Document:

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EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         Agreement made this 24th day of March 1994, by and between PARK
MERIDIAN BANK, a banking association chartered and existing under the laws of
the State of North Carolina having its principal place of business in Charlotte,
North Carolina (the "Bank"); and Bryan F. Kennedy, III ("Employee"), a resident
of Mecklenburg, North Carolina.

                                   WITNESSETH

         In consideration of the mutual covenants expressed herein, the parties
agree for themselves, their heirs, successors and assign, as follows.

     1. EMPLOYMENT. The bank hereby employs Employee, and Employee hereby
accepts employment, upon terms and conditions as set forth in this Agreement and
as established by general Bank policy, including policies set forth in the
Bank's personnel handbook and other policy manuals, which Employee acknowledges
that he has read and understands.

     2. TERM. This Agreement and the employment hereunder shall continue for a
term of two (2) years from the date hereof unless terminated sooner pursuant to
the terms of this Agreement. After the initial two year term, this agreement
shall automatically extend for successive one year terms unless either party
notifies the other of its intension not to renew this Agreement by written
notice delivered to the other party thirty (30) days prior to the expiration of
the initial term or any renewal term.

     3. TERMINATION. The Agreement may be terminated by the Bank, without
advance notice to Employee, for cause, including (i) the commission of a
wrongful act or acts by Employee that have or could have an adverse effect on
the business, operations, financial condition or reputation of the Bank, or (ii)
the failure of Employee to perform diligently the duties required of him under
this Agreement. Employee's employment under this Agreement may be terminated by
the Bank at any time for any reason and without cause. In the event that
Employee's employment hereunder is terminated by the Bank other than for a
reason set forth in the first sentence of this paragraph 3, the Bank shall, for
the remainder of the current term of this Agreement, pay the Employee his salary
under this Agreement less any compensation earned by the Employee during such
period for employment with any person; provided, however, that Employee shall be
obligated during such period to in good faith actively seek employment (not in
contravention of paragraph 8 hereof ) at a salary comparable to the salary that
had been paid to Employee by the Bank. Employee may terminate this Agreement at
any time.

    4. COMPENSATION. (a) As compensation for all services rendered by Employee
pursuant this Agreement, the Bank shall pay Employee an annual salary of Eighty
Thousand Dollars ($80,000.00), payable in accordance with the Bank's general
payroll policies then in effect. The Employee's salary shall be subject to
increase upon annual reviews of the Employee's performance.

            (b) Employee shall be eligible for annual bonus compensation as
determined by the Bank's Board of Directors in its sole and absolute discretion.

            (c) As incentive compensation, subject to the approval by the
shareholders of the Bank and the North Carolina Banking Commission, in the
manner contemplated under Chapter 53 of the North Carolina General Statutes, of
the Park Meridian Bank Employee Stock Option Plan ("the Plan"), the Bank intends
to grant Employee non-transferable options to purchase 10,000 shares of the
Common Stock of the Bank at the exercise price per share of the greater of
$11.00 or the fair market value of a share of Common Stock on the date of the
grant. Such options are to become exercisable at a rate of 2,000 shares per year
over a five-year period. In addition, such options would terminate in the manner
set forth in the Plan in the event the Employee's employment with the Bank is
terminated. The Bank shall not be obligated to award any options hereunder if
the Plan is not approved in the manner required by law.

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     5. BENEFITS AND PERQUISITES. During his term of employment hereunder,
Employee shall be entitled to vacation and other fringe benefits in accordance
with the bank's general policy. In addition, during the term of the Employee's
employment hereunder, the Bank shall provide the Employee a monthly car
allowance of Two Hundred Dollars ($250.00) and shall pay the Employee's
membership dues to the Charlotte Country Club.

     6. DUTIES. Employee shall perform such duties as are from time to time
assigned to him by the Board of Directors or the President of the Bank, which
shall initially include _________________________, to be developed and managed
in accordance with the Bank's overall objectives, policies, principles and
practices.

     7. EXTENT OF SERVICE. Employee shall devote his entire time, attention and
energies to the business of the Bank and shall not during the term of this
Agreement and the employment hereunder engage in any other business activity,
whether such business activity is pursued for gain, profit or other pecuniary
advantage, without the prior written approval of the Board of Directors or the
President of the Bank.

    8. RESTRICTIVE COVENANTS. (a) In the course of Employee's employment with
the Bank, Employee will be provided with and have access to trade secrets of the
Bank, including, without limitation, knowledge and information involving
customer lists and other confidential information and aspects of the business
operations of the Bank upon which the business success and competitive advantage
of the Bank depend. Employee acknowledges that such information, as well as all
other matters of Bank practices, procedure and policy, are highly confidential.
As part of the consideration provided herein, Employee agrees that he will not
use, divulge, publish or otherwise reveal, either directly or through another,
to any person, firm or organization during the term of this Agreement or for a
period of one (1) year after termination or expiration thereof, any such
knowledge or information and shall retain such information in trust in a
fiduciary capacity for the sole benefit of the Bank, its successors and assigns.
Upon expiration or termination of this Agreement, Employee agrees to return to
the bank all documents (both originals and copies), including without
limitation, customer lists, books and records, form agreements, manuals, and
other information that come into his possession during, by virtue of and in the
course of his employment and which are in any way connected with or related to
the Bank's business.

         (b) Based upon Employee's acknowledgment of the confidential nature and
unique value of the Bank of the knowledge and information hereinabove referred
to, and for the valuable consideration provided herein, Employee agrees (i) that
during the term of this Agreement and for so long as the Bank continues to make
payments to Employee pursuant to paragraph 3 hereof, Employee will not, without
the prior written consent of the Bank, directly or indirectly, either as
principal, agent, manager, employee, owner (if the percentage of ownership
exceeds one percent (1%) of the net worth of business), partner (general or
limited), director or officer, consultant or in any other capacity participate
in any business in competition with the Bank of Mecklenburg County, North
Carolina and (ii) if Employee terminates his employment with the Bank and the
Bank has fully complied with this Agreement, or if Employee is terminated for
cause by the bank due to his commission of a wrongful act or acts which have, or
could have, an adverse effect on the business, operations, financial condition,
or reputation of the Bank, then for a period of one year following the
termination of Employee's termination of Employee's employment with the Bank,
Employee shall not solicit business, in competition with the Bank, from any
customer or potential customer contacted by Employee during the term of his
employment with the Bank. Employee further acknowledges that the actual,
intended or reasonably contemplated business activities and operations of the
Bank presently encompass Mecklenburg County and that the restrictive covenants
contained in this paragraph are fair and reasonable as applied to Employee
within Mecklenburg County, and accurately reflect Employee's intention to be
bound thereby.

         (c) The provisions of this paragraph 8 shall be specifically
enforceable.

         9. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if delivered personally or
served by certified or registered mail, return receipt requested, to the
addresses listed below:

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                     Bank's Address             Park Meridian Bank
                                                6826 Morrison Boulevard
                                                Charlotte, North Carolina  28211

                     Employee's Address         Bryan F. Kennedy, III
                                                1235 Providence Road
                                                Charlotte, North Carolina 28207

       10. WAIVER OF BREACH. The waiver by the Bank of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.

       11. NO PROHIBITION. Employee hereby represents to the Bank that he is not
prohibited by the terms of any agreement or otherwise from performing services
for the Bank as contemplated herein and has delivered to the Bank an opinion of
counsel addressed to the Bank on such matter. Employee agrees to indemnify the
Bank, its officers, directors and employees, from any and all costs, including
reasonable legal expenses, losses, damages or injuries incurred by the Bank
arising in connection with the Bank's employing Employee as set forth herein.

       12. WRITTEN AGREEMENT. The terms of agreement incorporated in this
writing may not be changed orally, but only by an agreement in writing signed by
the parties against whom enforcement of any waiver, change, modification,
extension or discharge is sought.

       13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.

       14. SURVIVAL. Any provision herein that by its nature and effect is to
be observed, performed or kept after the termination of the employment
relationship between the bank and Employee shall survive and be binding upon and
for the benefit of the parties after such termination until fully observed,
performed or kept.

               IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement as of the day and year first above written.

                                     PARK MERIDIAN BANK

                                     BY:  /s/ Kevin Kennelly
                                          --------------------------
                                          Kevin Kennelly, President

                                     EMPLOYEE:

                                     /s/ Bryan F. Kennedy, III     (SEAL)
                                     ------------------------------
                                     Bryan F. Kennedy, III<PAGE>   1
EXHIBIT 10.3

                               PARK MERIDIAN BANK

                           EMPLOYEE STOCK OPTION PLAN
                                  (AS AMENDED)
         1.       PURPOSE

         The purpose of the Park Meridian Bank Employee Stock Option Plan (the
"Plan") is to promote the growth and profitability of Park Meridian Bank (the
"Bank") from time to time by increasing the personal participation of officers
and key employees in the financial performance of the Bank, by enabling the Bank
to attract and retain officers and key employees of outstanding competence and
by providing employees with an equity opportunity in the Bank. This purpose will
be achieved through the grant of stock options ("Options") to purchase shares of
common stock of the Bank ("Common Stock").

         2.       ADMINISTRATION

         The Plan shall be administered by the Bank's Board of Directors (the
"Board"); provided, however, that, if the Board includes members who are not
"disinterested persons" (as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, (made applicable to the Bank under
F.D.I.C. Rule 335.410) or any applicable successor rule or regulation ("Rule
16b-3")), then all authority of the Board under the Plan shall be exercised by a
committee of the Board (the "Committee") composed solely of all members thereof
who are "disinterested persons" (as so defined).

         The Board or Committee shall have complete authority to: (i) interpret
all terms and provisions of the Plan consistent with law; (ii) select from the
group of officers and key employees eligible to participate in the Plan the
officers and key employees eligible to whom Options shall be granted; (iii)
within the limits established herein, determine the number of shares to be
subject to, the exercise price of, and the term of each Option granted to each
of such officers and key employees; (iv) prescribe the form of instrument(s)
evidencing Options granted under this Plan; (v) determine the time or times at
which Options shall be granted to officers or key employees; (vi) make special
grants of Options to officers or key employees when determined to be
appropriate; (vii) provide, if appropriate, for the exercisability of Options
granted to officers or key employees in installments or subject to specified
conditions; (viii) determine the method of exercise of Options granted to
officers or key employees under the Plan; (ix) adopt, amend, and rescind general
and special rules and regulations for the Plan's administration; and (x) make
all other determinations necessary or advisable for the administration of this
Plan.

         Any action which the Board or Committee is authorized to take may be
taken without a meeting if all the members of the Board or Committee sign a
written document authorizing such action to be taken, unless different provision
is made by the By-Laws of the Bank or by resolution of the Board or Committee.

         The Board or Committee may designate selected Board or Committee
members or certain employees of the Bank to assist the Board or Committee in the
administration of the Plan and may grant authority to such persons to execute
documents, including Options, on behalf of the Board or Committee; subject in
each such case to the requirements of Rule 16b-3.

         No member or the Board or Committee or employee of the Bank assisting
the Board or Committee pursuant to the preceding paragraph shall be liable for
any action taken or determination made in good faith.

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         3.       STOCK SUBJECT TO PLAN

         The stock to be offered under this Plan shall be authorized but
unissued shares of Common Stock, shares of Common Stock previously issued and
thereafter acquired by the Bank, or any combination thereof. An aggregate of
201,494 shares are reserved for the grant under this Plan of Options. Any or all
of the options granted hereunder may, at the Board's or Committee's discretion,
be intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The number of shares
which may be granted under this Plan may be adjusted to reflect any change in
the capitalization of the Bank as contemplated by Section 9 of the Plan and
occurring after the adoption of this Plan. The Board or Committee will maintain
records showing the cumulative total of all shares subject to Options
outstanding under this Plan.

         4.       OPTIONS FOR OFFICERS AND KEY EMPLOYEES

                  a.       Eligibility and Factors to be Considered in Granting
                           Options

                  The grant of Options under this Section 4 shall be limited to
         those officers and key employees of the Bank who effect the Bank's
         long-term performance and are selected by the Board or Committee. In
         making any determination as to the officer(s) and key employee(s) to
         whom Options shall be granted under this Plan and as to the number of
         shares to be subject thereto, the Board or Committee shall take into
         account, in each case, the level and responsibility of the person's
         position, the level of the person's performance, the person's level of
         compensation, the assessed potential of the person and such additional
         factors as the Board or Committee shall deem relevant to the
         accomplishment of the purposes of the Plan.

                  Options may be granted under this Plan only for a reason
         connected with an officer's or key employee's employment by the Bank.

                  b.       Allotment of Shares

                  The Board or Committee may, in its sole discretion and subject
         to the provisions of this Plan, grant to participants eligible under
         this Plan, on or after the date hereof, Options to purchase shares of
         Common Stock. Options granted under this Plan may, at the discretion of
         the Board or Committee, be: (i) Options which are intended to qualify
         as incentive stock options under Section 422 of the Code; (ii) Options
         which are not intended so to qualify under Section 422 of the Code; or
         (iii) both of the foregoing, if granted separately, and not in tandem.
         Each Option granted under this Plan must be clearly identified as to
         its status as an incentive stock option or not.

                  Options granted under this Plan may be allotted to
         participants in such amounts, subject to the limitations specified in
         this Plan, as the Board or Committee, in its sole discretion, may from
         time to time determine. No single person may be granted options to
         purchase more than twenty percent of the shares of Common Stock
         reserved under this Plan.

                  In the case of Options intended to be incentive stock options,
         the aggregate fair market value (determined at the time of the Options'
         respective grants) of the shares with respect to which incentive stock
         options are exercisable for the first time by a participant hereunder
         during any calendar year (under all plans taken into account pursuant
         to Section 422(d) of the Code) shall not exceed $100,000. Options under
         this Plan not intended to qualify as incentive stock options under
         Section 422 of the Code may be granted to any Plan participant without
         regard to the Section 422(d) limitations.

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         c.       Option Price

                  The price per share at which each Option granted under this
         Plan may be exercised shall be such price as shall be determined by the
         Board or Committee at the time of grant based on such criteria as may
         be adopted by the Board or Committee at the time of grant in good
         faith, taking into account, in each case, the market price of the
         Common Stock, the level and responsibility of the person's position,
         the level of the person's performance, the person's level of
         compensation, the assessed potential of the person, and such additional
         factor or factors as the Board or Committee shall deem relevant to the
         accomplishment of the purposes of the Plan; provided, however, that in
         no event shall the exercise price per share of an Option be less than
         100% of the fair market value of the Bank's shares of Common Stock on
         the date the Option is granted. In the case of an Option intended to
         qualify as an incentive stock option under Section 422 of the Code, the
         price per share for owners of more than 10% of the total combined
         voting power of all classes of stock of the Bank shall not be less than
         110% of the fair market value of the Common Stock at the time such
         Option is granted.

                  If the Bank's shares of Common Stock are:

                  (1) actively traded on any national securities exchange or
         NASDAQ system that reports their sales prices, fair market value shall
         be the average of the high and low sales prices per share on the date
         the Board or Committee grants the Option;

                  (2) otherwise traded over the counter, fair market value shall
         be the average of the final bid and asked prices for the shares of
         Common Stock as reported for the date the Board or Committee grants the
         Option; or

                   (3) not traded, the Board or Committee shall consider any
         factor or factors which it believes affects fair market value, and
         shall determine fair market value without regard to any restriction
         other than a restriction which by its terms will never lapse.

         d.       Term of Option

                  The term of each Option granted under this Plan shall be
         established by the Board or Committee, but shall not exceed 10 years
         (or 5 years for owners of more than 10% of the total combined voting
         power of all classes of stock of the Bank) from the date of the grant.

         e.       Time of Granting Options

                  The date of grant of an Option under this Plan shall, for all
         purposes, be the date on which the Board or Committee makes the
         determination of granting such Option. Notice of the determination
         shall be given to each officer or key employee to whom an Option is so
         granted within a reasonable time after the date of such grant.

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         f.       Cancellation and Replacement of Options

                  The Board or Committee may at any time or from time to time
         permit the voluntary surrender by the holder of any outstanding Option
         granted under this Plan where such surrender is conditioned upon the
         granting under this Plan to such holder of new Option(s) for such
         number of shares as the Board or Committee shall determine, or may
         require such a voluntary surrender as a condition precedent to the
         grant under this Plan of new Option(s) to such holder.

                  The Board or Committee shall determine the terms and
         conditions of any such new Option(s), including the prices at and
         periods during which they may be exercised, in accordance with the
         provisions of this Plan, all or any of which may differ from the terms
         and conditions of the Option(s) surrendered. Any such new Option(s)
         shall be subject to all the relevant provisions of this Plan.

                  The shares subject to any Option so surrendered shall no
         longer be charged against the limitation or limitations provided in
         Section 3 of this Plan and may again become shares subject to the same
         applicable limitations of this Plan.

                  The granting of new Option(s) in connection with the surrender
         of outstanding Option(s) under this Plan shall be considered for the
         purposes of the Plan as the grant of new Option(s) and not an
         alteration, amendment or modification of the Plan or of the Option(s)
         being surrendered.

         5.       NON-TRANSFERABILITY

         An Option granted to a participant under this Plan shall not be
transferable by him or her except: (i) by will; (ii) by the laws of descent and
distribution; or (iii) pursuant to a qualified domestic relations order as
defined by the Code or in Title I of the Employee Retirement Income Security
Act, or the rules thereunder. In the case of an Option intended to be an
incentive stock option, such Option shall not be transferable by a participant
other than by will or the laws of descent and distribution and during the
optionee's lifetime shall be exercisable only by him or her.

         6.       EXERCISABILITY OF OPTIONS

         Subject to the provisions of this Plan, an Option granted under this
Plan shall be exercisable at such time or times after the date of grant thereof,
according to such schedule and upon such conditions as may be determined by the
Board or Committee at the time of grant.

         For a period of six months commencing on the date of grant of an Option
hereunder to a participant, such participant may not sell any share(s) of Common
Stock acquired upon exercise of such Option.

         Any Option granted under this Plan which is intended to qualify as an
incentive stock option under Section 422 of the Code shall terminate in full
(whether or not previously exercisable) prior to the expiration of its term on
the date the optionee ceases to be an employee of the Bank, unless the optionee
shall (a) die while an employee of the Bank, in which case the participant's
legatee(s) under his or her last will or the participant's personal
representative or representatives may exercise all or part of the previously
unexercised portion of such Option at any time within one year, but not beyond
the expiration of its term, after the participant's death to the extent the
optionee could have exercised the Option immediately prior to his or her death
or in the amount purchasable under the Option immediately after the death of the
optionee, whichever is greater, (b) become permanently or totally disabled
within the meaning of section 22(e)(3) of the Code (or any successor provision)
while an employee of the Bank, in

<PAGE>   5

which case the participant or his or her personal representative may exercise
the previously unexercised portion of such Option at any time within one year,
but not beyond the expiration of its term, after termination of his or her
employment or directorship to the extent the optionee could have exercised the
Option immediately prior to such termination, or (c) resign or retire with the
consent of the Bank or have his or her employment with the Bank terminated by
the Bank terminated the participant may exercise the previously unexercised
portion of such Option at any time within three months, but not beyond the
expiration of its term, after the participant's resignation, retirement or
employment termination to the extent the optionee could have exercised the
Option immediately prior to such resignation, retirement or employment
termination.

         Any Option granted under this Plan which is intended not to qualify as
an incentive stock option under Section 422 of the Code shall terminate in full
(whether or not previously exercisable) prior to the expiration of its term on
the date the optionee ceases to be an employee of the Bank, unless the optionee
shall (a) die while an employee of the Bank, in which case the participants
legatee(s) under his or her last will or the participant's personal
representative or representatives may exercise all or part of the previously
unexercised portion of such Option at any time within two years after the
participant's death to the extent the optionee could have exercised the Option
immediately prior to his or her death or in the amount purchasable under the
Option immediately after the death of the optionee, whichever is greater, (b)
become permanently or totally disabled within the meaning of Section 22(e)(3) of
the Code (or any successor provision) while an employee of the Bank, in which
case the participant or his or her personal representative may exercise the
previously unexercised portion of such Option at any time within two years after
termination of his or her employment to the extent the optionee could have
exercised the Option immediately prior to such termination, (c) resign with the
consent of the Bank or have his or her employment with the Bank terminated by
the Bank for any reason other than an "Immediate Termination Reason" (as defined
below), in which case of resignation or termination the participant may exercise
the previously unexercised portion of such Option at any time within three
months after the participant's resignation or employment termination to the
extent the optionee could have exercised the Option immediately prior to such
resignation or employment termination, (d) retire with the consent of the Bank
after the optionee has reached his or her 55th birthday and has at least 10
years of service with the Bank, in which case the participant may exercise the
previously unexercised portion of such Option at any time prior to the
expiration of its fixed term to the extent the optionee could have exercised the
Option immediately prior to such retirement, or (e) retire with the consent of
the Bank in any circumstance not covered by the preceding clause (d), in which
case the participant may exercise the previously unexercised portion of such
Option at any time within two years after the participant's retirement to the
extent the optionee could have exercised the Option immediately prior to such
retirement.

         For purposes of this Section 6, employment termination for an
"Immediate Termination Reason" means termination of employment by reason of
gross misconduct, which will include but may not be limited to the following:
(i) obvious intoxication on the job or possession of any alcoholic substance on
the premises of the Bank, or (ii) misuse of Bank assets (which shall include but
be limited to cash, equipment, and/or other assets).

         In no event may an Option be exercised after the expiration of its
fixed term.

         7.       METHOD OF EXERCISE

         Each Option granted under the Plan shall be deemed exercised when the
holder (a) shall indicate the decision to do so in writing delivered to the
Bank, (b) shall at the same time tender to the Bank payment in full in cash of
the exercise price for the shares for which the Option is exercised, (c) shall
tender to the Bank payment in full in cash of the amount of all federal and
state withholding or other

<PAGE>   6

employment taxes applicable to the taxable income, if any, of the holder
resulting from such exercise, and (d) shall comply with such other reasonable
requirements as the Board or Committee may establish.

         No person, estate, or other entity shall have any of the rights of a
shareholder with reference to shares subject to an Option until a certificate
for the shares has been delivered.

         An Option granted under this Plan may be exercised for any lesser
number of shares than the full amount for which it could be exercised. Such a
partial exercise of an Option shall not affect the right to exercise the Option
from time to time in accordance with this Plan for the remaining shares subject
to the Option.

         8.       TERMINATION OF OPTIONS

         An Option granted under this Plan shall be considered terminated in
whole or in part, to the extent that, in accordance with the provisions of this
Plan and such Option, it can no longer be exercised for any shares originally
subject to the Option. The shares subject to any Option or portion thereof,
which terminates, shall no longer be charged against the applicable limitation
or limitations provided in Section 3 of this Plan and may again become shares
available for the purposes, and subject to the same applicable limitations, of
this Plan.

         9.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

         In the event of any change in the outstanding Common Stock of the Bank
by reason of a stock dividend, stock split, stock consolidation,
recapitalization, reorganization, merger, split up or the like, the shares
available for purposes of this Plan and the number and kind of shares under
option in outstanding option agreements pursuant to this Plan and the option
price under such agreements shall be appropriately adjusted so as to preserve,
but not increase, the benefits of this Plan to the Bank and the benefits to the
holders of such Options; provided in the case of incentive stock options that,
in the case of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the excess of the aggregate
fair market value of the shares subject to any Option immediately after such
event over the aggregate option price of such shares is not more than the excess
of the aggregate fair market value of all shares subject to the Option
immediately before such event over the aggregate option price of such shares.

         Adjustments under this Section shall be made by the Board or Committee,
whose determination as to what adjustments shall be made and the extent thereof,
shall be final, binding and conclusive.

         10.      COMPLIANCE WITH SECURITIES LAWS AND OTHER REQUIREMENTS

         No certificate(s) for shares shall be executed and delivered upon
exercise of an Option until the Bank shall have taken such action, if any, as is
then required to comply with the provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, Chapter 53 of the
North Carolina General Statutes and the regulations of the North Carolina
Banking Commission thereunder, the regulations of the Federal Deposit Insurance
Corporation, the North Carolina Uniform Securities Act, as amended, any other
applicable state securities law(s) and the requirements of any exchange on which
the Common Stock may, at the time, be listed.

         In the case of the exercise of an Option by a person or estate
acquiring the right to exercise the Option by bequest or inheritance, the Board
or Committee may require reasonable evidence as to the ownership of the Option
and may require such consents and releases of taxing authorities as it may deem
advisable.

<PAGE>   7

         11.      NO RIGHT TO EMPLOYMENT

         Neither the adoption of the Plan nor its operation, nor any document
describing or referring to the Plan, or any part thereof, shall confer upon any
employee participant under the Plan any right to continue in the employ of the
Bank or shall in any way affect the right and power of the Bank to terminate the
employment with the Bank of any participant under this Plan at any time with or
without assigning a reason therefor, to the same extent as the Bank might have
done if this Plan had not been adopted.

         12.      AMENDMENT AND TERMINATION

         The Board or Committee may at any time suspend, amend, or terminate
this Plan. The Board or Committee may make such modifications of the terms and
conditions of a holder's Option as it shall deem advisable. No Option may be
granted during any suspension of the Plan or after such termination.
Notwithstanding the foregoing provisions of this Section, no amendment,
suspension or termination shall, without the consent of the holder of an Option,
alter or impair any rights or obligations under any Option theretofore granted
under the Plan.

         In addition to the Board or Committee approval of an amendment, if the
amendment would: (i) materially increase the benefits accruing to participants;
(ii) increase the number of securities issuable under this Plan (other than an
increase pursuant to Section 9 hereof); (iii) change the class or classes of
individuals eligible to receive Options; or (iv) otherwise materially modify the
requirements for eligibility, then such amendment must be approved by the
holders of the Bank's capital stock in the manner required by Chapter 53 of the
North Carolina General Statutes.

         13.      USE OF PROCEEDS

         The proceeds received by the Bank from the sale of shares pursuant to
Options granted under the Plan shall be used for general corporate purposes as
determined by the Board.

         14.      INDEMNIFICATION OF BOARD OR COMMITTEE

         In addition to such other rights of indemnification as they may have as
members of the Board, the members of the Board or Committee shall to the fullest
extent permitted by law, be indemnified by the Bank against the reasonable
expenses, including attorney's fees, actually and necessarily incurred in
connection with the defense of any action, suit, or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided the settlement is approved by independent legal
counsel selected by the Bank) or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit, or proceeding that such Board member
or Committee member is liable for gross negligence or misconduct in the
performance of his duties; provided that within 60 days after institution of any
such action, suit or proceeding the Board member or Committee member shall in
writing offer the Bank the opportunity, at its own expense, to handle and defend
the same.

<PAGE>   8

         15.      EFFECTIVE DATE OF THE PLAN

         This Plan was adopted by the Board of the Bank on March 18, 1994, and
shall be effective as of such date, subject to its approval by the appropriate
shareholder vote at the next ensuing annual meeting of shareholders of the Bank
and the approval of the North Carolina Banking Commission.

         16.      DURATION OF THE PLAN

         Unless previously terminated by the Board or Committee, this Plan shall
terminate at the close of business on March 18, 2004, and no Option shall be
granted under it thereafter, but such termination shall not affect any Option
theretofore granted under this Plan.

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