Exhibit 99.1

SELECT BANCORP, INC.

2008 OMNIBUS STOCK OWNERSHIP AND

LONG TERM INCENTIVE PLAN

THIS 2008 OMNIBUS STOCK OWNERSHIP AND LONG TERM INCENTIVE PLAN (the “Plan”) of Select Bancorp, Inc. (the “Company”), a North Carolina corporation with its principal office in Harnett County, North Carolina sets forth the terms and conditions under which Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, Stock Appreciation Rights, and/or Units may be granted from time to time to Eligible Employees and, where applicable, to Directors, subject to the following provisions:

ARTICLE I

DEFINITIONS

The following terms shall have the meanings set forth below. Additional terms defined in this Plan shall have the meanings ascribed to them when first used herein.

Annual Vesting Amount. With respect to any calendar year, the aggregate fair market value of stock subject to ISOs that are first exercisable during such calendar year for any Optionee, which may not exceed $100,000. The aggregate fair market value of stock with respect to which ISOs are first exercisable during any calendar year shall be determined by taking into account all ISOs granted to such person under all incentive stock options plans of the Company or of any Subsidiary.

Base Value. The Fair Market Value of a share of Common Stock on the date of issuance of a SAR.

Board. The Board of Directors of Select Bancorp, Inc.

Change in Control Transaction. The dissolution or liquidation of the Company; a reorganization, merger or consolidation of the Company as a result of which the outstanding securities of the class then subject to Rights hereunder are changed into or exchanged for cash or property or securities not of the Company’s issue; or a sale of all or substantially all of the assets of the Company to, or the acquisition of stock representing more than twenty-five percent (25%) of the voting power of the capital stock of the Company then outstanding by, another corporation, trust, limited liability company, bank, entity or person, other than pursuant to a merger in which the Company is the surviving entity.

Code. The Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

Committee. The Compensation Committee of the Board.

Common Stock. The Common Stock, par value $1.00 per share, of the Company.

Death. The date of death of an individual who has received Rights as established by the relevant death certificate.

Director. A member of the Board or a member of the Board of Directors of any Subsidiary.

Disability. The date on which an individual who has received Rights becomes permanently and totally disabled within the meaning of Section 22(e)(3) of the Code, which shall be determined by the Committee on the basis of such medical or other evidence as it may reasonably require or deem appropriate.

Distribution Date. March 15 ^th in the year of distribution of a Retained Unit in cash or Stock under Article V (or the first business day thereafter), except that in the case of special distributions, the Distribution Date shall be the first business day of the month in which the Committee determines the amount and form of the distribution.

Dividend Equivalent Credit. An amount equal to the dividend payable on one share of Common Stock determined and credited on the dividend payment date to each Unit Recipient’s account for each Unit which has been awarded to the Unit Recipient and not converted to a Retained Unit or canceled.

Dividend Equivalent Unit. A Unit awarded pursuant to a Dividend Equivalent Credit.

Effective Date. The date as of which this Plan is effective, which shall be the date it is adopted by the Board.

Eligible Employees. Those individuals who meet the following eligibility requirements:

i.            Such individual must be a full time employee of the Company or a Subsidiary.

For this purpose, an individual shall be considered to be an “employee” only if there exists between the Company or a Subsidiary and the individual the legal and bona fide relationship of employer and employee. In determining whether such relationship exists, the regulations of the United States Treasury Department relating to the determination of such relationship for the purpose of collection of income tax at the source on wages shall be applied.

ii.           Such individual is identified by the Committee as an employee who is in a position to contribute to the long-term success of the Company.

iii.          If the Registration shall not have occurred, such individual must have such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the investment involved in the receipt and/or exercise of a Right.

iv.          Such individual, being otherwise an Eligible Employee under the foregoing items, shall have been selected by the Committee as a person to whom a Right or Rights shall be granted under the Plan.

Exercise Price. The price at which an Option may be exercised.

Fair Market Value. With respect to the Company’s Common Stock, the market price per share of such Common Stock determined by the Committee, consistent with the requirements of Section 422 of the Code and to the extent consistent therewith, as follows, as of the date specified in the context within which such term is used:

i.            if the Common Stock was traded on a stock exchange on the date as of which such determination is made, then the Fair Market Value will be equal to the closing price reported by the applicable composite-transactions report for such date;

ii.           if on the date as of which such determination is made, quotations for the Common Stock are regularly listed on the NASDAQ system or another comparable system, the fair market value of a share of Common Stock shall be deemed to be equal to the closing price for the Common Stock quoted on such system for the trading date as of the date as of which such determination is made; and if a closing price is not available for such date, then the fair market value shall be equal to the closing price on the most recent trading day for which such a price is available;

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

iv.          if the Committee determines that the price as determined above does not represent the fair market value of a share of Common Stock, the Committee may then consider such other factors as it deems appropriate and then fix the fair market value for the purposes of this Plan. In such case, the Committee shall maintain a written record of its method of determining Fair Market Value.

Holder. An individual granted Rights to Restricted Stock.

ISO. An “incentive stock option” as defined in Section 422 of the Code.

Just Cause Termination means:

i.            with respect to the Company or any Subsidiary which employs the recipient of any Rights under the Plan (the “Recipient”) or for which such recipient primarily performs services, the commission by the recipient of an act of fraud, embezzlement, theft or proven dishonesty, or any other illegal act or practice (whether or not resulting in criminal prosecution or conviction), or any act or practice which the Committee shall, in good faith, deem to have resulted in the Recipient’s becoming unbondable under the Company’s or the Subsidiary’s fidelity bond;

ii.           the willful engaging by the Recipient in misconduct which is deemed by the Committee, in good faith, to be materially injurious to the Company or any Subsidiary, monetarily or otherwise, including, but not limited to, improperly disclosing trade secrets or other confidential or sensitive business information and data about the Company or any subsidiaries and competing with the Company or its subsidiaries, or soliciting employees, consultants or customers of the Company in violation of law or any employment or other agreement to which the Recipient is a party; or

iii.          the willful and continued failure or habitual neglect by the Recipient to perform his or her duties with the Company or the Subsidiary substantially in accordance with the operating and personnel policies and procedures of the Company or the Subsidiary generally applicable to all their employees. For purposes of this Plan, no act or failure to act by the Recipient shall be deemed to be “willful” unless done or omitted to be done by the Recipient not in good faith and without reasonable belief that the Recipient’s action or omission was in the best interest of the Company and/or the Subsidiary. Notwithstanding the foregoing, if the Recipient has entered into an employment agreement that is binding as of the date of employment termination, and if such employment agreement defines “Cause,” then the definition of “Cause” in such agreement shall apply to the Recipient in this Plan. “Cause” under either (i), (ii) or (iii) shall be determined by the Committee.

NASDAQ. National Association of Securities Dealers Automated Quotations system.

Non-Qualified Option. Any Option granted under Article III hereof whether designated by the Committee as a Non-Qualified Option or otherwise, other than an Option designated by the Committee as an ISO, or any Option so designated but which, for any reason, fails to qualify as an ISO pursuant to Section 422 of the Code and the rules and regulations thereunder.

Option Agreement. The agreement between the Company and an Optionee with respect to Options granted to such Optionee, including such terms and provisions as are necessary or appropriate under Article III.

Optionee. An individual granted an Option under Article III.

Option Period. The period ending on the expiration date of each Option, which shall not exceed 10 years from the date of grant of the Option.

Options. ISOs and Non-Qualified Options are collectively referred to herein as “Options;” provided, however, whenever reference is specifically made only to ISOs or Non-Qualified Options, such reference shall be deemed to be made to the exclusion of the other.

Performance Period. A period of two or more years during which certain criteria must be met in order for Units to be converted into Retained Units.

Plan Pool. A number of shares of authorized, but unissued, shares of Common Stock equal to Four Hundred Nine Thousand Three hundred Eighty-Five (409,385), as adjusted pursuant to Section 2.3(b), which shall be available as Stock under this Plan.

Registration. The registration by the Company of this Plan, the offering of Rights under this Plan, the offering of Stock under this Plan, and/or the Stock acquirable under this Plan under the 1933 Act and applicable state “Blue Sky” and securities laws.

Retained Units. Units which Unit Recipients receive based upon the satisfaction of performance goals during a Performance Period.

Restricted Stock. The Stock that a Holder shall be awarded with restrictions when, as, in the amounts and with the restrictions described in Article IV.

Restricted Stock Grant Agreement. The agreement between the Company and a Holder with respect to Rights to Restricted Stock, including such terms and provisions as are necessary or appropriate under Article IV.

Retirement. “Retirement” shall mean:

i.            the termination of an Eligible Employee’s employment under conditions which would constitute “normal retirement” or “early retirement” under any tax qualified retirement plan maintained by the Company or a Subsidiary, or

ii.           termination of employment after attaining age 65 (except in the case of a Just

Cause Termination), or

iii.          termination of service as a Director, at the election of the Director, at any time

after not less than five (5) years of service as a member of the board of directors.

Rights. The rights to exercise, purchase or receive the Options, Restricted Stock, Units and SARs described herein.

Rights Agreement. An Option Agreement, a Restricted Stock Grant Agreement, a Unit Agreement or a SAR Agreement.

SAR. The Right of a SAR Recipient to receive cash when, as and in the amounts described in Article VI.

SAR Agreement. The agreement between the Company and a SAR Recipient with respect to the SAR awarded to the SAR Recipient, including such terms and conditions as are necessary or appropriate under Article VI.

SAR Exercise Date. The date notice is received by the Company that a SAR is being exercised.

SAR Period. The period ending on the expiration date or dates of each SAR, which date shall be not later than ten (10) years after the date such SAR is granted.

SAR Recipient. An individual to whom SARs are granted.

SAR Vesting Period. The period or periods of time within which each SAR or portion thereof will first become exercisable.

SEC. The United States Securities and Exchange Commission.

Stock. The shares of Common Stock in the Plan Pool available for issuance pursuant to the valid exercise of a Right or on which the cash value of a Right is to be based.

Subsidiary . Any direct or indirect subsidiary entity of the Company.

Tax Withholding Liability.          All federal and state income taxes, social security tax, and any other taxes applicable to the compensation income arising from the transaction required by applicable law to be withheld by the Company.

Transfer. The sale, assignment, transfer, conveyance, pledge, hypothecation, encumbrance, loan, gift, attachment, levy upon, assignment for the benefit of creditors, by operation of law (by will or descent and distribution), transfer by a qualified domestic relations order, a property settlement or maintenance agreement, transfer by result of the bankruptcy laws or otherwise of a share of Stock or of a Right.

Units. The Right of a Unit Recipient to receive a combination of cash and Stock when, as and in the amounts described in Article V.

Unit Agreement. The agreement between the Company and Unit Recipient with respect to the award of Units to the Unit Recipient, including such terms and conditions as are necessary or appropriate under Article V.

Unit Recipient. An individual granted a Unit.

Vesting Period . The period or periods of time within which each Option or portion thereof will first become exercisable.

1933 Act. The Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

1934 Act. The Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

ARTICLE II

GENERAL

Section 2.1. Purpose.

The purposes of this Plan are to encourage and motivate Directors and selected key employees to contribute to the successful performance of the Company and any Subsidiary of the Company and to promote the growth of the market value of the Company’s Common Stock; to achieve a unity of purpose between such Directors, employees and shareholders by providing ownership opportunities, and, when viewed in conjunction with potential benefit plans for members of the Board and the Board of Directors of any Subsidiary, to achieve a unity of purpose between such employees and Directors in the achievement of the Company’s primary long term performance objectives; and to retain such employees by rewarding them with potentially tax-advantageous future compensation. These objectives will be promoted through the granting of Rights to designated Eligible Employees and Directors pursuant to the terms of this Plan.

Section 2.2. Administration.

(a)          The Plan shall be administered by the Committee. The Committee may designate any officers or employees of the Company or any Subsidiary to assist in the administration of the Plan, to execute documents on behalf of the Committee and to perform such other ministerial duties as may be delegated to them by the Committee.

(b)          Subject to the provisions of the Plan, the determinations and the interpretation and construction of any provision of the Plan by the Committee shall be final and conclusive upon persons affected thereby. By way of illustration and not of limitation, the Committee shall have the discretion:

(i)          to construe and interpret the Plan and all Rights granted hereunder and to determine the terms and provisions (and amendments thereof) of the Rights granted under the Plan (which need not be identical);

(ii)         to define the terms used in the Plan and in the Rights granted hereunder;

(iii)        to prescribe, amend and rescind the rules, regulations and policies relating to the Plan;

(iv)        to determine the Eligible Employees and Directors to whom and the time or times at which such Rights shall be granted, the number of shares of Stock, as and when applicable, to be subject to each Right, the exercise price or, other relevant purchase price or value pertaining to a Right, and the determination of leaves of absence which may be granted to Eligible Employees without constituting a termination of their employment for the purposes of the Plan; and

(v)         to make all other determinations and interpretations necessary or advisable for the administration of the Plan.

(c)          It shall be in the discretion of the Committee to grant Options to purchase shares of Stock to Eligible Employees which qualify as ISOs under the Code. Any Options granted which fail to satisfy the requirements for ISOs shall become Non-Qualified Options.

(d)          The intent of the Company is to effect the Registration, if necessary. In such event, the Company shall make available to Eligible Employees and Directors receiving Rights and/or shares of Stock in connection therewith all disclosure documents required under applicable federal and state laws. If such Registration shall not occur, the Committee shall be responsible for supplying the recipient of a Right and/or shares of Stock in connection therewith with such information about the Company as is contemplated by the federal and state securities laws in connection with exemptions from the registration requirements of such laws, as well as providing the recipient of a Right with the opportunity to ask questions and receive answers concerning the Company and the terms and conditions of the Rights granted under this Plan. In addition, if such Registration shall not occur, the Committee shall be responsible for determining the maximum number of Eligible Employees and the suitability of particular persons to be Eligible Employees in order to comply with applicable federal and state securities statutes and regulations governing such exemptions.

(e)          In determining the Eligible Employees and Directors to whom Rights may be granted and the number of shares of Stock to be covered by each Right, the Committee shall take into account the nature of the services rendered by such Eligible Employees and Directors, their present and potential contributions to the success of the Company and/or a Subsidiary and such other factors as the Committee shall deem relevant. An Eligible Employee or Director who has been granted a Right under this Plan may be granted an additional Right or Rights under this Plan if the Committee shall so determine. If pursuant to the terms of this Plan, or otherwise in connection with this Plan, it is necessary that the percentage of stock ownership of an Eligible Employee be determined, the ownership attribution provisions set forth in Section 424(d) of the Code shall be controlling.

(f)          The granting of Rights pursuant to this Plan is in the exclusive discretion of the Committee, and until the Committee acts, no individual shall have any Rights under this Plan. The terms of this Plan shall be interpreted in accordance with this intent.

Section 2.3. Stock Available For Rights.

(a)          Shares of the Stock shall be subject to, or underlying, grants of Options, Restricted Stock, SARs and Units under this Plan. The total number of shares of Stock for which, or with respect to which, Rights may be granted (including the number of shares of Stock in respect of which SARs and Units may be granted) under this Plan shall be those designated in the Plan Pool. In the event that a Right granted under this Plan to any Eligible Employee or Director expires or is terminated unexercised as to any shares of Stock covered thereby, such shares thereafter shall be deemed available in the Plan Pool for the granting of Rights under this Plan; provided, however, if the expiration or termination date of a Right is beyond the term of existence of this Plan as described in Section 7.3, then any shares of Stock covered by unexercised or terminated Rights shall not reactivate the existence of this Plan and therefore shall not be available for additional grants of Rights under this Plan.

(b)          In the event the outstanding shares of Common Stock are increased, decreased, changed into or exchanged for a different number or kind of securities as a result of a stock split, reverse stock split, stock dividend, recapitalization, merger, share exchange acquisition, combination or reclassification, appropriate proportionate adjustments will be made in: (i) the aggregate number and/or kind of shares of Stock in the Plan Pool that may be issued pursuant to the exercise of, or that are underlying, Rights granted hereunder; (ii) the exercise or other purchase price or value pertaining to, and the number and/or kind of shares of Stock called for with respect to, or underlying, each outstanding Right granted hereunder; and (iii) other rights and matters determined on a per share basis under this Plan or any Rights Agreement. Any such adjustments will be made only by the Committee and when so approved will be effective, conclusive and binding for all purposes with respect to this Plan and all Rights then outstanding. No such adjustments will be required by reason of (i) the issuance or sale by the Company for cash of additional shares of its Common Stock or securities convertible into or exchangeable for shares of its Common Stock, or (ii) the issuance of shares of Common Stock in exchange for shares of the capital stock of any corporation, financial institution or other entity acquired by the Company or any Subsidiary in connection therewith.

(c)          The grant of a Right pursuant to this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

(d)          No fractional shares of Stock shall be issued under this Plan for any adjustment under Section 2.3(b).         

Section 2.4. Severable Provisions.

The Company intends that the provisions of each of Articles III, IV, V and VI, in each case together with Articles I, II and VII, shall each be deemed to be effective on an independent basis, and that if one or more of such Articles, or the operative provisions thereof, shall be deemed invalid, void or voidable, the remainder of such Articles shall continue in full force and effect.

Article  III

OPTIONS

Section 3.1. Grant of Options.

(a)          The Company may grant Options to Eligible Employees as provided in this Article III. Options will be deemed granted pursuant to this Article III only upon (i) authorization by the Committee, and (ii) the execution and delivery of an Option Agreement by the Optionee and a duly authorized officer of the Company. The aggregate number of shares of Stock potentially acquirable under all Options granted shall not exceed the total number of shares of Stock remaining in the Plan Pool, less all shares of Stock potentially acquired under, or underlying, all other Rights outstanding under this Plan.

(b)          The Committee shall designate Options at the time a grant is authorized as either ISOs or Non-Qualified Options. ISOs may only be granted to Eligible Employees. In accordance with Section 422(d) of the Code, the aggregate Fair Market Value (determined as of the date an ISO is granted) of the shares of Stock as to which an ISO may first become exercisable by an Optionee in a particular calendar year may not exceed the Annual Vesting Amount. If an Optionee is granted Options in excess of the Annual Vesting Amount, or if such Options otherwise become exercisable with respect to a number of shares of Stock which would exceed the Annual Vesting Amount, such excess Options shall be Non-Qualified Options.

Section 3.2. Exercise Price.

The initial Exercise Price of each Option granted under this Plan shall be determined by the Committee in its discretion; provided, however, that the Exercise Price of an ISO shall not be less than (i) the Fair Market Value of the Common Stock on the date of grant of the Option, in the case of any Eligible Employee who does not own stock possessing more than ten percent (10%) of the total combined voting power of all classes of the capital stock of the Company (within the meaning of Section 422 (b) (6) of the Code), or (ii) one hundred and ten percent (110%) of such Fair Market Value in the case of any Eligible Employee who owns stock in excess of such amount.

Section 3.3. Terms and Conditions of Options.

(a)          All Options must be granted within ten (10) years of the Effective Date.

(b)          The Committee may grant ISOs and Non-Qualified Options, either separately or jointly, to an Eligible Employee. Directors who are not also Eligible Employees are only eligible to be granted Non-Qualified Options by the Committee.

(c)          Each grant of Options shall be evidenced by an Option Agreement in form and substance satisfactory to the Committee in its discretion, consistent with the provisions of this Article III.

(d)          Nothing contained in this Article III, any Option Agreement or in any other agreement executed in connection with the granting of an Option to an Eligible Employee under this Article III will confer upon any Optionee any right with respect to the continuation of his or her status as an employee of the Company or any Subsidiary.

(e)          Except as otherwise provided herein, each Option Agreement may specify the Vesting Period, if any, with respect to the total number of shares of Stock acquirable thereunder. Such Vesting Periods will be fixed by the Committee in its discretion, and may be accelerated or shortened by the Committee in its discretion.

(f)          Not less than one hundred (100) shares of Stock may be purchased at any one time through the exercise of an Option unless the number purchased is the total number at that time purchasable under all Options granted to the Optionee.

(g)          An Optionee shall have no rights as a shareholder of the Company with respect to any shares of Stock covered by Options granted to the Optionee until payment in full of the Exercise Price by such Optionee for the shares being purchased. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such Stock is fully paid for, except as provided in Section 2.3(b) hereof.

Section 3.4. Exercise of Options.

(a)          An Optionee must be an Eligible Employee or Director at all times from the date of grant until the exercise of the Options granted, except as provided in Section 3.5.

(b)          An Option may be exercised to the extent exercisable (i) by giving written notice of exercise to the Committee, specifying the number of full shares of Stock to be purchased and, if applicable, accompanied by full payment of the Exercise Price thereof and the amount of the Tax Withholding Liability pursuant to Section 3.4(c) below; and (ii) by giving assurances satisfactory to the Company that the shares of Stock to be purchased upon such exercise are being purchased for investment and not with a view to resale in connection with any distribution of such shares in violation of the 1933 Act; provided, however, that in the event the prior occurrence of the Registration or in the event resale of such Stock without such Registration would otherwise be permissible, this second condition will be inoperative if, in the opinion of counsel for the Company, such condition is not required under the 1933 Act or any other applicable law, regulation or rule of any governmental agency.

(c)          As a condition to the issuance of the shares of Stock upon full or partial exercise of a Non-Qualified Option, the Optionee will pay to the Company in cash, or in such other form as the Committee may determine in its discretion, the amount of the Company’s Tax Withholding Liability required in connection with such exercise.

(d)          The Exercise Price of an Option shall be payable to the Company either (i) in United States dollars, in cash or by check, or money order payable to the order of the Company, or (ii) at the discretion of the Committee, through the delivery of shares of the Stock owned by the Optionee (including, if the Committee so permits, a portion of the shares of Stock as to which the Option is then being exercised) with a Fair Market Value as of the date of delivery equal to the Exercise Price, or (iii) at the discretion of the Committee, by a combination of (i) and (ii) above. No shares of Stock shall be delivered until full payment has been made.

Section 3.5. Term and Termination of Option.

(a)          The Committee shall determine, and each Option Agreement shall state, the expiration date or dates of each Option, but such expiration date shall be not later than ten (10) years after the date such Option was granted. In the event an ISO is granted to a 10% shareholder, the expiration date or dates of each Option Period shall be not later than five (5) years after the date such Option is granted. The Committee may extend the expiration date or dates of an Option Period of any Non-Qualified Option after such date was originally set; provided, however such expiration date may not exceed the maximum expiration date described in this Section 3.5(a).

(b)          In the event of the termination of employment of an Optionee either by reason of (i) Just Cause Termination, or (ii) voluntary separation on the part of such Optionee for a reason other than Retirement or Disability, any Option or Options granted to the Optionee under this Plan, to the extent not previously exercised or surrendered by the Optionee, or expired by their terms, shall immediately terminate.

(c)          In the event of the termination of employment of an Optionee as a result of such Optionee’s Retirement, such Optionee shall have the right to exercise any Option or Options granted to the Optionee under this Plan, to the extent that they have not previously been exercised or surrendered by the Optionee, or expired by their terms, for a period of three (3) months after the date of retirement, but in no event may any Option be exercised later than the end of the Option Period. Notwithstanding any other provision contained herein, or in any Option Agreement, upon Retirement, any Option then held by an Optionee shall be exercisable immediately in full.

(d)          In the event of the termination of employment of an Optionee by reason of such Optionee’s Disability, such Optionee shall have the right to exercise any Option or Options held by the Optionee, to the extent that they previously have not been exercised or surrendered by the Optionee, or expired by their terms, notwithstanding any limitations placed on the exercise of such Options by this Plan or an Option Agreement, immediately in full and at any time within twelve (12) months after the last date on which such Optionee provides services as an officer or an employee of the Company before being disabled, but in no event may any Option be exercised later than the end of the Option Period.

(e)          In the event that an Optionee should die while employed by the Company, or within three (3) months after Retirement, any Option or Options granted to the Optionee under this Plan and not previously exercised or surrendered by the Optionee, or expired by their terms, shall vest and shall be exercisable, according to their respective terms, by the personal representative of such Optionee or by any person or persons who acquired such Options by bequest or inheritance from such Optionee, notwithstanding any limitations placed on the exercise of such Options by this Plan or any Option Agreement, immediately in full and at any time within twelve (12) months after the date of death of such Optionee, but in no event may any Option be exercised later than the end of the Option Period. Any references herein to an Optionee shall be deemed to include any person entitled to exercise an Option under the terms of this Plan after the death of such Optionee.

Section 3.6. Change in Control Transaction.

At any time prior to the date of consummation of a Change in Control Transaction, the Committee may, in its absolute discretion, determine that all or any part of the Options theretofore granted under this Article III shall become immediately exercisable in full and may thereafter be exercised at any time before the date of consummation of the Change in Control Transaction (except as otherwise provided in Article II hereof, and except to the extent that such acceleration of exercisability would result in an “excess parachute payment” within the meaning of Section 280G of the Code).

Section 3.7. Restrictions On Transfer.

An Option granted under Article III may not be Transferred except by will or the laws of descent and distribution and, during the lifetime of the Optionee to whom it was granted, may be exercised only by such Optionee.

Section 3.8. Stock Certificates.

Certificates representing the Stock issued pursuant to the exercise of Options will bear all legends required by law and necessary to effectuate the provisions hereof. The Company may place a “stop transfer” order against such shares of Stock until all restrictions and conditions set forth in this Article III, the applicable Option Agreement, and in the legends referred to in this Section 3.8 have been complied with.

Section 3.9. Amendment and Discontinuance.

The Board may at any time terminate the Plan; provided, however, that the Board (unless its actions are approved or ratified by the shareholders of the Company within twelve months of the date that the Board amends the Plan) may not amend the Plan to:

(a)          Increase the total number of shares of Stock issuable pursuant to all Rights under the Plan, except as contemplated in Article I or Section 2.3(b) hereof; or

(b)          Change the class of employees eligible to receive Incentive Stock Options that may participate in the Plan.

No termination, amendment, or modification of the Plan shall affect adversely an Optionee’s rights under an Option Agreement without the consent of the Optionee or his legal representative.

Article  IV

RESTRICTED STOCK GRANTS

Section 4.1 Grants of Restricted Stock.

(a)          The Company may issue Restricted Stock to Eligible Employees and Directors as provided in this Article IV. Restricted Stock will be deemed issued only upon (i) authorization by the Committee, and (ii) the execution and delivery of a Restricted Stock Grant Agreement by the person to whom such Restricted Stock is to be issued and a duly authorized officer of the Company.

(b)          Each issuance of Restricted Stock pursuant to this Article IV will be evidenced by a Restricted Stock Grant Agreement between the Company and the Holder in form and substance satisfactory to the Committee in its sole discretion, consistent with this Article IV. Each Restricted Stock Grant Agreement will specify the purchase price per share, if any, paid by the Holder for the Restricted Stock, such amount to be fixed by the Committee.

(c)          Without limiting the foregoing, each Restricted Stock Grant Agreement shall set forth the terms and conditions of any forfeiture provisions regarding the Restricted Stock, (including any provisions for accelerated vesting in the event of a Change in Control Transaction) as determined by the Committee.

(d)          At the discretion of the Committee, the Holder, as a condition to such issuance, may be required to pay to the Company in cash, or in such other form as the Committee may determine in its discretion, the amount of the Company’s Tax Withholding Liability required in connection with such issuance.

(e)          Nothing contained in this Article IV, any Restricted Stock Grant Agreement, or any other agreement executed in connection with the issuance of Restricted Stock under this Article IV will confer upon any Holder any right with respect to the continuation of his or her status as an employee of the Company or any Subsidiary.

Section 4.2. Restrictions on Transfer of Restricted Stock.

(a)          Shares of Restricted Stock acquired by a Holder may be Transferred only in accordance with the specific limitations on the Transfer of Restricted Stock imposed by applicable state or federal securities laws or set forth below, and subject to certain undertakings of the transferee set forth in Section 4.2(c). All Transfers of Restricted Stock not meeting the conditions set forth in this Section 4.2 are expressly prohibited.

(b)          Any prohibited Transfer of Restricted Stock is void and of no effect. Should such a Transfer be attempted, the Company may refuse to carry out the Transfer on its books, attempt to set aside the Transfer, enforce any undertaking or right under this Section 4.2, and/or exercise any other legal or equitable remedy.

(c)          Any Transfer of Restricted Stock that would otherwise be permitted under the terms of this Plan is prohibited unless the transferee executes such documents as the Company may reasonably require to ensure the Company’s rights under a Restricted Stock Grant Agreement and this Article IV are adequately protected with respect to the Restricted Stock so Transferred. Such documents may include, without limitation, an agreement by the transferee to be bound by all of the terms of this Plan applicable to Restricted Stock and of the applicable Restricted Stock Grant Agreement, as if the transferee were the original Holder of such Restricted Stock.

(d)          To facilitate the enforcement of the restrictions on Transfer set forth in this Article IV, the Committee may, at its discretion, require the Holder of shares of Restricted Stock to deliver the certificate(s) for such shares with a stock power executed in blank by the Holder and the Holder’s spouse, to the Secretary of the Company or his or her designee, and the Company may hold said certificate(s) and stock power(s) in escrow and take all such actions as are necessary to ensure that all Transfers and/or releases are made in accordance with the terms of this Plan. Such certificates may be held in escrow so long as the shares of Restricted Stock evidenced thereby are subject to any restriction on Transfer under this Article IV or under a Restricted Stock Grant Agreement. Each Holder acknowledges that the Secretary of the Company (or his or her designee) is so appointed as the escrow agent with the foregoing authorities as a material inducement to the issuance of shares of Restricted Stock under this Article IV, that the appointment is coupled with an interest, and that it accordingly will be irrevocable. The escrow agent will not be liable to any party to a Restricted Stock Grant Agreement (or to any other party) for any actions or omissions unless the escrow agent is grossly negligent relative thereto. The escrow agent may rely upon any letter, notice or other document executed by any signature purported to be genuine.

Section 4.3. Compliance with Law.

Notwithstanding any other provision of this Article IV, Restricted Stock may be issued pursuant to this Article IV only after there has been compliance with all applicable federal and state securities laws, and such issuance will be subject to this overriding condition. The Company may include shares of Restricted Stock in a Registration, but will not be required to register or qualify Restricted Stock with the SEC or any state agency, except that the Company will register with, or as required by local law, file for and secure an exemption from such registration requirements from the applicable securities administrator and other officials of each jurisdiction in which a Holder would be issued Restricted Stock hereunder prior to such issuance.

Section 4.4. Stock Certificates.

Certificates representing the Restricted Stock issued pursuant to this Article IV will bear all legends required by law and necessary to effectuate the provisions hereof. The Company may place a “stop transfer” order against shares of Restricted Stock until all restrictions and conditions set forth in this Article IV, the applicable Restricted Stock Grant Agreement and the legends referred to in this Section 4.4 have been complied with.

Section 4.5. Market Standoff.

To the extent requested by the Company and any underwriter of securities of the Company in connection with a firm commitment underwriting, no Holder of any shares of Restricted Stock will Transfer any such shares not included in such underwriting, or not previously registered in a Registration, during the one hundred twenty (120) day period following the effective date of the registration statement filed with the SEC under the 1933 Act in connection with such offering.

Section 4.6. Amendment and Discontinuance.

The Board may at any time terminate the Plan; provided, however, that the Board (unless its actions are approved or ratified by the shareholders of the Company within twelve months of the date that the Board amends the Plan) may not amend the Plan to:

(a)          Increase the total number of shares of Stock issuable pursuant to all Rights under the Plan, except as contemplated in Article I or Section 2.3(b) hereof; or

(b)          modify the requirements as to eligibility for participation under this Article IV.

No termination, amendment, or modification of the Plan shall affect adversely a Holder’s rights under a Restricted Stock Agreement without the consent of the Holder or his legal representative.

Section 4.7. Limitations .

The aggregate number of shares of Stock potentially distributable as Restricted Stock, shall not exceed the total number of shares of Stock remaining in the Plan Pool, less all shares of Stock potentially acquirable under, or underlying, all other Rights outstanding under this Plan.

Article  V

LONG-TERM INCENTIVE COMPENSATION UNITS

Section 5.1. Awards of Units.

(a)          The Company may grant awards of Units to Eligible Employees as provided in this Article V. Units will be deemed granted only upon (i) authorization by the Committee, and (ii) the execution and delivery of a Unit Agreement by the Eligible Employee to whom Units are to be granted and an authorized officer of the Company. Units may be granted in such amounts and to such Unit Recipients as the Committee may determine, subject to the limitations of Section 5.2 below.

(b)          Each grant of Units pursuant to this Article V will be evidenced by a Unit Award Agreement between the Company and the Unit Recipient in form and substance satisfactory to the Committee in its sole discretion, consistent with this Article V.

(c)          Except as otherwise provided herein, Units will be converted into Retained Units only after the end of the Performance Period. The Performance Period shall be set by the Committee for each year’s awards.

(d)          The percentage of the Units awarded under this Section 5.1 or credited pursuant to Section 5.5 that will be distributed to Unit Recipients shall depend on the levels of financial performance and other performance objectives achieved during each year of the Performance Period; provided, however, that the Committee may adopt one or more performance categories or eliminate all performance categories other than financial performance. Financial performance shall be based on the consolidated results of the Company and its Subsidiaries prepared on the same basis as the financial statements published for financial reporting purposes and determined in accordance with Section 5.1(e) below. Other performance categories adopted by the Committee shall be based on such measurements of performance as the Committee shall deem appropriate.

(e)           The conversion of Units into Retained Units will be based on the Company’s financial performance with results from other performance categories applied as a factor, not exceeding one (1), against financial results. The annual financial and other performance results will be averaged over the Performance Period and translated into percentage factors according to graduated criteria established by the Committee for the entire Performance Period. The resulting percentage factors shall determine the percentage of Units that will be converted to Retained Units. No conversion to Retained Units shall be made if a minimum average percentage of the applicable measurement of performance, financial and other, to be established by the Committee is not achieved for the Performance Period. The performance levels achieved for each Performance Period and percentage of Units converted to Retained Units shall be conclusively determined by the Committee.

(f)          The percentage of Units awarded which are converted to Retained Units based on the levels of performance (including any Units credited under Section 5.5) will be determined as soon as practicable after each Performance Period.

(g)          As soon as practical after determination of the number of Retained Units, such Retained Units shall be distributed in the form of a combination of Stock and cash in the relative percentages as between the two as determined by the Committee. Units that have been awarded, but which do not become Retained Units, shall be canceled.

(h)          Notwithstanding any provision in this Article V other than Section 5.2, if the Committee determines that it is appropriate under the circumstances, the Committee may award to any Eligible Employee by virtue of hire, promotion or upgrade to a higher job grade classification, or special individual circumstances, an award of Units, with respect to one or more Performance Periods that began in prior years and at the time of the award have not yet been completed.

(i)           Notwithstanding any other provision of this Plan, the Committee may reduce or eliminate awards to a Unit Recipient who has been demoted to a lower job grade classification, and where circumstances warrant, may permit continued participation, proration or early distribution, or a combination thereof, of awards which would otherwise be canceled.

Section 5.2. Limitations.

The aggregate number of shares of Stock potentially distributable under all Units granted, including any Units credited pursuant to Section 5.5, shall not exceed the total number of shares of Stock remaining in the Plan Pool, less all shares of Stock potentially acquirable under, or underlying, all other Rights outstanding under this Plan.

Section 5.3. Terms and Conditions.

(a)          All awards of Units must be made within ten (10) years of the Effective Date.

(b)          The award of Units shall be evidenced by a Unit Award Agreement in form and substance satisfactory to the Committee in its discretion, consistent with the provisions of this Article V.

(c)           Nothing contained in this Article V, any Unit Award Agreement or in any other agreement executed in connection with the award of Units under this Article V will confer upon any Unit Recipient any right with respect to the continuation of his or her status as an employee of the Company or any of its Subsidiaries.

(d)          A Unit Recipient shall have no rights as a shareholder of the Company with respect to any Units until the Retained Unit has been converted into shares of Stock. No adjustment shall be made in the number of Units for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such Stock is fully paid for, except as provided in Sections 2.3(b) and 5.6(a).

Section 5.4. Special Distribution Rules.

(a)          Except as otherwise provided in this Section 5.4, a Unit Recipient must be an Eligible Employee from the date a Unit is awarded to him or her continuously through and including the date of conversion to a Retained Unit.

(b)          In case of the Death or Disability of a Unit Recipient prior to the end of any Performance Period, the number of Retained Units converted for the Unit Recipient for such Performance Period shall be reduced pro rata based on the number of months remaining in the Performance Period after the month of Death or Disability. The Retained Units, reduced in the discretion of the Committee to the percentage indicated by the levels of performance achieved prior to the date of Death or Disability, if any, shall be distributed in cash or Stock within a reasonable time after Death or Disability. All other Units awarded to the Unit Recipient for such Performance Period shall be canceled.

(c)          If a Unit Recipient enters into Retirement prior to the end of any Performance Period, the Units converted to Retained Units for such Unit Recipient shall be prorated to the end of the year in which such Retirement occurs and distributed in cash and/or Stock at the end of the Performance Period based upon the Company’s performance for such period.

(d)          In the event of the termination of the Unit Recipient’s status as an Eligible Employee prior to the end of any Performance Period for any reason other than Death, Disability or Retirement, all Units awarded to the Unit Recipient with respect to any such Performance Period shall be immediately forfeited and canceled.

(e)          Upon a Unit Recipient’s promotion to a higher job grade classification, the Committee may, in its discretion, award to the Unit Recipient the total Units, or any portion thereof, which are associated with the higher job grade classification for the then current Performance Period.

Section 5.5. Dividend Equivalent Units.

The Committee may provide in a grant and in the Unit Agreement that on any record date for dividends on the Common Stock, an amount equal to the dividend payable on the number of shares of Common Stock covered by the Unit will be determined and credited on the payment date to each Unit Recipient’s account for each Unit which has been awarded to the Unit Recipient and not converted to a Retained Unit or canceled. Such amount will be converted within the account to an additional number of Units equal to the number of shares of Common Stock that could be purchased at Fair Market Value on such dividend payment date. These Units will be treated for purposes of this Article V in the same manner as those Units granted pursuant to Section 5.1.

Section 5.6. Adjustments.

(a)          In addition to the provisions of Section 2.3(b), if an extraordinary change occurs during a Performance Period which significantly alters the basis upon which the performance levels were established under Section 5.1 for that Performance Period, to avoid distortion in the operation of this Article V, but subject to Section 5.2, the Committee may make adjustments in such performance levels to preserve the incentive features of this Article V, whether before or after the end of the Performance Period, to the extent it deems appropriate in its sole discretion, which adjustments shall be conclusive and binding upon all parties concerned. Such changes may include, without limitation, adoption of, or changes in, accounting practices, tax laws and regulatory or other laws or regulations; economic changes not in the ordinary course of business cycles; significant corporate transactions; or compliance with judicial decrees or other legal authorities.

(b)          At any time prior to the date of consummation of a Change in Control Transaction, the Committee may determine that all or any part of the Units theretofore awarded under this Article V shall become immediately Retained Units (reduced pro rata based on the number of months remaining in the Performance Period after the consummation of the Change in Control Transaction) and may thereafter be distributed in cash or Stock at any time before the date of consummation of the Change in Control Transaction (except as otherwise provided in Article II hereof, and except to the extent that such acceleration of distribution would result in an “excess parachute payment” within the meaning of Section 280G of the Code).

Section 5.7. Other Conditions.

(a)          No person shall have any claim to be granted an award of Units under this Article V and there is no obligation for uniformity of treatment of Eligible Employees or Unit Recipients under this Article IV.

(b)          The Company shall have the right to deduct from any distribution or payment in cash under this Article V, and the Unit Recipient or other person receiving shares of Stock under this Article V shall be required to pay to the Company any Tax Withholding Liability. The number of shares of Stock to be distributed to any individual Unit Recipient may be reduced by the number of shares of Stock, the Fair Market Value of which on the Distribution Date is equivalent to the cash necessary to pay any Tax Withholding Liability, where the cash to be distributed is not sufficient to pay such Tax Withholding Liability, or the Unit Recipient may deliver to the Company cash sufficient to pay such Tax Withholding Liability.

(c)          Distribution of shares of Stock under this Article V may be delayed until the requirements of any applicable laws or regulations, and any stock exchange or applicable NASDAQ requirements, are satisfied. The shares of Stock distributed under this Article V shall be subject to such restrictions and conditions on disposition as counsel for the Company shall determine to be desirable or necessary under applicable law.

(d)          For the purpose of distribution of Units in cash, the value of a Unit shall be the Fair Market Value on the Distribution Date.

(e)          Notwithstanding any other provision of this Article V, no Dividend Equivalent Credits shall be made and no conversion of Dividend Equivalent Units to Retained Units shall be made if at the time a Dividend Equivalent Credit or conversion of Dividend Equivalent Units to Retained Units would otherwise have been made:

(i)          Any regular dividend on the Common Stock has been omitted and not subsequently paid or there exists any default in payment of dividends on any such outstanding shares of capital stock of the Company:

(ii)         The rate of dividends on the Common Stock is lower than at the time the Dividend Equivalent Units were awarded, adjusted for any change of the type addressed to in Section 2.3(b).

(iii)        Estimated consolidated net income of the Company for the twelve-month period preceding the month the Dividend Equivalent Credit or conversion of Dividend Equivalent Units to Retained Units would otherwise have been made is less than the sum of the amount of the Dividend Equivalent Credits and Retained Units eligible for distribution under this Article V in that month plus all dividends applicable to such period on an accrual basis, either paid, declared or accrued at the most recently paid rate, on all outstanding shares of Common Stock; or

(iv)        The Dividend Equivalent Credit or conversion of Dividend Equivalent Units to Retained Units would result in a default in any agreement by which the Company is bound.

(f)          In the event net income available under Section 5.7(e) above for Dividend Equivalent Credits and conversion of Dividend Equivalent Units to Retained Units is sufficient to cover part but not all of such amounts, the following order shall be applied in making payments: (i) Dividend Equivalent Credits, and then (ii) conversion of Dividend Equivalent Units to Retained Units.

Section 5.8. Designation of Beneficiaries.

A Unit Recipient may designate a beneficiary or beneficiaries to receive all or part of the Stock and/or cash to be distributed to the Unit Recipient under this Article V in case of Death. A designation of beneficiary may be replaced by a new designation or may be revoked by the Unit Recipient at any time. A designation or revocation shall be on a form to be provided for that purpose and shall be signed by the Unit Recipient and delivered to the Company prior to the Unit Recipient’s Death. In case of the Unit Recipient’s Death, any amounts to be distributed to the Unit Recipient under this Article V with respect to which a designation of beneficiary has been made (to the extent it is valid and enforceable under applicable law) shall be distributed in accordance with this Article V to the designated beneficiary or beneficiaries. The amount distributable to a Unit Recipient upon Death and not subject to such a designation shall be distributed to the Unit Recipient’s estate. If there shall be any question as to the legal right of any beneficiary to receive a distribution under this Article V, the amount in question may be paid to the estate of the Unit Recipient, in which event the Company shall have no further liability to anyone with respect to such amount.

Section 5.9. Restrictions On Transfer.

Units granted under Article V may not be Transferred, except as provided in Section 5.8, and, during the lifetime of the Unit Recipient to whom it was awarded, cash and Stock receivable with respect to Retained Units may be received only by such Unit Recipient.

Section 5.10. Amendment and Discontinuance.

The Board may at any time terminate the Plan; provided, however, that the Board (unless its actions are approved or ratified by the shareholders of the Company within twelve months of the date that the Board amends the Plan) may not amend the Plan to:

(a)          Increase the total number of shares of Stock issuable pursuant to all Rights under the Plan, except as contemplated in Article I or Section 2.3(b) hereof; or

(b)          modify the requirements as to eligibility for participation under this Article V.

No termination, amendment, or modification of the Plan shall affect adversely a Unit Recipient’s rights under a Unit Award Agreement without the consent of the Unit Recipient or his legal representative.

No award of Units may be granted under this Article V after May 31, 2018.

Section 5.11. Compliance with Rule 16b-3.

With respect to persons subject to Section 16 of the 1934 Act, transactions under this Article V are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any provision of this Article V or action by the Board or the Committee fails so to comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

Article  VI

STOCK APPRECIATION RIGHTS

Section 6.1. Grants of SARs.

(a)          The Company may grant SARs under this Article VI. SARs will be deemed granted only upon (i) authorization by the Committee, and (ii) the execution and delivery of a SAR Agreement by the Eligible Employee to whom the SARs are to be granted and a duly authorized officer of the Company. The aggregate number of shares of Stock which shall underlie SARs granted hereunder shall not exceed the total number of shares of Stock remaining in the Plan Pool, less all shares of Stock potentially acquirable under or underlying all other Rights outstanding under this Plan.

(b)          Each grant of SARs pursuant to this Article VI shall be evidenced by a SAR Agreement between the Company and the SAR Recipient, in form and substance satisfactory to the Committee in its sole discretion, consistent with this Article VI.

Section 6.2. Terms and Conditions of SARs.

(a)          All SARs must be granted within ten (10) years of the Effective Date.

(b)          Each SAR issued pursuant to this Article VI shall have an initial Base Value.

(c)          Nothing contained in this Article VI, any SAR Agreement or in any other agreement executed in connection with the granting of a SAR under this Article VI will confer upon any SAR Recipient any right with respect to the continuation of his or her status as an employee of the Company or any of its Subsidiaries.

(d)          Except as otherwise provided herein, each SAR Agreement may specify the SAR

Vesting Period. Such SAR Vesting Periods will be fixed by the Committee and may be accelerated or shortened by the Committee.

(e)          SARs relating to less than one hundred (100) shares of Stock may not be exercised at any one time unless the number exercised is the total number at that time exercisable under all SARs granted to the SAR Recipient.

(f)          A SAR Recipient shall have no rights as a shareholder of the Company with respect to any shares of Stock underlying such SAR. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such Stock is fully paid for, except as provided in Section 2.3(b).

Section 6.3. Restrictions On Transfer of SARs.

SARs granted under this Article VI may not be Transferred, except as provided in Section 6.7, and during the lifetime of the SAR Recipient to whom it was granted, may be exercised only by such SAR Recipient.

Section 6.4. Exercise of SARs.

(a)          A SAR Recipient, or his or her executors or administrators, or heirs or legatees, shall exercise a SAR of the SAR Recipient by giving written notice of such exercise to the Committee. SARs may be exercised only upon the completion of any SAR Vesting Period applicable to such SAR.

(b)          Within ten (10) business days of the SAR Exercise Date applicable to a SAR exercised in accordance with Section 6.4(a), the SAR Recipient shall be paid in cash the difference between the Base Value of such SAR (as adjusted, if applicable under Section 6.2(c), as of the most recently preceding quarterly period) and the Fair Market Value of the Common Stock as of the SAR Exercise Date, as such difference is reduced by the Company’s Tax Withholding Liability arising from such exercise.

Section 6.5. Termination of SARs.

The Committee shall determine, and each SAR Agreement shall state the SAR Period. The Committee may extend the expiration date or dates of a SAR Period after such date is originally set; provided, however, such expiration date may not exceed 10 years from the date of grant of the SAR.

Section 6.6. Change in Control Transaction.

At any time prior to the date or consummation of a Change in Control Transaction, the Committee may, in its absolute discretion, determine that all or any part of the SARs theretofore granted under this Article VI shall become immediately exercisable in full and may thereafter be exercised at any time before the date of consummation of the Change in Control Transaction (except as otherwise provided in Article II hereof, and except to the extent that such acceleration of exercisability would result in an excess parachute payment within the meaning of Section 280G of the Code).

Section 6.7. Designation of Beneficiaries.

A SAR Recipient may designate a beneficiary or beneficiaries to receive all or part of the cash to be paid to the SAR Recipient under this Article VI in case of Death. A designation of beneficiary may be replaced by a new designation or may be revoked by the SAR Recipient at any time. A designation or revocation shall be on a form to be provided for that purpose and shall be signed by the SAR Recipient and delivered to the Company prior to the SAR Recipient’s Death. In case of the SAR Recipient’s Death, the amounts to be distributed to the SAR Recipient under this Article VI with respect to which a designation of beneficiary has been made (to the extent it is valid and enforceable under applicable law) shall be distributed in accordance with this Article VI to the designated beneficiary or beneficiaries. The amount distributable to a SAR Recipient upon Death and not subject to such a designation shall be distributed to the SAR Recipient’s estate. If there shall be any question as to the legal right of any beneficiary to receive a distribution under this Article VI, the amount in question may be paid to the estate of the SAR Recipient in which event the Company shall have no further liability to anyone with respect to such amount.

Section 6.8. Amendment and Discontinuance.

The Board may at any time terminate the Plan; provided, however, that the Board (unless its actions are approved or ratified by the shareholders of the Company within twelve months of the date that the Board amends the Plan) may not amend the Plan to:

(a)          Increase the total number of shares of Stock issuable pursuant to all Rights under the Plan, except as contemplated in Section 2.3(b) hereof; or

(b)          modify the requirements as to eligibility for participation under this Article VI.

No termination, amendment, or modification of the Plan shall affect adversely a SAR Recipient’s rights under a SAR Agreement without the consent of the SAR Recipient or his legal representative.

Article  VII

MISCELLANEOUS

Section 7.1. Application of Funds.

The proceeds received by the Company from the sale of Stock pursuant to the exercise of Rights will be used for general corporate purposes.

Section 7.2. No Obligation to Exercise Right.

The granting of a Right shall impose no obligation upon the recipient to exercise such Right

Section 7.3. Term of Plan.

Except as otherwise specifically provided herein, Rights may be granted pursuant to this Plan from time to time within ten (10) years from the Effective Date.

Section 7.4. Captions and Headings; Gender and Number.

Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part of, and shall not serve as a basis for, interpretation or construction of this Plan. As used herein, the masculine gender shall include the feminine and neuter, and the singular number shall include the plural, and vice versa, whenever such meanings are appropriate.

Section 7.5. Expenses of Administration of Plan.

All costs and expenses incurred in the operation and administration of this Plan shall be borne by the Company or by a Subsidiary.

Section 7.6. Exculpation and Indemnification.

In connection with this Plan, no member of the Committee shall be personally liable for any act or omission to act in such person’s capacity as a member of the Committee, nor for any mistake in judgment made in good faith, unless arising out of, or resulting from, such person’s own bad faith, gross negligence, willful misconduct, or criminal acts. To the extent permitted by applicable law and regulation, the Company shall indemnify and hold harmless the members of the Committee, and each other officer or employee of the Company to whom any duty or power relating to the administration or interpretation of this Plan may be assigned or delegated, from and against any and all liabilities (including any amount paid in settlement of a claim with approval of the Board) and any costs or expense (including reasonable counsel fees) incurred by such person arising out of, or as a result of, such person’s duties, responsibilities, and obligations under this Plan, other than such liabilities, costs, and expenses as may arise out of, or result from, the bad faith, gross negligence, willful misconduct, or criminal acts of such persons.

Section 7.7. Governing Law.

Without regard to the principles of conflicts of laws the laws of the State of North Carolina shall govern and control the validity, interpretation, performance and enforcement of this Plan.

Section 7.8. Inspection of Plan.

A copy of this Plan, and any amendments thereto, shall be maintained by the Secretary of the Corporation and shall be shown to any proper person making inquiry about it.

Section 7.9. Section 409A of the Code.

The Corporation intends that the Plan comply with the requirements of Section 409A of the Code and shall be operated and interpreted consistent with that intent.

Exhibit 99.2

SELECT BANCORP, INC.

AMENDED AND RESTATED 2005 INCENTIVE STOCK OPTION PLAN

Select Bancorp, Inc., a North Carolina corporation (hereinafter referred to as the “Company”), does herein set forth the terms of the Select Bancorp, Inc. Amended and Restated 2005 Incentive Stock Option Plan (hereinafter referred to as this “Plan”) which was approved by the Board of Directors and shareholders of Select Bank & Trust Company (the “Bank”) and subsequently adopted by the Board of Directors of the Company (hereinafter referred to as the “Board”).

1.           Purpose of the Plan .   The purpose of this Plan is to provide for the grant of Incentive Stock Options (hereinafter referred to as “Option” or “Options”) qualifying for the tax treatment afforded by Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to eligible officers and employees of the Company or any of its subsidiaries (hereinafter referred to as “Optionees”) who wish to invest in the Company’s common stock (hereinafter referred to as “Common Stock”). The Company believes that participation in the ownership of the Company by Optionees will be to the mutual benefit of the Company and Optionees. The existence of this Plan will enhance the Company’s ability to attract capable individuals to employment in key employee positions.

2.           Administration of the Plan .

(a)          This Plan shall be administered by the Option Committee of the Board (hereinafter referred to as the “Committee”). The Committee shall consist of at least three (3) members of the Board all of whom shall qualify as non-employee directors as provided in Section 16(b) and the rules and regulations thereunder of the Securities Exchange Act of 1934, as amended. The members of the Committee shall be appointed by the Board and shall serve at the pleasure of the Board, which may remove members from, add members to, or fill vacancies in the Committee. Unless otherwise designated by the Board, the Compensation Committee of the Company shall serve as the Option Committee for purposes of this Plan.

(b)          The Committee shall decide to whom Options shall be granted under this Plan, the number of shares as to which Options shall be granted subject to the limitations set forth in Paragraph 11 of this Plan, the Option Price (as hereinafter defined) for such shares and such additional terms and conditions for such Options as the Committee deems appropriate.

(c)          A majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved unanimously in writing by the Committee, shall be considered as valid actions by the Committee.

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

3.           Shares of Common Stock Subject to the Plan .  The maximum number of shares of Common Stock that shall be available initially for Options under this Plan is Four Hundred Five Thousand Six Hundred Thirty-Four (405,634) shares, subject to adjustment as provided in Paragraph 15 hereof. Shares subject to Options which expire or terminate prior to the issuance of the shares of Common Stock shall again be available for future grants of Options under this Plan.

4.           Eligibility .   Options under this Plan may be granted to any Optionee as determined by the Committee. An individual may hold more than one Option under this or other plans adopted by the Company.

5.           Grant of Options .

(a)          The Committee shall authorize that Options for shares of Common Stock shall be granted to certain Optionees of the Company which Options shall be granted based upon the past service and the continued participation of those individuals in the operations of the Company. The allocation of said Options shall be as determined by a majority vote of the Committee at one or more meetings called for such purpose.

(b)          Upon the forfeiture of an Option for whatever reason prior to the expiration of the Option Period (as defined in Paragraph 10 hereof) the shares of Common Stock covered by a forfeited Option shall be available for the granting of additional Options to Optionees during the remaining term of this Plan upon such terms and conditions as may be determined by the Committee. The number of additional Options to be granted to specific Optionees during the term of this Plan shall be determined by the Committee as provided in Subparagraph 2(b) hereof.

6.           Vesting of Options .

(a)          Subject to the other terms and conditions contained in this Plan, Options granted shall vest and may be exercised by the Optionee at such times or intervals and on such other terms and conditions (if any) as are determined by the Committee and specified in the Option Agreement evidencing the Option (as hereinafter defined); provided, however , that Options granted under this Plan shall vest and the right of an Optionee to exercise an Option shall be nonforfeitable no sooner than is set forth in the following schedule:

(b)          In determining the number of shares of Common Stock under each Option vested under the above vesting schedule, an Optionee shall not be entitled to exercise an Option to purchase a fractional number of shares of the Common Stock. If the product resulting from multiplying the vested percentage times the Option results in a fractional number of shares of Common Stock, then an Optionee’s vested right shall be to the whole number of shares of Common Stock disregarding any fractional shares of Common Stock.

(c)          In the event that the employment of an Optionee with the Company or any of its subsidiaries terminates for any reason, other than the Optionee’s disability, death, retirement, or following a “change in control” of the Company, subject to Paragraph 13, the Optionee’s Options under this Plan shall be forfeited and shall be available again for grant to Optionees as may be determined by the Committee. Such forfeiture shall apply whether or not any such Options have been vested.

(d)          In the event that the employment of an Optionee with the Company or any of its subsidiaries should terminate because of such Optionee’s disability, death, or retirement, or following a “change in control” of the Company prior to the date when all Options allocated to the Optionee would be 100% vested in accordance with the applicable schedule as permitted under Subparagraph 6(a) above, then, notwithstanding the foregoing schedule in Subparagraph 6(a) above, all Options allocated to such Optionee shall immediately become fully vested and nonforfeitable, provided, however, that during the three (3) years following the date of this Plan, Options shall accelerate as provided in this Paragraph 6(d) only upon death or disability of the Optionee. For purposes of this Plan, the term “disability” shall be defined in the same manner as such term is defined in Section 22(e)(3) of the Code. When used in this Plan, the phrase “change in control” means a change in control as defined in Section 409A of the Code and rules, regulations and guidance of general application thereunder issued by the Department of Treasury, including:

(i)           Change in ownership: a change in ownership of the Company occurs on the date any one person or group accumulates ownership of the Company’s stock constituting more than 50% of the total fair market value or total voting power of the Company’s stock,

(ii)          Change in effective control: a change in effective control occurs if (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of stock of the Company possessing 35% or more of the total voting power of the Company’s stock, or (y) a majority of the Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Company’s board of directors, or

(iii)         Change in ownership of a substantial portion of assets: a change in the ownership of a substantial portion of the Company’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires assets from the Company having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the assets of the Company immediately before the acquisition or acquisitions. For this purpose, “gross fair market value” means the value of the Company’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

7.           Option Price .

(a)          The price per share of each Option granted under this Plan (hereinafter called the “Option Price”) shall be determined by the Committee as of the date of grant of such Option, but in no event shall the Option Price be less than 100% of the fair market value of Common Stock on the date of grant. If an Optionee at the time that an Option is granted owns stock possessing more than ten (10%) percent of the total combined voting power of all classes of stock of the Company, then the Option Price per share of each Option granted under this Plan shall be no less than 110% of the fair market value of Common Stock on the date of grant and such Option shall not be exercisable more than five (5) years from the date of grant. An Option shall be considered as granted on the date that the Committee acts to grant such Option.

(b)          The fair market value of a share of Common Stock shall be determined as follows: (i) if on the date as of which such determination is being made, Common Stock being valued is admitted to trading on a securities exchange or exchanges for which actual sale prices are regularly reported, or actual sale prices are otherwise regularly published, the fair market value of a share of Common Stock shall be deemed to be equal to the closing sale price as reported on the date as of which such determination is made; provided , however , that, if a closing sale price is not reported for such date, then the fair market value shall be equal to the closing sale price on the most recent trading day for which a closing sale price is available, or (ii) if on the date as of which such determination is made, no such closing sale prices are reported, but quotations for Common Stock are regularly listed on the National Association of Securities Dealers Automated Quotation System or another comparable system, the fair market value of a share of Common Stock shall be deemed to be equal to the arithmetic mean of the bid and asked prices for such Common Stock quoted on such system as reported for the date as of which such determination is made, but if bid and asked prices are not available for such date, then the fair market value shall be equal to the arithmetic mean of the bid and asked prices on the most recent trading day for which such prices are available, or (iii) if no such quotations are available, the fair market value of a share of Common Stock shall be deemed to be the average of the bid and asked prices furnished by a professional securities dealer making a market in such shares, as selected by the Committee, for the most recent trading date practicable. In the event that none of the foregoing methods can be applied to establish the fair market value of the Common Stock, the Board shall adopt a reasonable valuation method, which valuation method shall be documented in writing and shall apply such valuation method in a reasonable manner to fix the fair market value of the Common Stock for the purposes of this Plan.

8.           Payment of Option Price .   Payment for shares subject to an Option may only be made in cash.

9.           Terms and Conditions of Grant of Options .   Each Option granted pursuant to this Plan shall be evidenced by a written Incentive Stock Option Agreement (hereinafter referred to as “Option Agreement”) with each Optionee to whom an Option is granted; such agreement shall be substantially in the form attached hereto as “Exhibit A,” unless the Committee shall adopt a different form and, in each case, may contain such other, different, or additional terms and conditions as the Committee may determine. The Option shall terminate as provided in Paragraph 13 hereof. In addition to any further conditions provided herein and in the Option Agreement, the right of an Optionee to exercise the Option to purchase the Option Shares, either in whole or in part, shall be conditioned upon the completion by the Optionee of one (1) full year of service in the employment of the Company and/or the Bank following the date of grant of the Option.

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

11.          Limitation on Grant of Incentive Stock Options . No one Optionee shall be granted more than 40% of the shares reserved for issuance under this Plan pursuant to the provisions of Paragraph 3 hereof. Moreover, notwithstanding any other provision of this Plan, if any person shall be granted an Option under this Plan which would cause such person’s “annual vesting amount” to exceed $100,000.00, then such Options as shall be found to exceed $100,000.00 in “annual vesting amount” shall be treated as Options which are not incentive stock options pursuant to Section 422(d) of the Code. With respect to any calendar year, a person’s “annual vesting amount” is the aggregate fair market value of stock subject to incentive stock options with respect to which such options are first exercisable during such calendar year. For purposes of the foregoing, the aggregate fair market value of stock with respect to which incentive stock options are first exercisable during any calendar year shall be determined by taking into account all such options granted to such person under all incentive stock option plans of the Company or of any of its subsidiaries.

12.          Exercise of Incentive Stock Options .   An Option shall be exercised by written notice to the Committee signed by an Optionee or by such other person as may be entitled to exercise such Option. In the exercise of an Option, the aggregate Option Price for the shares being purchased may only be paid in cash and must be accompanied by a notice of exercise. The written notice shall state the number of shares with respect to which an Option is being exercised and shall either be accompanied by the payment of the aggregate Option Price for such shares or shall fix a date (not more than ten (10) business days from the date of such notice) by which the payment of the aggregate Option Price will be made. An Optionee shall not exercise an Option to purchase less than 100 shares, unless the Committee otherwise approves or unless the partial exercise is for the remaining shares available under such Option. A certificate or certificates for the shares of Common Stock purchased by the exercise of an Option shall be issued in the regular course of business subsequent to the exercise of such Option and the payment therefor. During the Option Period, no person entitled to exercise any Option granted under this Plan shall have any of the rights or privileges of a shareholder with respect to any shares of Common Stock issuable upon exercise of such Option, until certificates representing such shares shall have been issued and delivered and the individual’s name entered as a shareholder of record on the books of the Company for such shares.

13.        Effect of Termination of Employment, Retirement, Disability or Death .

(a)          In the event of the termination of employment of an Optionee by reason of being discharged for cause, any Option or Options granted to the Optionee under this Plan, to the extent not previously exercised or expired, and regardless of any vesting pursuant to Paragraph 6 hereof, shall immediately terminate. The phrase “discharged for cause” shall include termination at the sole discretion of the Board for reasons including but not limited to such Optionee’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses), a final cease and desist order, or material breach of any provision of any employment agreement that such Optionee may have with the Company or any of its subsidiaries.

(b)          In the event of the Optionee’s termination of employment for any reason other than for “cause,” retirement, death, disability or following a “change in control” of the Company (as defined in Paragraph 6(d) hereof), such Optionee shall have the right to exercise all vested Options granted to such Optionee, to the extent that such Options have not previously been exercised or expired, for a period of three (3) months after the date the Optionee gives notice that the Optionee terminates his or her employment with the Company or any of its subsidiaries, but in no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with Paragraph 10 hereof.

(c)          In the event of the termination of employment of an Optionee as a result of such Optionee’s retirement, all Options granted such Optionee shall vest and such Optionee shall have the right to exercise any Option granted under this Plan, to the extent that it has not previously been exercised or expired, for a period of three (3) months after the date of retirement, but in no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with Paragraph 10 hereof. For purposes of this Plan, the term “retirement” shall mean, subject to Board approval in each instance, (i) termination of an Optionee’s employment under conditions which would constitute retirement under any tax qualified retirement plan maintained by the Company or any of its subsidiaries or (ii) termination of an Optionee’s employment after attaining age 65.

(d)          In the event of the termination of employment of an Optionee by reason of such Optionee’s disability, all Options granted such Optionee shall vest and such Optionee shall have the right to exercise an Option granted under this Plan, to the extent that it has not previously been exercised or expired, at any time within twelve (12) months after the last date on which such Optionee provides services as an officer or an employee of the Company before being disabled, but in no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with Paragraph 10 hereof. For purposes of this Plan, the term “disability” shall be defined in the same manner as such term is defined in Section 22(e)(3) of the Code.

(e)          Notwithstanding anything else herein contained, in the event that an Optionee should die (i) while employed by the Company or any of its subsidiaries, (ii) within three (3) months after retirement, (iii) within three (3) months after Optionee’s termination following a change in control, or (iv) within twelve (12) months after Optionee’s termination by reason of Optionee’s disability, any Option or Options granted to the Optionee under this Plan and not previously exercised or expired shall vest and shall be exercisable, according to their respective terms, by the personal representative of such Optionee or by any person or persons who acquired such Options by bequest or inheritance from such Optionee, notwithstanding any limitations placed on the exercise of such Options by this Plan or an Option Agreement, immediately in full and at any time within twelve (12) months after the date of death of such Optionee, but in no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with Paragraph 10 hereof. Any references herein to an Optionee shall be deemed to include any person entitled to exercise an Option under the terms of this Plan after the death of such Optionee under the terms of this Plan.

(f)          In the event of the termination of employment of an Optionee following a “change in control” of the Company (as defined in Paragraph 6(d)), all Options granted such Optionee shall vest and such Optionee shall have the right to exercise any Option or Options granted to the Optionee under this Plan, to the extent they have not previously been exercised or expired, for a period of three (3) months after the date of termination, but in no event may any Option be exercised later than the end of the Option period provided in such Option Agreement in accordance with Paragraph 10 hereof.

14.        Effect of Plan on Employment Status .   The fact that the Committee has granted an Option to an Optionee under this Plan shall not confer on such Optionee any right to employment with the Company or any of its subsidiaries or to a position as an officer or an employee of the Company or any of its subsidiaries, nor shall it limit the right of the Company or any of its subsidiaries to remove such Optionee from any position held by the Optionee or to terminate the Optionee’s employment at any time.

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

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

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

(c)          Except upon a “change in control” as defined in Paragraph 6(d) hereof, upon the effective date of the dissolution or liquidation of the Company, this Plan and any Options granted hereunder, shall terminate.

16.          Non-Transferability .   Any Option granted under this Plan shall not be assignable or transferable except, in the case of the death of an Optionee, by will or by the laws of descent and distribution. In the event of the death of an Optionee, the personal representative, the executor or the administrator of such Optionee’s estate, or the person or persons who acquired by bequest or inheritance the rights to exercise such Option, may exercise any Option or portion thereof to the extent not previously exercised by an Optionee or expired, in accordance with its terms and Subparagraph 13(e) hereof.

17.          Tax Withholding .   The employer of a person granted an Option under this Plan shall have the right to deduct or otherwise effect a withholding of any amount required by federal or state laws to be withheld with respect to the grant, exercise or the sale of stock acquired upon the exercise of an Option in order for the employer to obtain a tax deduction otherwise available as a consequence of such grant, exercise or sale, as the case may be.

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

19.          Exculpation and Indemnification .   In connection with this Plan, no member of the Committee shall be personally liable for any act or omission to act in such person’s capacity as a member of the Committee, nor for any mistake in judgment made in good faith, unless arising out of, or resulting from, such person’s own bad faith, gross negligence, willful misconduct, or criminal acts. To the extent permitted by applicable law and regulation, the Company shall indemnify and hold harmless the members of the Committee, and each other officer or employee of the Company or of any subsidiary thereof to whom any duty or power relating to the administration or interpretation of this Plan may be assigned or delegated, from and against any and all liabilities (including any amount paid in settlement of a claim with the approval of the Board) and any costs or expenses (including counsel fees) incurred by such persons arising out of, or as a result of, any act or omission to act in connection with the performance of such person’s duties, responsibilities, and obligations under this Plan, other than such liabilities, costs, and expenses as may arise out of, or result from, the bad faith, gross negligence, willful misconduct, or criminal acts of such persons.

20.          Amendment and Modification of the Plan .   The Board may at any time and from time to time amend or modify this Plan (including the form of Option Agreement) in any respect consistent with applicable regulations; provided , however , that no amendment or modification shall be made that increases the total number of shares of Common Stock covered by this Plan or effects any change in the categories of persons who may receive Options under this Plan or materially increases the benefits accruing to Optionees under this Plan unless such change is approved by the shareholders. Any amendment or modification of this Plan shall not materially reduce the benefits under any Option theretofore granted to an Optionee under this Plan without the consent of such Optionee or the transferee thereof in the event of the death of such Optionee.

21.          Termination and Expiration of the Plan .   This Plan may be abandoned, suspended, or terminated at any time by the Board; provided , however , that abandonment, suspension, or termination of this Plan shall not affect any Options then outstanding under this Plan. No Option shall be granted pursuant to this Plan after ten (10) years from the Effective Date of this Plan as provided in Paragraph 22 hereof.

22.          Effective Date; Shareholder Approval .   This Plan was originally approved by the Board of Directors and shareholders of the Bank and was subsequently adopted by the Board of Directors of Select Bancorp, Inc. in connection with the Bank’s reorganization into the holding company form of organization. The Effective Date of the Plan is May 19, 2005, which is the date the Plan was approved by the shareholders of the Bank.

23.          Captions and Headings; Gender and Number . Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part hereof, and shall not serve as a basis for interpretation or in construction of this Plan. As used herein, the masculine gender shall include the feminine and neuter, the singular number the plural, and vice versa, whenever such meanings are appropriate.

24.          Expenses of Administration of Plan . All costs and expenses incurred in the operation and administration of this Plan shall be borne by the Company or one or more of its subsidiaries.

25.          Governing Law . Without regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control the validity, interpretation, performance, and enforcement of this Plan.

26.          Inspection of Plan . A copy of this Plan, and any amendments thereto or modification thereof, shall be maintained by the Secretary of the Company and shall be shown to any proper person making inquiry about it.

27.          Section 409A of the Code . The Company intends that the Plan comply with the requirements of Section 409A of the Code and shall be operated and interpreted consistent with that intent.

Incentive Stock Option Agreement

THIS INCENTIVE STOCK OPTION AGREEMENT (hereinafter referred to as this “Agreement”) is made and entered into as of this ___ day of __________, _____, between SELECT BANCORP, INC., a North Carolina corporation (hereinafter referred to as the “Company”), and _____________ a resident of __________ County, North Carolina (hereinafter referred to as the “Optionee”).

WHEREAS, the Board of Directors of the Company (hereinafter referred to as the “Board”) has adopted the Amended and Restated Select Bancorp, Inc. 2005 Incentive Stock Option Plan (hereinafter referred to as the “Plan”), which was originally approved by the Board of Directors of Select Bank & Trust Company (the “Bank”) and, on May 19, 2005 (the “Effective Date”), by the shareholders of the Bank; and

WHEREAS, the Plan provides that the Option Committee (hereinafter referred to as the “Committee”) of the Board will make available to certain officers and employees of the Company and its subsidiaries (the “Employer”) the right to purchase shares of the Company’s common stock (hereinafter referred to as “Common Stock”); and

WHEREAS, the Committee has determined that the Optionee should be granted an option to purchase shares of Common Stock under the Plan;

NOW, THEREFORE, the Company and the Optionee agree as follows:

1.           Date of Grant of Option .   The date of grant of the option granted under this Agreement is the ____ day of _____________, ______.

2.           Grant of Option .   Pursuant to the Plan, the Company grants to the Optionee the right (hereinafter referred to as the “Option”) to purchase from the Company all or any part of an aggregate of ___________________________ (______) shares of Common Stock (hereinafter referred to as the “Option Shares”) which shall be authorized but unissued shares.

3.           Vesting of Options .

(a)           Periodic Vesting . Subject to Subparagraphs 3(b) and 3(c) below, the Option shall vest and become exercisable in accordance with the following schedule:

(b)          Fractional Option Shares . In determining the number of Option Shares vested under the above vesting schedule, an Optionee shall not be entitled to exercise an Option for a fractional number of Option Shares. If the product resulting from multiplying the vested percentage times the allocated Option results in a fractional number of Option Shares, then the Optionee’s vested right shall be to the whole number of Option Shares, disregarding any fractional number.

(c)           Accelerated Vesting . Notwithstanding Paragraph 3(a) above, all Options previously not vested and subject to forfeiture shall become 100% vested and the right of the Optionee to exercise such Options shall become nonforfeitable upon the death, disability or retirement of the Optionee, or upon a “change in control” of the Company provided, however, that accelerated vesting during the first three (3) years of the Plan may only be effected upon the event of death or disability of the Optionee. For purposes of this Agreement, the terms “disability,” “retirement” and “change in control” have the same meanings as they have in the Plan.

(d)           Termination of Employment for Cause . In the event any Optionee’s employment with the Company or any of its subsidiaries is terminated for “cause,” then the Optionee’s Options, to the extent unexercised, shall be forfeited and shall be available again for grant to other officers and employees as may be determined by the Committee. Such forfeiture shall apply whether or not any such options have vested.

4.           Option Price .  The price to be paid for the Option Shares shall be __________________ and ____/100 Dollars ($______________) per share (hereinafter referred to as the “Option Price”) which is the fair market value of the Option Shares as determined by the Committee as of the date of grant of this Option.

5.           When and Extent to which Options may be Exercised . Subject to any further restrictions in this Agreement, the right of the Optionee to exercise the Option to purchase the Option Shares, either in whole or in part, shall be conditioned upon the completion by the Optionee of one (1) full year of service in the employment of the Employer following the date of grant of the Option set forth in Paragraph 1 hereof. At such time as the Option shall become exercisable in accordance with this Agreement, the Optionee, in his discretion, may exercise all or any portion of the Option, subject to Paragraphs 3 and 7 hereof. The Option shall terminate as provided in paragraph 8 hereof.

6.           Change in Control . When used herein, the phrase “change in control” has the same meaning as it has in the Plan.

7.           Method of Exercise .   The Option shall be exercised by written notice to the Committee signed by the Optionee or by such other person as may be entitled to exercise the Option. In the exercise of the Option, the aggregate Option Price for the shares being purchased may only be paid in cash and must be accompanied by a notice of exercise. The written notice shall state the number of shares with respect to which the Option is being exercised and, shall either be accompanied by the payment of the aggregate Option Price for such shares or shall fix a date (not more than ten (10) business days from the date of such notice) by which the payment of the aggregate Option Price will be made. The Optionee shall not exercise the Option to purchase less than one hundred (100) shares, unless the Committee otherwise approves or unless the partial exercise is for the remaining shares available under the Option. A certificate or certificates for the shares of Common Stock purchased by the exercise of the Option shall be issued in the regular course of business subsequent to the exercise of the Option and the payment therefor. During the Option Period, no person entitled to exercise the Option granted under this Agreement shall have any of the rights or privileges of a shareholder with respect to any shares of Common Stock issuable upon exercise of the Option, until certificates representing such shares shall have been issued and delivered and the individual’s name entered as a shareholder of record on the books of the Company for such shares.

8.           Termination of Option .   The Option shall terminate as follows:

(a)          Except as provided in Subparagraphs (b), (c), (d), (e), and (f) below, the Option granted under this Agreement, to the extent that it has not been exercised or expired, and regardless of any vesting pursuant to Paragraph 3 hereof, shall terminate on the earlier of (i) the date that the Optionee is discharged for cause, or (ii) the date which is ten (10) years from the date of grant of the Option set forth in Paragraph 1 hereof. Options which terminate within ten (10) years from the date of grant set forth in paragraph 1 shall be available again for grant to certain officers and employees as may be determined by the Committee. The phrase “discharged for cause” shall include termination at the sole discretion of the Board of Directors of the Employer of the Optionee for reasons including but not limited to the Optionee’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or a final cease and desist order, or material breach of any provision of any employment agreement that the Optionee may have with the Employer.

(b)          In the event of the Optionee’s termination of employment for any reason other than for “cause,” retirement, death, disability or following a “change in control” of the Company, such Optionee shall have the right to exercise all vested Options granted to such Optionee, to the extent that such Options have not previously been exercised or expired, for a period of three (3) months after the date the Optionee’s employment with the Company is effectively terminated, but in no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with Paragraph 10 hereof.

(c)          In the event the Optionee retires prior to the date which is ten (10) years after the date of grant of the Option, the Optionee shall have the right to exercise the Option, to the extent that it has not been exercised by the Optionee or expired, immediately in full and at any time within three (3) months after the date of retirement, but in no event may the Option be exercised later than ten (10) years after the date of grant of the Option set forth in paragraph 1 hereof. For purposes of this Agreement, the term “retirement” shall mean, subject to Board approval in each instance, (i) termination of the Optionee’s employment under conditions which would constitute retirement under any tax qualified retirement plan maintained by the Employer or (ii) termination of an Optionee’s employment after attaining age 65.

(d)          In the event the Optionee becomes disabled prior to the date which is ten (10) years after the date of grant of the Option, the Optionee shall have the right to exercise the Option, to the extent that it has not been exercised by the Optionee or expired, notwithstanding any limitation placed on the exercise of the Option by the Plan or by this Agreement, immediately in full and at any time within twelve (12) months after the last date on which the Optionee provided services as an officer or an employee of the Employer before being disabled, but in no event may the Option be exercised later than ten (10) years after the date of grant of the Option set forth in Paragraph 1 hereof. For purposes of this Agreement, the term “disability” shall be defined in the same manner as such term is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

(e)          Notwithstanding anything else herein, in the event that an Optionee should die (i) while employed by the Company or any of its subsidiaries, (ii) within three (3) months after retirement, (iii) within three (3) months after Optionee’s termination following a change in control, or (iv) within twelve (12) months after Optionee’s termination by reason of Optionee’s disability, the Option, to the extent it has not been exercised by the Optionee or expired, shall be exercisable, according to its terms, by the personal representative, the executor or administrator of the Optionee’s estate, or any person or persons who acquired the Option by bequest or inheritance from the Optionee, notwithstanding any limitation placed on the exercise of the Option by the Plan or by this Agreement, immediately in full and at any time within twelve (12) months after the date of death of the Optionee, but in no event may the Option be exercised later than ten (10) years from the date of grant of the Option as set forth in Paragraph 1 hereof.

(f)          In the event the Optionee’s employment with the Employer is terminated following a “change in control” of the Company, the Optionee shall have the right to exercise the Option, to the extent that it has not been exercised by the Optionee or expired, immediately in full and at any time within three (3) months after the date of termination, but in no event may the Option be exercised later than ten (10) years after the date of grant of the Options set forth in Paragraph 1 hereof.

9.           Effect of Agreement on Employment Status of Optionee . The fact that the Committee has granted the Option to the Optionee under this Agreement shall not confer on the Optionee any right to employment with the Employer or to a position as an officer or an employee of the Employer, nor shall it limit the right of the Employer to remove the Optionee from any position held by the Optionee or to terminate his or her employment at any time.

10.          Listing and Registration of Option Shares . The Company’s obligation to issue shares of Common Stock upon exercise of the Option is expressly conditioned upon (i) the completion by the Company of any registration or other qualification of such shares under any state or federal law or regulations or rulings of any government regulatory body or (ii) the making of such investment representations or other representations and agreements by the Optionee or any person entitled to exercise the Option in order to comply with the requirements of any exemption from any such registration or other qualification of the Option Shares which the Committee shall, in its sole discretion, deem necessary or advisable. Notwithstanding the foregoing, the Company shall be under no obligation to register or qualify the Option Shares under any state or federal law. The required representations and agreements referenced above may include representations and agreements that the Optionee, or any other person entitled to exercise the Option, (i) is purchasing such shares on his or her own behalf as an investment and not with a present intention of distribution or re-sale and (ii) agrees to have placed upon any certificates representing the Option Shares a legend setting forth any representations and agreements which have been given to the Committee or a reference thereto and stating that such shares may not be transferred except in accordance with all applicable state and federal securities laws and regulations, and further representing that, prior to making any sale or other disposition of the Option Shares, the Optionee, or any other person entitled to exercise the Option, will give the Company notice of the intention to sell or dispose of such shares not less than five (5) days prior to such sale or disposition.

11.        Adjustment Upon Change in Capitalization; Dissolution or Liquidation .

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

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

(c)          Except upon a change in control as set forth in paragraph 6 hereof, upon the effective date of the dissolution or liquidation of the Company, the Option granted under this Agreement shall terminate.

12.        Nontransferability .   The Option granted under this Agreement shall not be assignable or transferable except, in the event of the death of the Optionee, by will or by the laws of descent and distribution. In the event of the death of the Optionee, the personal representative, the executor or the administrator of the Optionee’s estate, or the person or persons who acquired by bequest or inheritance the right to exercise the Option may exercise the unexercised Option or a portion thereof, in accordance with the terms of this Agreement, prior to the date which is ten (10) years after the date of grant of Option as set forth in Paragraph 1 hereof.

13.        Notices .   Any notice or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given when delivered personally or when deposited in the United States mail as Certified Mail, return receipt requested, properly addressed with postage prepaid, if to the Company at its principal office at 700 W Cumberland Street, Dunn, North Carolina 28334; and, if to the Optionee to his or her last address appearing on the books of the Employer. The Employer and the Optionee may change their address or addresses by giving written notice of such change as provided herein. Any notice or other communication hereunder shall be deemed to have been given on the date actually delivered or as of the third (3rd) business day following the date mailed, as the case may be.

14.          Construction Controlled by Plan .   This Agreement shall be construed so as to be consistent with the Plan; and the provisions of the Plan shall be deemed to be controlling in the event that any provision hereof should appear to be inconsistent therewith. The Optionee hereby acknowledges receipt of a copy of the Plan from the Company.

15.          Severability .   Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid and enforceable under applicable law, but if any provision of this Agreement is determined to be unenforceable, invalid or illegal, the validity of any other provisions or part thereof, shall not be affected thereby and this Agreement shall continue to be binding on the parties hereto as if such unenforceable, invalid or illegal provision or part thereof had not been included herein.

16.          Modification of Agreement; Waiver .   This Agreement may be modified, amended, suspended, or terminated, and any terms, representations or conditions may be waived, but only by written instrument signed by each of the parties hereto. No waiver hereunder shall constitute a waiver with respect to any subsequent occurrence or other transaction hereunder or of any other provision hereof.

17.          Captions and Headings; Gender and Number . Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part hereof, and shall not serve as a basis for interpretation or in construction of this Agreement. As used herein, the masculine gender shall include the feminine and neuter, the singular number the plural, and vice versa, whenever such meanings are appropriate.

18.          Governing Law; Venue and Jurisdiction . Without regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control the validity, interpretation, performance, and enforcement of this Agreement. The parties hereto agree that any suit or action relating to this Agreement shall be instituted and prosecuted in the courts of the County of Harnett, State of North Carolina, and each party hereby does waive any right or defense relating to such jurisdiction and venue.

19.          Binding Effect .   This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns, and shall be binding upon and inure to the benefit of the Optionee, his heirs, legatees, personal representatives, executors, and administrators.

20.          Entire Agreement .   This Agreement constitutes and embodies the entire understanding and agreement of the parties hereto and, except as otherwise provided hereunder, there are no other agreements or understandings, written or oral, in effect between the parties hereto relating to the matters addressed herein.

21.          Counterparts .   This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF , the Company has caused this instrument to be executed in its corporate name by its President, or one of its Vice Presidents, and attested by its Secretary or one of its Assistant Secretaries, and its corporate seal to be hereto affixed, all by authority of its Board of Directors first duly given, and the Optionee has hereunto set his or her hand and adopted as his or her seal the typewritten word “SEAL” appearing beside his or her name, all done this the day and year first above written.

____________, Corporate Secretary

[Corporate Seal]

EXHIBIT A

NOTICE OF EXERCISE OF

INCENTIVE STOCK OPTION

Select Bancorp, Inc.

The undersigned hereby elects to purchase ________ whole shares of Common Stock of Select Bancorp, Inc. (the “Company”) pursuant to the Incentive Stock Option granted to the undersigned in that certain Incentive Stock Option Agreement between the Company and the undersigned dated the _____________ day of _________, ______. The aggregate purchase price for such Shares is $____________, which amount is (i) being tendered herewith, (ii) will be tendered on or before _________________, (cross out provision which does not apply) in cash. The effective date of this election shall be ____________________, ___________________, or the date of receipt of this Notice by the Company if later.

Executed this __________ day of _________________, ______, at _____________________.

Exhibit 99.3

SELECT BANCORP, INC.

AMENDED AND RESTATED 2005 NONSTATUTORY STOCK OPTION PLAN

Select Bancorp, Inc., a North Carolina corporation (hereinafter referred to as the “Company”), does herein set forth the terms of the Select Bancorp, Inc. 2005 Nonstatutory Stock Option Plan (hereinafter referred to as this “Plan”), which was approved by the Board of Directors and shareholders of Select Bank & Trust Company (the “Bank”) and subsequently adopted by the Board of Directors of the Company (hereinafter referred to as the “Board”).

1.           Purpose of this Plan . The purpose of this Plan is to provide for the grant of Nonstatutory Stock Options (hereinafter referred to as “Options” or singularly, “Option”) to Eligible Directors (as hereinafter defined) of the Company who wish to invest in the Company’s common stock (hereinafter referred to as “Common Stock”). The Board believes that participation in the ownership of the Company by the Eligible Directors will be to the mutual benefit of the Company and the Eligible Directors. In addition, the existence of this Plan will make it possible for the Company to attract capable individuals to serve on the Board. As used herein, the term “Eligible Directors” or singularly, “Eligible Director,” shall mean members of the Board of Directors of the Company or any of its subsidiaries serving at the time of adoption of this Plan or who may serve thereon from time to time and those individuals holding the title “Director Emeritus.”

2.           Administration of this Plan.

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

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

3.           Shares of Common Stock Subject to this Plan . The maximum number of shares of Common Stock that shall be offered under this Plan is Four Hundred Five Thousand Six Hundred Thirty-Four (405,634) shares, subject to adjustment as provided in paragraph 14. Shares subject to Options which expire or terminate prior to the issuance of the shares of Common Stock shall lapse and the shares of Common Stock originally subject to such Options shall again be available for future grants of Options under this Plan.

4.           Eligibility; Grant of Options . Each Eligible Director serving on the Board shall receive an Option to purchase shares of Common Stock in the amount as shall be determined by the Board of Directors by a majority vote. Any Options not granted hereby may be reserved for future issuance by a majority vote of the entire Board.

5.           Vesting of Options .

(a)          Options granted under this Plan shall vest and the right of an Eligible Director to exercise an Option shall be nonforfeitable no sooner than as set forth in the following schedule:

(b)          In determining the number of shares of Common Stock under each Option vested under the above vesting schedule, an Eligible Director shall not be entitled to exercise an Option to purchase a fractional number of shares of the Common Stock. If the product resulting from multiplying the vested percentage times the Option results in a fractional number of shares of Common Stock, then an Eligible Director’s vested right shall be to the whole number of shares of Common Stock disregarding any fractional shares of Common Stock.

(c)          In the event that the directorship of an Eligible Director with the Company or any of its subsidiaries terminates for any reason, other than the Eligible Director’s disability, death, retirement, or following a “change in control” of the Company, the Eligible Director’s Options under this Plan shall be forfeited and shall be available again for grant to Eligible Directors as may be determined by the Board. Such forfeiture shall apply whether or not any such Options have been vested.

(d)          In the event that the directorship of an Eligible Director with the Company or any of its subsidiaries should terminate because of such Eligible Director’s disability, death, or retirement, or following a “change in control” of the Company, prior to the date when all Options allocated to the Eligible Director would be 100% vested in accordance with the applicable schedule as permitted under subparagraph 5(a) above, then, notwithstanding the foregoing schedule in subparagraph 5(a) above, all Options allocated to such Eligible Director shall immediately become fully vested and nonforfeitable, provided, however, that during the three (3) years following the date of the adoption of this Plan by the Board of Directors of the Company, Options shall accelerate as provided in this paragraph 5(d) only upon death or disability of the Eligible Director. For purposes of this Plan, the term “disability” shall be defined in the same manner as such term is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). When used in this Plan, the phrase “change in control” means a change in control as defined in Section 409A of the Code and rules, regulations, and guidance of general application thereunder issued by the Department of Treasury, including:

(i)           Change in ownership: a change in ownership of the Company occurs on the date any one person or group accumulates ownership of the Company’s stock constituting more than 50% of the total fair market value or total voting power of the Company’s stock,

(ii)          Change in effective control: a change in effective control occurs if (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of stock of the Company possessing 35% or more of the total voting power of the Company’s stock, or (y) a majority of the Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Company’s board of directors, or

(iii)         Change in ownership of a substantial portion of assets: a change in the ownership of a substantial portion of the Company’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires assets from the Company having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the assets of the Company immediately before the acquisition or acquisitions. For this purpose, “gross fair market value” means the value of the Company’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

6.           Option Price .

(a)          The price per share of each Option granted under this Plan (hereinafter called the “Option Price”) shall be determined by the Board as of the effective date of grant of such Option, but in no event shall such Option Price be less than 100% of the fair market value of Common Stock on the date of grant. An Option shall be considered as granted on the date that the Board acts to grant such Option.

(b)          The fair market value of a share of Common Stock shall be determined as follows: (i) if on the date as of which such determination is being made, Common Stock being valued is admitted to trading on a securities exchange or exchanges for which actual sale prices are regularly reported, or actual sale prices are otherwise regularly published, the fair market value of a share of Common Stock shall be deemed to be equal to the closing sale price as reported on the date as of which such determination is made; provided , however , that, if a closing sale price is not reported for such date, then the fair market value shall be equal to the closing sale price on the most recent trading day for which a closing sale price is available, or (ii) if on the date as of which such determination is made, no such closing sale prices are reported, but quotations for Common Stock are regularly listed on the National Association of Securities Dealers Automated Quotation System or another comparable system, the fair market value of a share of Common Stock shall be deemed to be equal to the arithmetic mean of the bid and asked prices for such Common Stock quoted on such system as reported for the date as of which such determination is made, but if bid and asked prices are not available for such date, then the fair market value shall be equal to the arithmetic mean of the bid and asked prices on the most recent trading day for which such prices are available, or (iii) if no such quotations are available, the fair market value of a share of Common Stock shall be deemed to be the average of the bid and asked prices furnished by a professional securities dealer making a market in such shares, as selected by the Board, for the most recent trading date practicable. In the event that none of the foregoing methods can be applied to establish the fair market value of the Common Stock, the Board shall adopt a reasonable valuation method, which valuation method shall be documented in writing and shall take into consideration all available information material to the valuation of the Common Stock, and shall apply such valuation method in a reasonable manner to fix the fair market value of the Common Stock for the purposes of this Plan.

7.           Payment of Option Price . Payment for shares subject to an Option may only be made in cash.

8.           Terms and Conditions of Grant of Options . Each Option granted pursuant to this Plan shall be evidenced by a written Nonstatutory Stock Option Agreement (hereinafter referred to as “Option Agreement”) with each Eligible Director to whom an Option is granted; such agreement shall be substantially in the form attached hereto as “Exhibit A,” unless the Board shall adopt a different form and, in each case, may contain such other, different, or additional terms and conditions as the Board may determine. The Option shall terminate as provided in paragraph 12 hereof.

9.           Option Period . Each Option Agreement shall set forth a period during which such Option may be exercised (hereinafter referred to as the “Option Period”); provided , however , that the Option Period shall not exceed ten (10) years after the date of grant of such Option as specified in an Option Agreement.

10.          Limitation on Grant of Stock Options .   No one individual shall be granted Options under this Plan in excess of 40% of the shares reserved for issuance pursuant to Paragraph 3 hereof.

11.          Exercise of Options . An Option shall be exercised by written notice to the Board signed by an Eligible Director or by such other person as may be entitled to exercise such Option. In the case of the exercise of an Option, the aggregate Option Price for the shares being purchased may only be paid in cash and must be accompanied by a notice of exercise. The written notice shall state the number of shares with respect to which an Option is being exercised and shall either be accompanied by the payment of the aggregate Option Price for such shares or shall fix a date (not more than ten (10) business days after the date of such notice) by which the payment of the aggregate Option Price will be made. An Eligible Director shall not exercise an Option to purchase less than 100 shares, unless the Board otherwise approves or unless the partial exercise is for the remaining shares available under such Option. A certificate or certificates for the shares of Common Stock purchased by the exercise of an Option shall be issued in the regular course of business subsequent to the exercise of such Option and the payment therefor. During the Option Period, no person entitled to exercise any Option granted under this Plan shall have any of the rights or privileges of a shareholder with respect to any shares of Common Stock issuable upon exercise of such Option, until certificates representing such shares shall have been issued and delivered and the individual’s name entered as a shareholder of record on the books of the Company for such shares.

12.          Effect of Leaving the Board .

(a)          In the event that an Eligible Director is removed from the Board for “cause” (as defined in the Company’s Articles of Incorporation) any Option granted to the Eligible Director under this Plan, to the extent not previously exercised by the Eligible Director or expired, and regardless of any vesting pursuant to Paragraph 5 hereof, shall immediately terminate and shall be available again for the granting of additional options to Eligible Directors during the remaining term of this Plan upon such terms and conditions as may be determined by the Board.

(b)          In the event that an Eligible Director should leave the Board for any reason other than for “cause,” retirement, disability, death or following a “change in control” of the Company (as defined in Paragraph 5(d) hereof), such Eligible Director shall have the right to exercise any vested Option granted to the Eligible Director under this Plan, to the extent such Options have not been previously exercised by the Eligible Director or expired, for a period of not more than ninety (90) days following the effective date that the Eligible Director leaves the Board but in no event may any option be exercised later than the end of the Option Period provided in the Option Agreement in accordance with Paragraph 9 hereof.

(c)          In the event that an Eligible Director should leave the Board as a result of such Eligible Director’s retirement, such Eligible Director shall have the right to exercise all Options granted to the Eligible Director under this Plan, to the extent such Options have not been previously exercised by the Eligible Director or expired, for a period of not more than ninety (90) days following the effective date that the Eligible Director leaves the Board but in no event may any option be exercised later than the end of the Option Period provided in the Option Agreement in accordance with Paragraph 9 hereof. For purposes of this Plan, the term “retirement” shall mean termination of an Eligible Director’s membership on the Board (i) at any time after attaining age 65 with the approval of the Board; or (ii) at the election of the Eligible Director, at any time after not less than five (5) years service as a member of the Board, such service shall be computed cumulatively for purposes of this clause (ii).

(d)          In the event that an Eligible Director should leave the Board as a result of such Eligible Director’s retirement and designation by the Board as a “director emeritus,” all Options granted such Eligible Director shall vest and such Eligible Director shall have the right to exercise any Option granted under this Plan, to the extent that it has not previously been exercised by the Eligible Director or expired, at any time after such Eligible Director’s retirement but in no event may any option be exercised later than the end of the Option Period provided in the Option Agreement in accordance with Paragraph 9 hereof. For purposes of this Plan, an Eligible Director shall be designated a “director emeritus” without further action from the Board if such Eligible Director retires and has both (i) attained the age of 65 and (ii) served as a member of the Board for not less than three (3) years, such service being computed cumulatively for purposes of this clause (ii).

(e)          In the event that an Eligible Director should leave the Board by reason of such Eligible Director’s disability, such Eligible Director shall have the right to exercise an Option granted under this Plan, to the extent that it has not previously been exercised or expired, for such period of time as may be determined by the Board and specified in an Option Agreement, but in no event may any Option be exercised later than the end of the Option Period provided in the Option Agreement in accordance with Paragraph 9 hereof. For purposes of this Plan, the term “disability” shall be defined in the same manner as such term is defined in Section 22(e)(3) of the Code.

(f)          In the event that an Eligible Director should die while serving on the Board or after leaving by reason of disability or retirement or following a “change in control” during the Option Period provided in an Option Agreement in accordance with Paragraph 9 hereof, an Option granted under this Plan, to the extent that it has not previously been exercised or expired, shall be exercisable, in accordance with its terms, by the personal representative of such Eligible Director, the executor or administrator of such Eligible Director’s estate, or by any person or persons who acquired such Option by bequest or inheritance from such Eligible Director, notwithstanding any limitations placed on the exercise of such Option by this Plan or an Option Agreement, at any time within twelve (12) months after the date of death of such Eligible Director, but in no event may an Option be exercised later than the end of the Option Period provided in an Option Agreement in accordance with Paragraph 9 hereof. Any references herein to an Eligible Director shall be deemed to include any person entitled to exercise an Option after the death of such Eligible Director under the terms of this Plan.

(g)          In the event an Eligible Director shall leave the Board as a result of a “change in control” of the Company (as defined in Paragraph 5(d)), such Eligible Director shall have the right to exercise the Option granted under this Plan, to the extent that it has not previously been exercised by the Eligible Director or expired, for such period of time as may be determined by the Board as specified in an Option Agreement, but in no event may any Option be exercised later than the end of the Option Period provided in the Option Agreement in accordance with Paragraph 9 hereof.

13.          Effect of Plan on Status as Member of Board . The fact that an Eligible Director has been granted an Option under this Plan shall not confer on such Eligible Director any right to continued service on the Board, nor shall it limit the right of the Company to remove such Eligible Director from the Board at any time in accordance with applicable federal and/or state law.

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

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

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

(c)          Except upon a “change in control,” upon the effective date of the dissolution or liquidation of the Company, this Plan and any Options granted hereunder, shall terminate.

15.          Non-Transferability . An Option granted under this Plan shall not be assignable or transferable except, in the event of the death of an Eligible Director, by will or by the laws of descent and distribution. In the event of the death of an Eligible Director, his personal representative, the executor or the administrator of such Eligible Director’s estate, or the person or persons who acquired by bequest or inheritance the rights to exercise such Options, may exercise any Option or portion thereof to the extent not previously exercisable or surrendered by an Eligible Director or expired, in accordance with its terms, prior to the expiration of the exercise period as specified in subparagraph 12(f) hereof.

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

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

18.          Exculpation and Indemnification . In connection with this Plan, no member of the Board shall be personally liable for any act or omission to act in such person’s capacity as a member of the Board, nor for any mistake in judgment made in good faith, unless arising out of, or resulting from, such person’s own bad faith, gross negligence, willful misconduct, or criminal acts. To the extent permitted by applicable law and regulation, the Company shall indemnify and hold harmless the members of the Board, and each other officer or employee of the Company or of any of its subsidiaries to whom any duty or power relating to the administration or interpretation of this Plan may be assigned or delegated, from and against any and all liabilities (including any amount paid in settlement of a claim with the approval of the Board) and any costs or expenses (including counsel fees) incurred by such persons arising out of or as a result of, any act or omission to act in connection with the performance of such person’s duties, responsibilities, and obligations under this Plan, other than such liabilities, costs, and expenses as may arise out of, or result from, the bad faith, gross negligence, willful misconduct, or criminal acts of such persons.

19.          Amendment and Modification of this Plan . The Board may at any time, and from time to time, amend or modify this Plan (including the form of Option Agreement) in any respect consistent with applicable regulations; provided , however , that no amendment or modification shall be made that increases the total number of shares covered by this Plan or effects any change in the category of persons who may receive Options under this Plan or materially increases the benefits accruing to Eligible Directors under this Plan unless such change is approved by the holders of the requisite number of the Company’s outstanding shares of Common Stock and any applicable regulatory authority having jurisdiction with respect to the Plan, if any. Any amendment or modification of this Plan shall not materially reduce the benefits under any Option theretofore granted to an Eligible Director under this Plan without the consent of such Eligible Director or the transferee in the event of the death of such Eligible Director.

20.          Termination and Expiration of this Plan . This Plan may be abandoned, suspended, or terminated at any time by the Board; provided , however , that abandonment, suspension, or termination of this Plan shall not affect any Options then outstanding under this Plan. No Option shall be granted pursuant to this Plan after ten (10) years from the Effective Date of this Plan as provided in paragraph 21 hereof.

21.          Effective Date; Shareholder Approval . This Plan was originally approved by the Board of Directors and shareholders of the Bank and was subsequently adopted by the Board of Directors of Select Bancorp, Inc. in connection with the Bank’s reorganization into the holding company form of organization. The Effective Date of the Plan is May 19, 2005, which is the date the Plan was approved by the shareholders of the Bank.

22.          Captions and Headings; Gender and Number . Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part hereof, and shall not serve as a basis for interpretation or in construction of this Plan. As used herein, the masculine gender shall include the feminine and neuter, the singular number, the plural, and vice versa, whenever such meanings are appropriate.

23.          Expenses of Administration of Plan . All costs and expenses incurred in the operation and administration of this Plan shall be borne by the Company or by one of its subsidiaries.

24.          Governing Law . Without regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control the validity, interpretation, performance, and enforcement of this Plan.

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

26.          Section 409A of the Code . The Company intends that the Plan comply with the requirements of Section 409A of the Code and shall be operated and interpreted consistent with that intent.

NONSTATUTORY STOCK OPTION AGREEMENT

THIS NONSTATUTORY STOCK OPTION AGREEMENT (hereinafter referred to as this “Agreement”) is made and entered into as of this ____ day of __________, ______, between SELECT BANCORP, INC., a North Carolina corporation (hereinafter referred to as the “Company”), and _________________________________, a resident of ________ County, North Carolina (hereinafter referred to as the “Eligible Director”).

WHEREAS, the Board of Directors of the Company (hereinafter referred to as the “Board”) has adopted the Amended and Restated Select Bancorp, Inc. 2005 Nonstatutory Stock Option Plan (hereinafter referred to as the “Plan”), which was originally approved by the Board of Directors of Select Bank & Trust Company (the “Bank”) and, on May 19, 2005 (the “Effective Date”), by the shareholders of the Bank; and

WHEREAS, the Plan provides that the Board will make available to the Eligible Directors (as defined in the Plan), the right to purchase shares of the Company’s common stock (hereinafter referred to as “Common Stock”); and

WHEREAS, the Board has determined that the Eligible Director is entitled to purchase shares of Common Stock under the Plan;

NOW, THEREFORE, the Company and the Eligible Director agree as follows:

1.           Date of Grant of Option . The date of grant of the option granted under this Agreement is the ______ day of _______, ______.

2.           Grant of Option . Pursuant to the Plan, the Company grants to the Eligible Director the right (hereinafter referred to as the “Option”) to purchase from the Company all or a portion of an aggregate number of __________________ (______) shares of Common Stock (hereinafter referred to as the “Option Shares”) which shall be authorized but unissued shares.

3.           Vesting of Options .

(a)          Options granted under this Plan shall vest and the right of an Eligible Director to exercise an Option shall be nonforfeitable in accordance with the following schedule:

(b)          In determining the number of shares of Common Stock under each Option vested under the above vesting schedule, an Eligible Director shall not be entitled to exercise an Option to purchase a fractional number of shares of the Common Stock. If the product resulting from multiplying the vested percentage times the Option results in a fractional number of shares of Common Stock, then an Eligible Director’s vested right shall be to the whole number of shares of Common Stock disregarding any fractional shares of Common Stock.

(c)          In the event that the directorship of an Eligible Director is terminated for “cause,” such Eligible Director’s Options under this Plan shall be forfeited and shall be available again for grant to Eligible Employees as may be determined by the Committee. Such forfeiture shall apply whether or not any such Options have been vested.

(d)          In the event that the directorship of an Eligible Director with the Company should terminate for any reason other than for “cause,” retirement (including retirement and designation as “director emeritus”), disability, death or following a “change in control” of the Company prior to the date when all Options allocated to the Eligible Director would be 100% vested in accordance with the applicable schedule in Paragraph 3(a) hereof, the Eligible Director may exercise any vested Options and all Options not already vested shall be forfeited and shall be available again for grant to Eligible Directors as may be determined by the Board.

(e)          In the event that the directorship of an Eligible Director with the Company should terminate because of such Eligible Director’s disability, death, or retirement, or following a “change in control” of the Company prior to the date when all Options allocated to the Eligible Director would be 100% vested in accordance with the applicable schedule in Paragraph 3(a) above, then, notwithstanding the foregoing schedule in Paragraph 3(a) above, all Options allocated to such Eligible Director shall immediately become fully vested and nonforfeitable. For purposes of this Agreement, the terms “disability,” “retirement,” “director emeritus” and “change in control” have the same meanings as they have in the Plan.

4.           Option Price . The price to be paid for the Option Shares shall be _______ Dollars ($____) per share (hereinafter referred to as the “Option Price”) which is the fair market value of the Option Shares as determined by the Board as of the date of grant of this Option.

5.           When and Extent to Which Options may be Exercised . At such time as the Option shall become exercisable in accordance with this Agreement, the Eligible Director, in his discretion, may exercise all or any portion of the Option, subject to paragraphs 3 and 7 hereof. The Option shall terminate as provided in paragraph 8 hereof.

6.           Change in Control . When used herein, the phrase “change in control” has the same meaning as it has in the Plan.

7.           Method of Exercise . The Option shall be exercised by written notice to the Board signed by the Eligible Director or by such other person as may be entitled to exercise the Option. In the exercise of the Option, the aggregate Option Price for the shares being purchased may only be paid in cash and must be accompanied by a notice of exercise. The written notice shall state the number of shares with respect to which the Option is being exercised and, shall either be accompanied by the payment of the aggregate Option Price for such shares or shall fix a date (not more than ten (10) business days after the date of such notice) by which the payment of the aggregate Option Price will be made. The Eligible Director shall not exercise the Option to purchase less than 100 shares, unless the Board otherwise approves or unless the partial exercise is for the remaining shares available under the Option. A certificate or certificates for the shares of Common Stock purchased by the exercise of the Option shall be issued in the regular course of business subsequent to the exercise of the Option and the payment therefor. Neither the Eligible Director, nor any other person who may be entitled to exercise the Option, shall have any of the rights or privileges of a shareholder with respect to any shares of Common Stock issuable upon exercise of the Option, until certificates representing such shares shall have been issued and delivered and the individual’s name entered as a shareholder of record on the books of the Company for such shares.

8.           Termination of Option . The Option shall terminate, and shall thereupon be available again for grant to Eligible Directors as may be determined by the Board, as follows:

(a)          Except as provided in subparagraphs (b), (c), (d), (e), (f) and (g) below, the Option, to the extent that it has not been exercised or expired, shall terminate on the earlier of (i) the date the Eligible Director is removed from the Board for “cause” or (ii) the date which is ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof.

(b)          In the event the Eligible Director resigns from the Board for any reason other than “cause,” retirement, disability, death or following a change in control, the Eligible Director shall have the right to exercise vested Options, to the extent not exercised or expired for a period of ninety (90) days from the effective date of resignation.

(c)          In the event the Eligible Director retires prior to the date which is ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof, the Eligible Director shall have the right to exercise all Options, to the extent not exercised or expired, for a period of ninety (90) days from the effective date of retirement.

(d)          In the event the Eligible Director retires and is designated a “director emeritus” prior to the date which is ten (10) years after the date of grant of the option as set forth in paragraph 1 hereof, the Eligible Director shall have the right to exercise all Options, to the extent not exercised or expired, for the remainder of such ten (10) year period.

(e)          In the event the Eligible Director leaves the Board by reason of such Eligible Director’s disability prior to the date which is ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof, the Eligible Director shall have the right to exercise all Options, to the extent not exercised by him or expired, for the remainder of such ten (10) year period.

(f)          In the event the Eligible Director dies while serving on the Board or after his or her retirement or after his or her leaving by reason of disability or following a change in control and prior to the date which is ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof, all Options, to the extent not exercised by the Eligible Director or expired, shall be exercisable, according to its terms, by the personal representative, the executor or the administrator of the Eligible Director’s estate, or the person or persons who acquired the Option by bequest or inheritance from the Eligible Director, at any time within twelve (12) months after the date of death of the Eligible Director, but in no event may the Option be exercised later than ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof.

(g)          In the event the Eligible Director leaves the Board following a change in control of the Company, prior to the date which is ten (10) years after the date of grant of Options as set forth in paragraph 1 hereof, the Eligible Director shall have the right to exercise the Option, to the extent that it has not been exercised by him or her or expired, for the remainder of such ten (10) year period.

9.           Effect of Agreement on Status of Eligible Director . The fact that the Eligible Director has been granted the Option under the Plan shall not confer on the Eligible Director any right to continued service on the Board, nor shall it limit the right of the Company to remove the Eligible Director from the Board at any time.

10.          Listing and Registration of Option Shares . The Company’s obligation to issue shares of Common Stock upon exercise of the Option is expressly conditioned upon the completion by the Company of any registration or other qualification of such shares under any state or federal law or regulations or rulings of any governmental regulatory body or the making of such investment representations or other representations and agreements by the Eligible Director or any person entitled to exercise the Option in order to comply with the requirements of any exemption from any such registration or other qualification of the Option Shares which the Board shall, in its discretion, deem necessary or advisable. Notwithstanding the foregoing, the Company shall be under no obligation to register or qualify the Option Shares under any state or federal law. The required representations and agreements referenced above may include representations and agreements that the Eligible Director, or any other person entitled to exercise the Option, (i) is purchasing such shares on his or her own behalf as an investment and not with a present intention of distribution or re-sale and (ii) agrees to have placed upon any certificates representing the Option Shares a legend setting forth any representations and agreements which have been given to the Board or a reference thereto and stating that such shares may not be transferred except in accordance with all applicable state and federal securities laws and regulations, and further representing that, prior to making any sale or other disposition of the Option Shares, the Eligible Director, or any other person entitled to exercise the Option, will give the Company notice of the intention to sell or dispose of such shares not less than five (5) days prior to such sale or disposition.

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

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

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

(c)          Except upon a change in control as set forth in paragraph 6 hereof, upon the effective date of the dissolution or liquidation of the Company, the Option granted under this Agreement shall terminate.

12.          Non-Transferability . The Option granted under this Agreement shall not be assignable or transferable except, in the event of the death of the Eligible Director, by will or by the laws of descent and distribution. In the event of the death of the Eligible Director, the personal representative, the executor or the administrator of the Eligible Director’s estate, or the person or persons who acquired by bequest or inheritance the right to exercise the Option may exercise the unexercised Option or portion thereof, in accordance with its terms and paragraph 7(f) hereof, prior to the date which is ten (10) years after the date of grant of the Option as set forth in paragraph 1 hereof.

13.          Tax Withholding . The grant of the Option and Option Shares delivered pursuant to this Agreement, and any amounts distributed with respect thereto, may be subject to applicable federal, state and local withholding for taxes. The Eligible Director expressly acknowledges and agrees to such withholding, where applicable, without regard to whether the Option Shares may then be sold or otherwise transferred by the Eligible Director.

14.          Notices . Any notices or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered personally or when deposited in the United States mail as Certified Mail, return receipt requested, properly addressed and postage prepaid, if to the Company, at its principal office at 700 W Cumberland Street, Dunn, Harnett County, North Carolina 28334; and, if to the Eligible Director, at his or her last address appearing on the books of the Company. The Company and the Eligible Director may change their address or addresses by giving written notice of such change as provided herein. Any notice or other communication hereunder shall be deemed to have been given on the date actually delivered or as of the third (3rd) business day following the date mailed, as the case may be.

15.          Construction Controlled by Plan . This Agreement shall be construed so as to be consistent with the Plan; and the provisions of the Plan shall be deemed to be controlling in the event that any provision hereof should appear to be inconsistent therewith. The Eligible Director hereby acknowledges receipt of a copy of the Plan from the Company.

16.          Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this Agreement is determined to be unenforceable, invalid or illegal, the validity of any other provision or part thereof, shall not be affected thereby and this Agreement shall continue to be binding on the parties hereto as if such unenforceable, invalid or illegal provision or part thereof had not been included herein.

17.          Modification of Agreement; Waiver . This Agreement may be modified, amended, suspended or terminated, and any terms, representations or conditions may be waived, but only by a written instrument signed by each of the parties hereto. No waiver hereunder shall constitute a waiver with respect to any subsequent occurrence or other transaction hereunder or of any other provision hereof.

18.          Captions and Hearings; Gender and Number . Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part hereof, and shall not serve as a basis for interpretation or in construction of this Agreement. As used herein, the masculine gender shall include the feminine and neuter, the singular number, the plural, and vice versa, whenever such meanings are appropriate.

19.          Governing Law; Venue and Jurisdiction . Without regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control the validity, interpretation, performance, and enforcement of this Agreement. The parties hereto agree that any suit or action relating to this Agreement shall be instituted and prosecuted in the courts of the County of Harnett, State of North Carolina, and each party hereby does waive any right or defense relating to such jurisdiction and venue.

20.          Binding Effect . This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns, and shall be binding upon and inure to the benefit of the Eligible Director, his heirs, legatees, personal representatives, executors, and administrators.

21.          Entire Agreement . This Agreement constitutes and embodies the entire understanding and agreement of the parties hereto and, except as otherwise provided hereunder, there are no other agreements or understandings, written or oral, in effect between the parties hereto relating to the matters addressed herein.

22.          Counterparts . This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

IN WITNESS WHEREOF , the Company has caused this instrument to be executed in its corporate name by its President, or one of its Vice Presidents, and attested by its Secretary or one of its Assistant Secretaries, and its corporate seal to be hereto affixed, all by authority of its Board of Directors first duly given, and the Eligible Director has hereunto set his or her hand and adopted as his or her seal the typewritten word “SEAL” appearing beside his or her name, all done this the day and year first above written.

SELECT BANCORP, INC.

[CORPORATE SEAL]

EXHIBIT A

NOTICE OF EXERCISE OF

NONSTATUTORY STOCK OPTION

The undersigned hereby elects to purchase ________ whole shares of Common Stock of Select Bancorp, Inc. (the “Company”) pursuant to the Nonstatutory Stock Option granted to the undersigned in that certain Nonstatutory Stock Option Agreement between the Company and the undersigned dated the ____ day of _________, ___________________. The aggregate purchase price for such shares is $_______________, which amount is (i) being tendered herewith, (ii) will be tendered on or before _______________, ___________________, (cross out provision which does not apply) in cash. The effective date of this election shall be ____________________, ___________________, or the date of receipt of this Notice by the Company if later.

Executed this ___ day of ___________________, ___________________, at .