UWHARRIE CAPITAL CORP 2006 EMPLOYEE STOCK PURCHASE PLAN

Exhibit 10.2

UWHARRIE CAPITAL CORP

2006 EMPLOYEE STOCK PURCHASE PLAN

Uwharrie Capital Corp (the “Company”) hereby adopts this 2006 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”) as further described herein.

ARTICLE I

PURPOSE AND SCOPE OF PLAN

The purpose of the Plan is to encourage employees of Uwharrie Capital Corp (the “Company”) and companies which are, or during the term of the Plan become, subsidiaries of the Company or subsidiaries of its subsidiaries (the “Subsidiaries” and each a “Subsidiary”) to acquire equity interests in the Company and to encourage their continued employment by giving them options to purchase shares of the Company’s capital stock and, thereby, the opportunity to share the benefit of increases in the value of the Company’s capital stock.

Pursuant to and in accordance with the terms of the Plan, options (“Options”) may be granted from time to time to purchase shares of the Company’s common stock, $1.25 par value per share (“Common Stock”). The Options are intended to constitute options issued pursuant to an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).

The aggregate number of shares of Common Stock which may be sold upon the exercise of Options granted under the Plan is 94,474 shares, which maximum number is subject to adjustment as provided in Paragraph 6.1 hereof. Shares of Common Stock sold by the Company upon the exercise of Options granted hereunder, at the sole discretion of the Company, may be issued from the Company’s authorized but unissued shares, or be issued and outstanding shares purchased by the Company on the open market or in private transactions. Upon the expiration or termination of an Option granted pursuant to the Plan, any shares of Common Stock which have not been issued and purchased pursuant to the exercise of that Option shall again become available for the grant of new Options under the Plan.

The Plan shall be subject to approval by a vote of the holders of a majority of the shares of the Company’s Common Stock present or represented, in person or by proxy, and entitled to vote at a meeting of the Company’s shareholders held in accordance with North Carolina law. Subject to such approval, the Plan shall become effective as of May 16, 2006 (the “Effective Date”), which is the date of adoption of the Plan by the Company’s Board of Directors) and, unless sooner

terminated as provided herein, shall terminate at 5:00 P.M. on May 16, 2016 (the “Termination Date”). Following the Termination Date, no further Options may be granted under the Plan, but such termination shall not effect any Option granted prior to the Termination Date.

ARTICLE II

PLAN ADMINISTRATION

The Plan shall be administered by a committee (the “Committee”) of, and appointed by, the Board of Directors of the Company, and which shall be composed of not less than three members of the Board of Directors who (i)  are not employees of the Company and who are not, during the one year prior to service as members of the Committee, granted or awarded any equity securities of the Company pursuant to the Plan or any other plan of the Company or any of its affiliates, and who (ii)  otherwise qualify as “disinterested administrators” as defined in Rule 16b-3 (c) (2) (i) under the Securities Exchange Act of 1934. Members of the Committee shall serve at the pleasure of the Board, and the Board of Directors, from time to time and at its discretion, may remove members from (with or without cause) or add members to the Committee or fill any vacancies on the Committee, however created.

In its administration of the Plan, the Committee shall have the following authority, powers and duties:

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The Committee shall select one of its members as Chairman and shall hold meetings at such times and places as it shall deem necessary or desirable. A majority of the members of the Committee shall constitute a quorum for all matters with respect to administration of the Plan, and acts of a majority of the members of the Committee present at meetings at which a quorum is present, or acts reduced to and approved in writing by all of the members of the Committee without a meeting, shall be valid acts of the Committee.

All actions, decisions and determinations of the Committee in connection with the administration of the Plan, and in connection with the interpretation and construction of, or questions or other matters concerning, the Plan or any Options granted, shall (i)  be made consistent and in accordance with the terms of the Plan and shall be designed to cause the Plan to continue to comply with Section 423 of the Code, and (ii)  shall be final, conclusive and binding on all persons, including the Company, its shareholders, Eligible Employees and any other person claiming any interest in any Option; provided, however, that any action, decision, interpretation or determination, other than those respecting the actual grant of Options, shall be subject to review by the Board of Directors, either on its own initiative, at the request of the Committee or on application of any aggrieved party. In such a case, the determination of the Board of Directors on such review shall be final and binding on all affected parties.

To the extent permitted by applicable law, and in addition to such other rights of indemnification members of the Committee may have as Directors of the Company, the members of the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken or omitted in good faith under or in connection with administration of the Plan or any Option granted hereunder and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that any such Committee member is liable for gross negligence or misconduct in the performance of his duties; provided, however, that within sixty (60) days after institution of any such action, suit or proceeding, such Committee member(s) shall in writing offer the Company the opportunity, at its own expense, to handle and defend same.

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ARTICLE III

ELIGIBILITY

Except as provided in Paragraph 3.2 below, each employee of the Company and/or any Subsidiary who has been so employed on a continuous, full-time basis for a period of not less than one year preceding the effective date of a grant of Options under the Plan (the “Date of Grant”) and who remains actively employed by the Company and/or any Subsidiary or is on paid or authorized but unpaid leave of absence on that date (an “Eligible Employee”), shall be eligible to receive an Option under the Plan in connection with that grant of Options. For purposes of the Plan, the term “Eligible Employee” does not include (i)  any person whose customary employment is less than 20 hours per week, or whose customary employment is less than 5 months in any calendar year, or (ii)  any person who is a “highly compensated” employee of the Company or any of its Subsidiaries as defined in Section 414(q) of the Code. For purposes of determining an employee’s eligibility to receive an Option, the Committee may, at its sole discretion, give credit for the employee’s past service with any financial institution or other entity that shall have been acquired by the Company or any Subsidiary; provided, however, that all employees of the Company and/or any Subsidiary who were employees of any such acquired entity shall be treated alike for purposes of past service credit under the Plan.

Notwithstanding the provisions of Paragraph 3.1 above, in no event may an employee be granted an Option if such employee, immediately after the Option is granted, would own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or its parent or subsidiary corporation (as the terms “parent corporation” and “subsidiary corporation” are defined in Sections 424(e) and (f) of the Code). For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply, and shares of the Company’s stock which an Eligible Employee may purchase under outstanding options of any type shall be treated as shares owned by such employee.

ARTICLE IV

GRANT OF OPTIONS

Pursuant to the Plan, from time to time prior to the Termination Date the Company may grant Options to Eligible Employees to purchase shares of Common Stock. Each such grant of Options must be specifically approved by the Committee and, in connection with each such grant, Options will be granted in accordance with the terms of the Plan to all persons who are Eligible Employees as of the Date of Grant of such Options. However, notwithstanding anything contained herein to the contrary, in no event may the Committee approve a grant of Options under the Plan while any Option previously granted hereunder shall remain outstanding.

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At the time each grant of Options hereunder is approved by the Committee, the Committee also shall specify a dollar amount of annual compensation (the “Annual Factor”) on the basis of which the number of shares of Common Stock to be covered by the Option granted to each Eligible Employee will be determined. Each such Option will entitle the Eligible Employee to whom it is granted to purchase a number of whole shares of Common Stock equal to the lesser of (i)  such employee’s annual rate of compensation as of the day prior to the Date of Grant of that Option (as determined by the payroll records of the corporation that employs such person) divided by the Annual Factor set by the Committee for that grant of Options, or (ii)  500. The Annual Factor may be different for each grant of Options under the Plan; however, in connection with each separate grant of Options the Annual Factor shall be the same for all Eligible Employees.

The term “compensation” as used herein is defined as an Eligible Employee’s annualized regular, fixed base salary or wages based on the Eligible Employee’s salary or wage rate (and number of hours per week) in effect at the time of grant. Compensation does not include any bonus, overtime payment, contribution by an employer corporation to an employee benefit plan or other similar payment or contribution.

The option or purchase price of each share of Common Stock covered by Options included in each grant of Options under the Plan (the “Option Price”) shall be a percentage (the “Applicable Percentage”) of the fair market value of one share of the Common Stock on the Date of Grant of such Options (the “Fair Market Value”). The Applicable Percentage for each grant of Options shall be determined by the Committee, but (i)  in no event may be less than 85% nor more than 100%, and (ii ) may be different for each grant of Options, but in connection with each separate grant of Options shall be the same for all Eligible Employees.

The Fair Market Value of a share of the Company’s outstanding Common Stock on any particular date shall be, (i)  if the Common Stock is not then listed on the Nasdaq Stock Market, the fair market value of a share of the Common Stock as determined by the Committee in its sole discretion in such manner as it shall deem to be reasonable and appropriate, or, (ii)  if the Common Stock is listed on the Nasdaq Stock Market, the average of the bid and asked prices for a share of the Common Stock as quoted by Nasdaq on such date.

Each Option granted pursuant to the Plan shall be evidenced by a written notice (an “Option Notice”) delivered to the Eligible Employee to whom such Option is granted and which shall specify (i)  the Date of Grant of the Option, (ii)  the number of shares covered by the Option, and (iii)  the Option Price of the covered shares. Each Option Notice shall be in such form as the Committee shall determine and shall incorporate by reference the terms and provisions of the Plan. No Eligible Employee shall have any rights hereunder to purchase any shares of Common

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Stock until an Option has been granted to him and such Option is evidenced by an Option Notice delivered to him, all as provided herein.

Notwithstanding the foregoing provisions of the Plan or the terms of any Option granted hereunder, no employee of the Company or any Subsidiary shall be permitted to purchase shares of the Company’s stock under all employee stock purchase plans (including this Plan) of his employer corporation and its related corporations at a rate which exceeds $25,000 in fair market value of such stock (determined at the time the Option is granted) for each calendar year in which any option granted to such individual pursuant to any such plan is outstanding at any time. This limitation applies only to options granted under “employee stock purchase plans” as defined by Section 423 of the Code and does not limit the amount of the Company’s stock which an Eligible Employee may purchase under any other stock or bonus plan then in effect.

ARTICLE V

TERMS AND CONDITION OF OPTIONS; PURCHASE OF SHARES

Except as otherwise provided below, the term of each Option (the “Option Term”) shall extend for a period commencing on the Date of Grant and ending on the 15th day of the twenty-fourth calendar month (including the month in which the Option is granted) following the Date of Grant of such Option (the “Expiration Date”) Notwithstanding anything contained herein or in any Option Agreement to the contrary, to the extent that an Option shall not previously have been exercised in the manner required by the Plan, it shall expire and terminate at 5:00 P.M. on its Expiration Date.

In addition to the termination provisions set forth above, Options granted pursuant to the Plan shall terminate or may be terminated as provided in Paragraphs 5.6 and 6.1 below. Upon the expiration or termination of all or any portion of an Option, such Option or portion thereof shall, without any further act by the Company, expire and no longer be exercisable or confer any rights to any person to purchase shares of Common Stock under the Plan.

Each Option shall entitle the Eligible Employee to whom it is granted to purchase up to the total number of shares of Common Stock specified in the Option Notice relating to that Option, and to purchase all or any portion of such shares at the times and in the manner specified below.

During the first fifteen (15) days of each December and June during the Option Term of each Option granted under the Plan (the “Election Periods”), an Eligible Employee may elect to purchase shares pursuant to his Option. In order to make such election, the Eligible Employee must give written notice (an “Election Notice”) to the Company as to the number of shares he wishes to purchase (the “Elected Shares”). Such notices must be made on a form supplied by the Company for that purpose and must be accompanied by full payment of the Option Price of all

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Elected Shares or, if the Eligible Employee intends that payment for any of the Elected Shares be made from funds held for him under the payroll deduction plan described in Paragraph 5.4 below, such notice must indicate that payment of the Option Price for those shares will be made by transfer of funds under that plan. Purchases of Elected Shares shall be made on the Company’s last business day of each such month (the “Purchase Dates”). An Eligible Employee’s Election Notice as to any number of Elected Shares shall be irrevocable as to that number of shares and may not be altered or changed by such Eligible Employee following receipt of such notice by the Company.

The failure of an Eligible Employee to deliver an Election Notice to the Company in a timely manner to purchase all shares covered by an Option before the Expiration Date of that Option will be conclusively deemed to be an election by the Eligible Employee not to purchase, and a forfeiture of his rights to purchase, any and all such remaining shares covered by that Option; and, on the Expiration Date that Option shall immediately terminate and be of no further force or effect.

At its sole discretion and upon written notice to Eligible Employees, the Committee may (i)  provide for Election Periods during other months during the Option Term of Options granted under the Plan, or, (ii)  at the time any Options are granted, place other restrictions or limitations on the exercise of those Options.

Payment of the aggregate Option Price of Elected Shares must be delivered to the Company (in the form of certified or other collected U.S. funds) with the Election Notice pertaining to those Elected Shares required by Paragraph 5.2 above, or, in the case of any Eligible Employee participating in the payroll deduction plan, such payment must be transferred to the Company as described