Document:

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                      DIRECTOR SUPPLEMENTAL RETIREMENT PLAN

                               DIRECTOR AGREEMENT

     THIS AGREEMENT is made and entered into this      day of               ,
                                                  ----        --------------
2002, by and between The East Carolina Bank, a bank organized and existing under
the laws of the State of North Carolina (hereinafter referred to as the "Bank"),
and                 , a Director of the Bank (hereinafter referred to as the
    ----------------
"Director").

     WHEREAS, the Director is now in the service of the Bank and has for many
years faithfully served the Bank. It is the consensus of the Board of Directors
(hereinafter referred to as the "Board") that the Director's services have been
of exceptional merit, in excess of the compensation paid and an invaluable
contribution to the profits and position of the Bank in its field of activity.
The Board further believes that the Director's experience, knowledge of
corporate affairs, reputation and industry contacts are of such value, and the
Director's continued services so essential to the Bank's future growth and
profits, that it would suffer severe financial loss should the Director
terminate their services;

     ACCORDINGLY, the Board has adopted The East Carolina Bank Director
Supplemental Retirement Plan Director Agreement (hereinafter referred to as the
"Director Plan") and it is the desire of the Bank and the Director to enter into
this Agreement under which the Bank will agree to make certain payments to the
Director upon the Director's retirement or to the Director's beneficiary(ies) in
the event of the Director's death pursuant to the Director Plan;

     FURTHERMORE, it is the intent of the parties hereto that this Director Plan
be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Director, and be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Director is fully advised of the Bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and

     NOW THEREFORE, in consideration of services the Director has performed in
the past and those to be performed in the future, and based upon the mutual
promises and covenants herein contained, the Bank and the Director agree as
follows:

I.   DEFINITIONS

     A.   Effective Date:
          --------------

          The Effective Date of the Director Plan shall be November 5, 2001.

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     B.   Plan Year:
          ---------

          Any reference to the "Plan Year" shall mean a calendar year from
          January 1st to December 31st. In the year of implementation, the term
          "Plan Year" shall mean the period from the Effective Date to December
          31st of the year of the Effective Date.

     C.   Retirement Date:
          ---------------

          Retirement Date shall mean the first day of the calendar month
          following the latter of (i) the date in which the Director reaches age
          seventy (70) or (ii) the date upon which the Director actually retires
          from service with the Bank after reaching age seventy (70).

     D.   Termination of Service:
          ----------------------

          Termination of Service shall mean the Director's voluntary resignation
          of service by the Director or the Bank's discharge of the Director
          without cause, prior to the Normal Retirement Age (Subparagraph I
          [J]).

     E.   Pre-Retirement Account:
          ----------------------

          A Pre-Retirement Account shall be established as a liability reserve
          account on the books of the Bank for the benefit of the Director.
          Prior to the Director's Retirement Date ([Subparagraph I [C]), such
          liability reserve account shall be increased or decreased each Plan
          Year, until the aforestated event occurs, by the Index Retirement
          Benefit (Subparagraph I [F]). Said Pre-Retirement Account shall be
          credited interest at a rate of eight percent (8%) each Plan Year or
          until the entire Pre-Retirement Account is entirely paid to the
          Director, or the Director's beneficiary, and said Pre-Retirement
          Account balance is zero.

     F.   Index Retirement Benefit:
          ------------------------

          In the event the Director receives the retirement benefit set forth in
          Subparagraph II (A) herein, the Index Retirement Benefit for each
          Director in the Director Plan for each Plan Year shall be equal to the
          excess (if any) of the Index (Subparagraph I [G]) for that Plan Year
          over the Opportunity Cost (Subparagraph I [H]) for that Plan Year.

     G.   Index:
          -----

          The Index for any Plan Year shall be the aggregate annual after-tax
          income from the life insurance contract(s) described hereinafter as
          defined by FASB Technical Bulletin 85-4. This Index shall be applied
          as if such insurance contract(s) were purchased on the Effective Date
          of the Director Plan. When the Director completes twenty (20) or more
          total full years of

                                       2

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          service from the date of first service on the Board of the Bank, the
          premiums paid, or assumed paid, as set forth hereinbelow shall be one
          hundred thousand and no/100 Dollars ($100,000.00) each so that the
          total premiums paid, or assumed to be paid, for all policies listed
          hereinbelow shall be two hundred thousand and no/100 Dollars
          ($200,000.00).

          Insurance Company:            Jefferson Pilot Life Insurance Company
          Policy Form:                  Flexible Premium Adjustable Life
          Policy Name:                  ESP VI
          Insured's Age and Sex:        51, Male
          Riders:                       None
          Ratings:                      None
          Option:                       Level
          Face Amount:                  $121,000
          Premiums Paid:                $50,000
          Number of Premium Payments:   Single
          Assumed Purchase Date:        November 5, 2001

          Insurance Company:            Mass Mutual Life Insurance Company
          Policy Form:                  Flexible Premium Adjustable Life
          Policy Name:                  Strategic Life Exec
          Insured's Age and Sex:        52, Male
          Riders:                       None
          Ratings:                      None
          Option:                       Level
          Face Amount:                  $125,500
          Premiums Paid:                $50,000
          Number of Premium Payments:   Single
          Assumed Purchase Date:        November 5, 2001

          If such contracts of life insurance are actually purchased by the
          Bank, then the actual policies as of the dates they were actually
          purchased shall be used in calculations under this Director Plan. If
          such contracts of life insurance are not purchased or are subsequently
          surrendered or lapsed, then the Bank shall receive annual policy
          illustrations that assume the above-described policies were purchased
          or had not subsequently surrendered or lapsed. Said illustration shall
          be received from the respective insurance companies and will indicate
          the increase in policy values for purposes of calculating the amount
          of the Index.

          In either case, references to the life insurance contracts are merely
          for purposes of calculating a benefit. The Bank has no obligation to
          purchase such life insurance and, if purchased, the Director and the
          Director's beneficiary(ies) shall have no ownership interest in such
          policy and shall always have no greater interest in the benefits under
          this Director Plan than that of an unsecured creditor of the Bank.

                                       3

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     H.   Opportunity Cost:
          ----------------

          The Opportunity Cost for any Plan Year shall be calculated by taking
          the sum of the amount of premiums for the life insurance policies
          described in the definition of "Index" plus the amount of any
          after-tax benefits paid to the Director pursuant to the Director Plan
          (Paragraph II hereinafter) plus the amount of all previous years'
          after-tax Opportunity Cost, and multiplying that sum by the greater of
          either one of the following: (i) the average after tax yield of a
          one-year Treasury bill, or (ii) the Bank's average annualized
          after-tax Cost of Funds Expense as determined by the Bank's third
          quarter call report as filed with the appropriate regulatory agency.

     I.   Change of Control:
          -----------------

          Change of Control shall mean the direct or indirect acquisition by
          another person, firm or corporation, by merger, share exchange,
          consolidation, purchase or otherwise, of all or substantially all of
          the assets or stock of the Bank or its parent company.

     J.   Normal Retirement Age:
          ---------------------

          Normal Retirement Age shall mean the date on which the Director
          attains age seventy (70).

II.  INDEX BENEFITS

     A.   Retirement Benefits:
          -------------------

          Subject to Subparagraph II (D) hereinafter, a Director who remains on
          the Board until the Normal Retirement Age (Subparagraph I [J]) shall
          be entitled to receive the balance in the Pre-Retirement Account in
          fifteen (15) equal annual installments commencing thirty (30) days
          following the Director's retirement. In addition to these payments and
          commencing subsequent thereto, the Index Retirement Benefit (as
          defined in Subparagraph I [F]) for each Plan Year subsequent to the
          year that the Director begins receiving Index Retirement Benefits
          hereunder, and including the remaining portion of the Plan Year
          following the year that the Director begins receiving Index Retirement
          Benefits hereunder, shall be paid to the Director until the Director's
          death.

     B.   Termination of Service:
          ----------------------

          Subject to Subparagraph II (D), should a Director suffer a Termination
          of Service the Director shall be entitled to receive the percentage
          set forth hereinbelow of the balance in the Pre-Retirement Account
          payable to the Director in (15) equal annual installments commencing
          thirty (30) days

                                       4

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          following the Director's Normal Retirement Age (Subparagraph I [J]).
          In addition to these payments and commencing subsequent thereto, the
          percentage set forth hereinbelow of the Index Retirement Benefit for
          each Plan Year subsequent to the year in which the Director begins
          receiving Index Retirement Benefits hereunder, and including the
          remaining portion of the Plan Year in which the Director begins
          receiving Index Retirement Benefits hereunder, shall be paid to the
          Director until the Director's death.

          Subsequent to one (1)       20% for each full year of service
          full year on the Board of   from the date of first service
          Directors of the Bank       to a maximum of 100%

     C.   Death:
          -----

          Should the Director die prior to having received the balance of the
          Pre-Retirement Account the Director may be entitled to under the terms
          of this Director Plan, the entire unpaid balance of the Director's
          Pre-Retirement Account at the time of death shall be paid in a lump
          sum to the individual or individuals the Director may have designated
          in writing and filed with the Bank. In the absence of any effective
          designation of beneficiary(ies), the unpaid balance shall be paid as
          set forth herein to the duly qualified executor or administrator of
          the Director's estate. Said payment due hereunder shall be made the
          first day of the second month following the decease of the Director.
          If, upon death, the Director shall have received the total balance of
          the Director's Pre-Retirement Account, then no further benefit shall
          be due hereunder. In no event shall the Director's beneficiary receive
          any Index Retirement Benefit payment upon the death of the Director.

     D.   Discharge for Cause:
          -------------------

          All rights of the Director hereunder shall cease and terminate
          immediately in the event of a termination of Director's service with
          Bank "with cause." The term "with cause" shall be deemed to mean, but
          is not limited to, personal dishonesty, incompetence, willful material
          misconduct, breach of fiduciary duty, failure to perform the
          obligations of the Director as stated herein, willful violation of any
          law, rule, or regulation (other than minor traffic infractions), or,
          any material breach of any provision of this agreement.

     E.   Disability Benefit:
          ------------------

          In the event the Director becomes disabled, as defined herein, prior
          to any Termination of Service, and the Director's service with the
          Bank is terminated because of such disability, the Director, upon
          submission of written documentation and verification of disability
          satisfactory to the Bank, shall receive one hundred percent (100%) of
          the benefit amount

                                       5

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          provided in Subparagraph II (A) above. Payment of such benefit shall
          begin when the Director reaches his or her Normal Retirement Age.
          Subject to the Bank's obligations and Director's rights under Title I
          of the Americans with Disabilities Act and the Family and Medical
          Leave Act, if applicable, and any other applicable federal or state
          laws, disability shall be defined as the Director not being able to
          perform the duties of the Director's own job and shall be as further
          defined in the Bank's long term disability policy in effect at the
          time of said disability. If no such policy exists at the time of the
          disability, then disability shall be defined as a physical or mental
          impairment of Director which renders Director incapable of performing
          Director's normal and regular essential service duties and which shall
          be medically determined to be of permanent duration as the same is
          construed for purposes of disability benefits under the federal Social
          Security laws and regulations. If there is a dispute regarding whether
          the Director is disabled, such dispute shall be resolved by a
          physician selected by the Bank and such resolution shall be binding
          upon all parties to this Agreement.

     F.   Death Benefit:
          -------------

          Except as set forth above, there is no death benefit provided under
          this Agreement.

     G.   Long Term Care Policy Option:
          ----------------------------

          The Director shall have the option, prior to receipt of any benefits
          under the terms of this Agreement, to elect a long term care policy to
          be provided by the Bank. Said option to receive said long term care
          policy shall be exercised prior to receipt of any benefit set forth in
          this Agreement and said election shall be a one time election only and
          shall expire at the Director's age sixty (60).

          The value of the long term care policy provided by the Bank shall be
          equal to the Index Retirement Benefit (Subparagraph I [F]) for each
          Plan Year from the date the policy is provided by the Bank until the
          date the long term care policy terminates as set forth hereinbelow.
          The long term care policy provided by the Bank shall continue until
          the policy is either paid in full or the Director dies, at which time
          said policy shall terminate.

          If the Director elects said long term care policy, then, on the date
          said long term care policy is provided, the balance in the Director's
          accrued liability retirement account on said date shall be credited
          interest on each anniversary date of said long term care policy at a
          rate equal to the yield of a one-year Treasury Bill. The balance of
          said accrued liability retirement account, with interest, shall be
          paid to the Director in a lump sum within thirty (30) days of the
          Director's Retirement Date (Subparagraph I [C]).

                                       6

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          Upon the exercise of the option set forth herein, the Director shall
          not be entitled to any benefit set forth in Subparagraphs II (A), (B),
          (E), or Paragraph IV.

III. RESTRICTIONS UPON FUNDING

     The Bank shall have no obligation to set aside, earmark or entrust any fund
     or money with which to pay its obligations under this Director Plan. The
     Director, their beneficiary(ies), or any successor in interest shall be and
     remain simply a general creditor of the Bank in the same manner as any
     other creditor having a general claim for matured and unpaid compensation.

     The Bank reserves the absolute right, at its sole discretion, to either
     fund the obligations undertaken by this Director Plan or to refrain from
     funding the same and to determine the extent, nature and method of such
     funding. Should the Bank elect to fund this Director Plan, in whole or in
     part, through the purchase of life insurance, mutual funds, disability
     policies or annuities, the Bank reserves the absolute right, in its sole
     discretion, to terminate such funding at any time, in whole or in part. At
     no time shall any Director be deemed to have any lien nor right, title or
     interest in or to any specific funding investment or to any assets of the
     Bank.

     If the Bank elects to invest in a life insurance, disability or annuity
     policy upon the life of the Director, then the Director shall assist the
     Bank by freely submitting to a physical exam and supplying such additional
     information necessary to obtain such insurance or annuities.

IV.  CHANGE OF CONTROL

     Notwithstanding other terms of this Agreement, upon a Change of Control
     (Subparagraph I [I]), if the Director subsequently suffers a Termination of
     Service (Subparagraph I [D]), then the Director shall receive the benefits
     promised in this Director Plan upon attaining Normal Retirement Age, as if
     the Director had been continuously serving the Bank until the Director's
     Normal Retirement Age. The Director will also remain eligible for all
     promised death benefits in this Director Plan. In addition, no sale,
     merger, or consolidation of the Bank shall take place unless the new or
     surviving entity expressly acknowledges the obligations under this Director
     Plan and agrees to abide by its terms.

V.   MISCELLANEOUS

     A.   Alienability and Assignment Prohibition:
          ---------------------------------------

          Neither the Director, nor the Director's surviving spouse, nor any
          other beneficiary(ies) under this Director Plan shall have any power
          or right to transfer, assign, anticipate, hypothecate, mortgage,
          commute, modify or otherwise encumber in advance any of the benefits
          payable hereunder nor

                                       7

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          shall any of said benefits be subject to seizure for the payment of
          any debts, judgments, alimony or separate maintenance owed by the
          Director or the Director's beneficiary(ies), nor be transferable by
          operation of law in the event of bankruptcy, insolvency or otherwise.
          In the event the Director or any beneficiary attempts assignment,
          commutation, hypothecation, transfer or disposal of the benefits
          hereunder, the Bank's liabilities shall forthwith cease and terminate.

     B.   Binding Obligation of the Bank and any Successor in Interest:
          ------------------------------------------------------------

          The Bank shall not merge or consolidate into or with another bank or
          sell substantially all of its assets to another bank, firm or person
          until such bank, firm or person expressly agrees, in writing, to
          assume and discharge the duties and obligations of the Bank under this
          Director Plan. This Director Plan shall be binding upon the parties
          hereto, their successors, beneficiaries, heirs and personal
          representatives.

     C.   Amendment or Revocation:
          -----------------------

          It is agreed by and between the parties hereto that, during the
          lifetime of the Director, this Director Plan may be amended or revoked
          at any time or times, in whole or in part, by the mutual written
          consent of the Director and the Bank.

     D.   Gender:
          ------

          Whenever in this Director Plan words are used in the masculine or
          neuter gender, they shall be read and construed as in the masculine,
          feminine or neuter gender, whenever they should so apply.

     E.   Effect on Other Bank Benefit Plans:
          ----------------------------------

          Nothing contained in this Director Plan shall affect the right of the
          Director to participate in or be covered by any qualified or
          non-qualified pension, profit-sharing, group, bonus or other
          supplemental compensation or fringe benefit plan constituting a part
          of the Bank's existing or future compensation structure.

     F.   Headings:
          --------

          Headings and subheadings in this Director Plan are inserted for
          reference and convenience only and shall not be deemed a part of this
          Director Plan.

     G.   Applicable Law:
          --------------

          The validity and interpretation of this Agreement shall be governed by
          the laws of the State of North Carolina.

                                       8

<PAGE>

     H.   12 U.S.C. Section 1828(k):
          -------------------------

          Any payments made to the Director pursuant to this Director Plan, or
          otherwise, are subject to and conditioned upon their compliance with
          12 U.S.C. Section 1828(k) or any regulations promulgated thereunder.

     I.   Partial Invalidity:
          ------------------

          If any term, provision, covenant, or condition of this Director Plan
          is determined by an arbitrator or a court, as the case may be, to be
          invalid, void, or unenforceable, such determination shall not render
          any other term, provision, covenant, or condition invalid, void, or
          unenforceable, and the Director Plan shall remain in full force and
          effect notwithstanding such partial invalidity.

     J.   Notices:
          -------

          All notices required or permitted to be given pursuant to this
          Agreement shall be in writing, unless otherwise specified, and shall
          be delivered personally, deposited in the United States mail,
          registered or certified and postage prepaid with return receipt
          requested, or deposited with a reputable overnight courier which
          provides a day and time stamped receipt, addressed to Director, Bank
          or Trustee, as applicable, at the address set forth herein or to such
          other address as hereafter may be furnished to the other parties in
          writing pursuant to this paragraph. All notices so given shall be
          deemed effective and received upon the earlier of (i) actual receipt,
          (ii) receipt and refusal; or (iii) five (5) days from (1) the postmark
          date, if deposited with the United States Postal Service, or (2) the
          date of deposit, if deposited with an overnight courier, unless
          otherwise provided herein.

               Bank:       The East Carolina Bank
                           Hwy. 264
                           Engelhard, North Carolina 27824

               Trustee:    Thomas A. Nussbaum
                           Eastern Bank & Trust Co.
                           2 Adams Place, AP06
                           Quincy, MA 02169-7456

               Director:
                           ----------------------------

                           ----------------------------

                           ----------------------------

                           ----------------------------

                                       9

<PAGE>

VI.  ERISA PROVISION

     A.   Named Fiduciary and Plan Administrator:
          --------------------------------------

          The "Named Fiduciary and Plan Administrator" of this Director Plan
          shall be The East Carolina Bank, until its resignation or removal by
          the Board. As Named Fiduciary and Plan Administrator, the Bank shall
          be responsible for the management, control and administration of the
          Director Plan. The Named Fiduciary may delegate to others certain
          aspects of the management and operation responsibilities of the
          Director Plan including the employment of advisors and the delegation
          of ministerial duties to qualified individuals.

     B.   Claims Procedure and Arbitration:
          --------------------------------

          In the event a dispute arises over benefits under this Director Plan
          and benefits are not paid to the Director (or to the Director's
          beneficiary(ies) in the case of the Director `s death) and such
          claimants feel they are entitled to receive such benefits, then a
          written claim must be made to the Named Fiduciary and Plan
          Administrator named above within sixty (60) days from the date
          payments are refused. The Named Fiduciary and Plan Administrator shall
          review the written claim and if the claim is denied, in whole or in
          part, they shall provide in writing within sixty (60) days of receipt
          of such claim the specific reasons for such denial, reference to the
          provisions of this Director Plan upon which the denial is based and
          any additional material or information necessary to perfect the claim.
          Such written notice shall further indicate the additional steps to be
          taken by claimants if a further review of the claim denial is desired.
          A claim shall be deemed denied if the Named Fiduciary and Plan
          Administrator fail to take any action within the aforesaid sixty-day
          period.

          If claimants desire a second review they shall notify the Named
          Fiduciary and Plan Administrator in writing within sixty (60) days of
          the first claim denial. Claimants may review this Director Plan or any
          documents relating thereto and submit any written issues and comments
          it may feel appropriate. In their sole discretion, the Named Fiduciary
          and Plan Administrator shall then review the second claim and provide
          a written decision within sixty (60) days of receipt of such claim.
          This decision shall likewise state the specific reasons for the
          decision and shall include reference to specific provisions of the
          Plan Agreement upon which the decision is based.

          If claimants continue to dispute the benefit denial based upon
          completed performance of this Director Plan or the meaning and effect
          of the terms and conditions thereof, then claimants may submit the
          dispute to an arbitrator for final arbitration. The arbitrator shall
          be selected by mutual agreement of the Bank and the claimants. The
          arbitrator shall operate

                                       10

<PAGE>

          under any generally recognized set of arbitration rules. The parties
          hereto agree that they and their heirs, personal representatives,
          successors and assigns shall be bound by the decision of such
          arbitrator with respect to any controversy properly submitted to it
          for determination.

          Where a dispute arises as to the Bank's discharge of the Director "for
          cause," such dispute shall likewise be submitted to arbitration as
          above described and the parties hereto agree to be bound by the
          decision thereunder.

VII. TERMINATION OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE LAW,
     RULES OR REGULATIONS

     The Bank is entering into this Agreement upon the assumption that certain
     existing tax laws, rules and regulations will continue in effect in their
     current form. If any said assumptions should change and said change has a
     detrimental effect on this Director Plan as determined by the Bank in its
     sole discretion, then the Bank reserves the right to terminate or modify
     this Agreement accordingly. Upon a Change of Control (Subparagraph I [I]),
     this paragraph shall become null and void effective immediately upon said
     Change of Control.

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read
this Agreement and executed the original thereof on the first day set forth
hereinabove, and that upon execution, each has received a conforming copy.

                                            THE EAST CAROLINA BANK
                                            Engelhard, North Carolina

                                            By:
-----------------------------------            ---------------------------------
Witness                                                                    Title

-----------------------------------         ------------------------------------
Witness                                     Director

                                       11

<PAGE>

                          BENEFICIARY DESIGNATION FORM
                          FOR THE DIRECTOR SUPPLEMENTAL
                            RETIREMENT PLAN AGREEMENT

PRIMARY DESIGNATION:

         Name                        Address                    Relationship
         ----                        -------                    ------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECONDARY (CONTINGENT) DESIGNATION:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

All sums payable under the Director Supplemental Retirement Plan Director
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.

-------------------------                                             ----------
Director                                                              Date

                                       12<PAGE>

                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT

Insurer:                           Jefferson Pilot Life Insurance Company
                                   Mass Mutual Life Insurance Company

Policy Number:
                                   ---------

Bank:                              The East Carolina Bank

Insured:
                                   ------------------

Relationship of Insured to Bank:   Director

Trust:                             Rabbi Trust for the Executive Supplemental
                                   Retirement Plan Agreement, Director
                                   Supplemental Retirement Plan Agreement, and
                                   the Endorsement Method Split Dollar Plan
                                   Agreement

The respective rights and duties of the Bank and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:

I.   DEFINITIONS

     Refer to the policy contract for the definition of any terms in this
     Agreement that are not defined herein. If the definition of a term in the
     policy is inconsistent with the definition of a term in this Agreement,
     then the definition of the term as set forth in this Agreement shall
     supersede and replace the definition of the terms as set forth in the
     policy.

II.  POLICY TITLE AND OWNERSHIP

     Title and ownership shall reside in the Trustee for the Rabbi Trust for the
     Executive Supplemental Retirement Plan Agreement, Director Supplemental
     Retirement Plan Agreement, and the Endorsement Method Split Dollar Plan
     Agreement for its use and for the use of the Insured all in accordance with
     this Agreement. The Trustee at the direction of the Bank may, to the extent
     of the

<PAGE>

     Bank's interest, exercise the right to borrow or withdraw on the policy
     cash values. Where the Trustee at the direction of the Bank and the Insured
     (or assignee, with the consent of the Insured) mutually agree to exercise
     the right to increase the coverage under the subject policy, then, in such
     event, the rights, duties and benefits of the parties to such increased
     coverage shall continue to be subject to the terms of this Agreement.

III. BENEFICIARY DESIGNATION RIGHTS

     The Insured (or assignee) shall have the right and power to designate a
     beneficiary or beneficiaries to receive the Insured's share of the proceeds
     of the policy payable upon the death of the Insured, and to elect and
     change a payment option for such beneficiary, subject to any right or
     interest of the Bank or the Trust may have in such proceeds, as provided in
     this Agreement. Any such designation by the Insured shall be made in
     writing in the form attached hereto as Exhibit A and incorporated herein by
     reference. Any such designation or change therein shall be effective three
     (3) business days from delivery of said written notice by Insured to the
     Bank.

IV.  PREMIUM PAYMENT METHOD

     Subject to Subparagraph IX (B), the Bank or the Trustee at the direction of
     the Bank shall pay an amount equal to the planned premiums and any other
     premium payments that might become necessary to keep the policy in force.

V.   TAXABLE BENEFIT

     Annually the Insured will receive a taxable benefit equal to the value of
     the insurance protection as required by the Internal Revenue Service. The
     Bank or the Trustee at the direction of the Bank will report to the Insured
     the amount of imputed income each year on Form W-2 or its equivalent.

VI.  DIVISION OF DEATH PROCEEDS

     Subject to Paragraphs VII and IX herein, the division of the death proceeds
     of the policy is as follows:

     A.   At the time of the insured's death, should the Insured be serving on
          the Board of the Bank, retired from the Bank, or have had his or her
          service terminated from the Bank due to disability*, the Insured's
          beneficiary(ies), designated in accordance with Paragraph III or the
          Insured's estate if no beneficiary has been so designated, shall be
          entitled to an amount equal to eighty percent (80%) of the net-at-risk
          insurance portion of the proceeds. The net-at-risk insurance portion
          is the total proceeds less the cash value of the policy.

                                       2

<PAGE>

     B.   Should the Insured not be serving on the Board of the Bank at the time
          of his or her death for reasons other than disability* or retirement,
          the Insured's beneficiary(ies), designated in accordance with
          Paragraph III or the Insured's estate if no beneficiary has been so
          designated, shall be entitled to the percentage as set forth
          hereinbelow of the proceeds described in Subparagraph VI (A) above.

          Subsequent to one (1)       20% for each full year of service
          full year on the Board of   from the date of first service
          Directors of the Bank       to a maximum of 100%

          *Subject to the Bank's obligations and Insured's rights under Title I
          of the Americans with Disabilities Act and the Family and Medical
          Leave Act, if applicable, and any other applicable federal or state
          laws, for purposes of this Agreement, disability shall be defined as
          the Insured not being able to perform the duties of the Insured's own
          job and shall be as further defined in the Bank's long term disability
          policy in effect at the time of said disability. If no such policy
          exists at the time of the disability, then disability shall be defined
          as a physical or mental impairment of Insured which renders Insured
          incapable of performing Insured's normal and regular essential
          employment duties and which shall be medically determined to be of
          permanent duration as the same is construed for purposes of disability
          benefits under the federal Social Security laws and regulations.

     C.   The Bank shall be entitled to the remainder of such proceeds of the
          policy, including but not limited to the cash surrender value as
          provided in Paragraph VII herein.

     D.   The Bank and the Insured (or assignees) shall share in any interest
          due on the death proceeds on a pro rata basis as the proceeds due each
          respectively bears to the total proceeds, excluding any such interest.

VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY

     The Bank or the Trust, in the discretion of the Bank, shall at all times be
     entitled to an amount equal to the policy's cash value, as that term is
     defined in the policy contract, less any policy loans and unpaid interest
     or cash withdrawals previously incurred by the Bank or the Trustee at the
     direction of the Bank and any applicable surrender charges. Such cash value
     shall be determined as of the date of surrender or death as the case may
     be.

                                       3

<PAGE>

VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

     In the event the policy involves an endowment or annuity element, the
     Bank's or the Trust's right and interest in any endowment proceeds or
     annuity benefits, on expiration of the deferment period, shall be
     determined under the provisions of this Agreement by regarding such
     endowment proceeds or the commuted value of such annuity benefits as the
     policy's cash value. Such endowment proceeds or annuity benefits shall be
     considered to be death proceeds for the purposes of division under this
     Agreement.

IX.  TERMINATION OF AGREEMENT

     This Agreement shall terminate upon the occurrence of any one of the
     following:

     A.   The Insured is terminated by the Bank with cause. The term "with
          cause" includes, but is not limited to, personal dishonesty,
          incompetence, willful material misconduct, breach of fiduciary duty,
          failure to perform the obligations of the Insured as stated herein,
          willful violation of any law, rule, or regulation (other than minor
          traffic infractions), or, any material breach of any provision of this
          agreement.

     B.   Surrender, lapse, or other termination of the Policy by the Bank.

     Upon such termination, the Insured (or assignee) shall have a fifteen (15)
     day option, which period shall begin to run on the date of termination of
     the policy, to receive from the Bank or the Trustee at the direction of the
     Bank an absolute assignment of the policy in consideration of a cash
     payment to the Bank or the Trustee at the direction of the Bank, whereupon
     this Agreement shall terminate. Such cash payment referred to hereinabove
     shall be the greater of:

     1)   The Bank's or the Trust's share of the cash value of the policy on the
          date of such assignment, as defined in this Agreement; or

     2)   The amount of the premiums which have been paid by the Bank or the
          Trustee at the direction of the Bank prior to the date of such
          assignment.

     If, within said fifteen (15) day period, the Insured fails to exercise said
     option, fails to procure the entire aforestated cash payment, or dies, then
     the option shall terminate and the Insured (or assignee) agrees that all of
     the Insured's right, interest and claim in the policy shall terminate as of
     the date of the termination of this Agreement.

                                       4

<PAGE>

     The Insured expressly agrees that this Agreement shall constitute
     sufficient written notice to the Insured of the Insured's option to receive
     an absolute assignment of the policy as set forth herein.

     Except as provided above, this Agreement shall terminate upon distribution
     of the death benefit proceeds in accordance with Paragraph VI above.

X.   INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

     The Insured may not, without the written consent of the Bank or the Trustee
     at the direction of the Bank, assign to any individual, trust or other
     organization, any right, title or interest in the subject policy nor any
     rights, options, privileges or duties created under this Agreement.

XI.  AGREEMENT BINDING UPON THE PARTIES

     This Agreement shall bind the Insured and the Bank or the Trustee, their
     heirs, successors, personal representatives and assigns.

XII. ERISA PROVISIONS

     The following provisions are part of this Agreement and are intended to
     meet the requirements of the Employee Retirement Income Security Act of
     1974 ("ERISA"):

     A.   Named Fiduciary and Plan Administrator:
          --------------------------------------

          The "Named Fiduciary and Plan Administrator" of this Endorsement
          Method Split Dollar Agreement shall be The East Carolina Bank until
          its resignation or removal by the Board of Directors. As Named
          Fiduciary and Plan Administrator, the Bank or the Trustee at the
          direction of the Bank shall be responsible for the management,
          control, and administration of this Split Dollar Plan as established
          herein. The Named Fiduciary may delegate to others certain aspects of
          the management and operation responsibilities of the Plan, including
          the employment of advisors and the delegation of any ministerial
          duties to qualified individuals.

     B.   Funding Policy:
          --------------

          Subject to Subparagraph IX (B), the funding policy for this Split
          Dollar Plan shall be to maintain the subject policy in force by
          paying, when due, all premiums required.

                                       5

<PAGE>

     C.   Basis of Payment of Benefits:
          ----------------------------

          Direct payment by the Insurer is the basis of payment of benefits
          under this Agreement, with those benefits in turn being based on the
          payment of premiums as provided in this Agreement.

     D.   Claim Procedures:
          ----------------

          Claim forms or claim information as to the subject policy can be
          obtained by contacting Benmark, Inc. (800-544-6079). When the Named
          Fiduciary has a claim which may be covered under the provisions
          described in the insurance policy, it should contact the office named
          above, and they will either complete a claim form and forward it to an
          authorized representative of the Insurer or advise the named Fiduciary
          what further requirements are necessary. The Insurer will evaluate and
          make a decision as to payment. If the claim is payable, a benefit
          check will be issued in accordance with the terms of this Agreement.

          In the event that a claim is not eligible under the policy, the
          Insurer will notify the Named Fiduciary of the denial pursuant to the
          requirements under the terms of the policy. If the Named Fiduciary is
          dissatisfied with the denial of the claim and wishes to contest such
          claim denial, they should contact the office named above and they will
          assist in making an inquiry to the Insurer. All objections to the
          Insurer's actions should be in writing and submitted to the office
          named above for transmittal to the Insurer.

     E.   Notices:
          -------

          All notices required or permitted to be given pursuant to this
          Agreement shall be in writing, unless otherwise specified, and shall
          be delivered personally, deposited in the United States mail,
          registered or certified and postage prepaid with return receipt
          requested, or deposited with a reputable overnight courier which
          provides a day and time stamped receipt, addressed to the Insured,
          Bank or Trustee, as applicable, at the address set forth herein or to
          such other address as hereafter may be furnished to the other parties
          in writing pursuant to this paragraph. All notices so given shall be
          deemed effective and received upon the earlier of (i) actual receipt,
          (ii) receipt and refusal; or (iii) five (5) days from (1) the postmark
          date, if deposited with the United States Postal Service, or (2) the
          date of deposit, if deposited with an overnight courier, unless
          otherwise provided herein.

                                       6

<PAGE>

               Bank:      The East Carolina Bank
                          Hwy. 264
                          Engelhard, North Carolina 27824

               Trustee:   Thomas A. Nussbaum
                          Eastern Bank & Trust Co.
                          2 Adams Place, AP06
                          Quincy, MA 02169-7456

               Insured:
                          ----------------------------

                          ----------------------------

                          ----------------------------

                          ----------------------------

XIII. GENDER

     Whenever in this Agreement words are used in the masculine or neuter
     gender, they shall be read and construed as in the masculine, feminine or
     neuter gender, whenever they should so apply.

XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

     The Insurer shall not be deemed a party to this Agreement, but will respect
     the rights of the parties as herein developed upon receiving an executed
     copy of this Agreement. Payment or other performance in accordance with the
     policy provisions shall fully discharge the Insurer from any and all
     liability.

XV.  CHANGE OF CONTROL

     Change of Control shall mean the direct or indirect acquisition by another
     person, firm or corporation, by merger, share exchange, consolidation,
     purchase or otherwise, all or substantially all of the assets or stock of
     the Bank or its parent company. Upon a Change of Control, if the Insured's
     service is subsequently terminated, except for cause, then the Insured
     shall be one hundred percent (100%) vested in the benefits promised in this
     Agreement and, therefore, upon the death of the Insured, the Insured's
     beneficiary(ies) (designated in accordance with Paragraph III) shall
     receive the death benefit provided herein as if the Insured had died while
     employed by the Bank (see Subparagraph VI [A]).

XVI. AMENDMENT OR REVOCATION

     It is agreed by and between the parties hereto that, during the lifetime of
     the Insured, this Agreement may be amended or revoked at any time or times,
     in whole or in part, by the mutual written consent of the Insured and the
     Bank.

                                       7

<PAGE>

XVII. EFFECTIVE DATE

     The Effective Date of this Agreement shall be November 5, 2001.

XVIII. SEVERABILITY AND INTERPRETATION

     If a provision of this Agreement is held to be invalid or unenforceable,
     the remaining provisions shall nonetheless be enforceable according to
     their terms. Further, in the event that any provision is held to be over
     broad as written, such provision shall be deemed amended to narrow its
     application to the extent necessary to make the provision enforceable
     according to law and enforced as amended.

XIX. APPLICABLE LAW

     The validity and interpretation of this Agreement shall be governed by the
     laws of the State of North Carolina.

Executed at Engelhard, North Carolina this 22nd day of January, 2002.

                                            THE EAST CAROLINA BANK
                                            Engelhard, North Carolina

                                            By:
-----------------------------------            ---------------------------------
Witness                                                                    Title

-----------------------------------         ------------------------------------
Witness                                     Director

                                       8

<PAGE>

                          BENEFICIARY DESIGNATION FORM
                      FOR LIFE INSURANCE ENDORSEMENT METHOD
                           SPLIT DOLLAR PLAN AGREEMENT

PRIMARY DESIGNATION:

         Name                       Address                    Relationship
         ----                       -------                    ------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SECONDARY (CONTINGENT) DESIGNATION:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.

-------------------------                                              ---------
Director                                                               Date

                                       9

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