore granted to an Optionee under this Plan
without the consent of such Optionee or any permitted transferee.

         18. Termination and Expiration of this Plan. This Plan may be
abandoned, suspended, or terminated at any time by the Board; provided, however,
that abandonment, suspension, or termination of this Plan shall not affect any
Options then outstanding under this Plan. No Option shall be granted pursuant to
this Plan after ten (10) years from the effective date of this Plan as provided
in Paragraph 19 hereof.

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         19. Effective Date; Shareholder Approval. This Plan has been adopted by
the Board. The Plan shall not be effective until approved by the Commissioner of
Banks and the holders of two thirds of the outstanding shares of Common Stock.

         20. 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 hereof, and shall not serve as a
basis for interpretation or in construction of this Plan. As used herein, the
masculine gender shall include the feminine and neuter, the singular number, the
plural, and vice versa, whenever such meanings are appropriate.

         21. Expenses of Administration of Plan. All costs and expenses incurred
in the operation and administration of this Plan shall be borne by the
Corporation.

         22. 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.

         23. Inspection of Plan. A copy of this Plan, and any amendments thereto
or modifications thereof, shall be maintained by the Secretary of the
Corporation and shall be shown to any proper person making inquiry about it.<PAGE>

                                                                   Exhibit 10.12

STATE OF NORTH CAROLINA
COUNTY OF YANCEY

                                                   OPTION MODIFICATION AGREEMENT

         THIS OPTION MODIFICATION AGREEMENT (the "Agreement") is made and
entered into as of the 20th day of December, 2001, by William Banks
("Optionee");

                                   WITNESSETH:

         WHEREAS, Optionee is the holder of an option to purchase 6,600 shares
of common stock of First Western Bank ("FWB") at a price of $11.00 per share
(the "Option"); and,

         WHEREAS, FWB, MountainBank ("MountainBank"), and MountainBank Financial
Corporation ("MFC"), have entered into an Agreement and Plan of Reorganization
and Merger dated September 17, 2001 (the "Acquisition Agreement") which provides
for FWB to be merged into MountainBank (the "Merger"), with MountainBank to be
the surviving bank; and,

         WHEREAS, the Acquisition Agreement provides that, at the time the
Merger becomes effective, options to purchase shares of FWB's common stock
previously granted by FWB to its directors under FWB's nonstatutory stock option
plan, and previously granted by FWB to its officers and employees who become
officers and employees of MountainBank in connection with the Merger, will, to
the extent that those options remain outstanding and unexercised at the
effective time of the Merger, be assumed by MFC on their then current terms and
conditions and be converted into options to purchase shares of MFC's common
stock; and,

         WHEREAS, the Acquisition Agreement provides that such conversion will
be made such that, following the effective time of the Merger, each such option
will represent an option to purchase 0.50 shares of MFC's common stock for each
shares of FWB's common stock previously covered by the option, at a purchase
price appropriately adjusted to reflect the effect of the Merger and the
conversion of FWB's outstanding common stock into shares of MFC's common stock;
and,

         WHEREAS, consummation of the Merger is conditioned on the holders of
FWB's outstanding options agreeing to such assumption and conversion, and
Optionee desires to evidence his or her agreement to and acknowledgment of the
conversion of the Option and the terms thereof following assumption by MFC.

         NOW, THEREFORE, for and in consideration of MFC's assumption of the
Option and its conversion into an option to purchase shares of MFC's common
stock, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Optionee acknowledges and agrees
as follows:

         1. Modification of Option. The Option hereby is converted, effective as
of the effective time of the Merger ("Conversion Time"), into an option to
purchase 3,300 shares of MFC's common stock at a price of $22.00 per share.

         2. Terms of Option. Except with respect to the number and identity of
shares covered by the Option and the exercise price per share as described
above, all other terms and provisions of the Option (including without
limitation provisions relating to the term of the Option, conditions on
exercise, and provisions relating to termination and vesting of the Option)
shall continue in effect and the

<PAGE>

Option shall remain in full force and effect in
accordance with its terms, with MFC being substituted in the place and stead of
FWB as a party to the Option.

         3. Benefit. This Modification Agreement shall be binding upon and shall
inure to the benefit of Optionee, FWB, MFC and MountainBank and their respective
heirs, legal representatives, successors and permitted assigns, as applicable.

         IN TESTIMONY WHEREOF, Optionee has executed this Agreement under seal
as of this the day and year first above written.

                                                /S/ William A. Banks      (SEAL)
                                         ---------------------------------
                                                Optionee's Signature

                                                    William A. Banks
                                         ---------------------------------------
                                                     (Print Name)

<PAGE>

STATE OF NORTH CAROLINA
COUNTY OF YANCEY

                                                   OPTION MODIFICATION AGREEMENT

         THIS OPTION MODIFICATION AGREEMENT (the "Agreement") is made and
entered into as of the 20th day of December, 2001, by William Banks
("Optionee");

                                   WITNESSETH:

         WHEREAS, Optionee is the holder of an option to purchase 6,500 shares
of common stock of First Western Bank ("FWB") at a price of $9.50 per share (the
"Option"); and,

         WHEREAS, FWB, MountainBank ("MountainBank"), and MountainBank Financial
Corporation ("MFC"), have entered into an Agreement and Plan of Reorganization
and Merger dated September 17, 2001 (the "Acquisition Agreement") which provides
for FWB to be merged into MountainBank (the "Merger"), with MountainBank to be
the surviving bank; and,

         WHEREAS, the Acquisition Agreement provides that, at the time the
Merger becomes effective, options to purchase shares of FWB's common stock
previously granted by FWB to its directors under FWB's nonstatutory stock option
plan, and previously granted by FWB to its officers and employees who become
officers and employees of MountainBank in connection with the Merger, will, to
the extent that those options remain outstanding and unexercised at the
effective time of the Merger, be assumed by MFC on their then current terms and
conditions and be converted into options to purchase shares of MFC's common
stock; and,

         WHEREAS, the Acquisition Agreement provides that such conversion will
be made such that, following the effective time of the Merger, each such option
will represent an option to purchase 0.50 shares of MFC's common stock for each
shares of FWB's common stock previously covered by the option, at a purchase
price appropriately adjusted to reflect the effect of the Merger and the
conversion of FWB's outstanding common stock into shares of MFC's common stock;
and,

         WHEREAS, consummation of the Merger is conditioned on the holders of
FWB's outstanding options agreeing to such assumption and conversion, and
Optionee desires to evidence his or her agreement to and acknowledgment of the
conversion of the Option and the terms thereof following assumption by MFC.

         NOW, THEREFORE, for and in consideration of MFC's assumption of the
Option and its conversion into an option to purchase shares of MFC's common
stock, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Optionee acknowledges and agrees
as follows:

         1. Modification of Option. The Option hereby is converted, effective as
of the effective time of the Merger ("Conversion Time"), into an option to
purchase 3,250 shares of MFC's common stock at a price of $19.00 per share.

         2. Terms of Option. Except with respect to the number and identity of
shares covered by the Option and the exercise price per share as described
above, all other terms and provisions of the Option (including without
limitation provisions relating to the term of the Option, conditions on
exercise, and provisions relating to termination and vesting of the Option)
shall continue in effect and the

<PAGE>

Option shall remain in full force and effect in accordance with its terms, with
MFC being substituted in the place and stead of FWB as a party to the Option.

         3. Benefit. This Modification Agreement shall be binding upon and shall
inure to the benefit of Optionee, FWB, MFC and MountainBank and their respective
heirs, legal representatives, successors and permitted assigns, as applicable.

         IN TESTIMONY WHEREOF, Optionee has executed this Agreement under seal
as of this the day and year first above written.

                                                 /S/  William A. Banks   (SEAL)
                                             ----------------------------
                                                Optionee's Signature

                                                        William A. Banks
                                             ----------------------------------
                                                     (Print Name)

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