Dollars in thousands, except share data

Cause. Termination by the Company or the Bank for “Cause” shall mean (A) termination on account of willful misconduct of a material nature by the Employee in connection with performance of his duties as an employee; (B) use of alcohol or narcotics that affects his ability to perform his duties as an employee; (C) conviction of a felony or serious misdemeanor involving moral turpitude; (D) embezzlement or theft from the Company or the Bank; (E) gross inattention to or dereliction of duty; or (F) performance by the Employee of any other willful acts which Employee knew or reasonably should have known would be materially detrimental to the Company or the Bank.

Good Reason. Termination by the Employee for “Good Reason” shall mean (A) a material reduction in Employee’s position, duties, responsibilities or status as in effect immediately preceding the Change in Control, or a change in Employee’s title resulting in a material reduction in his responsibilities or position with the Company or the Bank as in effect immediately preceding the Change in Control, in either case without Employee’s consent; (B) a material reduction in the rate of Employee’s base salary as in effect immediately preceding the Change in Control or a material decrease in the bonus percentage to which Employee was entitled pursuant to any of the Company’s incentive bonus plans at the end of the fiscal year immediately preceding the Change in Control, in either case without Employee’s consent; provided, however, that nothing herein shall be construed to guarantee the Employee’s bonus award if performance, either by the Company or Employee, is below target as set forth in any of the Company’s such incentive bonus plans; or (C) the relocation of Employee, without his consent, to a location outside a 30 mile radius of Charlotte, North Carolina, following a Change in Control.

Change in Control. For purposes of this Agreement, “Change in Control” shall mean (A) the consummation of a merger, consolidation, share exchange or similar transaction of the Company with any other corporation as a result of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; (B) the sale or transfer (other than as security for obligations of the Company) of substantially all the assets of the Company; (C) in the absence of a prior expression of approval by the Board of Directors, the acquisition of more than 20% of the Company’s voting capital stock by any person within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a person, or group including a person, who beneficially owned, as of the date of this Agreement, more than 5% of the Company’s securities; (D) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at lease a majority thereof unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at lease two-thirds of the directors then still in office who were directors at the beginning of the period; or (E) any other change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act or the acquisition of control, within the meaning of Section 2(a)(2) of the Bank Holding Company Act of 1956, as amended, or Section 602 of the Change in Bank Control Act of 1978, of the Company by any person, company or other entity.

Compensation. Employee’s Compensation shall consist of the following: (A) Employee’s annual base salary, as paid by the Company or the Bank, in effect immediately preceding the Change in Control and (B) the average of any bonus paid by the Company or the Bank to Employee during the two most recent fiscal years ending prior to such Change in Control pursuant to any of the Company’s incentive bonus plan.

Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, Employee and the Company and their respective permitted successors and assigns. Neither this Agreement nor any right or interest hereunder shall be assignable by Employee, his beneficiaries, or legal representatives without the Company’s prior written consent. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, share exchange or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date Employee’s employment was terminated. As used in this Agreement, “Company” shall mean the Company as defined herein and any successor to its business and/or assets as aforesaid that executes and delivers the agreement provided for in this Section 6(i) or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

Amendment of Agreement. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

Headings and Gender. The headings of paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

Governing Law. This Agreement has been executed and delivered in the State of North Carolina, and its validity, interpretation, performance and enforcement shall be governed by the laws of such state.