SOUTH FINANCIAL GROUP INC
STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit10-1.txt
<DESCRIPTION>STOCK OPTION PLAN
<TEXT>
                                                                    Exhibit 10.1

                            THE SOUTH FINANCIAL GROUP
                  SECOND AMENDED AND RESTATED STOCK OPTION PLAN


1.       PURPOSE OF PLAN

         This Second  Amended and Restated Stock Option Plan (the "Plan") amends
and restates the  existing  Amended and Restated  Stock Option Plan of The South
Financial  Group,  Inc.  (the  "Company")  in 1986,  as it has been  amended  by
subsequent  amendments  dated November 19, 1997,  January 1, 2000,  December 19,
2001, and April 30, 2002. This Plan also  incorporates the provisions of a fifth
amendment  (dated the date of this document)  providing that upon termination of
an optionee for cause, all  existing  options  held by such  optionee  terminate
immediately.

         The Plan is intended  to serve as an  employment  incentive  to, and to
encourage  stock  ownership by,  certain  employees of the Company or any of its
subsidiaries  ("Subsidiaries"),  who are largely  responsible for the management
growth and protection of the Company's  business and who are making  substantial
contributions to the successful growth of the Company.

         It is contemplated that the Company's Board of Directors ("the "Board")
and/or  Committee  (as defined  below) may utilize the  availability  of options
granted hereunder  ("Options") to fund other  compensation plans of the Company,
subject, in all cases, to compliance with the terms hereof and applicable law.


2.       ADMINISTRATION

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

         The Board or Committee shall have complete  authority to: (i) interpret
all terms and provisions of the Plan  consistent  with law, (ii) select from the
group of officers  and key  employees  eligible to  participate  in the Plan the
officers and key  employees to whom Options  shall be granted,  (iii) within the
limits  established  herein,  determine  the  number of shares to be  subject to
Options and the term of each Option granted to officers and key employees,  (iv)
prescribe the form of instruments  evidencing Options, (v) determine the time or
times at which  Options  shall be granted to  officers  or key  employees,  (vi)
determine the method of exercise of Options granted to officers or key employees
under the Plan,  (vii) adopt,  amend and rescind  general and special  rules and
regulations   for  the  Plan's   administration,   and  (viii)  make  all  other
determinations  necessary or advisable for the  administration of this Plan. The
Board or Committee may designate  selected Board or Committee members or certain
employees of the Company to assist the Board or Committee in the  administration
of the Plan and may grant  authority  to such  persons to execute  documents  on
behalf of the Board or Committee,  subject in each such case to the requirements
of Rule 16b-3.

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



<PAGE>

3.       COMMON STOCK SUBJECT TO THE PLAN

         The stock subject to the Plan shall be shares of the  Company's  common
stock, par value $1.00 per share ("Common Stock") authorized for issuance by the
shareholders  of the Company but not issued at the time of the grant,  or shares
of Common  Stock which shall have been  reacquired  by the  Company.  Subject to
adjustment in  accordance  with the  provisions  of Section 5 hereof,  the total
amount of the Common Stock of the Company which may be issued pursuant to grants
under the Plan shall not exceed in the aggregate  3,700,000  shares.  Any shares
subject to an Option,  which  Option  for any  reason  expires or is  terminated
unexercised  as to such  shares,  may again be  subjected to an Option under the
Plan. The Board or Committee will maintain  records showing the cumulative total
of all shares subject to Options outstanding under this Plan.


4.  GRANT OF OPTIONS

         a.  Eligibility and Factors to be Considered in Granting  Options.  The
individuals  who shall be  eligible  to  participate  in the Plan  shall be such
employees as the Board or Committee shall determine from time to time.  However,
participation  shall be  limited  to those  officers  and key  employees  of the
Company or any of its  Subsidiaries  who will have,  or possess the potential of
having, the greatest impact on the Company's long-term performance. No member of
the Board who is not an  employee  of the  Company  shall be eligible to receive
Options  under this  Plan.  Options  may be  granted  under this Plan only for a
reason connected with an officer's or key employee's  employment by the Company.
In making any determination as to the officers and key employees to whom Options
shall be granted hereunder and as to the number of shares to be subject thereto,
the Board or  Committee  shall take into  account,  in each case,  the level and
responsibility of the person's position,  the level of the person's performance,
the person's  level of  compensation,  the assessed  potential of the person and
such  additional  factors as the Board or Committee  shall deem  relevant to the
accomplishment  of the  purposes of the Plan.  The Board or  Committee  may also
utilize  guidelines  set forth in other  compensation  plans of the  Company  in
determining any matters related to the grant of Options hereunder, provided that
the use of such guidelines comports with applicable law.

         b.  Allotment  of  Shares.   Options  granted  hereunder  may,  at  the
discretion  of the Board or  Committee,  be: (i) Options  which are  intended to
qualify as incentive  stock options  under  Section 422 of the Internal  Revenue
Code of 1986, as amended (the "Code"), (ii) Options which are not intended so to
qualify  under  Section  422 of the Code,  or (iii)  both of the  foregoing,  if
granted separately,  and not in tandem. Each Option granted under this Plan must
be clearly  identified  as to its status as an  incentive  stock  option or not.
Options  granted  hereunder  may be allotted to  participants  in such  amounts,
subject to the limitations specified in this Plan, as the Board or Committee, in
its sole discretion, may from time to time determine.

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

         c. Option Price.  The exercise  price of each share of stock covered by
an option  granted  hereunder  shall be equal to or greater than the Fair Market
Value per share of the Company's Common Stock on the date the option is granted.
If the stock is traded in the  over-the-counter  market,  such Fair Market Value
shall be deemed to be the  average  between the asked and the bid prices on such
day as  reported  by NASDAQ.  If the stock is traded on an  exchange,  such Fair
Market  Value  shall be deemed to be the  average  of the high and low prices at
which it is quoted or traded on such day.

         d. Time of Granting  Options.  The date of grant of an Option hereunder
shall be the date on which the Board or  Committee  makes the  determination  of
granting  such  Option,  provided,  however  that in the case of an  option  (1)

<PAGE>

originally  granted by a company to which the Company is a successor  (by merger
or  otherwise) of the  obligations  of such option and (2) which the Company has
elected to treat as being  issuable  under the Plan,  the date of grant shall be
the date on which such option was originally granted by the predecessor company.
Notice of the  determination  shall be given to each  officer or key employee to
whom an Option is so  granted  within a  reasonable  time after the date of such
grant.

         e. Duration and Exercise of Options.  The Option term shall be ten (10)
years  from the date the  Option is  granted,  except  that  such term  shall be
reduced  with  respect to any Option as outlined  below in the event of death or
termination of employment or voluntary retirement of the optionee; provided that
in the  case of a  merger,  consolidation,  dissolution  or  liquidation  of the
Company  involving a "Change in Control",  the expiration  date and the dates on
which any part of the Option shall be exercisable  for all of the shares covered
thereby may be accelerated, such the Option shall expire not less than one month
after  consummation of such merger,  consolidation,  dissolution or liquidation,
but the  effectiveness  of such  acceleration,  and any  exercise  of the Option
pursuant  thereto in excess of the number of shares for which it would have been
exercisable in the absence of such  acceleration,  shall be conditioned upon the
consummation  of such merger,  consolidation,  dissolution or  liquidation.  For
purposes of this Plan a "Change of Control" means a change of control  involving
the  Company  which is  required  to be  reported  in  response  to Item 5(f) of
Schedule 14A promulgated under the Securities  Exchange Act of 1934, as amended,
or any merger,  tender offer,  consolidation or sale of substantially all of the
assets of the Company or related series of such events, as a result of which (i)
the shareholders of the Company  immediately  prior to such event hold less than
50% of the  outstanding  voting  securities  of the  Company or its  survivor or
successor after such event,  (ii) persons holding less than 20% of the Company's
stock  immediately  prior to such  event  own more  than 50% of the  outstanding
voting  securities of the Company or its survivor or successor after such event,
or (iii) persons  constituting a majority of the Board were not directors for at
least the 24 preceding months.

         The  exercise  of any Option and the  delivery of the  optioned  shares
shall be contingent  upon receipt by the Company of the full exercise  price and
any amount  required to be withheld by the Company under  applicable tax laws in
connection  with the exercise of the Option.  The exercise price may be paid (i)
in cash or by check, or (ii) through  delivery of shares of Common Stock with an
aggregate  Fair Market Value on the date of exercise equal to the exercise price
of the shares being purchased, or (iii) through any combination of the foregoing
methods.  At any time when the Company is required to withhold  any amount under
applicable  tax laws in connection  with the exercise of an Option,  the Company
may, in its sole discretion,  accept payment of the withholding amount in shares
of Common Stock having a Fair Market Value on the date of exercise of the Option
equal to the amount  required to be withheld.  No Option may be exercised  after
termination of employment of the optionee except as hereinafter provided.

         Unless the Board or Committee expressly states otherwise at the time of
grant,  Options  shall be  exercisable  on a  cumulative  basis for 33.3% of the
shares  covered  thereby on each of the first three  anniversaries  of the grant
thereof.

         Unless the Board or Committee expressly states otherwise at the time of
grant, Options granted under the Plan may be exercised, if otherwise timely, (a)
within three months after voluntary retirement,  other than voluntary retirement
by reason of  disability,  of the  optionee at or after the age of 60 years,  if
such voluntary retirement occurs on or after one year following the grant of any
Option, and (b) within three months after voluntary  retirement occurring at any
age by reason of  disability.  In any such case, the Option may not be exercised
for more than the number of shares,  if any, as to which it was  exercisable  by
the optionee immediately before such voluntary retirement; provided that if such
voluntary  retirement was by reason of disability,  the Option shall in any case
be  exercisable  for at least 50% of the shares  covered  thereby;  and provided
further that if such  voluntary  retirement  occurred when or after the optionee
attained  the age of 65 years,  the Option shall be  exercisable  for all of the
shares covered  thereby.  Notwithstanding  the  foregoing,  in the event that an
optionee is  terminated  for cause,  all existing  options held by such optionee
shall terminate immediately.


<PAGE>

         If an optionee  shall die while employed by the Company or within three
months after voluntary retirement from employment with the Company,  such Option
may be exercised (to the extent that the optionee would have been entitled to do
so at the  date  of his  death)  by the  legatees,  personal  representative  or
distributees of the optionee  during the balance of the term thereof,  or within
one year of the date of the optionee's death, whichever is shorter.

         Notwithstanding  anything to the contrary  herein,  for a period of six
months  commencing on the date of grant of an Option hereunder to a participant,
such  participant may not sell any shares of Common Stock acquired upon exercise
of such Option.

         "Disability" shall mean a physical or mental condition  of an  employee
resulting  from bodily  injury,  disease,  or mental  disorder which renders him
incapable of continuing his usual and customary employment with the Company. The
disability  of an  employee  has shall be  determined  by a  licensed  physician
selected by the Board or Committee.


5.       RECAPITALIZATION

         The  aggregate  number of shares of Common  Stock  which may be granted
from time to time  hereunder and the aggregate  number of shares of Common Stock
which may be granted to any one person shall be proportionately adjusted for any
increase  or  decrease  in the  number of issued  shares of Common  Stock of the
Company resulting from a subdivision or consolidation of shares or other capital
adjustment,  or the payment of a stock dividend or other increase or decrease in
such shares,  effected without receipt of consideration by the Company,  if any;
provided, however, that any fractional shares resulting from any such adjustment
shall be  eliminated.  In the event of a change in the  Company's  Common  Stock
which is limited to a change in the par value  thereof,  or from par value to no
par value, without increase in the number of issued shares, the shares resulting
from any such change  shall be deemed to be Common  Stock  within the meaning of
the Plan.


6.       ASSIGNABILITY

         No Option granted hereunder shall be assignable except as  specifically
provided  herein.  Notwithstanding  anything to the contrary  herein,  no Option
granted hereunder shall be transferable by him or her except:  (i) by will, (ii)
by the laws of  descent  and  distribution,  or (iii)  pursuant  to a  qualified
domestic  relations  order as defined by the Code or in Title I of the  Employee
Retirement  Income  Security  Act,  or the rules  thereunder.  In the case of an
Option  intended to be an  incentive  stock  option,  such  Option  shall not be
transferable  by a  participant  other than by will or the laws of  descent  and
distribution and during the optionee's lifetime shall be exercisable only by him
or her. No Option,  right, or privilege hereunder shall be subject to execution,
attachment, or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate  or  otherwise  dispose of the Option,  or of any right or privilege
conferred  thereby  contrary to the provisions  hereof,  or upon the levy of any
attachment or similar process upon such Option,  right or privilege,  the Option
and such rights and privileges shall immediately become null and void.


7.       LISTING AND REGISTRATION OF SHARES

         Each Option shall be subject to the requirement that if at any time the
Board or  Committee  shall  determine,  in its  discretion,  that  the  listing,
registration, or qualification of the shares covered thereby upon any securities
exchange  or under any state or federal  law or the  consent or  approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection  with, the granting of such Option or the issue or purchase of shares
thereunder,  such  Option may not be  exercised  in whole or in part  unless and

<PAGE>

until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any  conditions not acceptable to the Board or
Committee.


8.       EXPIRATION AND TERMINATION OF THE PLAN

         Options may be granted  under the Plan at any time or from time to time
as long as the total number of shares optioned or purchased under this Plan does
not exceed the number of shares of Common  Stock  specified in Section 3 hereof.
The Plan may be  abandoned or  terminated  at any time by the Board or Committee
except with respect to any Options then  outstanding  under the Plan.  No Option
shall be granted pursuant to the Plan after ten years from the effective date of
the Plan.


9.       AMENDMENT OF PLAN

         The Board or Committee may at any time and from time to time modify and
amend  the Plan  (including  such  form of  option  agreement)  in any  respect;
provided,  however,  that no such  amendment  shall:  (a)  increase  (except  in
accordance with Section 5) the maximum number of shares for which Options may be
granted under the Plan either in the aggregate or to any individual employee, or
(b) reduce (except in accordance with Section 5) the minimum Option prices which
may be established  under the Plan, or (c) extend the term or terms during which
Options may be granted or exercised.  The  termination  of any  modification  or
amendment of the Plan shall not, without the consent of an employee,  affect his
rights under an Option theretofore granted to him.


10.      EFFECTIVE DATE OF THE PLAN

         The  effective  date of this Second  Amended and  Restated  Option Plan
shall be April 28, 2003.


</TEXT>
</DOCUMENT>
