Document:

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Exhibit 10.1 Employee Agreement Between Bank of Granite Corporation and
              Wesley W. Sturges

STATE OF NORTH CAROLINA

                                                            EMPLOYMENT AGREEMENT

COUNTY OF MECKLENBURG

         THIS EMPLOYMENT AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, the "Agreement") is made and entered into
as of the 16th day of July, 2003, by and among BANK OF GRANITE CORPORATION
("Granite"), the BANK OF GRANITE ("Bank") and WESLEY W. STURGES (hereinafter
referred to as the "Officer").

                              W I T N E S S E T H:

         WHEREAS, the Officer is a party to an Employment Agreement with First
Commerce Bank, dated as of July 8, 2002 (the "Existing Employment Agreement");

         WHEREAS, First Commerce Corporation, the parent company of First
Commerce Bank, has merged into Granite (the "Merger"), the separate existence of
First Commerce Corporation has ceased and Granite is the surviving corporation;

         WHEREAS, the Officer and Granite desire to terminate the Existing
Employment Agreement in its entirety, on the terms and conditions set forth
herein;

         WHEREAS, the Bank is a North Carolina bank and a wholly-owned
subsidiary of Granite (references to "the Employers" herein shall be deemed to
refer to Granite and the Bank collectively);

         WHEREAS, the Employers desire to retain the Officer's services as an
executive employee of each of the Employers for the Term (as defined below), and
the Officer is willing to serve as an executive employee of each of the
Employers for such period; and

         WHEREAS, the parties desire to enter into this Agreement to set forth
the terms and conditions of the Officer's employment with the Employers.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:

         Section 1. Termination of Existing Employment Agreement. The Officer
hereby terminates the Existing Employment Agreement in its entirety.
Specifically, the Officer hereby agrees that he will not receive any payments or
other benefits under Section 9 of the Existing Employment Agreement or pursuant
to any "change in control" provisions in the Existing Employment Agreement.

         Section 2. Employment. Each of the Employers hereby agrees to employ
the Officer, and the Officer hereby agrees to serve as an executive employee of
each of the Employers, upon the terms and conditions stated herein. The Officer
will (i) for the period from the Commencement Date (as defined in SECTION 10) to
the second anniversary of the

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Commencement Date, serve as Executive Vice President of each of the Employers
with such duties, responsibility and authority as are assigned or delegated to
the Officer by the Board of Directors of Granite (the "Board"), the Board of
Directors of the Bank (the "Bank Board"), the Chief Executive Officer of Granite
or the Chief Executive Officer of the Bank, (ii) if approved by the Board and
the Bank Board, on and after the second anniversary of the Commencement Date,
serve as President and Chief Operating Officer of each of the Employers with
such duties, responsibility and authority as are assigned or delegated to the
Officer by the Board, the Bank Board, the Chief Executive Officer of Granite or
the Chief Executive Officer of the Bank, and (iii) have such other duties,
responsibilities and authority, and render to the Employers such other
management services, as are customary for persons having such executive offices
with a commercial bank or bank holding company and as are reasonably assigned to
him from time to time by the Board or the Bank Board. The Officer shall
faithfully and diligently discharge his duties and responsibilities under this
Agreement and shall use his best efforts to implement the policies established
by the Board and the Bank Board. Prior to the time the Officer may be elected to
the Board pursuant to SECTION 6, the Officer shall participate in meetings of
the Board and the Bank Board and their committees (except meetings that may take
place in executive session) as necessary to provide for full and knowledgeable
participation in the active management of the Employers by the Officer.

         The Officer hereby agrees to devote such number of hours of his working
time and endeavors to his duties and responsibilities hereunder as the Officer,
the Board, the Bank Board, the Chief Executive Officer of Granite or the Chief
Executive Officer of the Bank shall deem to be necessary to discharge such
duties and responsibilities. Except with prior consent of the Board, the Bank
Board or the Chief Executive Officer of Granite, the Officer shall not engage in
any other occupation which requires a significant amount of the Officer's
personal attention during Granite's regular business hours or which otherwise
interferes with the Officer's attention to or performance of his duties and
responsibilities under this Agreement. However, nothing herein contained shall
restrict or prevent the Officer from personally, and for the Officer's own
account or for the account of the Officer's immediate family, trading in stocks,
bonds, securities, real estate or other forms of investment so long as such
investment activities do not interfere with the Officer's attention to or
performance of his duties and responsibilities under this Agreement.

         During the Term, the Officer shall maintain his primary residence at a
location permitting him to perform his duties and responsibilities at Granite's
offices in Mecklenburg County, North Carolina or, if so requested by the Board,
at Granite's principal offices in Hickory, North Carolina.

         Section 3. Compensation. For all services rendered by the Officer to
the Employers under this Agreement, the Bank shall pay the Officer a base salary
of no less than Two Hundred Thousand Dollars ($200,000) per annum for the first
two years of the Term and no less than Two Hundred Forty Thousand Dollars
($240,000) per annum thereafter ("Base Salary"), payable in cash not less
frequently than monthly. Such Base Salary shall be subject to customary
withholding taxes and such other employment taxes as are required by law. The
Officer's Base Salary shall not be decreased but may be increased as deemed
appropriate by the compensation committees of the Board and the Bank Board to
provide reasonable cost-of-living adjustments to the Officer and with due
consideration to keeping the Officer's salary comparable to the salaries

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of other senior executive officers holding similar positions with peer banks and
bank holding companies, and all references to Base Salary herein shall mean his
Base Salary as so increased.

         Section 4. Participation in Retirement and Employee Benefit Plan;
Fringe Benefits. During the Term, the Officer shall be entitled to participate
in any and all employee benefit programs and compensation plans from time to
time maintained by either of the Employers and available to senior executive
officers of either of the Employers, all in accordance with the terms and
conditions (including eligibility requirements) of such programs and plans and
the policies adopted by the Board or Bank Board in establishing such programs
and plans. The Officer shall be entitled to paid vacation leave in accordance
with the Employers' policy for the senior executive employees of the Employers
now or hereafter in effect.

         In addition to the other compensation and benefits described in this
Agreement, the Employers shall promptly reimburse the Officer for all reasonable
and duly documented expenses incurred by him in the performance of his duties
and responsibilities under this Agreement in accordance with the polices
established by the Board and the Bank Board. The Employers shall pay the
Officer's Tower Club membership fees and dues, any expenses incurred by the
Officer in connection with North Carolina Bankers Association meetings and, to
the extent approved in writing by Granite's Chief Executive Officer, American
Bankers Association annual meetings and other association meetings; provided,
however, that the Officer shall be responsible for all expenses for personal use
of the Tower Club. The Officer must file expense reports with respect to
reimbursable expenses in accordance with the Employers' policies.

         Section 5. Stock Options. Granite shall issue to Officer, within thirty
(30) days of the date of this Agreement, an incentive stock option to acquire
5,000 shares of Granite's common stock, par value $1.00 per share, pursuant to
the terms of Granite's 2001 Incentive Stock Option Plan (the "Granite Option
Plan"), which option will be for a term of five years and will vest 20% each
year beginning at the end of the first year following the grant date. The
Officer shall participate in subsequent issuances of incentive stock options
under the Granite Option Plan or any comparable plan adopted by Granite as
determined by the Board.

         Section 6. Additional Board Seats. As soon as reasonably practical
after the second anniversary of the Commencement Date, Granite shall give strong
consideration to recommending to the nominating committees of the Board and the
Bank Board that an additional director be added to each such Board of Directors
and that the Officer be nominated to serve as such additional director.

         Section 7. Appointment as President and Chief Operating Officer. If the
Officer is not named as President and Chief Operating Officer of each of the
Employers on or before the second anniversary of the Commencement Date, then the
Officer may elect to terminate his employment with the Employers, by written
notice to Granite within three (3) months following the date of the second
anniversary of the Commencement Date stating that the Officer is terminating his
employment pursuant to this SECTION 7 (the "SECTION 7 Termination Notice"), and,
in lieu of any salary or other benefits otherwise payable to the Officer under
this Agreement, (a) Granite shall pay the Officer $450,000 in cash within thirty
(30) days of Granite's receipt of the SECTION 7 Termination Notice, (b) all of
the incentive stock options issued to the Officer under this Agreement shall
become fully vested and exercisable immediately upon receipt by

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Granite of the SECTION 7 Termination Notice, (c) the Employers and the Officer
will enter into the Consulting and Noncompetition Agreement (as defined below),
and (d) if the Officer has been relocated to Hickory or its vicinity prior to
Granite's receipt of the SECTION 7 Termination Notice and, within one year of
the date of such notice, he notifies Granite in writing of his intention to move
to another location outside of the Hickory area, the Employers shall reimburse
the Officer for his reasonable moving and relocation expenses incurred in
connection with such move (not to exceed the reasonable expenses that would be
required to move the Officer to Mecklenburg County, North Carolina); provided,
however, that such move must be completed by the first anniversary of the date
of the SECTION 7 Termination Notice. In addition, if the Employers have
terminated the Officer's employment under this Agreement for any reason other
than for "Cause" pursuant to SECTION 13(d) prior to the second anniversary of
the Commencement Date, in lieu of any salary or other benefits otherwise payable
to the Officer under this Agreement as a result of such termination, the Officer
shall receive the payments and other benefits set forth in this SECTION 7.
Notwithstanding anything to the contrary in this Agreement, if the Board and the
Bank Board fail to nominate the Officer for a position as President and Chief
Operating Officer because the Officer has died or become Disabled (as defined in
SECTION 13(c)) or for any reason that would constitute "Cause" pursuant to
SECTION 13(d), the Officer shall have no rights under this SECTION 7 and (ii) if
the payment pursuant to clause (a) above and other benefits contemplated by this
SECTION 7 would constitute a parachute payment (including, without limitation,
the vesting of any rights) within the meaning of Section 280G(b)(3) of the
Internal Revenue Code, as amended (the "Code"), but for the operation of this
clause (ii), such payment shall be reduced to the extent necessary to cause the
aggregate present value of all payments (including, without limitation, the
vesting of any rights) contemplated by this SECTION 7, not to exceed 2.99 times
the Base Amount (as defined below), all within the meaning of Code Section 280G.
The parties intend for the preceding sentence to be interpreted and applied to
prevent the Officer from receiving, pursuant to this SECTION 7, an excess
parachute payment within the meaning of Code Section 280G. For purposes of this
Section, "Base Amount" has the meaning given to it in Code Section 280G (which
amount is generally the average annual compensation payable during the most
recent five tax years ending before the year in which the Commencement Date
falls, as reflected on Forms W-2 for the relevant periods). For purposes of this
Section, "Consulting and Noncompetition Agreement" means an agreement, on terms
to be mutually agreed among the Officer and the Employers, pursuant to which the
Officer would agree to provide consulting services to the Employers for three
years following the termination of his employment by Employers concerning the
businesses he had managed for Employers during his employment, and agreeing not
to compete with the Employers on the terms described in SECTION 11(b) hereof,
and providing that the Officer would be paid $90,000 per year for three years in
exchange for his services and noncompetition covenants under such agreement.

         Section 8. Automobile. For the period from the Commencement Date
through the date the Officer's employment with the Employers is terminated, the
Employers shall provide the Officer an automobile leased by the Employers for
his use in connection with his employment under this Agreement. Such automobile
shall be similar in terms of make and model to the automobile used by the
Officer in connection with his employment with First Commerce Bank immediately
prior to the Commencement Date.

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         Section 9. Relocation Expenses. If and when the Board requests the
Officer to move his residence to Hickory, North Carolina or its vicinity, the
Employers shall reimburse the Officer for his reasonable moving and relocation
expenses.

         Section 10. Term. Unless sooner terminated as provided in this
Agreement and except as otherwise provided in SECTION 14, the term of this
Agreement and the Officer's employment hereunder shall be for a period
commencing on the date hereof (the "Commencement Date") and continuing until the
close of business on the third anniversary of the Commencement Date; provided,
however, that on each anniversary of the Commencement Date, the term shall be
extended for a period of one (1) year unless the Employers or the Officer gives
written notice at least ninety (90) days prior to such anniversary that the Term
shall not be extended and shall be fixed at its then existing duration (the
"Term").

         Section 11. Noncompetition and Confidentiality. The Officer hereby
acknowledges and agrees that: (i) in the course of his service as an executive
officer of the Employers, he will gain substantial knowledge of and familiarity
with the Employers' customers and its dealings with them, and other Confidential
Information (as defined below) concerning the Employers' business, all of which
constitute valuable and privileged assets that are particularly sensitive due to
the fiduciary responsibilities inherent in the banking business; and (ii) in
order to protect the Employers' interest in and to assure the benefit of their
businesses, it is reasonable and necessary to place certain restrictions on the
Officer's ability to Compete (as defined below) against the Employers and on his
disclosure of Confidential Information. For that purpose, and in consideration
of the Employers' agreements contained herein, the Officer covenants and agrees
as provided below:

         (a) Confidentiality Covenant. All Confidential Information shall be
considered and kept by the Officer as the confidential, private and proprietary
property of the Employers. At all times during and following the Term, and
except as shall be required in the course of the performance by the Officer of
his duties on behalf of the Employers or permitted by a direct, written
authorization of the Board or the Bank Board, as applicable, he will not divulge
any Confidential Information to any Person (as defined below) not employed by
one of the Employers or a subsidiary thereof (except as required by applicable
laws or regulations, rules or orders promulgated thereunder), remove any such
Confidential Information in written or other recorded form from the Employers'
premises, or make any use of any Confidential Information for his own purposes
or for the benefit of any Person other than the Employers. Following the
termination of the Officer's employment with the Employers, this SECTION 11(a)
shall not apply to the disclosure of any information which then is in the public
domain (provided that the Officer was not responsible, directly or indirectly,
for permitting such information to enter the public domain without the consent
required herein) or which was obtained by the Officer from a Person (as defined
below) who is not obligated under an agreement of confidentiality with respect
to such information.

         (b) Noncompetition. In consideration of employment of the Officer,
during the Term and for a period of eighteen (18) months following the
termination of the Officer's employment with the Employers under this Agreement,
the Officer agrees that he will not, within: fifty (50) miles of any office of
the Employers or any of their subsidiaries; Burke County, North Carolina;
Mecklenburg County, North Carolina; Caldwell County, North Carolina; Catawba
County, North

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Carolina (collectively, the "Territory"); directly or indirectly, own, manage,
operate, join, control or participate in the management, operation or control
of, or be employed by, an independent contractor (as a consultant or otherwise)
of, or connected in any manner with, any Person who Competes with either of the
Employers or their subsidiaries, without the prior written consent of the Board.
Notwithstanding the foregoing, (i) the Officer shall be free, without such
consent, to purchase or hold as an investment or otherwise up to five percent
(5%) of the outstanding equity interests of any Person which has any class of
equity interests listed on any national securities exchange or which has
transactions in a class of its equity interests quoted on The Nasdaq Stock
Market or other over-the-counter market or inter-dealer quotation system, (ii)
the Officer may be employed by a Person who Competes with either of the
Employers or their subsidiaries in an area or unit of such Person's business
whose products, services or activities do not compete with the products or
activities of Granite, (iii) the Officer may be employed with a Person who
Competes with either of the Employers in a position that is not otherwise exempt
from the overtime provisions of the Fair Labor Standards Act to the extent such
position does not involve the exercise by the Officer of management or
supervisory responsibilities or utilize any Confidential Information, and (iv)
the covenants in this SECTION 11(b) shall cease to apply to the Officer upon the
sale or transfer of all or substantially all of the assets of either Employer
(except to an Affiliate of an Employer) or upon the occurrence of a transaction,
including a sale or transfer of capital stock or a merger involving either
Employer, after which a Person (other than a Person controlled by or under
common control with Granite prior to such transaction) acquires more than 50% of
the voting capital stock of either Employer.

         (c) Remedies for Breaches. The Officer understands and agrees that a
breach by him of the covenants contained in SECTION 11(a) or SECTION 11(b) will
be deemed a material breach of this Agreement and will cause irreparable injury
to the Employers, and that it would be difficult to ascertain the amount of
monetary damages that would result from any such breach. In the event of the
Officer's actual or threatened breach of the covenants contained in SECTION
11(a) or SECTION 11(b), either of the Employers shall be entitled to bring a
civil action seeking an injunction restraining the Officer from breaching or
continuing to breach those covenants or from any threatened breach thereof, or
any other legal or equitable relief relating to the breach of such covenants.
The Officer agrees that, if either of the Employers institutes any action or
proceeding against him seeking to enforce any of such covenants or to recover
other relief relating to an actual or threatened breach of any of such
covenants, he shall be deemed to have waived any claim or defense that such
Employer has an adequate remedy at law and shall not urge in any such action or
proceeding the claim or defense that an adequate remedy at law exists. The
exercise by an Employer of any such right, remedy, power or privilege, however,
shall not preclude such Employer from pursuing any other remedy or exercising
any other right, power or privilege available to it for any such breach, whether
at law or in equity, including the recovery of damages, all of which shall be
cumulative and in addition to all other rights, remedies, powers or privileges
of the Employers.

         If any provision or part of SECTION 11 is held to be unenforceable
because of the duration of such provision or the geographic area covered thereby
as provided in SECTION 11(b), the parties hereto agree to modify such provision,
or that the court making such determination shall have the power to modify such
provision, to reduce the duration or area of such provision or both, or to
delete specific words or phrases herefrom ("blue-penciling"), and, in its
reduced or blue-penciled form, such provision shall then be enforceable and
shall be enforced.

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         Notwithstanding anything contained to the contrary, the Officer agrees
that the provisions of SECTION 11(a) and SECTION 11(b) and the remedies provided
in this SECTION 11(c) for a breach shall be in addition to, and shall not be
deemed to supersede or to otherwise restrict, limit or impair, the rights of the
Employers under the Trade Secrets Protection Act contained in Article 24,
Chapter 66 of the North Carolina General Statutes, or any other state or federal
law or regulation dealing with or providing a remedy for this wrongful
disclosure, misuse or misappropriation of trade secrets or other proprietary or
confidential information.

         (d) Survival of Covenants. The Officer's covenants and agreements and
the Employers' rights and remedies provided for in this SECTION 11 shall survive
any termination of this Agreement or the Officer's employment with the
Employers.

         (e) Covenants of SECTION 11(a) and SECTION 11(b) are Essential and
Independent Covenants. The covenants by the Officer in SECTION 11(a) and SECTION
11(b) are essential elements of this Agreement, and without the Officer's
agreement to comply with such covenants, the Employers would not have entered
into this Agreement or employed or continued the employment of the Officer. The
Employers and the Officer have independently consulted their respective counsel
and have been advised in all respects concerning the reasonableness and
propriety of such covenants, with specific regard to the nature of the business
conducted by the Employers. The Officer's covenants in SECTION 11(a) and SECTION
11(b) are independent covenants and the existence of any claim by the Officer
against either Employer under this Agreement or otherwise, shall not excuse the
Officer's breach of any covenant in SECTION 11(a) and SECTION 11(b). If the
Officer's employment hereunder expires or is terminated, this Agreement shall
continue in full force and effect as is necessary or appropriate to enforce the
covenants and agreements of the Officer in SECTION 11(a) and SECTION 11(b).

         (f) Definitions. For purposes of this Agreement:

                  (i) "Confidential Information" means any and all data,
         figures, projections, estimates, lists, files, records, documents,
         manuals or other such materials or information (financial or otherwise)
         regulatory examinations, financial results and condition, lending and
         deposit operations, customers (including lists of customers and
         information regarding their accounts and business dealings with either
         of the Employers), policies and procedures, computer system and
         software, shareholders, employees, officers and directors of or
         relating to either of the Employers and generated, compiled or
         maintained by or on behalf of either of the Employers; provided,
         however, that Confidential Information shall not include any
         information that is in the public domain other than through actions of
         the Officer in violation of this Agreement or through the improper act
         of a Person who owes a duty of confidentiality to the Employers or any
         of their subsidiaries.

                  (ii) A Person that "Competes" means a Person that (A) solicits
         or secures deposits from any Person, (B) solicits or makes loans to any
         Person, (C) offers or engages in the provisions of trust services, (D)
         induces or attempts to induce any Person who was a customer of either
         of the Employers or their subsidiaries or any of its Affiliates at the
         time of the termination of the Officer's employment to change the
         customer's depository, loan, trust, or other banking relationship from
         either of the Employers or their

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         subsidiaries to another financial institution or financial services
         entity, (E) provides credit card services, or (F) otherwise provides
         any type of commercial banking or trust services, in each case within
         the Territory.

                  (iii) "Person" means (A) an individual or a corporation,
         partnership (limited or general), trust, limited liability company,
         business, association (mutual or stock, and including a mutual holding
         company), joint venture, pool, syndicate, unincorporated organization
         or any other form of entity; and (B) any Affiliate (as defined below)
         of any individual or entity listed in item (A).

                  (iv) "Affiliate" means any Person who controls, is under
         control with, or is controlled by the Person to whom reference is being
         made; and for the purposes of this definition of Affiliate, control
         shall be deemed to exist in a Person who beneficially owns ten percent
         (10%) or more of the outstanding equity interests (or options, warrants
         or other rights to acquire such equity interests) of another Person.

         Section 12. Standards. The Officer, in the execution of his duties and
responsibilities under this Agreement, shall at all times and in all respects
comply with the policies of the Board, the Bank Board and the Chief Executive
Officer of Granite, including any code of business conduct or code of ethics
adopted by the Board or the Bank Board for application to the Employers'
employees, and with all applicable statutes and with all rules, regulations,
administrative orders, statements or policy and other pronouncements or
standards promulgated by any Regulatory Authority (as defined below).

         Section 13. Termination and Termination Pay.

         (a) The Officer may terminate his employment under this Agreement at
any time upon sixty (60) days' written notice to the Board and the Board Board.
Subject to SECTION 7, upon such termination, the Officer shall be entitled to
receive payment of his Base Salary and all benefits and other compensation
earned, vested, accrued or accruing through the effective date of such
termination; provided, however, that the Board and the Bank Board, in their sole
discretion, may elect for the Officer not to serve out part or all of said
notice period.

         (b) The Officer's employment under this Agreement shall be terminated
upon his death. Upon any such termination, the Officer's estate shall be
entitled to receive promptly payment of his Base Salary and all benefits and
other compensation earned, vested, accrued or accruing through the date of his
death.

         (c) The Officer's employment under this Agreement shall be terminated
upon his becoming Disabled (as defined below). During the Term, the Employers
shall provide the Officer with the benefits of a disability insurance policy or
policies comparable to the policy provided to other senior executive officers of
the Bank from time to time, subject to the eligibility requirements related to
such insurance, and providing a disability benefit to the Officer of not less
than $8,580 per month. For purposes of this Agreement, "Disabled" means that,
for a period of 120 consecutive days, or an aggregate of 180 days during any
12-month period, the Officer is unable to perform satisfactorily his duties and
responsibilities under this Agreement by reason of physical incapacity or mental
impairment, as determined by an impartial and reputable

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physician practicing within Mecklenburg County, North Carolina, selected by
mutual agreement of the Officer and the Bank, or failing such agreement, by two
(2) physicians practicing within Mecklenburg County, North Carolina (one (1)
shall be selected by the Bank and one (1) selected by the Officer), and the
determination of such physician or physicians as to whether the Officer has
become Disabled shall be final and binding on the Officer and the Employers. The
Bank shall pay the reasonable fees and expenses of such physician or physicians
in making any determination required under this SECTION 13(c).

         (d) The Board and the Bank Board may terminate the Officer's employment
under this Agreement at anytime for any reason with or without Cause (as defined
below); provided, however, that, subject to SECTION 7, upon any such
termination, the Officer shall continue to receive his Base Salary for the
applicable Payment Period (as defined below); and, provided further that,
subject to SECTION 7, any such termination by the Board and the Bank Board shall
not prejudice the Officer's right to receive all compensation (in addition to
Base Salary) or benefits payable to, or receivable by, him under this Agreement
during the applicable Payment Period. The Officer shall receive his Base Salary
and all other compensation or benefits payable to, or receivable by, him under
this Agreement for the following periods (each a "Payment Period") upon any of
the following events: (i) following any termination without Cause (except as
described in the following item (ii)), the Payment Period shall be the remainder
of the Term; (ii) following the second written notice to the Officer from the
Board and the Bank Board of a less than satisfactory performance rating (which
rating and second notice may not be given less than one hundred eighty-one (181)
days after the first such rating and written notice), the Payment Period shall
be six (6) months; and (iii) following any termination for Cause, there shall be
no Payment Period.

         For purposes of this Agreement, "Cause" means:

                  (i) A determination by the Board and the Bank Board, acting
         reasonably and in good faith, that the Officer has (A) breached in any
         material respect any material term or condition of this Agreement, or
         (B) engaged in willful misconduct that is having or is reasonably
         likely to have a material adverse effect on the Employers' business,
         reputation or business prospects. Prior to any termination by the Board
         of the Officer's employment for Cause under this subparagraph, the
         Board and the Bank Board shall give the Officer written notice
         describing the basis for termination and, if during a period of thirty
         (30) days following such notice the Officer cures or corrects the same
         to the reasonable satisfaction of the Board and the Bank Board, then
         the Officer's employment shall not be terminated and this Agreement
         shall remain in full force and effect. Notwithstanding the above, if
         the Board has given written notice to the Officer on two previous
         occasions of (x) the same or a substantially similar material breach,
         failure, refusal or event of willful misconduct or (y) a material
         breach, failure, refusal or event of willful misconduct that the Board
         determines in good faith to be of substantially similar import, then
         termination for Cause under this SECTION 13(d) shall be effective
         immediately and the Officer shall have no right to cure or correct such
         material breach or event of willful misconduct;

                  (ii) The violation by the Officer of any applicable federal or
         state law, or any applicable rule, regulation, order or statement of
         policy promulgated thereunder by any governmental agency or authority
         having jurisdiction over either Employer, including

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         without limitation the Federal Deposit Insurance Corporation, the North
         Carolina Commissioner of Banks, the Board of Governors of the Federal
         Reserve Board or any other banking regulator (a "Regulatory
         Authority"), that results from the Officer's gross negligence, willful
         misconduct or intentional disregard of such law, rule, regulation,
         order or policy statement and that has or is reasonably likely to have
         a material adverse effect on any of the Employers' businesses or their
         respective reputations or business prospects.

                  (iii) The Officer's commission in the course of his employment
         with the Employers of an act of fraud, embezzlement, dishonesty or
         theft (whether or not resulting in criminal prosecution or conviction);

                  (iv) The Officer is convicted of or indicted for, or enters a
         guilty plea or a plea of no contest with respect to, any felony or any
         criminal offense involving dishonesty or breach of trust, or the
         occurrence of any event described in Section 19 of the Federal Deposit
         Insurance Act or any other event or circumstance that disqualifies the
         Officer from serving as an employee or executive officer of either of
         the Employers or any of their Affiliates;

                  (v) The issuance by a Regulatory Authority of a final and
         non-appealable finding or order removing, suspending, or prohibiting
         the Officer from participating in the conduct of either of the
         Employer's affairs;

                  (vi) The Officer's appropriation (or attempted appropriation)
         of a business opportunity of either Employer, including any attempt to
         secure or securing a material personal profit in connection with any
         transaction entered into on behalf of either Employer; or

                  (vii) The occurrence of any event resulting in the Officer
         being excluded from coverage, or having coverage limited as to the
         Officer as compared to other covered officers or employees, under the
         Employers' then current "blanket bond" or other fidelity bond or
         insurance policy covering its directors, officers or employees or the
         directors, officers or employees of its Affiliates.

         Section 14. Additional Regulatory Requirements and Events.

         (a) If any Regulatory Authority suspends and/or prohibits the Officer
from participating in the conduct of the affairs of Granite or the Bank, the
Employers' obligations hereunder shall be suspended as of the date of notice of
such action unless stayed by appropriate proceedings. If the suspension or
prohibition is lifted or dismissed, all of the Employers' obligations that were
suspended shall be reinstated. If such suspension or prohibition becomes final
and non-appealable, this Agreement shall terminate, and such termination shall
be deemed a termination for Cause (as defined in SECTION 13(d) above).

         (b) The Employers' obligations to provide compensation or other
benefits to the Officer under this Agreement shall be terminated or limited to
the extent required by any final regulation or order of the Federal Deposit
Insurance Corporation that limits or prohibits any

                                       45

<PAGE>

"golden parachute payment" as defined therein, but only to the extent that the
compensation or payments to be provided by the Employers under this Agreement
are so prohibited or limited.

         (c) Notwithstanding anything contained in this Agreement to the
contrary, it is understood and agreed that the Employers shall not be required
to make any payment or take any action under this Agreement if (i) Granite or
the Bank is declared by any Regulatory Authority to be insolvent, in default or
operating in an unsafe or unsound manner, (ii) such payment or action is
prohibited by or would violate any applicable rules, regulations, orders or
statements of policy, whether now existing or hereafter promulgated, of any
Regulatory Authority, or (iii) such payment or action otherwise would be
prohibited by any Regulatory Authority; provided that if only one of Granite or
the Bank is prohibited from fulfilling its obligations under this Agreement in
one of the circumstances described above, the other shall remain obligated to
fulfill such obligations.

         Section 15. Representations and Warranties by the Officer. The Officer
represents and warrants to the Employers that the execution and delivery by the
Officer of this Agreement do not, and the performance by the Officer of his
obligations hereunder will not, with or without the giving of notice or the
passage of time, or both, (a) violate any judgment, writ, injunction or order of
any court, arbitrator or governmental agency applicable to the Officer or (b)
conflict with, result in the breach of any provisions of or the termination of,
or constitute a default under, any agreement to which the Officer is a party or
by which he is or may be bound.

         Section 16. Post-Employment Cooperation. After the termination of his
employment hereunder, the Officer agrees to cooperate with and provide
assistance to the Employers and their legal counsel in connection with any
litigation (including arbitration or administrative hearings) or investigation
affecting an Employer, in which, in the reasonable judgment of the Employers'
counsel, the Officer's assistance or cooperation is needed. The Employers will
reimburse the Officer for his reasonable out-of-pocket expenses in connection
with providing such assistance.

         Section 17. Notices. All notices, consents, waivers and other
communications under this Agreement must be in writing and shall be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):

   If to the Employers:   Bank of Granite Corporation
                          Bank of Granite
                          P.O. Box 128
                          Granite Falls, North Carolina 28630
                          Attention: John A. Forlines, Jr.
                          Facsimile No.: (828) 496-2116

                            46

<PAGE>

   With a copy to:        Robinson, Bradshaw & Hinson, P.A.
                          101 N. Tryon Street, Suite 1900
                          Charlotte, North Carolina  28246
                          Attention: Henry H. Ralston
                          Facsimile No.(704) 378-4000

   If to the Officer:     Wesley W. Sturges
                          2700 Tanglewood Lane
                          Charlotte, North Carolina 28211

   With a copy to:        Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
                          2000 Renaissance Place
                          230 North Elm Street
                          Greensboro, North Carolina  27420
                          Attention:  Robert A. Singer
                          Facsimile No.: (336) 378-1001

         Section 18. Successors and Assigns.

         (a) This Agreement shall inure to the benefit of and be binding upon
the Employers and the Officer and their respective successors and assigns. Each
of Granite and the Bank will require any successor to it (whether direct or
indirect, by stock or asset purchase, merger, consolidation or otherwise) to all
or substantially all of its business or more than fifty percent (50%) of its
assets to assume expressly and agree to perform this Agreement in the same
manner and to the same extent it would be required to perform it if no such
succession had taken place. As used in this paragraph, "Granite" and the "Bank"
shall mean Granite and the Bank as hereinbefore defined and any successor to
their respective businesses and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.

         (b) The Employers are contracting for the unique and personal skills of
the Officer. Therefore, the Officer shall be precluded from assigning or
delegating his rights, duties or responsibilities hereunder.

         Section 19. Modification; Waiver; Amendments. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by each Employer and the
Officer. No waiver by any party hereto, at any time, of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No amendments or additions to this Agreement shall be binding
unless in writing and signed by each Employer and the Officer, except as herein
otherwise provided. Notwithstanding any provision hereof, the Board or the Bank
Board may increase any compensation or benefit payable to, or receivable by, the
Officer under this Agreement.

         Section 20. Applicable Law. This Agreement shall be governed in all
respects, whether as to validity, construction, capacity, performance or
otherwise, by the laws of North Carolina, except to the extent that federal law
shall be deemed to govern.

                                       47

<PAGE>

         Section 21. Jurisdiction. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the State of North Carolina,
County of Mecklenburg, or, if it has or can acquire jurisdiction, in the United
States District Court for the Western District of North Carolina, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on either party anywhere in the world.

         Section 22. Section Headings; Construction. The headings of Sections in
this Agreement are provided for convenience only and shall not affect its
construction or interpretation. All references to "Sections" refer to the
corresponding Sections of this Agreement unless otherwise specified. All words
used in this Agreement shall be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.

         Section 23. Mitigation and Offset. If Officer's employment is
terminated at any time during the first two years of the Commencement Date, or
if terminated pursuant to a SECTION 7 Termination Notice, Officer shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment and, except for payments under the Consulting and
Noncompetition Agreement or payments under the company's disability insurance
policy, and except as provided in SECTION 7 hereof, no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Officer in any subsequent employment. If Officer's employment hereunder is
terminated after the second anniversary of the Commencement Date and not
pursuant to a SECTION 7 Termination Notice, any payments and benefits that
Officer is entitled to after such termination pursuant to this Agreement (except
for any reimbursement of expenses pursuant to SECTION 16 hereof) shall be
reduced by the amount and to the extent of any compensation or benefits provided
to Officer by any subsequent employment, but Officer shall not be under an
affirmative duty in such circumstances to seek alternative employment.

         Section 24. Disputes. In the event any dispute shall arise between the
Officer and Granite, the Bank or the Board (and the Bank Board) as to the terms
or interpretation of this Agreement, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Officer to enforce
the terms of this Agreement or in defending against any action taken by Granite
and/or the Bank, unless the Officer shall have received no recovery or other
relief on his claims or shall have not prevailed on his defenses, the Employers
shall reimburse the Officer for all costs and expenses, including reasonable
attorneys' fees, incurred by him in such disputes or proceedings.

         Section 25. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

         Section 26. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the transactions described herein and
supersedes any and all other oral or written agreement(s) heretofore made, and
there are no representations or inducements by or to,

                                       48

<PAGE>

or any agreements between, any of the parties hereto other than those contained
herein in writing.

                         [Signatures on following page]

                                       49

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement under seal
to be effective as of the day and year first hereinabove written.

                           BANK OF GRANITE CORPORATION

                           By: /s/ John A. Forlines, Jr.
                               -------------------------------
                           Name: John A. Forlines, Jr.
                           Title: Chairman and CEO

                           BANK OF GRANITE

                           By: /s/ Charles M. Snipes
                               --------------------------------
                           Name: Charles M. Snipes
                           Title: President & CEO

                           WESLEY W. STURGES

                           /s/ Wesley W. Sturges
                           ------------------------------------

                                       50<PAGE>

Exhibit 10.2 Bank of Granite Corporation/First Commerce Corporation Omnibus
              Stock Incentive Plan

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION

                        OMNIBUS STOCK AND INCENTIVE PLAN

Approved by First Commerce Corporation Shareholders on April 23, 2002

Assumed by Bank of Granite Corporation pursuant to that certain Merger Agreement
between Bank of Granite Corporation and First Commerce Corporation dated as of
December 18, 2002, as amended, and subject to the terms and conditions thereof

                                       51
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
OMNIBUS STOCK AND INCENTIVE PLAN.........................................     53
1.   Purpose.............................................................     53
2.   Definitions.........................................................     53
3.   Administration......................................................     56
4.   Term of Plan/Common Stock Subject to Plan...........................     57
5.   Eligibility.........................................................     57
6.   Stock Options.......................................................     58
7.   Restricted Awards...................................................     59
8.   Performance Units...................................................     61
9.   Stock Purchase Rights...............................................     62
10.  Deferral Elections..................................................     66
11.  Termination of Employment...........................................     66
12.  Non-transferability of Awards.......................................     69
13.  Changes in Capitalization and Other Matters.........................     70
14.  Change in Control...................................................     70
15.  Amendment, Suspension and Termination...............................     74
16.  Miscellaneous.......................................................     74
PERFORMANCE UNIT AGREEMENT...............................................     80
RESTRICTED STOCK AGREEMENT...............................................     83
NON-QUALIFIED STOCK OPTION AGREEMENT FOR KEY EMPLOYEES..................      86
INCENTIVE STOCK OPTION AGREEMENT.........................................     90
STOCK PURCHASE SUBSCRIPTION AGREEMENT....................................     94
</TABLE>

                                       52
<PAGE>

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION

                        OMNIBUS STOCK AND INCENTIVE PLAN

         1.       PURPOSE. The purpose of this Plan is to further and promote
the interests of Bank of Granite Corporation (the "Company") and its
shareholders by enabling the Company and its Subsidiaries to attract, retain and
motivate key employees and directors, and to align the interests of such key
employees and directors with those of the Company's shareholders. Additionally,
this Plan's objectives are to provide a competitive reward for achieving
longer-term goals, provide balance to short-term incentive awards, and reinforce
a one company perspective. To do so, this Plan offers performance-based stock
and cash incentives and other equity-based incentive awards and opportunities to
provide such key employees and directors with a proprietary interest in
maximizing the growth, profitability and overall success of the Company.

         2.       DEFINITIONS. For purposes of this Plan, the following terms
shall have the meanings set forth below:

                  2.1      "AWARD" means an award, grant or issuance made to a
Participant under Sections 6, 7, 8 and/or 9.

                  2.2      "AWARD AGREEMENT" means the agreement executed by a
Participant pursuant to Sections 3.2 and 15.7 in connection with the granting of
an Award.

                  2.3      "BOARD" means the Board of Directors of the Company,
as constituted from time to time.

                  2.4      "CODE" means the Internal Revenue Code of 1986, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.

                  2.5      "COMMITTEE" means the Compensation Committee of the
Board, as constituted in accordance with Section 3.

                  2.6      "COMMON STOCK" means the Common Stock of the Company.

                  2.7      "COMPANY" means Bank of Granite Corporation, a
Delaware corporation, or any successor corporation to Bank of Granite
Corporation.

                  2.8      "COMPENSATION" shall mean all cash compensation
received by an Employee from the Company or a Designated Subsidiary and
includable in the Employee's gross income for federal income tax purposes, other
than any taxable reimbursements. By way of illustration, but not limitation,
"Compensation" shall include regular compensation such as salary, wages,
overtime, shift differentials, bonuses, commissions, and incentive compensation,
but shall exclude relocation reimbursements, expense reimbursements, tuition or
other reimbursements, and income realized as a result of participation in any
stock option, stock purchase, or similar plan of the Company or any Designated
Subsidiary.

                                       53
<PAGE>

                  2.9      "DISABILITY" means disability as determined by the
Committee in accordance with standards and procedures similar to those under the
Company's long-term disability plan, if any. If the Company does not then
maintain a long-term disability plan, Disability shall mean the inability of a
Participant, as determined by the Committee, substantially to perform such
Participant's regular duties and responsibilities due to a medically
determinable physical or mental illness which has lasted (or can reasonably be
expected to last) for a period of six (6) consecutive months.

                  2.10     "EMPLOYEE" shall mean any individual who is an
employee of the Company for tax purposes. For purposes of this Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company.

                  2.11     "EXCHANGE ACT" means the Securities Exchange Act of
1934, as in effect and as amended from time to time, or any successor statute
thereto, together with any rules, regulations and interpretations promulgated
thereunder or with respect thereto.

                  2.12     "FAIR MARKET VALUE" shall mean, as of any date, the
value of Common Stock determined as follows:

                  (a)      If the Common Stock is listed on an established stock
         exchange or national market system, including, without limitation, the
         Nasdaq National Market or the Nasdaq SmallCap Market or the
         over-the-counter Bulletin Board of The Nasdaq Stock Market, Inc. (the
         "Nasdaq"), its Fair Market Value shall be the closing sales price for
         such stock (or the closing bid, if no sales were reported) as quoted on
         such exchange or system for the last market trading day on the date of
         such determination, as reported in The Wall Street Journal or such
         other source as the Board deems reliable, or;

                  (b)      If the Common Stock is regularly quoted by a
         recognized securities dealer, but selling prices are not reported, its
         Fair Market Value shall be the mean of the closing bid and asked prices
         for the Common Stock on the date of such determination, as reported in
         The Wall Street Journal or such other source as the Board deems
         reliable, or;

                  (c)      In the absence of an established market for the
         Common Stock, the Fair Market Value thereof shall be determined in good
         faith by the Board.

                  2.13     "INCENTIVE STOCK OPTION" means any stock option
granted pursuant to the provisions of Section 6 that is intended to be (and is
specifically designated as) an "incentive stock option" within the meaning of
Section 422 of the Code.

                  2.14     "NON-EMPLOYEE DIRECTOR" means a member of the Board
or of the Board of Directors of a Subsidiary who is not an employee of the
Company or any Subsidiary.

                  2.15     "NON-QUALIFIED STOCK OPTION" means any stock option
awarded pursuant to the provisions of Section 6 of this Plan that is not an
Incentive Stock Option.

                  2.16     "OFFERING COMMENCEMENT DATE" shall mean the first day
of each Offering Period.

                                       54
<PAGE>

                  2.17     "OFFERING PERIOD" shall mean a period of
approximately twelve months during which funds may be accumulated for the
exercise of a Stock Purchase Right, commencing and ending as follows: commencing
on the first Trading Day on or after December 15th, and terminating on the last
Trading Day in the period ending December 14th. The duration of Offering Periods
may be changed pursuant to Section 9.

                  2.18     "PARTICIPANT" means an Employee or Non-Employee
Director who is selected by the Committee under Section 5 to receive an Award,
or an Employee who receives a Stock Purchase Right under Section 9.

                  2.19     "PERFORMANCE UNITS" means the monetary units granted
under Section 8.

                  2.20     "PLAN" means the Bank of Granite/First Commerce
Corporation Omnibus Stock and Incentive Plan as in effect and as amended from
time to time (together with any rules and regulations promulgated by the
Committee with respect thereto).

                  2.21     "PURCHASE DATE" shall mean the last day of each
Offering Period.

                  2.22     "PURCHASE PRICE" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Offering Commencement
Date or on the Purchase Date, whichever is lower; provided, however, that the
Purchase Price may be adjusted by the Board pursuant to Section 9.12.3 of this
Plan.

                  2.23     "RESERVES" shall mean the number of shares of Common
Stock covered by Awards under this Plan that have not yet been exercised and the
number of shares of Common Stock that have been authorized for issuance under
this Plan, but not yet awarded.

                  2.24     "RESTRICTED AWARD" means an Award of Restricted Stock
pursuant to the provisions of Section 7.

                  2.25     "RESTRICTED STOCK" means the restricted shares of
Common Stock granted pursuant to the provisions of Section 7 with the
restriction that the holder may not sell, transfer, pledge, or assign such
Restricted Stock and such other restrictions (which other restrictions may
expire separately or in combination, at one time, from time to time or in
installments), as determined by the Committee in accordance with and as set
forth in this Plan and/or the relevant Award Agreement.

                  2.26     "RETIREMENT" means (i) as to officers and employees,
retirement from active employment with the Company and its Subsidiaries and
receiving benefits under the Company's qualified retirement plan and (ii) as to
Non-Employee Directors, the same as "Retirement" under the "Retirement Policy"
in effect for the Board of Directors on which the Participant was serving upon
receipt of an Award.

                  2.27     "STOCK OPTIONS" means Incentive Stock Options and
Non-Qualified Stock Options.

                  2.28     "STOCK PURCHASE RIGHT" means a purchase right granted
under Section 9.

                                       55
<PAGE>

                  2.29     "SUBSIDIARY(IES)" means any corporation (other than
the Company) in an unbroken chain of corporations, beginning with the Company,
if each of such corporations, other than the last corporation in the unbroken
chain, owns fifty percent (50%) or more of the voting stock in one of the other
corporations in such chain.

                  2.30     "TRADING DAY" shall mean a day on which national
stock exchanges and the Nasdaq are open for trading.

         3.       ADMINISTRATION.

                  3.1      THE COMMITTEE. This Plan shall be administered by the
Committee. The Committee shall be appointed from time to time by the Board and
shall be comprised of not less than three (3) of the then members of the Board.
Members of the Committee shall serve at the pleasure of the Board, and the Board
may at any time and from time to time remove members from the Committee, or,
subject to the immediately preceding sentence, add members to the Committee. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business. Any act or acts approved in writing by all of the
members of the Committee then serving shall be the act or acts of the Committee
(as if taken by unanimous vote at a meeting of the Committee duly called and
held).

                  3.2      PLAN ADMINISTRATION AND PLAN RULES. The Committee is
authorized to construe and interpret this Plan and to promulgate, amend and
rescind rules, policies and regulations relating to the implementation,
administration and maintenance of this Plan. Subject to the terms and conditions
of this Plan, the Committee shall make all determinations necessary or advisable
for the implementation, administration and maintenance of this Plan including,
without limitation, (a) selecting Participants, (b) making Awards in such
amounts and form as the Committee shall determine, (c) imposing such
restrictions, terms and conditions upon such Awards as the Committee shall deem
appropriate, and (d) correcting any defect or omission, or reconciling any
inconsistency, in this Plan and/or any Award Agreement. The Committee may
designate persons other than members of the Committee to carry out the
day-to-day administration of this Plan under such conditions and limitations as
it may prescribe, except that the Committee shall not delegate its authority
with regard to selection for participation in this Plan and/or the granting of
any Awards to Participants. The Committee's determinations under this Plan need
not be uniform and may be made selectively among Participants, whether or not
such Participants are similarly situated. Any determination, decision or action
of the Committee in connection with the construction, interpretation,
administration, implementation or maintenance of this Plan shall be final,
conclusive and binding upon all Participants and any person(s) claiming under or
through any Participant(s). The Company shall effect the granting of Awards
under this Plan, in accordance with the determinations made by the Committee, by
execution of written agreements and/or other instruments in such form as is
approved by the Committee.

                  3.3      LIABILITY LIMITATION. Neither the Board nor the
Committee, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with this Plan (or any Award Agreement), and the members of the Board and the
Committee shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including,

                                       56
<PAGE>

without limitation, attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by the Articles of Incorporation and/or Bylaws of the
Company as then in effect and to the fullest extent under any directors' and
officers' liability insurance coverage which may be in effect from time to time.

         4.       TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.

                  4.1      TERM. This Plan shall terminate on December 31, 2012,
except with respect to Awards then outstanding. After such date no further
Awards shall be granted under this Plan.

                  4.2      COMMON STOCK SUBJECT TO PLAN.

                           4.2.1    COMMON STOCK. The Board shall reserve for
Awards under this Plan 160,000 shares of the authorized and unissued shares of
Common Stock. In the event of a change in the Common Stock of the Company that
is limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be the Common Stock
for purposes of this Plan. Common Stock which may be issued under this Plan
shall be authorized and unissued shares. No fractional shares of Common Stock
shall be issued under this Plan.

                           4.2.2    COMMON STOCK AUTHORIZED. The maximum number
of shares of Common Stock authorized for issuance under this Plan shall be
160,000.

                  4.3      COMPUTATION OF AVAILABLE SHARES. For the purpose of
computing the total number of shares of Common Stock available for Awards, there
shall be counted against the limitations set forth in Section 4.2 the maximum
number of shares of Common Stock potentially subject to issuance upon exercise
or settlement of Awards granted under Section 6, the number of shares of Common
Stock issued or subject to potential issuance under Awards of Restricted Stock
pursuant to Section 7, the maximum number of shares of Common Stock potentially
issuable under Awards of Performance Units pursuant to Section 8, and the
maximum number of shares issued or subject to issuance under Awards granted
under Section 9, in each case determined as of the date on which such Awards are
granted. If any Awards expire unexercised or are forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock which were theretofore subject (or potentially subject) to such
Awards shall again be available for Awards under this Plan to the extent of such
expiration, forfeiture, surrender, cancellation, termination or settlement of
such Awards; provided, however, that forfeited Awards shall not again be
available for Awards under this Plan if the Participant received, directly or
indirectly, any of the benefits of ownership of the securities of the Company
underlying such Award, including, without limitation, the benefit described in
Section 7.6.

         5.       ELIGIBILITY. Employees eligible for Awards under this Plan
shall consist of key Employees of the Company and/or its Subsidiaries who are
responsible for the management, growth and protection of the business of the
Company and/or its Subsidiaries and whose performance or contribution, in the
sole discretion of the Committee, benefits or will benefit the Company in a
significant manner. Non-employees (e.g., those with third party relationships
such

                                       57
<PAGE>

as directors or advisory directors of the Company and/or a Subsidiary) shall be
eligible Participants for Awards of Non-Qualified Stock Options and/or
Restricted Stock at the sole discretion of the Committee. Notwithstanding the
foregoing, the following Employees shall not be eligible for an Award of Stock
Purchase Rights:

                  (a)      any Employee whose customary employment is less than
         20 hours per week; and

                  (b)      any Employee whose customary employment is not more
         than five (5) months in any calendar year.

         Any provisions of this Plan to the contrary notwithstanding, no
Employee shall be awarded a Stock Purchase Right under this Plan (i) to the
extent that, immediately after the Award, such Employee (including by
attribution under Section 424(d) of the Code) would own capital stock of the
Company and/or hold outstanding options to purchase stock of the Company
constituting in the aggregate five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company, or
(ii) to the extent that his or her stock options and Stock Purchase Rights under
this Plan and any other employee stock purchase plans of the Company and its
Subsidiaries exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the Fair Market Value of the shares at the time such Stock
Purchase Right is granted) in the aggregate for each calendar year in which such
Stock Purchase Right is outstanding at any time.

         6.       STOCK OPTIONS.

                  6.1      TERMS AND CONDITIONS. Stock Options awarded under
this Plan may be in the form of Incentive Stock Options or Non-Qualified Stock
Options. Such Stock Options shall be subject to the terms and conditions set
forth in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of this Plan, as the
Committee shall set forth in the relevant Award Agreement.

                  6.2      GRANTS. Stock Options may be granted under this Plan
in such form as the Committee may from time to time approve. Subject to Section
5, Stock Options may be granted alone or in addition to other Awards.
Notwithstanding the above, no Incentive Stock Options shall be granted to any
Participant who owns more than 10% of the combined total voting power of the
Company or any Subsidiary, unless the requirements of Section 422(c)(6) of the
Code are satisfied.

                  6.3      EXERCISE PRICE. The exercise price per share of
Common Stock subject to a Stock Option shall be determined by the Committee at
the time of Award; provided, however, that the exercise price of an Incentive
Stock Option shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date of the Award of such Incentive
Stock Option. For any Participant who owns ten percent (10%) or more of the
combined total voting power of the Company or any Subsidiary, the exercise price
of an Incentive Stock Option shall not be less than one hundred ten percent
(110%) of such Fair Market Value.

                                       58
<PAGE>

                  6.4      TERM. The term of each Stock Option shall be such
period of time as is fixed by the Committee at the time of grant; provided,
however, that the term of any Incentive Stock Option shall not exceed ten (10)
years after the date the Incentive Stock Option is awarded. For any Participant
who owns ten percent (10%) or more of the combined total voting power of the
Company or any Subsidiary, the term of each Incentive Stock Option shall not
exceed five (5) years.

                  6.5      METHOD OF EXERCISE. A Stock Option may be exercised,
in whole or in part, by giving written notice of exercise to the Director of
Personnel of the Company, or such other officer of the Company as the Committee
shall designate, specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the exercise price in cash, by
certified check, bank draft or money order payable to the order of the Company
or, if permitted by the terms of the relevant Award Agreement and applicable
law, by delivery of, alone or in conjunction with a partial cash or instrument
payment, (a) a fully-secured, recourse promissory note, or (b) shares of Common
Stock already owned by the Participant or to be received upon exercise of the
Stock Option in a "cashless exercise" as described below. The Committee may, in
the relevant Award Agreement, also permit Participants (either on a selective or
group basis) to simultaneously exercise Stock Options and sell the shares of
Common Stock thereby acquired, and use the proceeds from such sale as payment of
the exercise price of such Stock Options. Payment instruments shall be received
by the Company subject to collection. The proceeds received by the Company upon
exercise of any Stock Option may be used by the Company for general corporate
purposes.

                  6.6      DATE OF EXERCISE. Vesting dates of Stock Options
awarded to a Participant will be specified in the applicable Award Agreement at
the discretion of the Committee. Stock Options that meet the vesting
requirements may be exercised in whole or in part at any time and from time to
time during their specified terms.

         7.       RESTRICTED AWARDS.

                  7.1      TERMS AND CONDITIONS. Restricted Awards shall be in
the form of grants of Restricted Stock. Restricted Awards shall be subject to
the terms and conditions set forth in this Section 7 and any additional terms
and conditions, not inconsistent with the express terms and provisions of this
Plan, as the Committee shall set forth in the relevant Award Agreement.

                  7.2      RESTRICTED STOCK GRANTS. An Award of Restricted Stock
is an Award of shares of Common Stock, in uncertificated form, issued to and
registered with the Company's designated Stock Transfer Agent, in the name of
the applicable Participant, subject to such restrictions, terms and conditions
as the Committee deems appropriate, including, without limitation, restrictions
on the sale, assignment, transfer, pledge, hypothecation or other disposition of
such shares and the requirements that the Participant deposit such shares with
the Company while such shares are subject to such restrictions and that such
shares be forfeited upon termination of employment or cessation of service as a
Non-Employee Director for specified reasons within a specified period of time.

         7.3      GRANTS OF AWARDS.

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<PAGE>

                           7.3.1    Subject to Section 5, Restricted Awards may
be granted alone or in addition to any other Awards. Subject to the terms of
this Plan, the Committee shall determine the number of Restricted Awards to be
granted to a Participant and the Committee may impose different terms and
conditions on any particular Restricted Award made to any Participant.

                           7.3.2    Each Restricted Award of Restricted Stock
shall be issued in an uncertificated form and registered in the name of the
Participant. The stock transfer books of the Company's designated Stock Transfer
Agent shall be noted with the following legend with reference to the shares made
subject to such Restricted Award.

                  "These shares are subject to the terms and restrictions of the
                  Bank of Granite/First Commerce Corporation Omnibus Stock And
                  Incentive Plan; such shares are subject to forfeiture or
                  cancellation under the terms of said Plan; and such shares
                  shall not be sold, transferred, assigned, pledged, encumbered,
                  or otherwise alienated or hypothecated except pursuant to the
                  provisions of said Plan, a copy of which Plan is available
                  from Bank of Granite Corporation upon request."

         Such Award shall be held in uncertificated form until the restrictions
thereon shall have lapsed and all of the terms and conditions applicable thereto
have been satisfied.

                  7.4      RESTRICTION PERIOD. In accordance with Sections 7.1
and/or 7.2, Restricted Awards shall only become unrestricted and vest in the
Participant in accordance with such vesting schedule relating to the service
performance restriction applicable to such Restricted Award as the Committee may
establish in the relevant Award Agreement (the "Restriction Period").
Notwithstanding the immediately preceding sentence, in no event shall the
Restriction Period be less than one (1) year and one day after the date on which
such Restricted Award is granted. During the Restriction Period applicable to a
Restricted Award, such Award shall be unvested and a Participant may not sell,
assign, transfer, pledge, encumber or otherwise dispose of or hypothecate such
Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Participant shall be entitled to receive
payment of the Restricted Award or a portion thereof, as the case may be, as
provided in Section 7.5.

                  7.5      PAYMENT OF AWARDS.

                           7.5.1    RESTRICTED STOCK GRANTS. After the
satisfaction and/or lapse of the restrictions, terms and conditions set by the
Committee in respect of a Restricted Award of Restricted Stock, a certificate
for the number of shares of Common Stock issued which are no longer subject to
such restrictions, terms and conditions shall, as soon as practicable
thereafter, be delivered to the Participant. The remaining shares, if any,
issued in respect of such Restricted Stock shall either be forfeited and
canceled, or shall continue to be subject to the restrictions, terms and
conditions set by the Committee, as the case may be.

                  7.6      SHAREHOLDER RIGHTS. A Participant shall have, with
respect to the shares of Common Stock received under a Restricted Award of
Restricted Stock, all of the rights of a shareholder of the Company, including,
without limitation, the right to vote the shares and to

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<PAGE>

receive any cash dividends. Stock dividends issued with respect to such
Restricted Stock shall be treated as additional Awards of Restricted Stock
grants and shall be subject to the same restrictions and other terms and
conditions that apply to the shares of Restricted Stock with respect to which
such stock dividends are issued.

         8.       PERFORMANCE UNITS.

                  8.1      TERMS AND CONDITIONS. Awards of Performance Units
shall be subject to the terms and conditions set forth in this Section 8 and any
additional terms and conditions, not inconsistent with the express provisions of
this Plan, as the Committee shall set forth in the relevant Award Agreement.

                  8.2      PERFORMANCE UNIT GRANTS. A Performance Unit is an
Award of units (with each unit representing such monetary amount as is
designated by the Committee in the Award Agreement) granted to a Participant,
subject to such terms and conditions as the Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
units (or a portion thereof) in the event certain performance criteria are not
met within a designated period of time.

                  8.3      GRANTS. Subject to Section 5, Performance Units may
be awarded alone or in addition to any other Awards. Subject to the terms of
this Plan, the Committee shall determine the number of Performance Units to be
awarded to a Participant and the Committee may impose different terms and
conditions on any particular Performance Units awarded to any Participant.

                  8.4      PERFORMANCE GOALS AND PERFORMANCE PERIODS.
Participants receiving Awards of Performance Units shall only earn into and be
entitled to payment in respect of such Awards if the Company, a Subsidiary
and/or a division of the Company specified by the Committee (a "Division")
and/or the Participant satisfy certain performance goals (the "Performance
Goals") during and in respect of a designated performance period as determined
by the Committee (the "Performance Period"). Performance Goals and the
Performance Period shall be established by the Committee in its sole discretion.
Performance Periods may overlap each other from time to time. The Committee
shall establish Performance Goals for each Performance Period prior to, or as
soon as practicable after, the commencement of such Performance Period. The
Committee shall also establish a schedule or schedules for such Performance
Units setting forth the portion of the Award which will be earned or forfeited
based on the degree of achievement, or lack thereof, of the Performance Goals at
the end of the relevant Performance Period. In setting Performance Goals, the
Committee may use, but shall not be limited to, such measures as total
shareholder return, return on equity, return on assets, net earnings per share
growth, comparisons to peer companies, divisional goals, individual or aggregate
Participant performance or such other measure or measures of performance as the
Committee, in its sole discretion, may deem appropriate. Such performance
measures shall be defined as to their respective components and meanings by the
Committee in its sole discretion. During any Performance Period, the Committee
shall have the authority to adjust the Performance Goals in such manner as the
Committee, in its sole discretion, deems appropriate with respect to such
Performance Period. In addition to the Performance Goals, the Committee may also
require a minimum shareholder return (threshold) be attained before
consideration is

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<PAGE>

given to any results achieved on the Performance Goals. Should the Company, a
Subsidiary, a Division and/or the Participant achieve the applicable Performance
Goals, but the minimum shareholder return (threshold) is not satisfied, then the
Participant's earning into and right to receive payment under the Performance
Units awarded may be deferred by the Committee for up to two (2) year(s) until
the threshold is satisfied. If the minimum shareholder return (threshold) is not
satisfied within such additional period of time, then the Performance Units
awarded shall lapse and be forfeited.

                  8.5      PAYMENT OF UNITS. With respect to each Performance
Unit, the Participant shall, if the applicable Performance Goals and minimum
shareholder return (threshold) have been satisfied by the Company, a Subsidiary,
a Division and/or the Participant, as applicable, during the relevant
Performance Period, be entitled to receive payment in an amount equal to the
designated value of each Performance Unit awarded times the number of such
Performance Units so earned. Payment in settlement of earned Performance Units
shall be made as soon as practical following the conclusion of the applicable
Performance Period in cash, in shares of unrestricted Common Stock or in
Restricted Stock, as the Committee, in its sole discretion, shall determine and
provide in the relevant Award Agreement. Should the Company, a Subsidiary, a
Division and/or the Participant satisfy the applicable Performance Goals, but
the minimum shareholder return (threshold) is not satisfied, then the
Participant's earning into and right to receive payment under the Performance
Units awarded may be deferred by the Committee for up to two (2) year(s) until
the threshold is satisfied. If the minimum shareholder return (threshold) is not
satisfied within such additional period of time, then the Performance Units
awarded shall lapse and be forfeited.

         9.       STOCK PURCHASE RIGHTS.

                  9.1      TERMS AND CONDITIONS. Awards of Stock Purchase Rights
shall be in the form of grants of rights to elect to make payroll deductions to
be used to purchase shares of Common Stock. Stock Purchase Rights Awards shall
be subject to the terms and conditions set forth in this Section 9 and any
additional terms and conditions, not inconsistent with the express terms and
conditions of this Plan, as the Committee shall set forth in the relevant Stock
Purchase Agreement.

                  9.2      STOCK PURCHASE RIGHTS GRANTS. An Award of Stock
Purchase Rights may be in such form as the Committee may from time to time
approve. Subject to Section 5, Stock Purchase Rights may be awarded alone or in
addition to other Awards. Effective on the Offering Commencement Date of each
Offering Period, each eligible Participant participating in such Offering Period
shall be granted a Stock Purchase Right on the Purchase Date of such Offering
Period, at the applicable Purchase Price, a number of shares of Common Stock
determined by dividing such Employee's total payroll deductions actually made
before such Purchase Date and retained in the Participant's account as of the
Purchase Date by the applicable Purchase Price without adjustment for changes in
the Compensation of the Participant.

                  9.3      SUBSCRIPTION.

                           9.3.1    A Participant may exercise Stock Purchase
Rights awarded to him or her by completing a Stock Purchase Subscription
Agreement authorizing payroll deductions in

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the form provided by the Company and filing it with the designated accounting
representative of the Company before the applicable Offering Commencement Date,
unless a later time for submission is set by the Committee for all Participants
with respect to a given Offering Period.

                           9.3.2    Payroll deductions for a Participant shall
commence on the first payroll date occurring in the January following the
applicable Offering Commencement Date and shall end on the last payroll date in
the November before the Purchase Date of the Offering Period to which such
authorization is applicable, unless sooner terminated by the Participant as
provided in this Section 9.

                  9.4      OFFERING PERIODS. There shall be consecutive Offering
Periods of twelve (12) months duration under this Plan, with a new Offering
Period commencing on the first Trading Day on or after December 15th each year,
or on such other date as the Committee shall determine, and continuing
thereafter until terminated in accordance with Section 9.12 hereof. The
Committee shall have the power to change the duration and timing of Offering
Periods with respect to future offerings without shareholder approval.

                  9.5      PAYROLL DEDUCTIONS.

                           9.5.1    At the time a Participant files his or her
Stock Purchase Agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not less than ten
dollars ($10.00) and not more than is permissible under the provisions of
Section 5.

                           9.5.2    All payroll deductions made for a
Participant shall be credited to his or her account under this Plan. A
Participant may not make any additional payments into such account. A
Participant's account shall be only a bookkeeping account maintained by the
Company, and neither the Company nor any Subsidiary shall be obligated to
segregate or hold in trust or escrow any funds in a Participant's account.
Amounts not expended because of the Plan rule that fractional shares shall not
be purchased shall be refunded to the Participant.

                           9.5.3    A Participant may discontinue his or her
exercise of Stock Purchase Rights awarded to him or her as provided in Section
9.8 hereof, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period, by completing and filing with the
designated accounting representative of the Company a new Stock Purchase
Subscription Agreement authorizing a change in payroll deduction rate. Unless
otherwise authorized by the Committee, a Participant may not change his or her
payroll deduction rate more than twice during any Offering Period. The change in
rate shall be effective with the first payroll period following thirty (30)
business days after receipt of the new Stock Purchase Subscription Agreement by
the designated accounting representative of the Company unless the Company
elects to process a given change in participation more quickly.

                           9.5.4    Notwithstanding the foregoing, to the extent
necessary to comply with the limitations of Section 423(b)(8) of the Code and
Section 5 hereof, a Participant's payroll deductions may be decreased to zero
percent (0%) at any time during an Offering Period.

                           9.5.5    At the time a Stock Purchase Right is
exercised, in whole or in part, or at the time some or all of the Common Stock
issued under this Plan in connection with

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the Stock Purchase Rights awarded to the Participant is disposed of, the
Participant must make adequate provision for federal, state, or other tax
withholding obligations, if any, arising upon the exercise of the Stock Purchase
Right or the disposition of the Common Stock. The Company may, but shall not be
obligated to, withhold from the Participant's Compensation the amount necessary
for the Company to meet applicable withholding obligations related to the
Participant's tax obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Participant that may be available to
it.

                  9.6      EXERCISE OF STOCK PURCHASE RIGHT. Unless a
Participant withdraws from participating in the awarding of Stock Purchase
Rights pursuant to this Section 9 as provided in Section 9.8 hereof, his or her
Stock Purchase Rights shall be exercised automatically on the Purchase Date, and
the maximum number of full shares subject to the Stock Purchase Rights shall be
purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in the Participant's account. No fractional
shares shall be purchased; any payroll deductions accumulated in a Participant's
account that are insufficient to purchase a full share shall be retained in the
Participant's account for the subsequent Offering Period, subject to earlier
withdrawal by the Participant as provided in Section 9.8 hereof. Any other funds
left over in a Participant's account after the Purchase Date shall be returned
to the Participant. During a Participant's lifetime, a Participant's Stock
Purchase Rights exercisable only by him or her.

                  9.7      DELIVERY. As promptly as practicable after each
Purchase Date on which a purchase of shares occurs, the Company shall arrange
for the delivery to each Participant or his or her broker, or to a broker
designated by the Committee, of a stock certificate evidencing the shares
purchased upon exercise of the applicable Stock Purchase Rights. Shares may be
registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship,
or as community property.

                  9.8      WITHDRAWAL.

                           9.8.1    A Participant may withdraw all, but not less
than all, the payroll deductions credited to his or her account and not yet used
to exercise his or her Stock Purchase Rights under this Plan at any time on or
before fifteen (15) calendar days before the Purchase Date by giving written
notice to the designated accounting representative of the Company in the form
provided by the Company. All of the Participant's payroll deductions credited to
his or her account shall be paid to such Participant promptly after receipt of
notice of withdrawal, such Participant's Stock Purchase Rights for the Offering
Period shall automatically be terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period.

                           9.8.2    A Participant's withdrawal from an Offering
Period shall not have any effect upon his or her eligibility to participate in
any succeeding Offering Period commencing after the termination of the Offering
Period from which the Participant withdraws.

                  9.9      TERMINATION OF EMPLOYMENT. Upon a Participant's
ceasing to be an Employee for any reason at any time on or before a Purchase
Date of an Offering Period, he or she shall be deemed to have elected to
withdraw from participation in the awarding and exercise

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<PAGE>

of Stock Purchase Rights pursuant to this Section 9, and the payroll deductions
credited to such Participant's account during such Offering Period shall be
returned to such Participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 16.8 hereof, and such Participant's
Stock Purchase Rights shall be automatically terminated.

                  9.10     INTEREST. No interest shall accrue or be payable on
the payroll deductions of a Participant described in this Section 9.

                  9.11     MISCELLANEOUS.

                           9.11.1   No Participant shall have interest or voting
rights in shares covered by any of his or her Stock Purchase Rights or in any
dividends declared by the Company in respect of its outstanding Common Stock
until such Stock Purchase Right has been exercised.

                           9.11.2   Shares to be delivered to a Participant
under this Section 9 shall be registered in the name of the Participant or in
the name of the Participant and his or her spouse, as designated by the
Participant.

                           9.11.3   If on a given Purchase Date the number of
shares with respect to which Stock Purchase Rights are to be exercised exceeds
the number of shares then available under this Plan, the Company shall make a
pro rata allocation of the shares remaining available for purchase in as uniform
a manner as shall be practicable and as it shall determine to be equitable.

                           9.11.4   Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of a Stock
Purchase Right may be assigned, transferred, pledged, or otherwise disposed of
in any way (other than by will, the laws of descent and distribution, or as
provided in Section 16.8 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge, or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 9.8 hereof.

                           9.11.5   All payroll deductions received or held by
the Company under this Section 9 shall be general corporate funds and as such
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions or pay interest thereon.

                           9.11.6   Individual accounts shall be maintained for
each Participant receiving Stock Purchase Rights under this Section 9.
Statements of account shall be given to Participants at least annually, which
statements shall set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased, and the remaining cash balance, if any.

                  9.12     TERMINATION.

                           9.12.1   The Committee may at any time and for any
reason terminate the operation of or amend this Section 9. No such termination
shall affect Stock Purchase Rights previously granted, provided that an Offering
Period may be terminated by the Committee on any Purchase Date if the Committee
determines that the termination of the Offering Period is in

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<PAGE>

the best interests of the Company and its shareholders. Except as provided in
this Section 9.11, no amendment may make any change in any Stock Purchase Rights
theretofore granted that adversely affects the rights of any Participant. To the
extent necessary to comply with Section 423 of the Code (or any other applicable
law, regulation, or stock exchange rule), the Company shall obtain shareholder
approval in such manner and to such degree as required.

                           9.12.2   Without shareholder consent and without
regard to whether any Participant's rights may be considered to have been
"adversely affected," the Committee shall be entitled to: change the Offering
Periods, the maximum amount of permitted payroll deductions, and the frequency
and/or number of permitted changes in the amount withheld during an Offering
Period; establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars; permit payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections; establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each Participant properly correspond with amounts withheld from the
Participant's Compensation; and establish such other limitations and procedures
as the Committee determines in its sole discretion are advisable.

                           9.12.3   In the event that the Committee determines
that the ongoing operation of this Section 9 may result in unfavorable financial
accounting consequences, the Committee may, in its discretion and, to the extent
necessary or desirable, modify or amend this Plan to reduce or eliminate such
accounting consequences including, but not limited to:

                  (a)      altering the Purchase Price for any Offering Period,
         including an Offering Period underway at the time of the change in
         Purchase Price; or

                  (b)      shortening any Offering Period so that the Offering
         Period ends on a new Purchase Date, including an Offering Period
         underway at the time of the Committee action.

Such modifications or amendments shall not require shareholder approval or the
consent of any Participants under this Section 9.

         10.      DEFERRAL ELECTIONS. The Committee may permit a Participant to
elect to defer receipt of any payment of cash or any delivery of shares of
Common Stock that would otherwise be due to such Participant by virtue of the
exercise, earn out or settlement of any Award made under Section 6, 7 or 8 of
this Plan. If any such election is permitted, the Committee shall establish
rules and procedures for such deferrals, including, without limitation, the
payment or crediting of reasonable interest on such deferred amounts credited in
cash or the crediting of dividend equivalents in respect of deferred Awards
credited in shares of Common Stock.

         11.      TERMINATION OF EMPLOYMENT.

                  11.1     GENERAL. Subject to the terms and conditions of
Section 14 and except as otherwise provided in Section 9 with respect to Stock
Purchase Rights, if, and to the extent, the terms and conditions under which an
Award may be exercised, earned out or settled after a Participant's termination
of employment or a Non-Employee Director ceases to be a director, for

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<PAGE>

any particular reason shall not have been set forth in the relevant Award
Agreement, by and as determined by the Committee in its sole discretion, the
following terms and conditions shall apply as appropriate and as not
inconsistent with the terms and conditions, if any, of such Award Agreement:

                           11.1.1   Except as otherwise provided in this Section
11.1.1:

                  (a)      If a Participant's employment by the Company or any
         of its Subsidiaries is terminated for any reason (other than
         Disability, Retirement or death) while Stock Options granted to such
         Participant are non-vested, such Participant's rights, if any, to
         exercise any non-vested Stock Options, if any, shall immediately
         terminate and the Participant (and such Participant's estate,
         designated beneficiary or other legal representative) shall forfeit any
         rights or interest in or with respect to any such Stock Options. In the
         event of Disability, Retirement or death while a Participant's Stock
         Options are non-vested, such non-vested Stock Options shall become
         vested to the extent determined by the Committee.

                  (b)      The Committee, in its sole discretion, may determine
         that vested Stock Options, if any, of a Participant whose employment
         terminates other than by reason of death, Disability or Retirement, to
         the extent exercisable immediately prior to such termination of
         employment, may remain exercisable for a specified time period not to
         exceed thirty (30) days after such termination (subject to the
         applicable terms and provisions of this Plan [and any rules or
         procedures hereunder] and the relevant Award Agreement).

                  (c)      If a Participant's termination of employment is due
         to Disability, a Participant shall have the right, subject to the
         applicable terms and provisions of this Plan (and any rules or
         procedures hereunder) and the relevant Award Agreement, to exercise
         Incentive Stock Options, if any, at any time within the period ending
         on the earlier of the end of the term of such Incentive Stock Options
         and the first anniversary of the date of termination due to Disability
         (to the extent such Participant was entitled to exercise any such
         Incentive Stock Options immediately prior to such termination).

                  (d)      If a Participant's termination of employment is due
         to Retirement, a Participant shall have the right, subject to the
         applicable terms and provisions of this Plan (and any rules or
         procedures hereunder) and the relevant Award Agreement, to exercise
         Incentive Stock Options, if any, at any time within three (3) months
         following such termination due to Retirement (to the extent such
         Participant was entitled to exercise any such Incentive Stock Options
         immediately prior to such termination).

                  (e)      If any Participant dies while entitled to exercise a
         Stock Option, if any, such Participant's estate, designated beneficiary
         or other legal representative, as the case may be, shall have the
         right, subject to the applicable provisions of this Plan (and any rules
         or procedures hereunder) and the relevant Award Agreement, to exercise
         such Stock Options, if any, at any time within one (1) year from the
         date of such Participant's death (but in no event more than one (1)
         year from the date of such Participant's termination of

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<PAGE>

         employment due to Disability) or three (3) months from the date of such
         Participant's termination of employment due to Retirement, as
         applicable.

                  (f)      If vested Stock Options held by a Participant whose
         employment is terminated by reason of Disability or Retirement are
         Non-Qualified Stock Options the Participant shall have the right,
         subject to the applicable terms and provisions of this Plan (and any
         rules and procedures hereunder) and the relevant Award Agreement, to
         exercise such Non-Qualified Stock Options at any time following the
         Participant's termination of employment (to the extent the Participant
         was entitled to exercise such Non-Qualified Stock Options immediately
         prior to such termination) and prior to the expiration date of such
         Non-Qualified Stock Options as fixed by the Committee and set forth in
         the Award Agreement related thereto.

                  (g)      If a Non-Employee Director ceases to be a director
         for any reason (other than Disability, Retirement or death) while
         Non-Qualified Stock Options granted to such Non-Employee Director are
         non-vested, such Non-Employee Director's rights, if any, to exercise
         any non-vested Non-Qualified Stock Options, if any, shall immediately
         terminate and the Non-Employee Director (and such Non-Employee
         Director's estate, designated beneficiary or other legal
         representative) shall forfeit any rights or interest in or with respect
         to any such Non-Qualified Stock Options. In the event of the
         Disability, Retirement or death of a Non-Employee Director while the
         Non-Employee Director's Non-Qualified Stock Options are non-vested,
         such non-vested, Non-Qualified Stock Options shall become vested to the
         extent determined by the Committee. The Committee, in its sole
         discretion, may determine that vested Non-Qualified Stock Options, if
         any, of a Non-Employee Director who ceases to be a director other than
         by reason of death, Disability or Retirement, to the extent exercisable
         immediately prior to such cessation, may remain exercisable for a
         specified time period not to exceed thirty (30) days after such
         cessation (subject to the applicable terms and provisions of this Plan
         [and any rules or procedures hereunder] and the relevant Award
         Agreement). If the cessation of a Non-Employee Director's status as a
         director is due to Retirement or Disability, the Non-Employee Director
         shall have the right, subject to the applicable terms and provisions of
         this Plan (and any rules or procedures hereunder) and the relevant
         Award Agreement, to exercise such Non-Qualified Stock Options, if any,
         at any time within the following such cessation due to Retirement or
         Disability (to the extent such Non-Employee Director was entitled to
         exercise any such Non-Qualified Stock Options immediately prior to such
         cessation) and prior to the expiration date of such Non-Qualified Stock
         Options as fixed by the Committee and as set forth in the Award
         Agreement related thereto. If any Non-Employee Director dies while
         entitled to exercise Non-Qualified Stock Options, such Non-Employee
         Director's estate, designated beneficiary or other legal
         representative, as the case may be, shall have the right, subject to
         the applicable provisions of this Plan (and any rules or procedures
         hereunder) and the relevant Award Agreement, to exercise such
         Non-Qualified Stock Options, if any, at any time within one (1) year
         from the date of such Non-Employee Director's death.

                           11.1.2   If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any reason (other than
Disability, Retirement or death) prior to the satisfaction and/or lapse of the
restrictions, terms and conditions applicable to Restricted

                                       68
<PAGE>

Award(s), such Restricted Award or Awards shall be forfeited, unless the
Committee in its discretion determines otherwise. In the event of a
Participant's Disability, Retirement or death during the Restricted Period,
shares of Restricted Stock shall become free of restrictions to the extent
determined by the Committee.

                           11.1.3   If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any reason (other than
Disability, Retirement or death) prior to the completion of any Performance
Period, all of such Participant's Performance Units earnable in relation to such
Performance Period shall be forfeited. If a Participant's termination of
employment is due to Disability, Retirement or death, the disposition of the
Participation Units of such Participant earnable in the Performance Period in
which such termination occurs will be determined by the Committee in its
discretion.

         12.      NON-TRANSFERABILITY OF AWARDS.

                  (a)      Except as otherwise provided in Section 12(b), no
         Award under this Plan or any Award Agreement, and no rights or
         interests therein, shall or may be assigned, transferred, sold,
         exchanged, pledged, disposed of or otherwise hypothecated or encumbered
         by a Participant or any beneficiary thereof, except by testamentary
         disposition or the laws of descent and distribution. No such right or
         interest shall be subject to seizure for the payment of the
         Participant's (or any beneficiary's) debts, judgments, alimony, or
         separation maintenance or be transferable by operation of law in the
         event of the Participant's (or any beneficiary's) bankruptcy or
         insolvency. Except as otherwise provided in Section 12(b), during the
         lifetime of a Participant, Stock Options are exercisable only by the
         Participant.

                  (b)      A Participant who holds Non-Qualified Stock Options
         (whether such Stock Options were Non-Qualified Stock Options when
         awarded or subsequent to the Award thereof became Non-Qualified Stock
         Options pursuant to applicable law or any provision of this Plan) may
         assign those Non-Qualified Stock Options to a Permitted Assignee (as
         defined below) at any time after the Award, but prior to the expiration
         date, of such Non-Qualified Stock Options if as of the time of such
         transfer (i) a registration statement on Form S-8 (or any successor
         form) filed by the Company under the Securities Act of 1933, as in
         effect and as amended from time to time, or any successor statute
         thereto (the "Securities Act"), with respect to this Plan (and the
         Awards granted and shares of Common Stock issuable hereunder) and (ii)
         a registration statement on Form S-3 (or any successor form) filed by
         the Company under the Securities Act with respect to shares of Common
         Stock issuable to Permitted Assignees have been declared effective by
         the Securities and Exchange Commission ("SEC") and all applicable state
         securities and "blue sky" authorities, and remain in effect. Each such
         transferred Non-Qualified Stock Option shall continue to be governed by
         the applicable terms and provisions of this Plan (and any rules or
         procedures hereunder) and the applicable Award Agreement with the
         transferor Participant, and the Permitted Assignee shall be entitled to
         the same rights and subject to the same obligations, restrictions,
         limitations and prohibitions under this Plan and such Award Agreement
         as the transferor Participant, as if such assignment had not taken
         place; provided, however, that no Non-Qualified Stock Option assigned
         to a Permitted Assignee may be assigned by that Permitted Assignee.

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<PAGE>

         The term "Permitted Assignee" shall mean (w) the child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law of a Participant, including adoptive
relationships, or any person sharing a Participant's household (other than a
tenant or employee), (x) a trust in which persons listed in item (w) have more
than fifty percent of the beneficial interest, (y) a foundation in which persons
listed in item (w), or the Participant, control the management of assets, or (z)
any other entity in which the persons listed in item (w), or the Participant,
own more than fifty percent of the voting interests, who acquires Non-Qualified
Stock Options from a Participant through a gift or domestic relations order.

         13.      CHANGES IN CAPITALIZATION AND OTHER MATTERS.

                  13.1     NO CORPORATE ACTION RESTRICTION. The existence of
this Plan, Award Agreements and/or the Awards granted hereunder shall not limit,
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger, share exchange
or change in the ownership of the Company or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stocks ahead of or
affecting the Company's or any Subsidiary's capital stock or the rights thereof,
(d) any dissolution or liquidation of the Company or any Subsidiary, (e) any
sale or transfer of all or any part of the Company's or any Subsidiary's assets
or business, or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, Permitted Assignee, beneficiary or any other person
shall have any claim against any member of the Board, the Committee, the Company
or any Subsidiary as a result of any such action.

                  13.2     RECAPITALIZATION ADJUSTMENTS. In the event of any
change in capitalization affecting the Common Stock, including, without
limitation, a stock dividend or other distribution, stock split, reverse stock
split, recapitalization, merger, acquisition, subdivision, split-up, spin-off,
split-off, combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Stock, the Board, in its sole discretion,
may authorize and make such proportionate adjustments, if any, as the Board may
deem appropriate to reflect such change, including, without limitation, with
respect to the aggregate number of shares of the Common Stock for which Awards
in respect thereof may be granted under this Plan, the maximum number of shares
of the Common Stock which may be sold or awarded to any Participant, any number
of shares of the Common Stock covered by each outstanding Award, and the
exercise price, Purchase Price or other price per share of Common Stock in
respect of outstanding Awards.

         14.      CHANGE IN CONTROL.

                  14.1     ACCELERATION OF AWARDS VESTING. Except as otherwise
provided in Section 14.2, if a Change in Control of the Company occurs (a) all
Stock Options then unexercised and outstanding shall become fully exercisable as
of the date of the Change in Control, (b) all restrictions, terms and conditions
applicable to all Restricted Stock then outstanding shall be deemed lapsed and
satisfied as of the date of the Change in Control, and (c)

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<PAGE>

all outstanding Performance Units shall be deemed to have been fully earned as
of the date of the Change in Control.

                  14.2     SIX-MONTH RULE. The provisions of Section 14.1 shall
not apply to any of the Awards described in Section 14.1 that has been granted
and outstanding for less than six (6) months as of the date of the Change in
Control.

                  14.3     PAYMENT AFTER CHANGE IN CONTROL. Within thirty (30)
days after a Change in Control occurs, (a) the holder of an Award of Restricted
Stock shall receive a new certificate for such shares without the legend set
forth in Section 7.3.2, and (b) the holder of an Award of Performance Units
shall receive payment of the value of such Award in cash.

                  14.4     TERMINATION AS A RESULT OF A POTENTIAL CHANGE IN
CONTROL. In determining the applicability of Section 14.1, if (a) a
Participant's employment is terminated by the Company or any Subsidiary prior to
a Change in Control without Cause at the request of a Person who has entered
into an agreement with the Company the consummation of which will constitute a
Change in Control, or (b) the Participant terminates his or her employment with
the Company or any Subsidiary for Good Reason prior to a Change in Control and
the circumstance or event which constitutes Good Reason occurs at the request of
the Person described in Section 14.4(a), then for purposes of this Section 14, a
Change in Control shall be deemed to have occurred immediately prior to such
Participant's termination of employment.

                  14.5     DEFINITIONS. For purposes of this Section 14, the
following words and phrases shall have the meaning specified:

                           14.5.1   "BENEFICIAL OWNER" shall have the meaning
set forth in SEC Regulation Section 240.13d-3 or any successor regulation.

                           14.5.2   "CAUSE" shall mean, unless otherwise defined
in an employee Participant's individual employment agreement with the Company or
any Subsidiary (in which case such employment agreement definition shall
govern), (a) the indictment of the Participant for any serious crime, (b) the
willful and continued failure by the Participant to substantially perform the
Participant's duties, as they may be defined from time to time, with the
Participant's primary employer or to abide by the written policies of the
Company or the Participant's primary employer (other than any such failure
resulting from the Participant's incapacity due to physical or mental illness),
or (c) the willful engaging by the Participant in conduct which is demonstrably
and materially injurious to the Company or any Subsidiary, monetarily or
otherwise. For purposes of the preceding sentence, no act shall be considered
"willful" unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that such act, or failure to act, was in the
best interests of the Company and its Subsidiaries.

                           14.5.3   A "CHANGE IN CONTROL" shall be deemed to
have occurred if any one of the following conditions shall have been satisfied:

                  (a)      any Person becomes the Beneficial Owner, directly or
         indirectly, of securities of the Company (not including in the
         securities beneficially owned by any such Person any securities
         acquired directly from the Company) representing twenty-five

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<PAGE>

         percent (25%) or more of the combined voting power of the Company's
         then outstanding securities; or

                  (b)      during any period of twenty-four (24) consecutive
         months, individuals who at the beginning of such period constituted the
         Board and any new director (other than a director designated by a
         Person who has entered into an agreement with the Company to effect a
         transaction described in Sections 13.5.3(a), 13.5.3(c) or 13.5.3(d))
         whose election or nomination for election to the Board was or is
         approved of by a vote of at least two-thirds of the directors at the
         beginning of such twenty-four (24) month period or whose election or
         nomination for election was previously so approved, cease for any
         reason to constitute a majority of the Board; or

                  (c)      the shareholders of the Company approve and the
         action is implemented to merge the Company with any other corporation,
         to effect a share exchange for the Company's outstanding securities, or
         to effect a complete liquidation of the Company, other than a merger,
         share exchange, or liquidation which would result in the voting
         securities of the Company outstanding immediately prior thereto
         continuing to represent (either by remaining outstanding or being
         converted into voting securities of the Surviving Entity), in
         combination with the ownership of any trustee or other fiduciary
         holding securities under any benefit plan of the Company or any
         Subsidiary, more than seventy-five percent (75%) of the combined voting
         power of the voting securities of the Company or such Surviving Entity
         outstanding immediately after such merger, share exchange or
         liquidation; or

                  (d)      the shareholders of the Company approve an agreement
         for the sale or disposition by the Company (other than to a Subsidiary)
         of all or substantially all of the Company's assets.

         Notwithstanding the foregoing, with respect to a particular Participant
a Change in Control shall not include any event, circumstance or transaction
which results from the action of any Person which is or includes, is affiliated
with, or is wholly or partly controlled by one or more executive officers of the
Company or any Subsidiary and in which entity or group the Participant
participates.

                           14.5.4   "GOOD REASON" for termination by a
Participant of the Participant's employment shall mean, for purposes of this
Section 14, unless otherwise defined in the Participant's individual employment
agreement with the Company or any Subsidiary (in which case such employment
agreement definition shall govern), the occurrence (without the Participant's
consent) of any one of the following:

                  (a)      the assignment to the Participant of any duties
         and/or responsibilities substantially and significantly inconsistent
         with the nature and status of the Participant's duties and/or
         responsibilities immediately prior to any Potential Change in Control,
         or a substantial and significant adverse alteration in the nature or
         status of the employee's duties and/or responsibilities from those in
         effect immediately prior to any such Potential Change in Control;
         provided, however, that a redesignation of the Participant's title
         shall not under any circumstances constitute Good Reason if the
         Participant's overall status

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<PAGE>

         among the Company and its Subsidiaries is not substantially and
         significantly adversely affected; or

                  (b)      a reduction in the Participant's rate of annual base
         salary as in effect on the day prior to the occurrence of a Potential
         Change in Control, where "annual base salary" is the Participant's
         regular basic annual compensation prior to any reduction therein under
         a salary reduction agreement pursuant to Section 401(k) or Section 125
         of the Code, and, without limitation, shall not include, fees,
         retainers, reimbursements, bonuses, incentive awards, prizes or similar
         payments.

                           14.5.5   "PERSON" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; provided, however, a Person shall not include (a) the Company or
any Subsidiary, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a Subsidiary qualified under Section
401(a) of the Code, (c) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (d) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of securities of the Company.

                           14.5.6   "POTENTIAL CHANGE IN CONTROL" shall be
deemed to have occurred if any one of the following conditions shall have been
satisfied:

                  (a)      the Company enters into an agreement, the
         consummation of which would result in the occurrence of a Change in
         Control; or

                  (b)      the Company or any Person publicly announces an
         intention to take or to consider taking actions which, if consummated,
         would constitute a Change in Control; or

                  (c)      any Person becomes the Beneficial Owner, directly or
         indirectly, of securities of the Company representing ten percent (10%)
         or more of the combined voting power of the Company's then outstanding
         securities, or any Person increases such Person's beneficial ownership
         of such securities by five (5) percentage points or more over the
         percentage so owned by such Person on January 1, 2002; or

                  (d)      the Board adopts a resolution to the effect that, for
         purposes of this Plan, a Potential Change in Control has occurred.

                           14.5.7   "SURVIVING ENTITY" shall mean only an entity
in which all or substantially all of the Company's shareholders immediately
before any merger, share exchange or liquidation become shareholders by the
terms of such merger, share exchange or liquidation.

                  14.6     ADVERSE TAX CONSEQUENCES. If the making of any
payment or payments pursuant to this Section 14 or otherwise would (a) subject
the Participant to an excise tax under Section 4999 of the Code, or any like or
successor section thereto, or (b) result in the Company's loss of a federal
income tax deduction for such payments under Section 280G of the Code, or any
like or successor section thereto (either or both, an "Adverse Tax
Consequence"), then, unless otherwise expressly provided in a relevant Award
Agreement, the payments attributable to this Plan that are "parachute payments"
within the meaning of such Section 280G of the Code shall

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<PAGE>

be reduced, as determined by the Committee in its sole discretion, but after
consultation with the Participant affected, to the extent necessary to avoid any
Adverse Tax Consequence. Any disputes regarding whether any payments to a
Participant would result in an Adverse Tax Consequence shall be resolved by an
opinion of a nationally recognized accounting firm acceptable to the Company and
the Participant (with the Company's independent auditors being deemed
acceptable).

         15.      AMENDMENT, SUSPENSION AND TERMINATION.

                  15.1     IN GENERAL. In addition to its rights under Section
9.11 with respect to Stock Purchase Rights, the Board may suspend or terminate
this Plan (or any portion thereof) at any time and may amend this Plan at any
time and from time to time in such respects as the Board may deem advisable to
insure that any and all Awards conform to or otherwise reflect any change in
applicable laws or regulations, or to permit the Company or the Participants to
benefit from any change in applicable laws or regulations, or in any other
respect the Board may deem to be in the best interests of the Company or any
Subsidiary; provided, however, that no such amendment shall, without majority
(or such greater percentage if required by law, charter, by-law or other
regulation or rule) shareholder approval to the extent required by law or the
rules of any exchange upon which the Common Stock is listed, (a) except as
provided in Section 13, materially increase the number of shares of Common Stock
which may be issued under this Plan, (b) materially modify the requirements as
to eligibility for participation in this Plan, (c) materially increase the
benefits accruing to Participants under this Plan, or (d) extend the termination
date of this Plan. No such amendment, suspension or termination shall (i)
materially adversely affect the rights of any Participant under any outstanding
Award, without the consent of such Participant, or (ii) make any change that
would disqualify this Plan, or any other plan of the Company or any Subsidiary
intended to be so qualified, from (A) the exemption provided by SEC Regulation
Section 240.16b-3, or any successor thereto, or (B) the benefits provided under
Section 422 of the Code or any successor thereto.

                  15.2     AWARD AGREEMENTS. The Committee may amend or modify
at any time and from time to time any outstanding Award and Award Agreement, in
any manner to the extent that the Committee would have had the authority under
this Plan to initially determine the restrictions, terms and provisions of such
Award, including, without limitation, to change the date or dates as of which
Stock Options may be exercised. No such amendment or modification shall,
however, materially adversely affect the rights of any Participant under any
such Award and Award Agreement without the consent of such Participant.

         16.      MISCELLANEOUS.

                  16.1     TAX WITHHOLDING. The Company shall have the right to
deduct from any payment or settlement under this Plan, including, without
limitation, the exercise of any Stock Option, or the delivery or vesting of any
shares of Common Stock, Restricted Stock, any federal, state, local or other
taxes of any kind which the Committee, in its sole discretion, deems necessary
to be withheld to comply with the Code and/or any other applicable law, rule or
regulation. If the Committee, in its sole discretion, permits shares of Common
Stock to be used to satisfy any such tax withholding, such Common Stock shall be
valued based on the Fair Market Value of such stock as of the date the tax
withholding is required to be made, such date

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<PAGE>

to be determined by the Committee. The Committee may establish rules limiting
the use of Common Stock to meet withholding requirements by Participants who are
subject to Section 16 of the Exchange Act.

                  16.2     NO RIGHT TO EMPLOYMENT. Neither the adoption of this
Plan, the granting of any Award, nor the execution of any Award Agreement shall
confer upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.

                  16.3     UNFUNDED PLAN. This Plan shall be unfunded and the
Company shall not be required to segregate any assets in connection with any
Awards. Any liability of the Company to any person with respect to any Award or
any Award Agreement shall be based solely upon the contractual obligations that
may be created as a result of this Plan or any such Award or Award Agreement. No
such obligation of the Company shall be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or
any Subsidiary. Nothing contained in this Plan or any Award Agreement shall be
construed as creating in respect of any Participant (or beneficiary thereof, any
Permitted Assignee or any other person) any equity or other interest of any kind
in any assets of the Company or any Subsidiary or creating a trust of any kind
or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary, any Permitted Assignee or any
other person.

                  16.4     PAYMENTS TO A TRUST. The Committee is authorized to
cause to be established a trust agreement or several trust agreements or similar
arrangements from which the Committee may make payments of amounts due or to
become due to any Participants under this Plan.

                  16.5     OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS.
Payments and other benefits received by a Participant under an Award shall not
be deemed a part of a Participant's Compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Board
expressly determines in writing that inclusion of an Award or portion of an
Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual base salary or other cash compensation. Awards may be made in
addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of this Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.

                  16.6     LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE. No
Award shall be made and no shares of the Common Stock shall be issued under this
Plan, and no assignment of a Non-Qualified Stock Option to a Permitted Assignee
shall be made, unless legal counsel for the Company shall be satisfied that such
issuance or assignment will be in compliance with all

                                       75
<PAGE>

applicable federal and state securities laws and regulations and any other
applicable laws or regulations. The Committee may require, as a condition of any
payment of any Award, share issuance or assignment of Non-Qualified Stock
Options, that certain agreements, undertakings, representations, certificates,
and/or information, as the Committee may deem necessary or advisable, be
executed or provided to the Company to assure compliance with all such
applicable laws or regulations. Certificates for shares of the Restricted Stock
and/or Common Stock delivered under this Plan may be subject to such stock
transfer orders and such other restrictions as the Committee may deem advisable
under the rules, regulations, or other requirements of the SEC, and the Nasdaq,
or any stock exchange on which the Common Stock is listed, and any applicable
federal or state securities law. The Committee may cause a legend or legends to
be put on any such share certificates to make appropriate reference to such
restrictions. In addition, if, at any time specified herein (or in any Award
Agreement) for (a) the making of any determination, (b) the issuance or other
distribution of Restricted Stock and/or Common Stock, or (c) the payment of
amounts to or through a Participant with respect to any Award, any law, rule,
regulation or other requirement of any governmental authority or agency shall
require either the Company, any Subsidiary, any Participant (or any designated
beneficiary or other legal representative) or any Permitted Assignee to take any
action in connection with any such determination, any such shares to be issued
or distributed, any such payment, or the making of any such determination, as
the case may be, shall be deferred until such required action is taken. If at
any time and from time to time the Committee determines, in its sole discretion,
that the listing, registration or qualification of any Award, or any Common
Stock or property covered by or subject to such Award, upon the Nasdaq or any
stock exchange, or under any foreign, federal, state or local securities or
other law, rule or regulation is necessary or desirable as a condition to or in
connection with the granting of such Award or the issuance or delivery of
Restricted Stock and/or Common Stock or other property under such Award or
otherwise, no such Award may be exercised or settled, or paid in Restricted
Stock, Common Stock or other property, unless such listing, registration or
qualification shall have been effected free of any conditions that are not
acceptable to the Committee.

                  16.7     AWARD AGREEMENTS. Each Participant receiving an Award
shall enter into an Award Agreement with the Company in a form specified by the
Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein.

                  16.8     DESIGNATION OF BENEFICIARY. Each Participant to whom
an Award has been made may designate a beneficiary or beneficiaries to receive
any payment which under the terms of this Plan and the relevant Award Agreement
may become payable on or after the Participant's death. At any time, and from
time to time, any such designation may be changed or canceled by the Participant
without the consent of any such beneficiary. Any such designation, change or
cancellation must be on a form provided for that purpose by the Committee and
shall not be effective until received by the Committee. If no beneficiary has
been named by a deceased Participant, or if the designated beneficiaries have
predeceased the Participant, the beneficiary shall be the Participant's estate.
If the Participant designates more than one beneficiary, any payments under this
Plan to such beneficiaries shall be made in equal shares unless the Participant
has expressly designated otherwise, in which case the payments shall be made in
the shares designated by the Participant.

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<PAGE>

                  16.9     LEAVES OF ABSENCE/TRANSFERS. The Committee shall have
the power to promulgate rules, policies and regulations and to make
determinations, as it deems appropriate, under this Plan in respect of any leave
of absence from the Company or any Subsidiary granted to a Participant. Without
limiting the generality of the foregoing, the Committee may determine whether
any such leave of absence shall be treated as if the Participant has terminated
employment with the Company or any such Subsidiary. If a Participant transfers
within the Company, or to or from any Subsidiary, such Participant shall not be
deemed to have terminated employment as a result of such transfers.

                  16.10    GOVERNING LAW. This Plan and all actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of North Carolina, without regard to principles of conflict of laws. Any
titles and headings herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or interpretation of
any provisions of this Plan.

                  16.11    EFFECTIVE DATE. This Plan became effective as of
February 15, 2002, subject to the condition of its approval by a majority of the
First Commerce Corporation shareholders at First Commerce Corporation 2002
Annual Meeting of Shareholders.

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<PAGE>

                           NON-QUALIFIED STOCK OPTIONS
                             ASSIGNMENT AND CONSENT

         The undersigned holder (hereinafter referred to as "Holder") of
non-qualified options to acquire shares of the common stock (hereinafter
referred to as "NSOs") of Bank of Granite Corporation (hereinafter referred to
as "GRAN") hereby assigns to the undersigned assignee (hereinafter referred to
as "Assignee") NSOs to acquire the number of shares of common stock set forth in
the description of assigned NSOs below and the Holder's rights and obligations
with respect to such assigned NSOs under the Bank of Granite/First Commerce
Corporation Omnibus Stock and Incentive Plan (hereinafter referred to as the
"Plan") and under the "Award Agreement" (as defined in the Plan) evidencing the
grant of such assigned NSOs. The Holder and the Assignee acknowledge and agree
that such assignment is subject to the terms and conditions of the Plan,
including, for example, the provisions of the Plan requiring that the Assignee
be and remain a "Permitted Assignee" as defined under and for the period set
forth in the Plan, and of the Award Agreement.

         The Assignee acknowledges and agrees that the Assignee has reviewed and
understands the terms and conditions of both the Plan and the Award Agreement.
The Holder and the Assignee each acknowledges and agrees that he, she or it has
not relied upon GRAN or any of its employees, directors, representatives or
agents for advice or guidance in electing to make or receive the assignment set
forth herein.

         Description of assigned NSOs:

                  ______________      Date of Holder's Award Agreement

                  ______________      Number of shares acquirable by Holder
                                      under Award Agreement

                  ______________      Number of NSOs being assigned (i.e.,
                                      number of option shares being assigned)

         Executed and agreed to, this the ___ day of ___________, 20___.

HOLDER:                                   ASSIGNEE:

________________________________          ______________________________________
                                                       Signature

                                          ______________________________________
                                                    Please Print Name

                                          ______________________________________
                                                         Street

                                          ______________________________________
                                                 City, State and Zip Code

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<PAGE>

                                          ______________________________________
                                          Federal Taxpayer Identification Number

         Consented to, this the ___ day of ___________, 20___.

                                          BANK OF GRANITE CORPORATION

                                          By:  _________________________________
                                               Name and Title

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<PAGE>

                           PERFORMANCE UNIT AGREEMENT

                                 PURSUANT TO THE

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION
                        OMNIBUS STOCK AND INCENTIVE PLAN

                                    * * * * *

Employee:

Agreement Date:

Number of Performance Units granted:

Designated value of each Performance Unit: $

Performance Period:

                                    * * * * *

         WHEREAS, THIS PERFORMANCE UNIT AGREEMENT (this "Agreement"), dated as
of the Agreement Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Employee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and

         WHEREAS, the Employee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and

         WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Performance Units provided for
herein to the Employee as an inducement to commence service with, or to remain
in the service of, GRAN (or one of its Subsidiaries) and as an incentive for
increased effort during such service;

         NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.

         1.       INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Employee hereby acknowledges receipt of a true copy of the Plan
and that the Employee has read the Plan carefully and fully understands its
content.

                                       80
<PAGE>

         2.       GRANT OF PERFORMANCE UNITS. GRAN hereby grants to the Employee
number of Performance Units specified above, subject to the achievement of the
Performance Goals set forth on Schedule A attached hereto.

         3.       PAYMENT OF PERFORMANCE UNITS.

                  3.1.     If the Employee is or has been employed by GRAN or
any Subsidiary during the Performance Period specified above, and as of the last
day of such Performance Period the Performance Goals and threshold requirements
set forth on Schedule A have been achieved (or partially achieved) and exceeded
threshold requirements, the Employee shall be entitled to receive payment as
determined by the Committee in good faith in accordance with terms and provision
of this Agreement and the Plan (and at the time specified in the Plan). Should
the Company, Division and/or Participant achieve the applicable Performance
Goals, but the minimum shareholder return (threshold) falls below the minimum
expectations, then the Award opportunity may be deferred by the Committee for up
to two (2) years until the threshold is exceeded. If the minimum shareholder
return (threshold) is not achieved within such additional period of time, then
no Award shall be paid. Payment shall be made in the form of [cash] [Restricted
Stock] [unrestricted Common Stock] [Mark through all but one of options and
initial].

                  3.2.     Unless otherwise provided, if the Employee's
employment with GRAN and its Subsidiaries is terminated for any reason prior to
the end of the Performance Period specified above, the Employee's then
outstanding unearned Performance Units shall be canceled and forfeited in
accordance with Section 11 of the Plan.

         4.       ASSIGNABILITY. Neither the Employee (nor an Employee's
beneficiary) may sell, exchange, pledge, transfer, assign or otherwise encumber,
hypothecate or dispose of the Performance Units Stock or the Employee's (or such
beneficiary's) interest in or under this Agreement (other than by testamentary
disposition by the Employee or the laws of descent and distribution).

         5.       AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Employee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Employee.

         6.       NOTICE. Any Notice which may be required or permitted under
this Agreement shall be in writing, and may be delivered in person or via
facsimile transmission, overnight courier service or certified mail, postage
pre-paid, properly addressed as follows.

                  6.1.     If such notice is to GRAN, to the attention of
__________________, or at such other address as GRAN, by notice to the Employee,
may designate in writing from time to time.

                  6.2.     If such notice is to the Employee, at the address
shown on the records of GRAN, or at such other address as the Employee, by
notice to GRAN, may designate in writing from time to time.

                                       81
<PAGE>

         7.       GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of North Carolina. In the
event of any conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.

         IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto set his hand, all as
of Option Date specified above.

ATTESTED:                                 BANK OF GRANITE CORPORATION

By:    _________________________          By:    _______________________________
                (Name)                                       (Name)

Title: _________________________          Title: _______________________________
           [Corporate Seal]

                                          (Employee)

                                       82
<PAGE>

                           RESTRICTED STOCK AGREEMENT

                                 PURSUANT TO THE

                   BNAK OF GRANITE/FIRST COMMERCE CORPORATION
                        OMNIBUS STOCK AND INCENTIVE PLAN

                                    * * * * *

Employee:

Agreement Date:

Number of shares of Restricted Stock granted:

Unrestricted shares of Common Stock to be delivered if employed on the following
specified vesting dates:

<TABLE>
<CAPTION>
                                          Number of Unrestricted
                Vesting Dates             Shares of Common Stock
                -------------             ----------------------
<S>             <C>                       <C>
1.
2.
3.
4.
5.
</TABLE>

                                    * * * * *

         WHEREAS, THIS RESTRICTED STOCK AGREEMENT (this "Agreement"), dated as
of the Agreement Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Employee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and

         WHEREAS, the Employee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and

         WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the shares of Restricted Stock
provided for herein to the Employee as an inducement to commence service with,
or to remain in the service of, GRAN (or one of its Subsidiaries) and as an
incentive for increased effort during such service;

         NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.

                                       83
<PAGE>

         1.       INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Employee hereby acknowledges receipt of a true copy of the Plan
and that the Employee has read the Plan carefully and fully understands its
content.

         2.       GRANT OF RESTRICTED STOCK. GRAN hereby grants to the Employee
the number of shares of Restricted Stock specified above.

         3.       DIVIDEND PAYMENTS. On each dividend payment date for shares of
Common Stock the Employee shall be entitled to receive the cash dividend to be
paid holders of record of Common Stock in respect of the outstanding fully-paid
and non-assessable shares of Common Stock.

         4.       PAYMENT OF SHARES OF RESTRICTED STOCK.

                  4.1.     If the Employee is employed by GRAN or any Subsidiary
on a vesting date specified above, the Employee shall be entitled, in accordance
with the terms and provisions of the Plan and at the time set forth therein, to
receive a new stock certificate (registered in the Employee's name) for the
number of shares of Common Stock set forth opposite such vesting date.

                  4.2.     Unless otherwise provided, if the Employee's
employment with GRAN and its Subsidiaries is terminated for any reason prior to
any vesting date specified above, the Employee's then unvested shares of
Restricted Stock shall be canceled and forfeited in accordance with Section 11
of the Plan.

         5.       ASSIGNABILITY. Neither the Employee (nor an Employee's
beneficiary) may sell, exchange, pledge, transfer, assign or otherwise encumber,
hypothecate or dispose of the Restricted Stock or the Employee's (or such
beneficiary's) interest in or under this Agreement (other than by testamentary
disposition by the Employee or the laws of descent and distribution).

         6.       AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Employee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Employee.

         7.       NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.

                  7.1.     If such notice is to GRAN, to the attention of
_________________, or at such other address as GRAN, by notice to the Employee,
may designate in writing from time to time.

                                       84
<PAGE>

                  7.2.     If such notice is to the Employee, at the address
shown on the records of GRAN, or at such other address as the Employee, by
notice to GRAN, may designate in writing from time to time.

         8.       GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of North Carolina. In the
event of any conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.

         IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto set his hand, all as
of Option Date specified above.

ATTESTED:                                 BANK OF GRANITE CORPORATION

By:    _________________________          By:    _______________________________
               (Name)                                       (Name)

Title: _________________________          Title: _______________________________
            [Corporate Seal]

                                          (Employee)

                                       85
<PAGE>

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                FOR KEY EMPLOYEES

                                 PURSUANT TO THE

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION
                        OMNIBUS STOCK AND INCENTIVE PLAN

                                    * * * * *

Optionee:

Option Date:

Per Share Exercise Price:  $

Number of Option Shares subject to this Option:

Exercisable on the following vesting dates in respect of the following Option
Shares:

<TABLE>
<CAPTION>
                                 Number of Unrestricted
             Vesting Dates       Shares of Common Stock
             -------------       ----------------------
<S>          <C>                 <C>
1.
2.
3.
4.
5.
</TABLE>

                                    * * * * *

         WHEREAS, THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"),
dated as of the Option Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Optionee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and

         WHEREAS, the Optionee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and

         WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Incentive Stock Option provided
for herein to the Optionee as an inducement to commence service with, or to
remain in the service of, GRAN (or one of its Subsidiaries) and as an incentive
for increased effort during such service;

                                       86
<PAGE>

         NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.

         1.       INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Optionee hereby acknowledges receipt of a true copy of the Plan
and that the Optionee has read the Plan carefully and fully understands its
content.

         2.       GRANT OF OPTION. GRAN hereby grants to the Optionee an option
(this "Option") to acquire from GRAN at the Per Share Exercise Price specified
above the aggregate number of shares of Common Stock specified above (the
"Option Shares"). This Option is intended to quality as an Incentive Stock
Option (within the meaning of Section 422 of the Code).

         3.       CASH PAYMENTS EQUIVALENT TO DIVIDENDS. On each dividend
payment date for shares of Common Stock the Optionee shall not be entitled to
receive a cash payment equal to the dividend which would have been paid to the
Optionee if the number of Option Shares subject to the Option on the record date
immediately preceding such payment date were fully-paid and non-assessable
shares of Common Stock held by the Optionee.

         4.       EXERCISE OF THIS OPTION.

                  4.1.     Unless otherwise provided in this Agreement or in the
Plan, this Option shall become exercisable on the vesting dates specified above
in respect of the number of Option Shares specified above and shall remain
exercisable during the period ending ten (10) years from the date immediately
prior to the Option Date (the "Option Period").

                  4.2.     The Committee shall have the right, exercising
reasonable discretion, to delay the exercise of this Option by the Optionee in
whole or in part for any reasonable period of time specified by the Committee.

                  4.3.     In no event shall this Option be exercisable for a
fractional share of Common Stock.

         5.       METHOD OF EXERCISE AND PAYMENT.

                  5.1.     This Option shall be exercised by the Optionee by
delivery to the Director of Personnel of GRAN, or such other officer of GRAN as
the Committee shall designate, on any business day (the "Exercise Date") of a
written notice, in such manner and form as may be required by GRAN, specifying
the number of Option Shares the Optionee then desires to acquire (the "Notice").
The Notice shall be accompanied by payment of the aggregate Per Share Exercise
Price for such number of Option Shares, such payment to be made in the manner
set forth in Section 6.5 of the Plan.

                                       87
<PAGE>

                  5.2.     Within a reasonable period of time after the Exercise
Date, GRAN shall deliver to the Optionee certificates for the number of
fully-paid and non-assessable Option Shares acquired by the Optionee, registered
in the name of the Optionee.

         6.       TERMINATION. Unless otherwise provided, this Option shall
terminate and be of no force or effect in accordance with the terms and
provisions of Section 11 of the Plan, or upon the expiration of the Option
Period (if earlier to occur).

         7.       ASSIGNABILITY. Except otherwise specifically provided in
Section 12 (b) of the Plan, this Option shall not be sold, exchanged, pledged,
transferred, assigned or otherwise encumbered, hypothecated or disposed of by
the Optionee (or any beneficiary) other than by testamentary disposition by the
Optionee or the laws of descent and distribution. Except as otherwise
specifically provided in such Section 12 (b), this Option is exercisable during
Optionee's lifetime only by the Optionee.

         8.       AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Optionee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Optionee.

         9.       NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.

                  9.1.     If such notice is to GRAN, to the attention of
______________________________, or at such other address as GRAN, by notice to
the Optionee, may designate in writing from time to time.

                  9.2.     If such notice is to the Optionee, at the address
shown on the records of GRAN, or at such other address as the Optionee, by
notice to GRAN, may designate in writing from time to time.

         10.      GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of the State of North
Carolina, without regard to principles of conflict of laws. In the event of any
conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control.

                                       88
<PAGE>

         IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Optionee has hereunto set his hand, all as
of Option Date specified above.

ATTESTED:                                 BANK OF GRANITE CORPORATION

By:     _________________________         By:  _________________________________
                 (Name)                                   (Name)

Title:  _________________________         By:  _________________________________
            [Corporate Seal]

                                          (Optionee)

                                       89
<PAGE>

                        INCENTIVE STOCK OPTION AGREEMENT

                                 PURSUANT TO THE

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION
                        OMNIBUS STOCK AND INCENTIVE PLAN

                                    * * * * *

Optionee:

Option Date:

Per Share Exercise Price: $

Number of Option Shares subject to this Option:

Exercisable on the following vesting dates in respect of the following Option
Shares:

                                Number of Unrestricted
<TABLE>
<CAPTION>
             Vesting Dates      Shares of Common Stock
             -------------      ----------------------
<S>          <C>                <C>
1.
2.
3.
4.
5.
</TABLE>

                                    * * * * *

         WHEREAS, THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement"),
dated as of the Option Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Optionee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and

         WHEREAS, the Optionee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and

         WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Incentive Stock Option provided
for herein to the Optionee as an inducement to commence service with, or to
remain in the service of, GRAN (or one of its Subsidiaries) and as an incentive
for increased effort during such service;

         NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.

                                       90
<PAGE>

         1.       INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Optionee hereby acknowledges receipt of a true copy of the Plan
and that the Optionee has read the Plan carefully and fully understands its
content.

         2.       GRANT OF OPTION. GRAN hereby grants to the Optionee an option
(this "Option") to acquire from GRAN at the Per Share Exercise Price specified
above the aggregate number of shares of Common Stock specified above (the
"Option Shares"). This Option is intended to quality as an Incentive Stock
Option (within the meaning of Section 422 of the Code).

         3.       CASH PAYMENTS EQUIVALENT TO DIVIDENDS. On each dividend
payment date for shares of Common Stock the Optionee shall not be entitled to
receive a cash payment equal to the dividend which would have been paid to the
Optionee if the number of Option Shares subject to the Option on the record date
immediately preceding such payment date were fully-paid and non-assessable
shares of Common Stock held by the Optionee.

         4.       EXERCISE OF THIS OPTION.

                  4.1.     Unless otherwise provided in this Agreement or in the
Plan, this Option shall become exercisable on the vesting dates specified above
in respect of the number of Option Shares specified above and shall remain
exercisable during the period ending ten years from the date immediately prior
to the Option Date (the "Option Period").

                  4.2.     Pursuant to Section 422(b)(7) of the Code, the Fair
Market Value (determined on the Option Date) of the number of Option Shares with
respect to which this Option is first exercisable in any calendar year shall not
exceed $100,000.

                  4.3.     The Committee shall have the right, exercising
reasonable discretion, to delay the exercise of this Option by the Optionee in
whole or in part for any reasonable period of time specified by the Committee.

                  4.4.     In no event shall this Option be exercisable for a
fractional share of Common Stock.

         5.       METHOD OF EXERCISE AND PAYMENT.

                  5.1.     This Option shall be exercised by the Optionee by
delivery to the ________________ of GRAN, or such other officer of GRAN as the
Committee shall designate, on any business day (the "Exercise Date") of a
written notice, in such manner and form as may be required by GRAN, specifying
the number of Option Shares the Optionee then desires to acquire (the "Notice").
The Notice shall be accompanied by payment of the aggregate Per Share Exercise
Price for such number of Option Shares, such payment to be made in the manner
set forth in Section 6.5 of the Plan.

                                       91
<PAGE>

                  5.2.     Within a reasonable period of time after the Exercise
Date, GRAN shall deliver to the Optionee certificates for the number of
fully-paid and non-assessable Option Shares acquired by the Optionee, registered
in the name of the Optionee.

         6.       TERMINATION. Unless otherwise provided, this Option shall
terminate and be of no force or effect in accordance with the terms and
provisions of Section 11 of the Plan, or upon the expiration of the Option
Period (if earlier to occur).

         7.       ASSIGNABILITY. Except otherwise specifically provided in
Section 12 (b) of the Plan, this Option shall not be sold, exchanged, pledged,
transferred, assigned or otherwise encumbered, hypothecated or disposed of by
the Optionee (or any beneficiary) other than by testamentary disposition by the
Optionee or the laws of descent and distribution. Except as otherwise
specifically provided in such Section 12 (b), this Option is exercisable during
Optionee's lifetime only by the Optionee.

         8.       AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Optionee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Optionee.

         9.       NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.

                  9.1.     If such notice is to GRAN, to the attention of
_________________, or at such other address as GRAN, by notice to the Optionee,
may designate in writing from time to time.

                  9.2.     If such notice is to the Optionee, at the address
shown on the records of GRAN, or at such other address as the Optionee, by
notice to GRAN, may designate in writing from time to time.

         10.      GOVERNING LAW; CONSTRUCTION. This Agreement shall be
governed by and shall be construed in accordance with the laws of the State of
North Carolina, without regard to principles of conflict of laws. In the event
of any conflict between the terms of this Agreement and the terms of the Plan,
the terms of the Plan shall control.

                                       92
<PAGE>

         IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Optionee has hereunto set his hand, all as
of Option Date specified above.

ATTESTED:                                 BANK OF GRANITE CORPORATION

By:    _________________________          By:    _______________________________
               (Name)                                       (Name)

Title: _________________________          Title: _______________________________
            [Corporate Seal]

                                          (Optionee)

                                       93
<PAGE>

                      STOCK PURCHASE SUBSCRIPTION AGREEMENT

                                 PURSUANT TO THE

                   BANK OF GRANITE/FIRST COMMERCE CORPORATION
                        OMNIBUS STOCK AND INCENTIVE PLAN

                                          [ ] Initial Authorization
                                          [ ] Change Authorization

Name of Employee: ________________________________          Employee #_________
                            (Please Print)

Social Security #_______________                    Date of Hire: ______________

                (FILL IN THE APPROPRIATE SECTIONS AND SIGN BELOW)

A.       INITIAL PAYROLL DEDUCTION AUTHORIZATION

In connection with an Award of Stock Purchase Rights to me under the Bank of
Granite/First Commerce Corporation Omnibus Stock and Incentive Plan, I hereby
authorize Bank of Granite to deduct the following funds from my wages:

$____________ from my pay each pay period. (NOTE: Minimum $10.00 per pay period)

B.       CHANGE OR DISCONTINUE PAYROLL DEDUCTION

                  I authorize Bank of Granite to change the amount of my current
         payroll deduction to $___________ per pay period (Note: you may change
         the amount of your payroll deduction only once per Offering Period).

                  I hereby instruct Bank of Granite to discontinue my payroll
         deduction.

         I UNDERSTAND THAT THE ABOVE AUTHORIZATIONS WILL BE EFFECTIVE AS SOON AS
PROCESSED BY BANK OF GRANITE AND WILL REMAIN IN EFFECT UNTIL SUCH TIME AS I SEND
WRITTEN INSTRUCTIONS TO CHANGE MY AUTHORIZATION.

Signature:_________________________________              Date: _________________

                                       94

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