Exhibit 10.3

Amendment to Endorsement Split Dollar Agreement

This Amendment to Endorsement Split Dollar Agreement (this “Amendment”) is
entered into effective as of this 2nd day of November, 2011 by and between
Crescent State Bank, a North Carolina-chartered bank (the “Bank”), and Michael
G. Carlton (the “Executive”), and amends that certain Endorsement Split Dollar
Agreement effective as of October 1, 2003 among the aforesaid parties (the
“Agreement”).

Whereas, as a result of participation in the Troubled Asset Relief Program
Capital Purchase Program by Crescent Financial Corporation (“Crescent”), the
parent holding company of the Bank, Crescent and the Bank are subject to, among
other things, the executive compensation requirements of Section 111(b) of the
Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, and as implemented by guidance and
regulations issued by the Treasury Department with respect to the Capital
Purchase Program, as such guidance and regulations may be amended from time to
time (the “TARP Standards”), with respect to the compensation of certain current
and future employees of Crescent and the Bank; and

Whereas, Crescent intends to consummate an investment transaction with Piedmont
Community Bank Holdings, Inc. (“Investor”) in which Investor will make a
substantial investment in Crescent and will thereby obtain voting control of
Crescent and become its majority shareholder through the acquisition of its
common stock as contemplated in that certain Investment Agreement dated February
23, 2011 by and among Crescent, the Bank and Investor (the “Transaction”), and
the consummation of such Transaction will constitute a change in control under
Section 409A of the Internal Revenue Code of 1986 (“IRC”); and

Whereas, the Agreement is maintained as part of a deferred compensation and
death benefit executive compensation program together with a salary continuation
arrangement maintained through that certain Second Amended Salary Continuation
Agreement effective as of September 10, 2008, and last amended effective as of
February 23, 2011, among the aforesaid parties (the “Salary Continuation
Agreement”); and

Whereas, Crescent and the Bank have ceased benefit accruals under the Salary
Continuation Agreement, and may, in certain circumstances, vest any unvested
benefits under the Salary Continuation Agreement, terminate the Salary
Continuation Agreement and pay out the “Accrual Balance” under the Salary
Continuation Agreement to Executive in accordance with IRC Section 409A and as
permitted by the TARP Standards and the parties wish to amend the Agreement in
connection therewith.

Now Therefore, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that this
Agreement is amended as follows.

1.  Section 2.2 of the Agreement is amended to read as follows:
 
 
 

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2.2 Executive’s Interest. The Executive shall have the right to designate the
beneficiary of the Executive’s Interest. If, at the time of the Executive’s
termination of employment with the Bank or Crescent, the Executive is or has
become entitled to benefits (whether or not such benefits have been previously
paid) under the Salary Continuation Agreement, or if the Executive’s termination
of employment with the Bank or Crescent occurs because of the Executive’s death
(except under Section 5.2 of the Salary Continuation Agreement as in effect on
the date of termination of employment or, if earlier, as in effect on the date
of termination of the Salary Continuation Agreement), then the beneficiary
designated in accordance with the Split Dollar Policy Endorsement shall be
entitled to 80% of the Net Death Proceeds (the “Executive’s Interest”). The
Executive or the Executive’s transferee shall also have the right to elect and
change settlement options that may be permitted for the Executive’s Interest.

2.  Section 8.2 of the Agreement is amended to read as follows:

8.2 Amendment and Termination of Agreement. This Agreement may be amended or
terminated solely by a written agreement signed by the Bank and the Executive.
However, this Agreement will automatically terminate and the Executive’s
Interest shall be forfeited if benefits under the Salary Continuation Agreement
are neither paid nor payable because of termination under Article 5 of the
Salary Continuation Agreement as in effect on the date of termination of
employment or, if earlier, as in effect on the date of termination of the Salary
Continuation Agreement. This Agreement shall also terminate upon the occurrence
of any one of the following:

(a) Surrender, lapse, or other termination of the Policy by the Bank, or

(b) Distribution of the death benefit proceeds in accordance with Section 2.2
above.

Notwithstanding any provision of this Agreement to the contrary or the
termination of the Salary Continuation Agreement, in the event the investment
transaction contemplated in that certain Investment Agreement dated February 23,
2011 by and among Crescent Financial Corporation,  the Bank and Piedmont
Community Bank Holdings, Inc. (the “Transaction”) is closed, the Bank shall not
surrender, terminate or cause or permit the lapse of the Policy and this
Agreement shall not terminate or be amended to reduce the death benefit coverage
provided to the Executive during such time as the Executive remains employed by
the Bank following the closing of the Transaction and shall not thereafter
surrender, terminate or cause or permit the lapse of the Policy or amend or
terminate this Agreement, without the Executive’s express written consent, other
than a termination that occurs under Article 5 of the Salary Continuation
Agreement as in effect on the date of termination of employment or, if earlier,
as in effect on the date of termination of the Salary Continuation Agreement, or
a termination following distribution of the death benefit proceeds in accordance
with Section 2.2 above.  In addition, the Bank shall provide to Executive on an
annual basis a statement confirming that Executive retains the Policy and death
benefit and identifying the intended beneficiary.

 
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In Witness Whereof, the Executive and a duly authorized officer of the Bank have
executed this Amendment to Endorsement Split Dollar Agreement as of the date
first written above.

Executive:
 
Bank:
   
Crescent State Bank
     
 /s/ Michael G. Carlton
 
By:
 /s/ Bruce W. Elder
Michael G. Carlton
         
Its:
 SVP & CFO
                   
And By:
 /s/ Thomas E. Holder, Jr.
           
Its:
 Senior Vice President

 
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