EMPLOYMENT CONTINUITY AGREEMENT
THIS EMPLOYMENT CONTINUITY AGREEMENT (this "Agreement") is between LSB BANCSHARES,
INC., a North Carolina corporation (referred to in this Agreement as the "Company," which term includes any
subsidiary of the Company where the context so requires), and JOE W. CARROLL, a resident of Thomasville,
North Carolina ("Executive"), and is effective as of June 9, 1998 (the "Effective Date").
The Company's Board of Directors (the "Board") acknowledges that Executive's contributions to the growth and
success of the Company will be substantial. As a publicly held corporation, the Board recognizes that there exists
a possibility of a change in control of the Company. The Board also recognizes that the possibility of such a
change in control may contribute to uncertainty on the part of the Executive and may result in the departure or
distraction of the Executive from his responsibilities.
Outstanding management of the Company is essential to advancing the best interests of the Company and its
shareholders. In the event of a threat or occurrence of a bid to acquire or change control of the Company or to
effect a business combination, it is particularly important that the Company's business be continued with a
minimum of disruption. The Board believes that the objective of securing and retaining the Executive will be
achieved if the Executive is given assurances of employment security so that he will not be distracted by personal
uncertainties and risks created by such circumstances.
The Board believes that such assurances will secure the continued services of the Executive in the performance of
his regular duties and such extra duties as may be required of him during such periods of uncertainty and enable
the Company to rely on such Executive to manage its affairs during any such period with less concern for his
The Stock Option and Compensation Committee of the Board (the "Committee") has recommended, and the
Board has approved, entering