EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN



                               EXECUTIVE AGREEMENT



     THIS AGREEMENT is made and entered into this 10th day of March, 2003, by

and between the Carolina Bank, a bank organized and existing under the laws of

the State of North Carolina (hereinafter referred to as the "Bank"), and Gunnar

N.R. Fromen, an Executive of the Bank (hereinafter referred to as the

"Executive").



     WHEREAS, the Executive is now in the employ of the Bank and has for many

years faithfully served the Bank. It is the consensus of the Board of Directors

(hereinafter referred to as the "Board") that the Executive's services have been

of exceptional merit, in excess of the compensation paid and an invaluable

contribution to the profits and position of the Bank in its field of activity.

The Board further believes that the Executive's experience, knowledge of

corporate affairs, reputation and industry contacts are of such value, and the

Executive's continued services so essential to the Bank's future growth and

profits, that it would suffer severe financial loss should the Executive

terminate their services;



     ACCORDINGLY, the Board has adopted the Carolina Bank Executive Supplemental

Retirement Plan (hereinafter referred to as the "Executive Plan") and it is the

desire of the Bank and the Executive to enter into this Agreement under which

the Bank will agree to make certain payments to the Executive upon the

Executive's retirement or to the Executive's beneficiary(ies) in the event of

the Executive's death pursuant to the Executive Plan;



     FURTHERMORE, it is the intent of the parties hereto that this Executive

Plan be considered an unfunded arrangement maintained primarily to provide

supplemental retirement benefits for the Executive, and be considered a

non-qualified benefit plan for purposes of the Employee Retirement Security Act

of 1974, as amended ("ERISA"). The Executive is fully advised of the Bank's

financial status and has had substantial input in the design and operation of

this benefit plan; and



     NOW THEREFORE, in consideration of services the Executive has performed in

the past and those to be performed in the future, and based upon the mutual

promises and covenants herein contained, the Bank and the Executive agree as

follows:



I.   DEFINITIONS



     A.   Effective Date:



          The Effective Date of the Executive Plan shall be December 24, 2002.



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     B.   Plan Year:



          Any reference to the "Plan Year" shall mean a calendar year from

          January 1st to December 31st. In the year of implementation, the term

          "Plan Year" shall mean the period from the Effective Date to December

          31st of the year of the Effective Date.



     C.   Retirement Date:



          Retirement Date shall mean retirement from service with the Bank that

          becomes effective on the first day of the calendar month following the

          month in which the Executive reaches age sixty-five (65) or such later

          date as the Executive may actually retire.



     D.   Early Retirement Date:



          Early Retirement Date shall mean a retirement from service which is

          effective prior to the Normal Retirement Age stated herein, provided

          the Executive has attained age sixty-two (62).



     E.   Termination of Service:



          Termination of Service shall mean the Executive's voluntary

          resignation of service by the Executive or the Bank's discharge of the

          Executive without cause, prior to the Early Retirement Date

          (Subparagraph I [D]).



     F.   Index Retirement Benefit:



          The Index Retirement Benefit for each Executive in the Executive Plan

          for each Plan Year shall be equal to the excess (if any) of the Index

          (Subparagraph I [G]) for that Plan Year over the Opportunity Cost

          (Subparagraph I [H]) for that Plan Year.



     G.   Index:



          The Index for any Plan Year shall be the aggregate annual after-tax

          income from the life insurance contract(s) described hereinafter as

          defined by FASB Technical Bulletin 85-4. This Index shall be applied

          as if such insurance contract(s) were purchased on the Effective Date

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