ABC BANCORP, DEF 14A, 1997-03-28

ABC BANCORP
DEF 14A, 1997-03-28
STATE COMMERCIAL BANKS

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<PAGE>

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[_] Definitive Proxy Statement Rule 14a-6(e)(2))

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

ABC BANCORP
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

ABC BANCORP
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No Filing Fee Required.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

<PAGE>

NOTICE OF

ANNUAL MEETING

AND

PROXY STATEMENT

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

ABC BANCORP

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

ANNUAL MEETING OF SHAREHOLDERS

APRIL 15, 1997
<PAGE>

ABC BANCORP
310 FIRST STREET, S.E.
MOULTRIE, GEORGIA 31768

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

APRIL 15, 1997

To the Shareholders of ABC Bancorp:

Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of ABC Bancorp (the "Company") will be held at Sunset Country Club,
Thomasville Highway, Moultrie, Georgia 31768, on Tuesday, April 15, 1997,
commencing at 4:15 p.m., local time, for the following purposes:

(1) To elect four directors for a one-year term of office, four directors
for a two-year term of office and four directors for a three-year term
of office and in the alternative, if PROPOSAL (2), below, is not
approved by the Company's shareholders, to elect twelve directors for
one-year terms of office;

(2) To consider and vote upon an amendment to the Company's Bylaws to
divide the Company's Board of Directors into three classes, to serve
staggered terms of office, a copy of which is included as Appendix A to
the accompanying Proxy Statement;

(3) To consider and vote upon a proposal to adopt the Company's 1997
Incentive Stock Option Plan for Kenneth J. Hunnicutt, the Company's
Chief Executive Officer, a copy of which is included as Appendix B to
the accompanying Proxy Statement;

(4) To consider and vote upon a proposal to adopt the Company's Omnibus
Stock Ownership and Long Term Incentive Plan for the Company's officers
and managerial employees, a copy of which is included as Appendix C to
the accompanying Proxy Statement;

(5) To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent
accountants for the fiscal year ending December 31, 1996; and

(6) To transact any other business that may properly come before the Annual
Meeting or any adjournment or postponement thereof.

The close of business on March 14, 1997, has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at,
the Annual Meeting or any adjournment or postponement thereof. Only
shareholders of record at the close of business on the record date are
entitled to notice of, and to vote at, the Annual Meeting.

Shareholders may receive more than one proxy because of shares registered in
different names or addresses. Each such proxy should be marked, dated, signed
and returned. Please check to be certain of the manner in which your shares
are registered -- whether individually, as joint tenants, or in a
representative capacity -- and sign the related proxy accordingly.

A complete list of shareholders entitled to vote at the Annual Meeting will
be available for examination by any shareholder, for any purpose germane to
the Annual Meeting, during normal business hours, for a period of at least 10
days prior to the Annual Meeting at the Company's corporate offices located at
the address set forth above.
<PAGE>

ABC BANCORP
310 FIRST STREET, S.E.
MOULTRIE, GEORGIA 31768

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

PROXY STATEMENT
---------------------

GENERAL INFORMATION

This Proxy Statement and the accompanying form of proxy (which were first
sent or given to shareholders on or about March 31, 1997) are furnished to
shareholders of ABC Bancorp (the "Company") in connection with the
solicitation by and on behalf of the Board of Directors of the Company of
proxies for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held at Sunset Country Club, Thomasville Highway, Moultrie, Georgia, on
Tuesday, April 15, 1997, at 4:15 p.m., local time, and any adjournment or
postponement thereof.

A proxy may be revoked at any time before the shares represented by it are
voted at the Annual Meeting by delivering to the Secretary of the Company
either a written revocation or a duly executed proxy bearing a later date, or
by voting in person at the Annual Meeting. All shares represented by a
properly executed, unrevoked proxy will be voted on all matters presented at
the Annual Meeting on which the shares are entitled to vote, unless the
shareholder attends the Annual Meeting and votes in person. Proxies solicited
will be voted in accordance with the instructions given on the enclosed form
of proxy. UNLESS AUTHORITY IS WITHHELD IN THE MANNER INDICATED ON THE ENCLOSED
FORM OF PROXY, IT IS INTENDED THAT PROXIES IN THE ACCOMPANYING FORM WILL BE
VOTED FOR THE ELECTION AS A DIRECTOR OF EACH OF THE NOMINEES NAMED HEREIN.

Only shareholders of record at the close of business on March 14, 1997 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting.
On the Record Date, the Company had 5,396,561 shares of common stock (the
"Common Stock") outstanding and entitled to vote. All holders of Common Stock
are entitled to cast one vote per share held as of the Record Date.

The cost of preparing and mailing proxy materials will be borne by the
Company. In addition to solicitation by mail, solicitations may be made by
officers and other employees of the Company in person or by telephone,
telecopier or telegraph. Brokerage houses, custodians, nominees and
fiduciaries will be reimbursed for the expenses of sending proxy materials to
the beneficial owners of Common Stock held of record on behalf of such
persons.
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 14, 1997, by each person who is
known to the Board of Directors of the Company to own beneficially five
percent or more of the outstanding Common Stock.

<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES OF COMMON
BENEFICIAL OWNER STOCK BENEFICIALLY OWNED PERCENT OF CLASS (1)
- ------------------- -------------------------- -------------------
<S> <C> <C>
Eugene M. Vereen, Jr. 414,552(2) 7.7%
52 Cherokee Road
Moultrie, Georgia 31678
</TABLE>
- --------
(1) Based upon 5,396,561 shares of Common Stock outstanding, which does not
include options for 51,667 shares of Common Stock granted to Mr.
Hunnicutt.
(2) Includes 1,840 shares owned by M.I.A., Co., a corporation of which Mr.
Vereen is President; 3,200 shares owned by his wife; and 341,235 shares
owned by other members of Mr. Vereen's family, with whom Mr. Vereen shares
investment and voting power pursuant to an oral agreement.

SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock, as of the Record Date, by directors,
nominees for election as directors, executive officers named in the Summary
Compensation Table set forth under the caption "Executive Compensation and
Other Information," and by all directors and executive officers as a group.

NAME OF COMMON STOCK
BENEFICIAL BENEFICIALLY OWNED AS PERCENT
OWNER POSITION WITH THE COMPANY OF MARCH 14, 1997(1) OF CLASS
---------- ------------------------- --------------------- ----------
<S> <C> <C> <C>
Johnny W. Floyd (2) Director 36,454 *

J. Raymond Fulp Director 25,043 *

Kenneth J. Hunnicutt (3) Chief Executive Officer,
President and Director 113,446 2.1

Daniel B. Jeter Director Nominee -- --

Willard Lasseter (4) Director 71,999 1.3

Bobby B. Lindsey (5) Director 52,806 *

Hal L. Lynch (6) Director 139,304 2.6

Eugene M. Vereen, Jr. (7) Director 414,552 7.7

Doyle Weltzbarker (8) Director 58,970 1.1

Sidney J. Wooten, III Chief Operating Officer,
Executive Vice President
and Director 1,000 *

Henry C. Wortman (9) Director 25,679 *

John M. Mobley Director Nominee 5,306 *

All directors, nominees
for election as directors
and executive officers as
a group (17 persons,
including those listed
above) 947,683 17.6
</TABLE>
- --------
*Less than 1%.

2
<PAGE>

(1) Except as otherwise specified, each individual has sole and direct
beneficial ownership interest and voting rights with respect to all shares
of Common Stock indicated.
(2) Includes 5,887 shares owned by Mr. Floyd's wife and 17,826 shares owned by
his two children, with whom Mr. Floyd shares investment and voting power
pursuant to an oral agreement.
(3) Includes options to acquire 51,667 shares (See "EXECUTIVE COMPENSATION AND
OTHER INFORMATION"); 3,973 shares owned by a partnership in which Mr.
Hunnicutt is a partner; and 1,500 shares owned by a partnership of which
Mr. Hunnicutt's wife is a partner.
(4) Includes 2,666 shares owned by Mr. Lasseter's wife, with whom Mr. Lasseter
shares investment and voting power; and 29,333 shares owned by Lasseter
Tractor Company, a corporation of which Mr. Lasseter is President.
(5) Includes 9,982 shares owned by Mr. Lindsey's three children, with whom Mr.
Lindsey shares investment and voting power; 766 shares owned jointly by
Mr. Lindsey and his son; and 666 shares owned by Mr. Lindsey's wife, with
whom he shares investment and voting power. Also includes 8,033 shares
owned by Dixie Oil Co., 6,033 shares owned by Dixie Gas & Oil Co., 6,033
shares owned by Dixie Petroleum Co.; 8,033 shares owned by L & D Oil Co.,
Inc. and 7,900 shares owned by L.D. Advertising Co., with respect to all
of which Mr. Lindsey is President.
(6) Includes 129,998 shares owned by Mr. Lynch's family members, with whom Mr.
Lynch shares voting and investment power.
(7) Includes 1,840 shares owned by M.I.A., Co., a corporation of which Mr.
Vereen is President; 3,200 shares owned by his wife; and 341,235 shares
owned by his four children, with whom Mr. Vereen shares investment and
voting power pursuant to an oral agreement.
(8) Includes 16,284 shares held by the West-End Milling Company ESOP Trust of
which Mr. Weltzbarker serves as trustee and as to which Mr. Weltzbarker
disclaims beneficial ownership.
(9) Includes 2,694 shares owned by Mr. Wortman's wife, with whom Mr. Wortman
shares investment and voting power; and 6,357 shares held as co-trustee
with Mr. Wortman's wife for the benefit of their two children; and 1,000
shares owned jointly by Mr. Wortman and spouse.

3
<PAGE>

PROPOSAL I: ELECTION OF DIRECTORS

The Company's Bylaws provide that the Board of Directors shall consist of no
fewer than seven nor more than 15 directors. The Board of Directors currently
consists of 11 directors with terms of office expiring on the date of this
Annual Meeting. On February 18, 1997, the Board of Directors voted to amend
the Company's Bylaws, subject to shareholder approval of PROPOSAL II, below,
to divide the Board of Directors into three classes, as nearly equal in size
as possible. Each class will serve three years, with the terms of office of
the respective classes expiring in successive years. Initially the term of
office of directors in Class I will expire at the 1998 Annual Meeting, the
term of office of directors in Class II will expire at the 1999 Annual
Meeting, and the term of office of directors in Class III will expire at the
2000 Annual Meeting. The Board of Directors proposes that the nominees
identified below be elected to the class and for the term as set forth below
and until the election and qualification of their successors, as provided in
the Bylaws of the Company.

In the alternative and in the event that PROPOSAL II, below, is not approved
by the Company's shareholders, the Board of Directors proposes that all of the
nominees described below be elected to a one-year term and until the election
and qualification of their successors, as provided in the Bylaws of the
Company. The proxyholders intend to vote "FOR" the election of the individuals
named below. All of the nominees except Mr. Jeter and Mr. Mobley are currently
serving as directors of the Company. All nominees have consented to serve on
the Board of Directors if elected by the shareholders. If a nominee is unable
to serve as director, the proxy will be voted for a nominee named by the Board
of Directors in his stead by those persons named to vote the proxies. The
Board of Directors has no reason to believe that any nominee will be unable to
serve.

4
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
NAME, AGE AND TERM AS DIRECTOR CLASS AND OTHER DIRECTORSHIPS
------------------------------ ----- ----------------------------------------
<C> <C> <S>
Bobby B. Lindsey, 67 II Chairman of the Board of Tifton Bank
Director since 1994 since 1986. Mr. Lindsey serves as
President of Dixie Oil Company, Gasmarts,
Inc., Dixie Gas & Oil Company, Dixie
Petroleum Company, Dixie Oil Distributing
Company, Dixie Oil, Florida, L & L Oil
Company, Dixie Petroleum Company of
Alabama, Red Diamond Oil Company, Best
Petroleum Company, Dixie Refineries,
Inc., each of which is engaged in the
petroleum business, Lenox Enterprises,
Inc., an oil retail company and L.D.
Advertising Company, an advertising
agency, all since prior to 1978.
Willard Lasseter, 67 III Chairman of the Board of ABC Bancorp
Director since 1982 since April 19, 1995. Vice Chairman of
the Board of ABC Bancorp from 1992 to
1995. Chairman of the Board of American
Bank since 1990 and director of American
Bank since 1971, Mr. Lasseter also served
as Vice Chairman of the Board of American
Bank from 1984 to 1990. Mr. Lasseter also
serves as a director of Cairo Bank and
Thomas Bank. Since 1959, Mr. Lasseter has
owned and operated Lasseter Tractor
Company, a John Deere dealership.
Hal L. Lynch, 67 II President of Lynch Management Company,
Director since 1992 which manages automobile dealerships in
Florida and Georgia. Mr. Lynch has been
in the automobile business since 1953.
Doyle Weltzbarker, 62 III Vice Chairman of the Board of ABC Bancorp
Director since 1985 since 1995. Director of Quitman Bank
since 1975. From 1982 until 1987, Mr.
Weltzbarker served as Vice Chairman, and
currently serves as Chairman, of the
Board of Directors of Quitman Bank. Since
1985, Mr. Weltzbarker has served as a
director and President of West End
Milling Company, a feed manufacturing
business, and Brooksco Dairy, Inc. and
Dixie Hog Corporation, both of which are
livestock and farming businesses. Mr.
Weltzbarker also serves as a director of
Georgia-Florida Fertilizer Co. and on the
advisory board of Norfolk Southern
Corporation, which owns the Norfolk
Southern Railroad.
Henry C. Wortman, 59 II Vice Chairman and director of Quitman
Director since 1990 Bank since 1988. Mr. Wortman has been a
principal partner of Jackson & Wortman, a
dairy and general farming operation based
in Quitman, Georgia, since 1965.
Johnny W. Floyd, 58 I Mr. Floyd currently serves as the
Director since 1996 Chairman of the Board of Central Bank and
Trust, of which he has been a director
since 1996. Mr. Floyd is the President of
Floyd Timber Company, a forestry products
company, and the President of Cordele
Realty.
Sidney J. Wooten, III, 43 I Executive Vice President and Chief
Director since 1996 Operating Officer of ABC Bancorp from
August 1996 to present. From June 1991
until December 1995, Mr. Wooten served as
the President and Chief Executive Officer
of First National Bank of White County,
Georgia. From December 1995 until August
1996, Mr. Wooten served as Senior Vice
President of First National Bancorp.
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
NAME, AGE AND TERM AS DIRECTOR CLASS AND OTHER DIRECTORSHIPS
------------------------------ ----- ----------------------------------------
<C> <C> <S>
Daniel B. Jeter, 45 I Since 1979, Mr. Jeter has been the Vice-
Director Nominee President and a major shareholder of
Standard Discount Corporation, a consumer
finance company, and is an officer and
director of each of its several
affiliates.
John M. Mobley, 64 I Since 1982, Mr. Mobley has been engaged
Director Nominee in agricultural operations as the
President and a major shareholder of
Mobley Plant Company, Inc., Moultrie,
Georgia, and affiliated businesses.
</TABLE>

The election of a director requires the affirmative vote of a majority of
votes cast by the outstanding shares of Common Stock present or represented at
the Annual Meeting and entitled to vote. Unless otherwise specified, the proxy
holders designated in the proxy will vote the shares covered thereby at the
Annual Meeting "FOR" the election of all of the director nominees.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
ALL OF THE DIRECTOR NOMINEES.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Company's Executive and Loan Committee is comprised of six directors, a
majority of whom are neither officers nor employees of the Company. The
Executive and Loan Committee is authorized to exercise all of the powers of
the Board of Directors, except the power to declare dividends, elect
directors, amend the bylaws, issue stock or recommend any action to
shareholders. The Executive and Loan Committee, among other things, considers
and makes recommendations to the Board of Directors regarding the size and
composition of the Board, recommends and nominates candidates to fill Board
vacancies that occur and recommends to the Board the director nominees for
whom the Board will solicit proxies. The current members of the Executive and
Loan Committee are Messrs. Vereen, Hunnicutt, Lasseter, Lindsey, Lynch and
Weltzbarker.

The members of the Company's Compensation Committee, established in 1992,
are Messrs. Vereen, Hunnicutt, Lasseter and Weltzbarker. The duties of the
Compensation Committee are generally to establish the salaries, bonuses,
management perquisites and other compensation of the officers of the Company
and each of the Company's nine subsidiary banks (the "Banks").

The Company also has an Audit Committee consisting of seven members. One of
the Audit Committee members is a director of the Company, and each of the
remaining six members is a Bank director. Mr. Lasseter currently represents
the Company on this committee. The other members of the Audit Committee are
Grady Williams (Chairman), Raymond Fulp, Henry Wortman, John Briggs, Lynn
Jones and Maurice Chastain. The Audit Committee meets as required to review
the audits performed by the office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, the Department of Banking and Finance
of the State of Georgia, the State Banking Department of the State of Alabama,
the Company's independent accountants and the internal auditors of the Company
and the Banks.

In 1996, the Board of Directors held 12 meetings. The Executive and Loan
Committee held 12 meetings, the Compensation Committee held one meeting and
the Audit Committee held one meeting. Each director attended at least 75% of
all meetings of the full Board of Directors and of those Committees on which
he served in 1996.

The Company does not have a standing nominating committee.

6
<PAGE>

EXECUTIVE COMPENSATION AND OTHER INFORMATION

EXECUTIVE COMPENSATION

The following table sets forth information as to all cash and non-cash
compensation paid or accrued during each of the last three fiscal years to the
Company's Chief Executive Officer and to each of its other executive officers
whose total cash compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------- -------
OTHER ANNUAL RESTRICTED ALL OTHER
COMPENSA- STOCK OPTIONS/ LTIP ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS TION AWARD SARS PAYOUTS COMPENSATION
- --------------------------- ---- ----------- ---------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth J. Hunnicutt, 1996 $221,250(2) $ 83,944(3) -- -- -- -- $54,138(4)
Chief Executive 1995 $176,860(2) $ 42,771(3) -- -- -- -- $54,138(4)
Officer, 1994 $173,458(2) $ 15,334(3) -- -- -- -- $54,138(4)
President and
Director
Sidney J. Wooten, III 1996 $ 62,299(5) $ 17,863 -- -- -- -- --
Executive Vice
President, Chief
Operating Officer and
Director
</TABLE>
- --------
(1) Includes director's fees.

(2) Contributions to the investment account under the Deferred Compensation
Agreement, previously disclosed as "Salary," are now disclosed as "All
Other Annual Compensation." See footnote (4), below.

(3) Includes an annual incentive bonus pursuant to Mr. Hunnicutt's Executive
Employment Agreement. See "--Executive Employment Agreement--Mr.
Hunnicutt" and "Report of the Compensation Committee of the Board of
Directors on Executive Compensation."

(4) For each of 1994, 1995 and 1996, the Company made contributions for the
benefit of Mr. Hunnicutt to a Simplified Employee Pension Plan in the
amount of $22,500; to the investment account under the Deferred
Compensation Agreement in the amount of $15,300; and to the investment
account under the Salary Continuation Agreement in the amount of $16,338.
Amounts contributed under the Deferred Compensation Agreement have been
previously disclosed as "Salary." Amounts contributed under the Salary
Continuation Agreement were inadvertently omitted from the Company's Proxy
Statements prior to the Company's Proxy Statement for the 1996 Annual
Meeting of Shareholders.

(5) Mr. Wooten commenced employment with the Company as its Executive Vice
President and Chief Operating Officer as of August 26, 1996, pursuant to
an Executive Employment Agreement that provides for an annual base salary
of $175,000. See "--Executive Employment Agreement--Mr. Wooten."

7
<PAGE>

STOCK OPTION EXERCISES DURING 1996 AND STOCK OPTION YEAR-END VALUES

The following table sets forth information with respect to options exercised
by the named executive officer in the last fiscal year and the number and
value of unexercised options and SARs held as of the end of the last fiscal
year for the executive officer named in the Summary Compensation Table.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS/SARS AT
SHARES OPTIONS/SARS AT FY-END (#) FY-END ($) (2)
ACQUIRED ON VALUE ------------------------------ -------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth J. Hunnicutt.... 26,667 $255,000 -- 6,667(3) -- $67,500(3)
</TABLE>
- --------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) The fiscal-year end values are calculated based upon the last known sales
price for the Common Stock on December 31, 1996.
(3) This option was granted pursuant to the Company's 1992 Incentive Stock
Option Plan for Mr. Hunnicutt at an exercise price of $6.75 per share. The
option first becomes exercisable in 1997 and vests at a rate of 1,000
shares per year.

DEFERRED COMPENSATION AGREEMENT

The Company has entered into a Deferred Compensation Agreement with Mr.
Hunnicutt. Pursuant to the Deferred Compensation Agreement, which is fully
funded by insurance, the Company has agreed to pay Mr. Hunnicutt deferred
compensation in the event of his retirement, disability or death or
termination of his employment, in the amounts and for the periods set forth
below.

<TABLE>
<CAPTION>
EVENT AMOUNT NUMBER OF MONTHS
- ------------------------------ ---------------------------------------- ---------------------
<S> <C> <C>
Normal retirement $3,750/month 180
Early retirement Value of investment account (1) 120
Disability $3,750/month if during normal retirement 180
Value of investment account if prior
to retirement (1) 120
Death during normal retirement $5,000/month Balance of 180 months
Death during early retirement $5,000/month Balance of 120 months
Death prior to retirement $5,000/month 180
Termination of employment Value of investment account (1)(2) 120
</TABLE>
- --------
(1) The balance of the investment account as of the dates set forth below is
as follows:

<TABLE>
<CAPTION>
DATE BALANCE
------ ---------
<S> <C>
12/15/95.................... $244,000
12/15/96.................... $265,000
12/15/97.................... $286,000
12/15/98.................... $310,000
12/15/99.................... $336,000
12/15/2000.................. $360,000
</TABLE>

(2) Mr. Hunnicutt may elect: (i) not to receive the value of the investment
account upon termination of his employment; and (ii) to receive normal
retirement benefits of $3,750 per month for 180 months when he reaches
normal retirement age.

In the fiscal year ended December 31, 1996, $9,524 was accrued, but not
paid, to Mr. Hunnicutt pursuant to the Deferred Compensation Agreement.

8
<PAGE>

SALARY CONTINUATION AGREEMENT

The Company has entered into a Salary Continuation Agreement with Mr.
Hunnicutt. The Salary Continuation Agreement, which is fully funded by
insurance, provides that if Mr. Hunnicutt remains in the Company's employ
until he reaches age 68, he will be entitled to receive 15 annual payments of
$33,750 each in compensation for various consulting and advisory services to
be provided to the Company and/or its senior executives over a 15-year period.

EXECUTIVE EMPLOYMENT AGREEMENT--MR. HUNNICUTT

The Company entered into an employment agreement with Mr. Hunnicutt
effective as of September 20, 1994, amended as of September 30, 1996 (the
"Hunnicutt Employment Agreement"), pursuant to which Mr. Hunnicutt has agreed
to serve as the President and Chief Executive Officer of the Company for an
initial term of five years. The term is automatically extended for an
additional one year term on the anniversary of the effective date of the
Hunnicutt Employment Agreement unless either party gives written notice to the
other party not to so extend the term within 90 days prior to any such
anniversary, in which case no further extension will occur and the term will
end two years after the anniversary of the date of the notice not to extend.
Notwithstanding any notice by the Company not to extend, the term of the
Hunnicutt Employment Agreement will not expire prior to the expiration of 24
months after the occurrence of a Change of Control (as such term is defined in
the Hunnicutt Employment Agreement) of the Company. The Hunnicutt Employment
Agreement, which automatically terminates when Mr. Hunnicutt attains age 68,
provides that Mr. Hunnicutt will receive a base salary of $150,000.

In addition, the Hunnicutt Employment Agreement provides that Mr. Hunnicutt
is entitled to receive an annual bonus and to participate in all present and
future employee benefit, retirement and compensation plans of the Company
consistent with his salary and his position as the President and Chief
Executive Officer of the Company. The Hunnicutt Employment Agreement further
provides that, in the event of termination of Mr. Hunnicutt's employment with
the Company, the Company will pay to Mr. Hunnicutt (i) his base salary and
annual bonus through the date of termination if he is terminated by the
Company's Board of Directors for "cause" (as defined in the Hunnicutt
Employment Agreement) and (ii) his base salary and annual bonus through the
date of termination and, for three additional 12-month periods, his base
salary and a bonus in an amount determined pursuant to the terms of the
Hunnicutt Employment Agreement if he terminates his employment for "good
reason" (as defined in the Hunnicutt Employment Agreement).

If Mr. Hunnicutt elects to terminate his employment upon 90 days notice,
then the Company is obligated to pay him his annual salary and annual bonus
through the date of termination. In the event of Mr. Hunnicutt's death, the
Company is obligated to purchase, under certain circumstances, all outstanding
stock options previously granted to Mr. Hunnicutt, whether or not such options
are then exercisable, at a cash purchase price equal to the amount by which
the aggregate fair market value of such options exceed their exercise price.
Finally, the Hunnicutt Employment Agreement also included certain restrictive
covenants which limit Mr. Hunnicutt's ability to compete with the Company or
divulge certain confidential information concerning the Company.

EXECUTIVE EMPLOYMENT AGREEMENT--MR. WOOTEN

The Company entered into an employment agreement with Mr. Sidney J. Wooten
effective as of August 26, 1996 (the "Wooten Employment Agreement"), pursuant
to which Mr. Wooten has agreed to serve as the Executive Vice President and
Chief Operating Officer of the Company for an initial term of three years. The
term is automatically extended for an additional one year term on the
anniversary of the effective date of the Wooten Employment Agreement unless
either party gives written notice to the other party not to so extend the term
within 90 days prior to any such anniversary, in which case no further
extension will occur and the term will end two years after the anniversary of
the date of the notice not to extend. Notwithstanding any notice by the
Company not to extend, the term of the Wooten Employment Agreement will not
expire prior to the expiration of 24 months after the occurrence of a Change
of Control (as such term is defined in the Wooten Employment Agreement) of the
Company. The Wooten Employment Agreement, which automatically terminates when
Mr. Wooten attains age 65, provides that Mr. Wooten will receive a base salary
of $175,000.

9
<PAGE>

In addition, the Wooten Employment Agreement provides that Mr. Wooten is
entitled to receive an annual bonus and to participate in all present and
future employee benefit, retirement and compensation plans of the Company
consistent with his salary and his position as the Executive Vice President
and Chief Operating Officer of the Company. The Wooten Employment Agreement
further provides that, in the event of termination of Mr. Wooten's employment
with the Company, the Company will pay to Mr. Wooten (i) his base salary and
annual bonus through the date of termination if he is terminated by the
Company's Board of Directors for "cause" (as defined in the Wooten Employment
Agreement); (ii) his base salary and annual bonus through the date of
termination and, for two additional 12-month periods, his base salary and a
bonus in an amount determined pursuant to the terms of the Wooten Agreement if
his employment is terminated by him for "good reason" (as defined in the
Wooten Employment Agreement).

If Mr. Wooten elects to terminate his employment upon 90 days notice, then
the Company is obligated to pay him his annual salary and annual bonus through
the date of the term or any additional term during which the notice of
termination was given. In the event of Mr. Wooten's death, the Company is
obligated to purchase, under certain circumstances, all outstanding stock
options previously granted to Mr. Wooten, whether or not such options are then
exercisable, at a cash purchase price equal to the purchase price as provided
in such outstanding stock options. Finally, the Wooten Employment Agreement
also includes certain restrictive covenants which limit Mr. Wooten's ability
to compete with the Company or divulge certain confidential information
concerning the Company.

EXECUTIVE CONSULTING AGREEMENT

On September 20, 1994, the Company entered into an Executive Consulting
Agreement with Eugene M. Vereen, Jr., as amended on March 30, 1995 (the
"Executive Consulting Agreement"), pursuant to which Mr. Vereen has agreed to
provide certain consulting services to the Company following his retirement or
resignation as Chairman of the Board of Directors for a period of six years,
provided that the Executive Consulting Agreement automatically terminates upon
Mr. Vereen's 80th birthday. Mr. Vereen retired as Chairman of the Board on
April 19, 1995. The Executive Consulting Agreement provides that Mr. Vereen
will provide consulting services to the Company when requested by the
Company's Chief Executive Officer and that the Company will pay Mr. Vereen the
sum of $87,500 per year for his services thereunder. In addition, Mr. Vereen
is entitled to reimbursement for his reasonable expenses incurred in
connection with his duties under the Executive Consulting Agreement. Finally,
the Executive Consulting Agreement includes certain restrictive covenants
which limit Mr. Vereen's ability to compete with the Company or divulge
certain confidential information concerning the Company.

COMPENSATION OF DIRECTORS

All directors, with the exception of Mr. Vereen, receive a fee of $300 per
month. Board of Directors' meetings are held monthly. Members of the Executive
and Loan Committee (except Mr. Hunnicutt) receive a fee of $300 per month, and
members of the Audit Committee receive $200 per meeting.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1996, Mr. Hunnicutt was the Company's President and Chief Executive
Officer in addition to serving on the Compensation Committee. Mr. Vereen, who
also served on the Compensation Committee, is a former Chief Executive Officer
of the Company. No other member of the Compensation Committee is or was an
officer or employee of the Company or any of its subsidiaries.

The Company and the Banks have had, and expect to have in the future,
banking transactions in the ordinary course of business with members of the
Compensation Committee, including corporations, partnerships and other
organizations in which such members have an interest. The Company's Board of
Directors believes that the terms of such loans (including interest rates,
collateral and repayment terms) are fair and equitable and are substantially
the same as terms prevailing at the time such loans were made for comparable
transactions with unrelated parties. Such transactions do not involve more
than the normal risk of collectibility or present other unfavorable features.

10
<PAGE>

REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION

The Company's executive compensation programs are administered by the
Compensation Committee of the Board of Directors (the "Compensation
Committee"). During 1996, the Compensation Committee was composed of Messrs.
Vereen, Hunnicutt, Lasseter and Weltzbarker.

The Company's executive compensation is designed to attract and retain
highly qualified executives and to motivate them to maximize shareholder
returns. The base salary for executives is determined in relation to their
level of responsibility. Salary ranges are reviewed on an annual basis, taking
into consideration, among other things, the financial performance of the
Company, and are adjusted as necessary. Executives' salaries are reviewed on
an annual basis, and salary changes are based primarily upon individual
performance.

In reviewing the performance of Mr. Hunnicutt, the Company's President and
Chief Executive Officer, the Compensation Committee took into account Mr.
Hunnicutt's Employment Agreement, which establishes his base compensation from
year to year. The Company may consider and declare from time to time increases
in Mr. Hunnicutt's base compensation, and if operating results of the Company
are significantly less favorable in a given year, may decrease the base
compensation of executive officers generally, including Mr. Hunnicutt. In
determining Mr. Hunnicutt's compensation, the Compensation Committee
considered the effects of inflation, adjustments to the salaries of other
senior management personnel and Mr. Hunnicutt's past performance and the
contribution which he made to the business and profits of the Company during
fiscal year 1996. The Company's performance in 1996 reflected net income of
$6.7 million, an increase of 13% over net income for 1996 of $5.9 million.
Income per average share also significantly increased, as did the return on
average assets and the return on average equity. Total assets, net loans and
deposits also showed significant increases in 1996. Accordingly, the
Compensation Committee awarded Mr. Hunnicutt an annual incentive bonus of
$58,278 and increased Mr. Hunnicutt's base salary by 22% for 1997. Mr.
Hunnicutt did not participate in the deliberations of the Compensation
Committee concerning his compensation.

Submitted by the Compensation
Committee

Eugene M. Vereen, Jr.
Kenneth J. Hunnicutt
Willard Lasseter
Doyle Weltzbarker

11
<PAGE>

PERFORMANCE GRAPH

Set forth below is a line graph comparing the change in the cumulative total
shareholder return on the Common Stock against the cumulative return of the
NASDAQ Stock Market (US Companies) and the index of Nasdaq Bank Stocks for the
period commencing May 19, 1994 through December 31, 1996. In May 1994, the
Company sold 747,500 shares of Common Stock pursuant to a registered public
offering (the "Offering"). Prior to the Offering, quotations for the Common
Stock were not reported on any market, and there was no established public
trading market for the Common Stock. The graph shows the value at May 19,
1994, December 30, 1994, June 30, 1995, December 29, 1995, June 28, 1996 and
December 31, 1996 assuming an investment of $100 on May 19, 1994 and
reinvestment of dividends and other distributions to shareholders.

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
Legend

CRSP Total Returns Index for: 05/19/94 12/30/94 12/29/95 12/31/96
- ----------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
ABC BANCORP 100.0 94.4 153.7 186.3
Nasdaq Stock Market (US Companies) 100.0 104.3 147.5 181.4
Nasdaq Bank Stocks 100.0 95.1 141.7 187.3
SIC 6020-6029, 6710-6719 US & Foreign

Notes:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 5/19/94.
</TABLE>

<PAGE>

PROPOSAL II: AMENDMENT TO THE COMPANY'S BYLAWS
TO CLASSIFY THE COMPANY'S BOARD OF DIRECTORS

On February 18, 1997, the Board of Directors adopted a resolution
unanimously approving and recommending to the Company's shareholders for their
approval an amendment to the Company's Bylaws that would divide the Board into
three classes with staggered terms. The text of the proposed amendment is
attached hereto as Appendix A.

The Board of Directors recommends that the Bylaws be amended to divide the
Board into three classes, as nearly equal in size as possible. After a start-
up period during which two classes will be elected for one-year and two-year
terms, the term of office of the directors of each class will expire at the
third annual meeting after their election. This proposal is intended to
provide continuity of management and policies and to encourage anyone seeking
control of the Company to negotiate with management to reach terms acceptable
to the Board. Adoption of this proposal will make it more difficult to change
the composition of the Board. The Bylaws currently require that the entire
Board is subject to election each year so it would take only one year for the
Board to be replaced. Following adoption of the proposal, at least two annual
meetings, or a special meeting called for the purpose of removing the
directors, would be required to effect a change in control of the Board of
Directors.

While the Board believes that the proposed amendment to the Bylaws should be
adopted for the reasons set forth above, the Board is aware that the proposed
amendment may tend to deter any unfriendly tender offers or other efforts to
gain control of the Company and thereby deprive shareholders of opportunities
to sell shares at higher than market prices. Dividing the Board into three
classes with staggered terms will make it more difficult for shareholders to
change a majority of current directors. These provisions are effective without
regard to whether a change in control has occurred or is occurring and
therefore may also have the effect of preventing shareholders from replacing
directors for reasons unrelated to the control of the Company. The Company is
not aware, however, of any effort to accumulate its securities or to gain
control of it at this time, and the proposal is not being adopted in order to
block any such effort.

If the shareholders approve the amendment to the Bylaws to classify the
Board of Directors, then the directors elected at the Annual Meeting shall
have the terms of office as described in PROPOSAL I, above.

Approval of the amendment to the Company's Bylaws requires the affirmative
vote of a majority of votes cast by the outstanding shares of Common Stock
present or represented at the Annual Meeting and entitled to vote. Unless
otherwise specified, the proxy holders designated in the proxy will vote the
shares covered thereby at the Annual Meeting "FOR" the approval of the
amendment.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE AMENDMENT TO THE BYLAWS TO CLASSIFY THE COMPANY'S BOARD OF DIRECTORS.

13
<PAGE>

PROPOSAL III: APPROVAL OF 1997 INCENTIVE STOCK OPTION PLAN
FOR KENNETH J. HUNNICUTT

On January 21, 1997, the Board of Directors of the Company adopted, subject
to the approval of the shareholders of the Company, the 1997 Incentive Stock
Option Plan for Kenneth J. Hunnicutt (the "Hunnicutt Plan"). The Company is
largely dependent upon the initiative, efforts and judgment of its President,
Kenneth J. Hunnicutt, for the successful operation of the business of the
Company and of its subsidiaries. The purpose of the Hunnicutt Plan is to
advance the interests of the Company and its subsidiaries by encouraging Mr.
Hunnicutt to acquire a proprietary interest in the Company and its future
growth and to continue his association with the Company and its subsidiaries.

Options granted under the Hunnicutt Plan are designated as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

The full text of the Hunnicutt Plan is set forth at Appendix B to this Proxy
Statement, and the following summary is qualified in its entirety by reference
to Appendix B.

Number of Shares. The Company has granted to Kenneth J. Hunnicutt (the
"Optionee") the option to purchase a maximum of 45,000 shares of Common Stock
of the Company (the "Option").

Vested Interest. Upon the approval of the shareholders, the Optionee's
interest in the entire Option granted pursuant to the Hunnicutt Plan will be
fully vested. The Option becomes exercisable in stages generally over a period
of seven years from the date of grant, subject to acceleration in the event of
the termination of the Optionee's employment with the Company. (See
"Limitation on Amount," below.)

Adjustment. In the event there is any change in the Common Stock as a result
of a reorganization, merger, consolidation, recapitalization, stock split,
issuance of stock dividend or otherwise, the number and kind of shares
authorized by the Hunnicutt Plan, and the number, option price and kind of
shares covered by the Option will be automatically adjusted as required in
order to prevent an adverse effect upon the Optionee.

Administration. The Plan will be administered by a Committee appointed by
the Board of Directors (the "Hunnicutt Committee"), which at present consists
of Messrs. Eugene M. Vereen, Jr., Willard Lasseter and Doyle Weltzbarker. The
composition and number of members of the Hunnicutt Committee may be changed
from time to time by the Board at its discretion.

The terms and provisions of Option are set forth in an agreement (the
"Option Agreement") between the Company and Mr. Hunnicutt which specifies,
among other things, the exercise price of the Option, the duration of the
Option, the number of shares to which the Option relates and the percentage of
the Option that becomes exercisable on specified dates in the future.

Option Price. The purchase price of each share of Common Stock subject to
the Option granted pursuant to the Hunnicutt Plan is $17.00, which price
represents a value equal to the fair market value of each such share at the
time the Option was granted, as determined by a method consistent with
applicable provisions of the Code and Treasury Regulations promulgated
thereunder.

Termination of Option. To the extent that the Option granted pursuant to the
Hunnicutt Plan has not previously been exercised, the Option will terminate
and will no longer be exercisable after 11:59 p.m., Atlanta, Georgia time, on
the date that is ten years from the date the Option was granted (the
"Expiration Date").

Option Non-Assignable. During the Optionee's lifetime, the Option is
exercisable only by the Optionee or, if the Optionee is disabled, his duly
appointed guardian or legal representative, and the Option may not be assigned
by the Optionee other than by Will or by applicable laws of descent and
distribution.

Limitation on Amount. The aggregate fair market value (determined as of the
time the Option is granted) of the shares with respect to which the Option is
exercisable for the first time by the Optionee during any

14
<PAGE>

calendar year (under all plans of the Company) may not exceed the "$100,000
Per-Year Limitation" of Section 422(d) of the Code, provided that in the event
of the Optionee's termination of employment for any reason other than death,
the Option will become immediately exercisable in full except to the extent
that the deferral of exercisablity of the Option would avoid, or minimize the
effect of, noncompliance with such limitation, while allowing the Optionee to
exercise the Option within the three-month period of Section 422(a)(2) of the
Code or the one-year period of Section 422(c)(6) of the Code, as may be
applicable.

New Plan Benefits. The following table sets forth information with respect
to options granted pursuant to the Hunnicutt Plan.

1997 INCENTIVE STOCK OPTION PLAN

<TABLE>
<CAPTION>
DOLLAR NUMBER
VALUE OF
NAME AND POSITION ($)(1) UNITS
- ----------------- ------- ------
<S> <C> <C>
Kenneth J. Hunnicutt,............................................ $56,250 45,000
President and Chief Executive Officer
Executive Group.................................................. $56,250 45,000
Non-Executive Director Group..................................... N/A N/A
Non-Executive Officer Employee Group............................. N/A N/A
</TABLE>
- --------
(1) Dollar value is calculated based on the difference between the exercise
price of the Option and the closing market price of the Common Stock on
March 14, 1997 ($18.25) and the exercise price ($17.00) multiplied by the
total number of shares of Common Stock subject to the Option (45,000).

Federal Income Tax Consequences. As noted above, the options awarded under
the Hunnicutt Plan are intended to qualify as incentive stock options ("ISOs")
within the meaning of Section 422 of the Code.

The Company believes that the principal Federal income tax consequences
under the Hunnicutt Plan to the Optionee and to the Company pursuant to the
Code and the Treasury regulations and rulings thereunder, all as currently in
effect, should generally be as follows:

(i) The Optionee will not recognize taxable income, and the Company will not
be entitled to an income tax deduction, upon the grant of the Option.

(ii) Unless he is subject to the alternative minimum tax, the Optionee will
not recognize taxable income and the Company will not be entitled to an income
tax deduction upon the exercise by the Optionee of the Option, provided the
Optionee was an employee of the Company for the entire period from the date of
grant of the Option until three months before the date of exercise (increased
to twelve months if employment ceased due to total and permanent disability).
The employment requirement is waived in the event of termination of employment
by reason of the Optionee's death. If these employment requirements are not
met, the Option will be treated as a "non-qualified stock option" under the
Code.

(iii) If the Optionee disposes of the shares acquired under the Option after
at least two years following the date of grant of the Option and at least one
year following the date of transfer of the shares to the Optionee following
exercise of the Option, the Optionee will recognize a long-term capital gain
(or loss) equal to the difference between the amount realized upon the
disposition and the exercise price paid.

(iv) Except for certain transactions such as gifts and related party
transactions, if the Optionee disposes of the shares within two years after
the date of grant of the Option or within one year after the transfer of the
shares to the Optionee, but all other requirements of Section 422 of the Code
are met, the Optionee will recognize ordinary income upon disposition of the
shares in an amount equal to the lesser of (a) the fair market value of the
shares on the date of transfer to the Optionee minus the exercise price or (b)
the amount realized on disposition minus the exercise price. Any additional
gain will be treated as short or long-term capital gain, depending on how long
the Optionee held the shares. However, in the case of such a disqualifying
disposition

15
<PAGE>

by a person subject to Section 16(b) of the Securities Exchange Act of 1934
(the "1934 Act"), the determination of ordinary income under (a) above will
generally be based on the fair market value of the shares on the later of the
date of the transfer of the shares to the Optionee or the date which is six
months following the date of the grant of the option. In the case of
disqualifying dispositions resulting from, for example, a gift or related
party transaction, the amount of ordinary income realized by the Optionee will
be equal to the fair market value of the shares as of the date of transfer to
the Optionee minus the exercise price.

(v) Where all requirements of Section 422 of the Code are met, including the
holding and employment requirements specified in paragraph (ii) and (iii)
above, the Company will not be entitled to any Federal income tax deduction
with respect to the Option at any time. In those cases where any of such
requirements are not met, the Company generally will be allowed a Federal
income tax deduction to the extent of the ordinary income includable in the
Optionee's gross income in accordance with the provisions of Section 83 of the
Code (as such deduction may be limited by certain provisions of the Code,
including Sections 162(m), 263 or 263(A)).

(vi) The Company will not recognize any gain or loss upon the issuance of
shares under the Hunnicutt Plan.

(vii) To the extent that the grant of the Option violates the "$100,000 Per-
Year Limitation" described above, or fails to satisfy any other of the
requirements set forth in the Hunnicutt Plan, the Option will be treated as a
"non-qualified stock option" under the Code.

Other Considerations. The Hunnicutt Plan is not qualified under Section
401(a) of the Code and, based upon current law and published interpretations,
the Company believes the Hunnicutt Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.

The comments set forth in the above paragraphs are only a summary of certain
of the Federal income tax consequences relating to the Hunnicutt Plan based on
the Code as in effect at the date of grant of the Option. No consideration has
been given to the effects of state, local and other laws (tax or other) on the
Hunnicutt Plan or the Optionee.

Approval by Shareholders. Approval of the Hunnicutt Plan requires the
affirmative vote of a majority of votes cast by the outstanding shares of
Common Stock present or represented at the Annual Meeting and entitled to
vote. Unless otherwise specified, the proxy holders designated in the proxy
will vote the shares covered thereby at the Annual Meeting "FOR" the approval
of the Hunnicutt Plan.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE 1997 INCENTIVE STOCK OPTION PLAN FOR KENNETH J. HUNNICUTT.

16
<PAGE>

PROPOSAL IV: APPROVAL OF OMNIBUS STOCK OWNERSHIP
AND LONG TERM INCENTIVE PLAN

On February 18, 1997, the Board of Directors of the Company adopted the ABC
Bancorp Omnibus Stock Ownership and Long Term Incentive Plan (the "Omnibus
Plan"), subject to approval by the shareholders of the Company. The Board of
Directors believes that the Omnibus Plan will motivate eligible employees to
contribute to the successful performance of the Company and its subsidiaries
and the growth of the market value of the Company's Common Stock; will promote
unity of purpose between such employees and shareholders by providing
ownership opportunities; and will promote the retention of such employees by
rewarding them with potentially tax-advantageous future compensation.

The full text of the Omnibus Plan is set forth at Appendix C to this Proxy
Statement, and the following summary is qualified in its entirety by reference
to Appendix C.

The key provisions of the Omnibus Plan are as follows:

General. The Omnibus Plan will be effective as of February 18, 1997 for a
ten year period. Awards granted under the Omnibus Plan may be in the form of
Qualified or Nonqualified Stock Options, Restricted Stock, Stock Appreciation
Rights ("SARs"), Long-Term Incentive Compensation Units consisting of a
combination of cash and Common Stock ("Units"), or any combination thereof
within the limitations set forth in the Omnibus Plan. The Omnibus Plan
provides that awards may be made for ten years, and the Omnibus Plan will
remain in effect thereafter until all matters relating to the payment of
awards and administration of the Omnibus Plan have been settled.

Administration. The Omnibus Plan, if approved by the shareholders, will be
administered by the Compensation Committee of the Board of Directors (the
"Omnibus Committee"). The Omnibus Committee is comprised at present of Messrs.
Eugene M. Vereen, Jr., Kenneth J. Hunnicutt, Willard Lasseter and Doyle
Weltzbarker. The Omnibus Committee has authority, subject to approval by the
Board of Directors, to administer and interpret the Omnibus Plan. The Omnibus
Committee, within the terms of the Omnibus Plan selects eligible employees to
participate in the Omnibus Plan, determines the type, amount and duration of
individual awards and may accelerate payments and vesting of Plan awards.

Shares Available. The Omnibus Plan provides that the aggregate number of
shares of the Company's Common Stock which may be subject to award may not
exceed 425,000, subject to adjustment in certain circumstances to prevent
dilution. The Company's Common Stock delivered under the Omnibus Plan will be
authorized and unissued shares. Shares underlying awards that are canceled,
expired, forfeited or terminated shall, in most circumstances, again be
available for the grant of additional awards within the limits provided by the
Omnibus Plan.

Eligibility. The Omnibus Plan provides for awards to eligible employees.
Because it is within the discretion of the Omnibus Committee to determine
which employees receive awards and the amount and type of award received, it
is not possible at the present time to determine the amount of awards or the
number of individuals to whom awards will be made under the Omnibus Plan. The
executive officers of the Company named in the table under the caption
"Executive Compensation" herein are among the officers who would be eligible
to receive awards under the Omnibus Plan.

Stock Options. Subject to the terms and provisions of the Omnibus Plan,
options to purchase the Common Stock of the Company ("Options") may be granted
to eligible employees at any time and from time to time as shall be determined
by the Omnibus Committee. Such options may be "incentive stock options," as
defined in Section 422 of the Code, or "non-qualified options" under the Code.
The Omnibus Committee will have discretion in determining the number of shares
of Common Stock to be covered by each Option granted to the recipient (the
"Optionee"). Each grant of Options will be evidenced by an Option Agreement
that will specify the exercise price, the duration of the Option, the number
of shares to which the Option pertains, the percentage of the Option that
becomes exercisable on specified dates in the future, and such other
provisions as the Omnibus Committee may determine.

17
<PAGE>

The initial exercise price for each Option granted under the Omnibus Plan
will be determined by the Committee in its discretion; provided, however, that
the exercise price of any Option intended to qualify as an incentive stock
option will not be less than (i) the Fair Market Value of the Common Stock (as
determined pursuant to the Plan) on the date of grant of the Option, in the
case of any Optionee who does not own stock possessing more than 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) 110% of such
Fair Market Value in the case of any Optionee who owns stock in excess of such
amount.

All Options granted under the Omnibus Plan expire no later than ten years
from date of grant. Subject to the limitations set forth in the Omnibus Plan,
any Option may be exercised by payment to the Company of cash or, at the
discretion of the Omnibus Committee, by surrender of shares of the Company's
Common Stock owned by the employee (including, if the Committee so permits, a
portion of the shares as to which the Option is then being exercised), or a
combination of cash and such shares. Options will be evidenced by an Option
Agreement in a form approved by the Omnibus Committee, which may contain
additional limitations, terms and conditions, in addition to the restrictions
set forth in the Omnibus Plan, which the Omnibus Committee otherwise deems
desirable.

The Omnibus Plan places limitations on the exercise of Options that
constitute incentive stock options under certain circumstances upon or after
termination of employment, and also provides the Omnibus Committee with the
discretion to place similar limitations on the exercise of any non-qualified
options. Options are nontransferable except by will or in accordance with
applicable laws of descent and distribution. The granting of an Option does
not accord the recipient the rights of a shareholder, and such rights accrue
only after the exercise of an Option and the payment in full of the exercise
price by the Optionee for the shares being purchased.

Restricted Stock. The Omnibus Plan provides for the award of shares of
Common Stock which are subject to certain restrictions ("Restricted Stock")
provided in the Omnibus Plan or otherwise determined by the Omnibus Committee.
Restricted Stock awards pursuant to the Omnibus Plan will be evidenced by a
Restricted Stock Grant Agreement between the Company and the recipient (the
"Holder"), specifying the purchase price, if any, paid by the Holder for the
Restricted Stock, with such price to be determined by the Omnibus Committee.
The Restricted Stock Grant Agreement will also set forth any forfeiture
provisions regarding the Restricted Stock (including any provisions for
accelerated vesting in the event of a "Change of Control" with respect to the
Company), as determined by the Omnibus Committee in its discretion. The Holder
may sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
Restricted Stock during the restriction period designated by the Omnibus
Committee only in accordance with the specific limitations imposed by
applicable state or federal securities laws or as may be determined by the
Omnibus Committee. Certificates representing Restricted Stock issued pursuant
to the Omnibus Plan will bear all legends required by law and necessary to
effectuate the provisions of the Omnibus Plan and the applicable Restricted
Stock Grant Agreement. To facilitate the enforcement of the restrictions on
the Restricted Stock, the Omnibus Committee may in its discretion require the
Holder to deliver such certificates to the Company to be held in escrow until
the applicable restriction period has expired.

Long-Term Incentive Compensation Units. The Omnibus Plan authorizes the
Omnibus Committee to grant awards of "Units" to eligible employees. Units will
be granted only upon authorization by the Omnibus Committee and the execution
and delivery of a Unit Award Agreement, in form and substance satisfactory to
the Omnibus Committee, by the employee to whom Units are to be granted (a
"Unit Recipient"). Stock or cash underlying Units are distributed only after
the end of a performance period of two of more years (the "Performance
Period") beginning with the year in which the Units are granted. The
Performance Period respecting each grant of Units will be set by the Omnibus
Committee. There may be more than one Unit granted to a Unit Recipient at any
given time and the Performance Periods may differ. At the time a Unit is
granted the Omnibus Committee will establish levels of financial performance
and other performance objectives to be achieved in each year of the
Performance Period. The Omnibus Committee may adopt one or more performance
categories or eliminate all performance categories other than financial
performance. Distributions of stock or cash underlying Units will be based on
the Company's financial performance with results from other performance

18
<PAGE>

categories applied as a factor, not exceeding one, 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 Omnibus Committee for the entire
Performance Period. The resulting percentage factors will determine the
percentage of Units to be distributed. No distributions will be made if a
minimum average percentage of the applicable measurement of performance
established by the Omnibus Committee is not achieved for the Performance
Period.

The Omnibus Plan provides for (in the discretion of the Omnibus Committee)
the proration of Units in the event of a Unit Recipient's death, disability,
retirement or termination of employment as a result of a "Change of Control"
with respect to the Company. In the event of termination of the Unit
Recipient's status as an eligible employee prior to the end of the applicable
Performance Period for any reason other than death, disability, retirement or
termination as a result of a Change of Control, undistributed Units awarded
for such Performance Period will be immediately forfeited.

A Unit Recipient will have no rights as a shareholder of the Company with
respect to any Units until the distribution of shares of Stock in connection
therewith, other than receipt of dividends credited to the Unit Recipient's
account for Units awarded and not distributed, calculated according to the
terms of the Omnibus Plan.

Stock Appreciation Rights. The Omnibus Committee in its discretion may grant
Stock Appreciation Rights ("SARs") under the Omnibus Plan. SARs will be
granted only pursuant to a SAR Agreement, which shall provide for an
expiration date not later than ten years after the date such SAR is granted. A
SAR will entitle the holder (the "SAR Recipient") to receive from the Company
an amount equal to the excess, if any, of the aggregate fair market value of
the Company's Common Stock which is the subject of the SAR over its "Base
Value," defined as the fair market value of such stock on the date of issuance
of the SAR and subject to adjustment from time to time by the Omnibus
Committee in accordance with the terms of the Omnibus Plan.

The Company will pay the amount to which the SAR Recipient exercising the
SAR is entitled in cash. A SAR Recipient may designate a beneficiary to
receive cash otherwise payable to the SAR Recipient in the event of the SAR
Recipient's death.

New Plan Benefits. No benefits have been granted or will be granted under
the Omnibus Plan prior to the approval of the Omnibus Plan by the shareholders
of the Company.

Federal Income Tax Treatment. A recipient of an Option granted under the
Omnibus Plan will not realize any taxable income upon the grant of such
Option, and the Company will not be entitled to any income tax deduction in
connection therewith. Upon the exercise of a Nonqualified Stock Option granted
under the Omnibus Plan, the employee will realize taxable ordinary income
equal to the excess of the fair market value of the shares of the Company's
Common Stock on the date such Option is exercised over the option price, and
the Company will be entitled to a corresponding deduction (as such deduction
may be limited by certain provisions of the Code, including Section 162(m),
263 or 263(A)).

An employee who receives Restricted Stock will not realize any taxable
income at the time of the grant of Restricted Stock so long as the shares are
subject to a substantial risk of forfeiture. When any such restrictions lapse,
the recipient will recognize ordinary income equal to the fair market value of
the shares of Common Stock at the time of the lapse of the restrictions. The
Company will be entitled to a tax deduction at the same time in the amount
taxable to the employee (as such deduction may be limited by certain
provisions of the Code, including Section 162(m), 263 or 263(A)). With regard
to dividends paid by the Company in cash and in stock during the time the
restrictions are in effect, the Company will be entitled to a deduction for
compensation for the value of such dividends at the time they are paid to the
recipient (as such deduction may be limited by certain provisions of the Code,
including Section 162(m), 263 or 263(A)), and the recipient will have taxable
compensation income at that time in a corresponding amount.

19
<PAGE>

Any cash and the fair market value of any Common Stock of the Company
received as payment in respect of Units will constitute ordinary income to the
Unit Recipient upon receipt (in the case of a Unit Recipient who is an insider
subject to Section 16(b) of the 1934 Act, the fair market value of the shares
six months after receipt will be used to measure income, unless a Section
83(b) election is filed). The Company will be entitled to an income tax
deduction corresponding to the ordinary income recognized by the Unit
Recipient (as such deduction may be limited by certain provisions of the Code,
including Section 162(m), 263 or 263(A)).

An employee who is granted SARs under the Omnibus Plan will not realize any
taxable income upon the grant of such SAR, and the Company will not be
entitled to any deduction for income tax purposes at such time. However, when
the employee exercises a SAR, the amount of cash paid by the Company is
taxable to him or her as ordinary income. The Company will be entitled to a
corresponding deduction for the taxable year in which the SAR is exercised (as
such deduction may be limited by certain provisions of the Code, including
Section 162(m), 263 or 263(A)).

Amendment and Termination. The Board may, at any time and from time to time,
terminate, amend, or modify some or all of the provisions of the Omnibus Plan.
However, without the approval of the shareholders of the Company (as may be
required by the Code, by Section 16 of the Exchange Act, by any national
securities exchange or system on which the shares are then listed or reported,
or by a regulatory body having jurisdiction with respect hereto) no such
termination, amendment, or modification may: (1) materially increase the total
number of shares which may be granted to insiders under the Omnibus Plan; (2)
materially modify the requirements as to eligibility for insiders to
participate in the Omnibus Plan; (3) materially increase the cost of the
Omnibus Plan related to insiders or materially increase the benefits to
insiders; (4) extend the period during which awards may be granted to or
exercised by insiders; (5) change the provisions of the Omnibus Plan regarding
option price on grants to insiders; or (6) modify the Omnibus Plan or the
terms of awards in such a way that the members of the Omnibus Committee lose
their status as "disinterested persons" under Rule 16b-3 of the Exchange Act.

No termination, amendment, or modification of the Omnibus Plan may in any
manner adversely affect any award previously granted under the Omnibus Plan,
without the written consent of the recipient.

Vote Required. Approval of the Omnibus Plan requires the affirmative vote of
a majority of votes cast by the outstanding shares of Common Stock present or
represented at the Annual Meeting and entitled to vote. Unless otherwise
specified, the proxy holders designated in the proxy will vote the shares
covered thereby at the Annual Meeting "FOR" the approval of the Omnibus Plan.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE ABC BANCORP OMNIBUS STOCK OWNERSHIP AND LONG TERM
INCENTIVE PLAN.

20
<PAGE>

PROPOSAL V: RATIFICATION OF INDEPENDENT ACCOUNTANTS

The Company has appointed Mauldin & Jenkins, Certified Public Accountants
and Consultants, LLC ("Mauldin & Jenkins"), as its independent accountants for
the fiscal year ended December 31, 1996. Mauldin & Jenkins has served as the
Company's independent accountants since 1985. Service provided to the Company
and its subsidiaries by Mauldin & Jenkins in the fiscal year ended December
31, 1995 included the examination of the Company's consolidated financial
statements, limited review of quarterly reports, services related to filings
with the Securities and Exchange Commission (the "SEC") and consultation with
respect to various tax matters.

Representatives of Mauldin & Jenkins will be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions by shareholders.

Ratification of the appointment of Mauldin & Jenkins as the Company's
independent accountants for the fiscal year ended December 31, 1996 requires
the affirmative vote of a majority of votes cast by the outstanding shares of
Common Stock present or represented at the Annual Meeting and entitled to
vote. Unless otherwise specified, the proxy holders designated in the proxy
will vote the shares covered thereby at the Annual Meeting "FOR" ratification
of the appointment of Mauldin & Jenkins. In the event that the shareholders do
not ratify the appointment of Mauldin & Jenkins, the appointment will be
reconsidered by the Audit Committee and the Board of Directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" RATIFICATION OF THE APPOINTMENT OF MAULDIN & JENKINS AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDED DECEMBER
31, 1996.

CERTAIN TRANSACTIONS

The Company and the Banks have had, and expect to have in the future,
banking transactions in the ordinary course of business with directors and
officers of the Company and the Banks and their associates, including
corporations, partnerships and other organizations in which such directors and
officers have an interest. At December 31, 1996, certain officers and
directors, and companies in which they have a 10% or more beneficial interest,
were indebted to the Banks in the aggregate amount of approximately
$6,471,269. The Company's Board of Directors believes that the terms of such
loans (including interest rates, collateral and repayment terms) are fair and
equitable and are substantially the same as terms prevailing at the time such
loans were made for comparable transactions with unrelated parties. Such
transactions do not involve more than the normal risk of collectibility or
present other unfavorable features.

Since November 1, 1991, the Company has leased a building from Mr. Hunnicutt
and an unrelated third party that is used as the Company's operations center
in Moultrie, Georgia. On November 1, 1996, the Company renewed the lease
increasing the monthly rent payments from $2,500 to $3,334 per month. Rent
payments under the lease, which expires on November 1, 2001, totalled $31,668
for 1996 and will total $40,000 per year thereafter, payable in monthly
installments of $3,334 each.

Since February 1996, the Company has leased a building from Mr. Hunnicutt
and an unrelated third party that is used for storage and office space for the
Company's Facilities Manager in Moultrie, Georgia. The lease for this space is
on a month-to-month basis, with annual rent payments of $7,200, payable in
monthly installments of $600 each.

SECTION 16 REPORTING

Section 16(a) of the 1934 Act requires the Company's directors and executive
officers, and persons who own more than ten percent of the Company's Common
Stock, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock. They are also required to furnish the
Company with copies of all Section 16(a) forms they file with the SEC.

21
<PAGE>

To the Company's knowledge, based solely on its review of the copies of such
reports furnished to it and written representations that no other reports were
required, during the fiscal year ended December 31, 1996, all the Company's
officers, directors and greater than ten percent shareholders complied with
all applicable Section 16(a) filing requirements.

OTHER MATTERS

The Board of Directors does not contemplate bringing before the Annual
Meeting any matter other than those specified in the Notice of Annual Meeting
of Shareholders, nor does it have information that other matters will be
presented at the Annual Meeting. If other matters come before the Annual
Meeting, signed proxies will be voted upon such questions in accordance with
the best judgment of the persons acting under the proxies.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the 1998 Annual Meeting
of Shareholders and to be included in the Company's proxy statement and form
of proxy for that meeting must be received by the Company, directed to the
attention of the Secretary, not later than December 5, 1997. Any such proposal
must comply in all respects with the rules and regulations of the SEC.

FORM 10-K

Upon receipt of a written request, the Company will, without charge, furnish
any owner of Common Stock a copy of its Annual Report to the SEC on Form 10-K
for the fiscal year ended December 31, 1996, including financial statements
and the schedules thereto. Copies of exhibits to the Form 10-K are also
available upon specific request and payment of a reasonable charge for
reproduction. Such request should be directed to the Secretary of the Company
at the address indicated on the front of this Proxy Statement.

Moultrie, Georgia By Order of the Board of Directors

[ Sig Cut ]
March 31, 1997

Willard Lasseter, Chairman

<PAGE>

APPENDIX A

TEXT OF PROPOSED AMENDMENT TO THE BYLAWS
OF
ABC BANCORP
<PAGE>

APPENDIX A

TEXT OF PROPOSED ARTICLE III, SECTION 2 OF THE BYLAWS
OF
ABC BANCORP

Section 2. Number, Election, Term and Retirement. The number of directors
which shall constitute the whole Board of Directors shall be not less than
seven nor more than 15. The Board of Directors of the corporation shall be
divided into three classes which shall be as nearly equal in number as is
possible. At the first election of directors to such classified Board of
Directors, each Class I director shall be elected to serve until the next
ensuing annual meeting of shareholders, each Class II director shall be
elected to serve until the second ensuing annual meeting of shareholders and
each Class III director shall be elected to serve until the third ensuing
annual meeting of shareholders. At each annual meeting of shareholders
following the meeting at which the Board of Directors is initially classified,
the number of directors equal to the number of the class whose term expires at
the time of such meeting shall be elected to serve until the third ensuing
annual meeting of shareholders. In the event of any change in the authorized
number of directors, the number of directors in each class shall be adjusted
so that thereafter each of the three classes shall be composed, as nearly as
may be possible, of one-third of the authorized number of directors; provided
that any change in the authorized number of directors shall not increase or
shorten the term of any director, and any decrease shall become effective only
as and when the term or terms of office of the class or classes of directors
affected thereby shall expire, or a vacancy or vacancies in such class or
classes shall occur. The number of directors may be increased or decreased
from time to time by the Board of Directors by amendment of this by-law, but
no decrease shall have the effect of shortening the term of an incumbent
director. The directors shall be elected by plurality vote at the annual
meeting of shareholders, except as hereinafter provided, and each director
elected shall hold office until his successor is elected and qualified or
until his earlier resignation, removal from office or death. Directors shall
be natural persons who have attained the age of 18 years, but need not be
residents of the State of Georgia or shareholders of the corporation.
Employees of subsidiary corporations shall not be eligible to serve as
directors. With the exception of Eugene M. Vereen, Jr., each director shall
retire at the annual meeting following the date such director attains the age
of 70.

<PAGE>

APPENDIX B

1997 INCENTIVE STOCK OPTION PLAN FOR KENNETH J. HUNNICUTT
<PAGE>

ABC BANCORP

1997 INCENTIVE STOCK OPTION PLAN
FOR KENNETH J. HUNNICUTT

1. DEFINITIONS

Unless the context expressly requires otherwise, the terms set forth below,
when used in this Plan and when capitalized, shall have the following
respective meanings:

(a) Board--The Board of Directors of the Company.

(b) Code--The Internal Revenue Code of 1986, as amended, together with the
rules and regulations promulgated thereunder, and any corresponding provisions
of subsequent law.

(c) Committee--A committee appointed by the Board to administer this Plan,
which, until appointed, shall consist of the full Board, the number and
composition of which may be changed from time to time by the Board at its
discretion.

(d) Common Stock--The voting Common Stock of the Company (which may be
acquired upon exercise of the Option granted pursuant to this Plan).

(e) Company--ABC Bancorp, a corporation organized under the laws of the
State of Georgia.

(f) Disability--The permanent and total disability of Optionee as defined in
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.

(g) Effective Date--The date of adoption of the Plan by the Board.

(h) Option--The option granted pursuant to this Plan to Optionee.

(i) Optionee--Kenneth J. Hunnicutt, President of the Company.

(j) Plan--This ABC Bancorp 1997 Incentive Stock Option for Kenneth J.
Hunnicutt.

2. PURPOSE

The Company is largely dependent upon the initiative, efforts and judgment
of its President, Kenneth J. Hunnicutt, for the successful operation of the
business of the Company and of its subsidiaries. The purpose of the Plan is to
advance the interests of the Company and its subsidiaries by encouraging Mr.
Hunnicutt to acquire a proprietary interest in the Company and in its future
growth and to continue his association with the Company and its subsidiaries.

3. ADMINISTRATION

The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee shall have plenary authority, in its discretion, to
interpret and administer the Plan. Except as to matters which are herein
expressly reserved for determination by the Board, the Committee's decisions
and determinations in the administration of the Plan shall be final,
conclusive and binding upon all persons, including, but not limited to, the
Company, its subsidiaries, the shareholders and directors of the Company and
its subsidiaries and any person having any interest in the Option.
<PAGE>

4. SHARES SUBJECT TO OPTION

(a) Grant of Option. The Company will grant to Optionee, in accordance with
the directions of the Committee and the terms of this Plan, the Option to
purchase Forty-Five Thousand (45,000) shares of the Common Stock. Such shares
may be made available from either authorized but theretofore unissued shares
of Common Stock, Common Stock held in treasury or shares of Common Stock
reacquired by the Company, including, but not limited to, shares purchased in
the open market, as determined in any given instance by the Committee.

(b) Vested Interest. Optionee shall be fully vested immediately in the
entire Option granted pursuant hereto.

(c) Adjustment. In the event there is any change in the Common Stock as a
result of a reorganization, merger, consolidation, recapitalization, stock
split, issuance of stock dividend, or otherwise, the number and kind of shares
authorized by the Plan, and the number, option price and kind of shares
covered by the Option, shall be automatically adjusted as required in order to
prevent an adverse effect upon Optionee, and the Committee shall notify
Optionee hereunder of such adjustment and shall deliver to him such
documentation as may be necessary or desirable to evidence same.

5. TERMS AND CONDITIONS OF OPTION

The Option is intended to be an incentive stock option qualifying under
Section 422 of the Code for favorable tax treatment. It shall be evidenced by
a written Incentive Stock Option Agreement, signed by a member of the
Committee or by a duly authorized officer of the Company, and containing
provisions consistent with the requirements of this Plan. The following terms
and conditions shall apply to the Option:

(a) Option Price. The Option shall contain the option price at which each
share covered by the Option may be purchased, which price shall be no less
than the fair market value of such shares at the time the Option is granted,
as determined by a method consistent with the applicable provisions of the
Code and any Treasury Regulations promulgated thereunder.

(b) Payment. The option price of shares purchased upon any exercise of the
Option shall be paid fully at the time of exercise in cash (including personal
or certified checks representing good funds).

(c) Termination of Option. To the extent that the Option has not previously
been exercised, the Option shall terminate at and shall no longer be
exercisable after 11:59 p.m., Atlanta, Georgia time, on the date that is ten
(10) years from the date the Option is granted.

(d) Option Non-Assignable. During Optionee's lifetime, the Option shall be
exercisable only by Optionee or, if Optionee is disabled, by his duly
appointed guardian or legal representative, and the Option shall not be
assignable by Optionee other than by will or by the applicable laws of descent
and distribution.

(e) No Rights as Shareholder. Optionee shall have no rights as a shareholder
of the Company with respect to the shares subject to the Option, including,
but not limited to, voting, dividend and liquidation rights, until the date of
issuance to him of a certificate for such shares.

(f) Certain Requirements for Qualification as Incentive Stock
Options. Although not affecting the validity of or the right to exercise the
Option, it is understood that qualification of the Option as an incentive
stock option pursuant to Section 422 of the Code is conditioned on the
following requirements being met:

(1) Shares received by Optionee pursuant to any exercise of the Option
must be held by him for a period of at least two (2) years from the date of
grant of the Option and for a period of at least one (1) year after the
transfer of such shares to him, and may not be disposed of by him prior to
the expiration of such periods, except in a transfer described in Section
424(c) of the Code.

(2) At all times during the period beginning on the date of grant of the
Option and ending on the day which is three (3) months (one (1) year in the
event the cessation of optionee's employment is caused by

2
<PAGE>

disability, as defined for this purpose in Section 22(e)(3) of the Code)
before the date of exercise of the Option, Optionee must have been an
employee of either the Company, a parent or subsidiary corporation of the
Company, or a corporation (or a parent or subsidiary thereof) that assumes
the Option pursuant to Section 424(a) of the Code; provided, however, that
the foregoing provision in this subparagraph (2) shall be inapplicable in
the event that the cessation of Optionee's employment with the Company or
any such other corporation results from his death.

6. TIME AND MANNER OF EXERCISE

(a) Time of Exercise. The aggregate fair market value (determined as of the
time the Option is granted) of the shares with respect to which the Option is
exercisable for the first time by Optionee during any calendar year (under all
incentive stock option plans of the Company or of any parent or subsidiary of
the Company) shall not exceed the "$100,000 Per-Year Limitation" of Section
422(d) of the Code; provided, however, that in the event of Optionee's
termination of employment (meaning that he is no longer employed by the
Company or any parent or subsidiary of the Company) for any reason other than
death, the Option shall become immediately exercisable in full except to the
extent that the deferral of exercisability of the Option would avoid, or
minimize the effect of, noncompliance with said limitation contained in
Section 422(d) of the Code, while allowing Optionee to exercise the Option
within the 3-month period of Section 422(a)(2) of the Code or the 1-year
period of Section 422(c)(6) of the Code, as may be applicable.

(b) Manner of Exercise. In order to exercise the Option, Optionee (or his
heirs or representatives, as the case may be) shall give written notice to the
Secretary or any Assistant Secretary of the Company at the Company's principal
office. Such notice shall specify the number of shares to be purchased, which
shall be in a multiple of 100 shares.

7. SECURITIES REGULATIONS

The Company shall not be obligated to issue or sell any shares optioned
pursuant to this Plan to Optionee in the absence of an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), and
registration under any applicable state securities laws, unless the Company
receives an opinion of counsel satisfactory to it that registration is not
required under the Act and under applicable state securities laws pursuant to
exemptions from registration contained therein.

8. EFFECTIVE DATE AND DURATION OF PLAN

The Plan shall become effective upon the Effective Date; provided, however,
that grant of the Options prior to approval of the Plan by the shareholders of
the Company is subject to such shareholder approval within twelve (12) months
of adoption of the Plan by the Board of Directors. Unless previously
terminated by the Board, the Plan shall terminate on the tenth anniversary of
its adoption by the Board.

9. AMENDMENT

The Plan may, from time to time, be terminated, modified, or amended by the
Board of Directors of the Company in such respects as it shall deem advisable
in order that the Option shall be an "incentive stock option", as such term is
defined in Section 422 of the Code; provided, however, that no such
modification or amendment shall change: (a) the number of shares of Common
Stock subject to the Option, with the exception of changes in such number of
shares by reason of the operation of the provisions of paragraph (c) of
Section 4 hereof; (b) the option price, with the exception of changes in such
price by reason of the operation of the provisions of paragraph (c) of Section
4 hereof; (c) the maximum period during which the Option may be exercised; or
(d) the provisions relating to adjustments to be made upon those changes
described in paragraph (c) of Section 4 hereof.

3
<PAGE>

AS APPROVED BY THE BOARD OF DIRECTORS OF ABC BANCORP ON JANUARY 21, 1997.

ABC BANCORP

BY: /s/ Willard Lasseter
---------------------------------
Title: Chairman

ATTEST:

/s/ Sara Hall
- -------------------------------
Secretary

(CORPORATE SEAL)

4
<PAGE>

APPENDIX C

OMNIBUS STOCK OWNERSHIP AND LONG TERM INCENTIVE PLAN
<PAGE>

ABC BANCORP

OMNIBUS STOCK OWNERSHIP AND
LONG TERM INCENTIVE PLAN

THIS IS THE OMNIBUS STOCK OWNERSHIP AND LONG TERM INCENTIVE PLAN ("Plan") of
ABC Bancorp (the "Corporation" or "Company"), a Georgia corporation with its
principal office in Moultrie, Colquitt County, Georgia, under which Incentive
Stock Options and Non-Qualified Options to acquire shares of the Stock,
Restricted Stock, Stock Appreciation Rights, and/or Units may be granted from
time to time to Eligible Employees of the Corporation and of any of its
Subsidiaries (the "Subsidiaries"), 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.

BOARD. The Board of Directors of ABC Bancorp.

CHANGE IN CONTROL TRANSACTION. The dissolution or liquidation of the
Corporation; a reorganization, merger or consolidation of the Corporation 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 Corporation's issue; or a sale of all or substantially all of the
assets of the Corporation to, or the acquisition of stock representing more
than twenty-five percent (25%) of the voting power of the capital stock of the
Corporation then outstanding by, another corporation, bank, other entity or
person.

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, $1.00 par value per share, of the
Corporation.

DEATH. The date of death of an Eligible Employee who has received Rights as
established by the relevant death certificate.

DISABILITY. The date on which an Eligible Employee 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.

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 Corporation or a
Subsidiary. For this purpose, an individual shall be considered to be
an "employee" only if there exists between the Corporation 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 falls within the job grade classifications set forth in
Schedule 1. Such job grade classification may be amended, expanded,
restricted or otherwise modified by the Committee, subject to
ratification of such action by the Board.

1
<PAGE>

(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.

FAIR MARKET VALUE. With respect to the Corporation'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 in
question, then the Fair Market Value will be equal to the closing price
reported by the applicable composite-transactions report for such date;

(ii) if the Common Stock was traded over-the-counter on the date in question
and was classified as a national market issue, then the Fair Market
Value will be equal to the last transaction price quoted by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), National Market System ("NMS");

(iii) if the Common Stock was traded over-the-counter on the date in
question but was not classified as a national market issue, then the
Fair Market Value will be equal to the average of the last reported
representative bid and asked prices quoted by the NASDAQ for such
date; and

(iv) if none of the foregoing provisions is applicable, then the Fair Market
Value will be determined by the Committee in good faith on such basis
as it deems appropriate, subject to the approval of the Board. In such
case, the Committee shall maintain a written record of its method of
determining Fair Market Value.

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

JUST CAUSE TERMINATION. A termination by the Corporation or a Subsidiary of
an Eligible Employee's employment by the Corporation or the Subsidiary in
connection with the good faith determination of the Board or the Board of
Directors of the Subsidiary, as applicable, that the Eligible Employee is
incompetent or otherwise has engaged in any acts involving dishonesty or moral
turpitude or in any acts that materially and adversely affect the business,
affairs or reputation of the Corporation or the Subsidiary.

NON-QUALIFIED OPTION. Any Option granted under III 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 Corporation and an Optionee with
respect to Options granted to such Optionee, including such terms and
provisions as are necessary or appropriate under III.

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.

PLAN POOL. A total of Four Hundred Twenty-Five Thousand (425,000) shares of
authorized, but unissued, Common Stock, as adjusted pursuant to Section
2.3(b), which shall be available as Stock under this Plan.

REGISTRATION. The registration by the Corporation under the 1933 Act and
applicable state "Blue Sky" and securities laws 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.

RESTRICTED STOCK. The Stock which a Holder shall be awarded with
restrictions when, as, in the amounts and with the restrictions described in
IV.

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RESTRICTED STOCK GRANT AGREEMENT. The agreement between the Corporation and
a Holder with respect to Rights to Restricted Stock, including such terms and
provisions as are necessary or appropriate under 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 Corporation or a
Subsidiary, or

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

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 an SAR Agreement.

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

SAR AGREEMENT. The agreement between the Corporation and an SAR Recipient
with respect to the SAR awarded to the SAR Recipient, including such terms and
conditions as are necessary or appropriate under VI.

SEC. The 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.

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
Corporation.

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 V.

UNIT AGREEMENT. The agreement between the Corporation 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 V.

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 employees within
specified job grade classifications to contribute to the successful
performance of the Corporation and its Subsidiaries and the growth of the
market value of the Corporation's Common Stock; to achieve a unity of purpose
between such employees and shareholders by providing ownership opportunities,
and, when viewed in conjunction with potential benefit plans for members of
the Board and the Boards of Directors of some or all of the Subsidiaries, to
achieve a unity of

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purpose between such employees and directors in the achievement of the
Corporation'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 pursuant to the terms of this Plan.

SECTION 2.2. ADMINISTRATION.

(a) The Plan shall be administered by the Committee. Subject to the
provisions of SEC Rule 16b-3(d), the Committee may designate any
officers or employees of the Corporation 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 recommended to the Board for approval, and when so
approved by the Board shall be final and conclusive upon persons
affected thereby. By way of illustration and not of limitation, the
Committee shall have the discretion, subject to the approval by the
Board,

(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 and regulations
relating to the Plan;

(iv) to determine the Eligible Employees 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) Notwithstanding the foregoing, or any other provision of this Plan, the
Committee will have no authority to determine any matters, or exercise
any discretion, to the extent that the power to make such
determinations or to exercise such discretion would cause the loss of
exemption under SEC Rule 16b-3 of any grant or award hereunder.

(d) It shall be in the discretion of the Committee, subject to approval by
the Board, to grant Options to purchase shares of Stock which qualify
as ISOs under the Code or which will be given tax treatment as Non-
Qualified Options. Any Options granted which fail to satisfy the
requirements for ISOs shall become Non-Qualified Options.

(e) The intent of the Corporation is to effect the Registration. In such
event, the Corporation shall make available to Eligible Employees
receiving Rights and/or shares of Stock in connection therewith all
disclosure documents required under such 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 Corporation 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 Corporation and the terms
and conditions of the Rights granted under this Plan.

<PAGE>

In addition, if such Registration shall not occur, the Committee shall
be responsible, subject to approval by the Board, 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.

(f) In determining the Eligible Employees to whom Rights may be granted and
the number of shares of Stock to be covered by each Right, the Committee
and the Board shall take into account the nature of the services
rendered by such Eligible Employees, their present and potential
contributions to the success of the Corporation and/or a Subsidiary and
such other factors as the Committee and the Board shall deem relevant.
An Eligible Employee who has been granted a Right under this Plan may be
granted an additional Right or Rights under this Plan if the Committee
and the Board 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.

(g) The granting of Rights pursuant to this Plan is in the exclusive
discretion of the Board , and until the Board 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 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, subject to
approval by the Board, 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 Corporation 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 organization acquired by
the Corporation 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 Corporation to make adjustments,
reclassification, 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).

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<PAGE>

SECTION 2.4. SEVERABLE PROVISIONS.

The Corporation 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, (ii) the approval of
such grant by the Board, and (iii) the execution and delivery of an
Option Agreement by the Eligible Employee optionee (the "Optionee") and
a duly authorized officer of the Company. Options will not be deemed
granted hereunder merely upon authorization of such grant by the
Committee. 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) Subject to approval by the Board, the Committee shall designate Options
at the time a grant is authorized as either ISOs or Non-Qualified
Options. 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 (pursuant to Article III and all
other plans of the Company and/or its Subsidiaries) may not exceed
$100,000 (the "$100,000 Limitation"). If an Optionee is granted Options
in excess of the $100,000 Limitation, or if such Options otherwise
become exercisable with respect to a number of shares of Stock which
would exceed the $100,000 Limitation, such excess Options shall be Non-
Qualified Options.

SECTION 3.2. EXERCISE PRICE.

(a) Subject to approval by the Board, the initial exercise price of each
Option granted under this Plan (the "Exercise Price") 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 ten percent
(110%) of such Fair Market Value in the case of any Eligible Employee
who owns stock in excess of such amount.

(b) Subject to the approval of the Board and the provisions of Section
3.2(a) (as to the establishment of the Exercise Price of an Option on
the date of grant), the Committee may establish that the Exercise Price
of an Option shall be adjusted upward or downward, on a quarterly
basis, based upon the market value performance of the Common Stock in
comparison with the aggregate market value performance of one or more
indices composed of publicly-traded financial institutions and
financial institution holding companies deemed by the Committee to be
similar (in terms of asset size, capitalization, trading volumes and
other factors deemed relevant by the Committee) to the Company (an
"Index" and the "Indices"); provided, however, that the Exercise Price
of an ISO shall not be adjustable if, under the Code, such adjustable
Exercise Price would disqualify the ISO as an ISO. The Committee may
utilize Indices published by third parties and/or may construct one or
more Indices meeting the characteristics described above.

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<PAGE>

The Indices utilized will be recalculated quarterly, including in such
quarterly recalculation such adjustments for stock splits, reverse stock
splits and stock dividends of the companies in the indices and of the Company
as are appropriate. Each such Index shall include no fewer than fifteen (15)
publicly-traded financial institutions and financial institution holding
companies. If more than one Index is utilized by the Committee, it may give
such weighting to each Index utilized as the Committee may determine in its
sole discretion, consistent with the provisions of this Article III

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, subject to approval by the Board, may grant ISOs and
Non-Qualifed Options, either separately or jointly, to an Eligible
Employee.

(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) At the discretion of the Committee, an Optionee, as a condition to the
granting of an Option, must execute and deliver to the Company a
confidential information agreement approved by the Committee.

(e) Nothing contained in Article III, any Option Agreement or in any other
agreement executed in connection with the granting of an Option 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 of its Subsidiaries.

(f) Except as otherwise provided herein, each Option Agreement may specify
the period or periods of time within which each Option or portion
thereof will first become exercisable (the "Vesting Period") 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;
provided, however, that the Vesting Period for any portion of each ISO
shall be at least one year (1) from the date such Option was granted.

(g) 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.

(h) 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 Sections 2.3(b) and 3.2(b).

(i) All shares of Stock obtained pursuant to an Option which qualifies as
an ISO shall be held in escrow for a period which ends on the later of
(i) two (2) years from the date of the granting of the ISO or (ii) one
(1) year after the issuance of such shares pursuant to the exercise of
the ISO. Such shares of Stock shall be held by the Company or its
designee. The Optionee who has exercised the ISO shall have all rights
of a shareholder, including, but not limited to, the rights to vote,
receive dividends and sell such shares. The sole purpose of the escrow
is to inform the Company of a disqualifying disposition of the shares
of Stock acquired within the meaning of Section 422 of the Code, and it
shall be administered solely for this purpose.

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<PAGE>

(j) Additionally and notwithstanding any other provisions of this Article
III, no shares of Stock obtained pursuant to an Option may be
Transferred until at least six (6) months and one (1) day shall have
elapsed since the date such Option was granted.

SECTION 3.4. EXERCISE OF OPTIONS.

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

(b) An Option may be exercised to the extent exercisable (i) by giving
written notice of exercise to the Company, 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 and the Board, through the delivery of shares of 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)
having a Fair Market Value as of the date of delivery equal to the
Exercise Price, or (iii) at the discretion of the Committee and the
Board, 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) Subject to approval by the Board, 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 (the "Option Period"). 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. Subject to approval by the
Board, 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) To the extent not previously exercised, each Option will terminate upon
the expiration of the Option Period specified in the Option Agreement;
provided, however, that, subject to the provisions of Section 3.5(a),
each ISO will terminate upon the earlier of: (i) ninety (90) days after
the date that the Optionee ceases to be an Eligible Employee for any
reason, other than by reason of Death, Disability, or a Just Cause
Termination; (ii) twelve (12) months after the date that the Optionee
ceases to be an Eligible Employee by reason of Disability; or (iii)
immediately as of the date that the Optionee ceases to be an Eligible
Employee by reason of a Just Cause Termination. The Committee may,
subject to approval by the Board, specify other events that will result
in the termination of an ISO (including, without limitation,
termination of employment by reason of Death). In the case of Non-
Qualified Options, the

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<PAGE>

Committee shall have discretion, subject to approval by the Board, to
specify what, if any, events will terminate the Option prior to the
expiration of the Option Period.

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). Any Option that has
not been fully exercised before the date of consummation of the Change in
Control Transaction shall terminate on such date, unless a provision has been
made in writing in connection with such transaction for the assumption of all
Options theretofore granted, or the substitution for such Options of options
to acquire the voting stock of a successor employer corporation, or a parent
or a subsidiary thereof, with appropriate adjustments as to the number and
kind of shares and prices, in which event the Options theretofore granted
shall continue in the manner and under the terms so provided.

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 amend, suspend or discontinue the provisions of this Article
III at any time or from time to time; provided that no action of the Board
will cause ISOs granted under this Plan not to comply with Section 422 of the
Code unless the Board specifically declares such action to be made for that
purpose; and, provided, further, that no such action may, without the approval
of the shareholders of the Company, materially increase (other than by reason
of an adjustment pursuant to Section 2.3(b) hereof) the maximum aggregate
number of shares of Stock in the Plan Pool, materially increase the benefits
accruing to Eligible Employees or materially modify eligibility requirements
for participation under this Article III. Moreover, no such action may alter
or impair any Option previously granted under this Article III without the
consent of the applicable Optionee.

SECTION 3.10. COMPLIANCE WITH RULE 16B-3.

With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Article III 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 III 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 and the Board.

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ARTICLE IV
RESTRICTED STOCK GRANTS

SECTION 4.1 GRANTS OF RESTRICTED STOCK.

(a) The Company may issue Restricted Stock to Eligible Employees as
provided in this Article IV. Restricted Stock will be deemed issued
only upon (i) authorization by the Committee, (ii) approval by the
Board, and (iii) the execution and delivery of a Restricted Stock Grant
Agreement by the Eligible Employee to whom such Restricted Stock is to
be issued (the "Holder") and a duly authorized officer of the Company.
Restricted Stock will not be deemed to have been issued merely upon
authorization by the Committee.

(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 and the Board.

(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 and the Board.

(d) At the discretion of the Committee, the Holder, as a condition to such
issuance, may be required (i) to execute and deliver to the Company a
confidential information agreement approved by the Committee, and/or
(ii) to pay to the Corporation in cash, or in such other form as the
Committee may determine in its discretion, the amount of the
Corporation's Tax Withholding Liability required in connection with
such issuance.

(e) Nothing contained in this Article IV, any Restricted Stock Grant
Agreement or in 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 of its Subsidiaries.

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(a) are
expressly prohibited.

(b) Any prohibited Transfer of Restricted Stock is void and of no effect.
Should such a Transfer purport to occur, 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(b), 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.

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<PAGE>

(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 insure
that all Transfers and/or releases are made in accordance with the
terms of this Plan. The certificates may be held in escrow so long as
the shares of Restricted Stock whose ownership they evidence 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 holder 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 holder 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 holder is
grossly negligent relative thereto. The escrow holder 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 an
Eligible Employee 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 amend, suspend or discontinue this Article IV at any time or
from time to time; provided, that no such action of the Board shall alter or
impair any rights previously granted to Holders under this Article IV without
the consent of such affected Holders; and provided, further, that no such
action may, without the approval of the Company's shareholders, materially
increase (other than by reason of an adjustment pursuant to Section 2.3(b)
hereof) the maximum aggregate number of shares of Stock in the Plan Pool,
materially increase the benefits accruing to Eligible Employees under this
Article IV or materially modify the requirements as to eligibility for
participation under this Article IV. Moreover, no such action may alter or
impair any Restricted Stock previously granted under this Article IV with the
consent of the applicable Holder.

11
<PAGE>

SECTION 4.7. COMPLIANCE WITH RULE 16B-3.

With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Article IV 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 IV 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 and the Board.

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, (ii) approval by the Board, and (iii)
the execution and delivery of a Unit Agreement by the Eligible Employee
to whom Units are to be granted (a "Unit Recipient") and an authorized
officer of the Company. Units will not be deemed granted merely upon
authorization by the Committee. Units may be granted in each of the
years 1997 through 2004 in such amounts and to such Unit Recipients as
the Committee may determine, subject to approval by the Board and to
the limitation in 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 distributed only
after the end of a performance period of two or more years
("Performance Period") beginning with the year in which such Units were
awarded. The Performance Period shall be set by the Committee and the
Board 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, subject to approval
of the Board, 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 measurements of performance
as the Committee shall deem appropriate.

(e) Distributions of Units awarded 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, subject to approval of
the Board, for the entire Performance Period. The resulting percentage
factors shall determine the percentage of Units to be distributed. No
distributions of Units, based on financial performance and other
performance, shall be made if a minimum average percentage of the
applicable measurement of performance, to be established by the
Committee and approved by the Board, is not achieved for the
Performance Period. The performance levels achieved for each
Performance Period and percentage of Units to be distributed shall be
conclusively determined by the Committee, subject to approval by the
Board.

(f) The percentage of Units awarded which Unit Recipients become entitled
to receive based on the levels of performance (including those Units
credited under Section 5.5) will be determined as soon as practicable
after each Performance Period and are called "Retained Units."

12
<PAGE>

(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 shares and cash in the relative percentages as between
the two as determined by the Committee, subject to approval by the
Board. The Units awarded, but which Unit Recipients do not become
entitled to receive, shall be canceled.

(h) Notwithstanding any other provision in this Article V, the Committee,
if it determines that it is necessary or advisable under the
circumstances, may, subject to approval by the Board, adopt rules
pursuant to which Eligible Employees by virtue of hire, or promotion or
upgrade to a higher job grade classification, or special individual
circumstances, may be granted the total award of Units or any portion
thereof, with respect to one or more Performance Periods that began in
prior years and at the time of the awards have not yet been completed.

SECTION 5.2. LIMITATIONS.

The aggregate number of shares of Stock potentially distributable under all
Units granted, including those 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) At the discretion of the Committee and the Board, a Unit Recipient, as
a condition to the award of Units, may be required to execute and
deliver to the Company a confidential information agreement approved by
the Committee.

(d) 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.

(e) A Unit Recipient shall have no rights as a shareholder of the Company
with respect to any Units until the distribution of shares of Stock in
connection therewith. 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 distribution of such
Unit.

(b) In case of the Death or Disability of a Unit Recipient prior to the end
of any Performance Period, the number of Units awarded to 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 remaining Units, reduced in the
discretion of the Committee and the Board to the percentage indicated
by the levels of performance achieved prior to the date of Death or
Disability, if any, shall be distributed within a reasonable time after
Death or Disability. All other Units awarded to the Unit Recipient for
such Performance Period shall be canceled.

13
<PAGE>

(c) If a Unit Recipient enters into Retirement prior to the end of any
Performance Period, the Units awarded to such Unit Recipient under this
Article V and not yet distributed shall be prorated to the end of the
year in which such Retirement occurs and distributed 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 and the Board may 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.

Notwithstanding any other provision of this Plan, the Committee and the
Board 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 5.5. DIVIDEND EQUIVALENT UNITS.

On each record date for dividends on the Common Stock, an amount equal to
the dividend payable on one share of Common Stock will be determined and
credited (the "Dividend Equivalent Credit") on the payment date to each Unit
Recipient's account for each Unit which has been awarded to the Unit Recipient
and not distributed 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, subject to approval by the Board, 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; 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, subject to approval by the Board,
determine that all or any part of the Units theretofore awarded under
this Article V shall become immediately distributable (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 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). Any Units that have not been
distributed before the date of consummation of Use Change in Control
Transaction shall terminate on such date, unless a provision has been
made in writing in connection with such transaction for the assumption
of all awards of Units theretofore made, or the substitution for such
units of awards of compensation units having comparable

14
<PAGE>

characteristics under a long term incentive award plan of a successor
employer corporation, or a parent or a subsidiary thereof, with
appropriate adjustments, in which event the awards of Units theretofore
made shall continue in the manner and under the terms so provided.

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 (as defined in Section 5.7(d) below) 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) Any 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 NASDAQ-NMS 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. Except as
otherwise determined by the Committee, the "Distribution Date" shall be
March 15th in the year of distribution (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 and the Board determine the amount and form of the
distribution.

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

(i) The regular quarterly 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 Corporation:

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

(iii) Estimated consolidated net income of the Corporation for the
twelve month period preceding the month the Dividend Equivalent
Credit or distribution would otherwise have been made is less than
the sum of the amount of the Dividend Equivalent Credits and 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

<PAGE>

(iv) The Dividend Equivalent Credit or distribution would result in a
default in any agreement by which the Corporation is bound.

(f) In the event net income available under Section 5.7(e) above for
Dividend Equivalent Credits and awards eligible for distribution under
this Article V 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) Units eligible for distribution under
this Article V.

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 Corporation
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 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 Corporation 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 Units may be received only
by such Unit Recipient.

SECTION 5.10. AMENDMENT AND DISCONTINUANCE.

No award of Units may be granted under this Article V after December 31,
2004. The Board may amend, suspend or discontinue the provisions of this
Article V at any time or from time to time, provided, that no such action may,
without the approval of the shareholders of the Corporation, materially
increase (other than by reason of an adjustment pursuant to Section 2.3(b)
hereof) the maximum number of shares of Stock in the Plan Pool, materially
increase the benefits accruing to Eligible Employees under this Article V or
materially modify the eligibility requirements for participation under this
Article V.

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 and the Board.

ARTICLE VI
STOCK APPRECIATION RIGHTS

SECTION 6.1. GRANTS OF SARS.

(a) The Corporation may grant SARs under this Article VI. SARs will be
deemed granted only upon (i) authorization by the Committee, (ii)
approval by the Board, and (iii) the execution and delivery of a SAR
Agreement by the Eligible Employee to whom the SARs are to be granted
(the "SAR Recipient") and a duly authorized officer of the Corporation.
SARs will not be deemed granted merely upon authorization by the
Committee. 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

<PAGE>

(b) Each grant of SARs pursuant to this Article VI shall be evidenced by a
SAR Agreement between the Corporation 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 (the "Base Value") equal to the Fair Market Value of a share of
Common Stock on the date of issuance of the SAR.

(c) Subject to the approval of the Board and the provisions of Section
6.2(b) (as to the establishment of the initial Base Value of a SAR),
the Committee may establish that the Base Value of a SAR shall be
adjusted, upward or downward, on a quarterly basis, based upon the
market value performance of the Common Stock in comparison with the
aggregate market value performance of the Index or Indices utilized
under Section 3.2(b).

(d) At the discretion of the Committee and the Board, a SAR Recipient, as a
condition to the granting of a SAR, must execute and deliver to the
Corporation a confidential information agreement approved by the
Committee.

(e) 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 Corporation
or any of its Subsidiaries.

(f) Except as otherwise provided herein, each SAR Agreement may specify the
period or periods of time within which each SAR or portion thereof will
first become exercisable (the "SAR Vesting Period"). Such SAR Vesting
Periods will be fixed by the Committee, subject to approval by the
Board, and may be accelerated or shortened by the Committee, subject to
approval by the Board.

(g) SARs relating to no less than one hundred (100) shares of Stock may 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.

(h) A SAR Recipient shall have no rights as a shareholder of the
Corporation 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 Sections 2.3(b) and 6.2(c).

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 by giving written notice of such
exercise to the Corporation. SARs may be exercised only upon the
completion of the SAR Vesting Period, if any, applicable to such SAR
(the date such notice is received by the Corporation being referred to
herein as the "SAR Exercise Date").

(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.

17
<PAGE>

SECTION 6.5. TERMINATION OF SARS.

Subject to approval by the Board, the Committee shall determine, and each
SAR Agreement shall state, the expiration date or dates of each SAR, but such
expiration date shall be not later than ten (10) years after the date such SAR
is granted (the "SAR Period"). Subject to approval by the Board, the Committee
may extend the expiration date or dates of a SAR Period after such date was
originally set; provided, however, such expiration date may not exceed the
maximum expiration date described in this Section 6.5(a).

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). Any SAR that has not been
fully exercised before the date of consummation of the Change in Control
Transaction shall terminate on such date, unless a provision has been made in
writing in connection with such transaction for the assumption of all SARs
theretofore granted, or the substitution for such SARs of grants of stock
appreciation rights having comparable characteristics under a stock
appreciation rights plan of a successor employer corporation or bank, or a
parent or a subsidiary thereof, with appropriate adjustments, in which event
the SARs theretofore granted shall continue in the manner and under the terms
so provided.

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 Corporation 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 Corporation shall have no
further liability to anyone with respect to such amount.

SECTION 6.8. AMENDMENT AND DISCONTINUANCE.

The Board may amend, suspend or discontinue the provisions of this Article
VI at any time or from time to time provided that no action of the Board may,
without the approval of the shareholders of the Corporation materially
increase (other than by reason of an adjustment pursuant to Section 2.3(b)
hereof) the maximum aggregate number of shares of Stock in the Plan Pool,
materially increase the benefits accruing to Eligible Employees or materially
modify eligibility requirements for participation under this Article VI.
Moreover, no such action may alter or impair any SAR previously granted under
this Article VI without the consent of the applicable SAR Recipient.

SECTION 6.9. COMPLIANCE WITH RULE 16B-3.

With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Article VI 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 VI or action by the Board or the Committee fails so to comply,
it shall be deemed null and void, is the extent permitted by law and deemed
advisable by the Committee and the Board.

18
<PAGE>

ARTICLE VII
MISCELLANEOUS

SECTION 7.1. APPLICATION OF FUNDS.

The proceeds received by the Corporation 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 provide 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 Corporation or by one or more Subsidiaries. The
Corporation shall also indemnify, defend and hold each member of the Committee
and the Board harmless against all claims, expenses and liabilities arising
out of or related to the exercise of the powers of the Committee and the Board
and the discharge of the duties of the Committee and the Board hereunder.

SECTION 7.6. GOVERNING LAW.

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

SECTION 7.7. 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.

19
<PAGE>

ABC BANCORP
310 FIRST STREET, S.E. MOULTRIE, GEORGIA 31768

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints WILLARD LASSETER AND KENNETH J. HUNNICUTT,
and each of them, with full power of substitution, the proxies and attorneys
of the undersigned at the Annual Meeting of Shareholders of ABC Bancorp (the
"Company") to be held on Tuesday, April 15, 1997 (the "Annual Meeting") at
Sunset Country Club, Thomasville Highway, Moultrie, Georgia, at 4:15 p.m.,
local time, and at any adjournment or postponement thereof, and hereby
authorizes them to vote as designated below at the Annual Meeting all the
shares of Common Stock of ABC Bancorp held of record by the undersigned as of
March 14, 1997. The undersigned hereby acknowledges receipt of the Annual
Report of the Company for the fiscal year ended December 31, 1996 and the
Notice of Annual Meeting and Proxy Statement of the Company for the Annual
Meeting.

I. Election of the following nominees to the Board of Directors in three
classes, for one-year terms of office (Class I) two-year terms of office
(Class II), or three-year terms of office (Class III), as indicated below
and in the alternative, if PROPOSAL II, below, is not approved by the
shareholders, for election of all of the following nominees to the Board of
Directors for one-year terms of office:

[_]FOR all nominees listed below (except as marked to the contrary below)
[_]WITHHOLD AUTHORITY to vote for
all nominees listed below

<TABLE>
<S> <C> <C>
CLASS I CLASS II CLASS III
------- -------- ---------
Johnny W. Floyd J. Raymond Fulp Kenneth J. Hunnicutt
Daniel B. Jeter Bobby B. Lindsay Willard Lasseter
Sidney J. Wooten Henry C. Wortman Eugene M. Vereen, Jr.
John Mobley Hal L. Lynch Doyle Weltzbarker

INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
WRITE THE NAME(S) OF SUCH NOMINEE(S) IN THE SPACE PROVIDED BELOW.

- -----------------------------------------------------------------------------
IF THIS FORM OF PROXY IS EXECUTED BY THE UNDERSIGNED IN SUCH MANNER AS NOT
TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE, THIS FORM OF
PROXY SHALL BE DEEMED TO GRANT SUCH AUTHORITY.

II. Amendment to the Company's Bylaws to divide the Company's Board of
Directors into three classes, to serve staggered terms of office

[_] FOR [_] AGAINST [_] ABSTAIN

III. To adopt the Company's 1997 Incentive Stock Option Plan for Kenneth J.
Hunnicutt

[_] FOR [_] AGAINST [_] ABSTAIN

IV. To adopt the Company's Omnibus Stock Ownership and Long Term Incentive
Plan for the Company's officers and managerial employees

[_] FOR [_] AGAINST [_] ABSTAIN

V. To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent accountants
for the fiscal year ended December 31, 1996

[_] FOR [_] AGAINST [_] ABSTAIN
</TABLE>

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF EACH NOMINEE, AND IN THE DISCRETION OF THE
PROXY HOLDERS AS TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.

PLEASE SIGN PROXY

IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.

Print Name(s)
---------------------------------

Signature
---------------------------------

Signature if
Held Jointly
---------------------------------

Dated: ,1997
---------------------------------

PLEASE DATE AND SIGN IN THE SAME MANNER IN WHICH YOUR SHARES ARE REGISTERED.
WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ATTORNEY OR
CORPORATE OFFICER, PLEASE GIVE FULL TITLE AS SUCH. JOINT OWNERS SHOULD EACH
SIGN.