Exhibit 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is entered into as of the 30th day
of July, 2020, and made effective as of July 20, 2020 (the “Effective Date”), by
and between Bancorp 34, Inc. (the “Company”) and James T. Crotty (“Executive”). 
Any reference to the “Bank” shall mean Bank 34, the wholly-owned subsidiary of
the Company.
WHEREAS, the Company wishes to assure itself of the continued services of
Executive for the period provided in this Agreement; and
WHEREAS, in order to induce Executive to accept employment with the Company and
to provide further incentive for Executive to achieve the financial and
performance objectives of the Company, the parties desire to enter into this
Agreement; and
WHEREAS, the Company desires to set forth the rights and responsibilities of
Executive and the compensation payable to Executive, as modified from time to
time.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the term of this Agreement, Executive agrees to serve initially as the
Co-President and Chief Executive Officer of the Company, and agrees to serve
subsequently as the President and Chief Executive Officer of the Company (the
“Executive Position”) and will perform the duties and will have all powers
associated with such position as set forth in any job description provided to
Executive by the Company, and as may be set forth in the bylaws of the Company. 
During the period provided in this Agreement, Executive also agrees to serve, if
elected, as an officer of any subsidiary or affiliate of the Company and in such
capacity carry out such duties and responsibilities reasonably appropriate to
that office.
2. TERM AND DUTIES.
(a) The term of this Agreement and the period of Executive’s employment
hereunder shall begin as of the Effective Date and shall, initially, continue
through the second anniversary of the Effective Date.  Commencing on January 1,
2021 (the “Renewal Date”) and continuing on each January 1st thereafter (each a
“Renewal Date”), this Agreement shall renew for an additional year such that the
remaining term shall be twenty-four (24) months, provided, however, that in
order for this Agreement to renew, the disinterested members of the Board of
Directors of the Company (the “Board”) must take the following actions within
the time frames set forth below prior to each Renewal Date:  (i) at least sixty
(60) days prior to the Renewal Date, conduct a comprehensive performance
evaluation and review of Executive for purposes of determining whether to extend
this Agreement; and (ii) affirmatively approve the renewal or non-renewal of
this Agreement, which such decision shall be included in the minutes of the
Board’s meeting.  If the decision of such disinterested members of the Board is
not to renew this Agreement, then the Board shall provide Executive with a
written notice of non-renewal (“Non-Renewal Notice”) at least thirty (30) days
and not more than sixty (60) days prior to any Renewal Date, such that this
Agreement shall terminate at the end of twenty-four (24) months following such
Renewal Date.  The failure of the disinterested members of the Board to take the
actions set forth herein before any Renewal Date will result in the automatic
non-renewal of this Agreement, even if the Board fails to affirmatively issue
the Non-Renewal Notice to Executive.  If the Board fails to inform Executive of
its determination regarding the renewal or non-renewal of this Agreement, the
Executive may request, in writing, the results of the Board’s action (or
non-action) and the Board shall, within thirty (30) days of the receipt of such
request, provide a written response to Executive.  Reference herein to the term
of this Agreement shall refer to both such initial term and such extended terms.

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(b) Notwithstanding the foregoing, in the event that the Company or the Bank has
entered into an agreement to effect a transaction which would be considered a
Change in Control as defined under Section 5 hereof while the Executive is
employed pursuant to this Agreement, then the term of this Agreement shall
automatically be extended for twenty-four (24) months following the date on
which the Change in Control occurs.

(c) During the period of his employment hereunder, except for periods of absence
occasioned by illness, reasonable vacation periods, and reasonable leaves of
absence, Executive will devote all of his business time, attention, skill and
efforts to the faithful performance of his duties under this Agreement,
including activities and duties related to the Executive Position. 
Notwithstanding the preceding sentence, subject to the approval of the Board,
Executive may serve as a member of the board of directors of business, community
and charitable organizations, provided that in each case such service shall not
materially interfere with the performance of his duties under this Agreement,
adversely affect the reputation of the Company or any other affiliates of the
Company, or present any conflict of interest.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of
Executive’s employment following the expiration of the term of this Agreement.

3.
COMPENSATION, BENEFITS AND REIMBURSEMENT.

(a) Base Salary.  In consideration of Executive’s performance of the
responsibilities and duties set forth in this Agreement, the Company will
provide Executive the compensation specified in this Agreement.  The Company
will pay Executive a salary of $260,000.00 per year (“Base Salary”).  Such Base
Salary will be payable in accordance with the customary payroll practices of the
Company.  During the term of this Agreement, the Board may consider increasing,
but not decreasing (other than a decrease which is applicable to all senior
officers of the Company and in a percentage not in excess of the percentage
decrease for other senior officers), Executive’s Base Salary as the Board deems
appropriate.  Any change in Base Salary will become the “Base Salary” for
purposes of this Agreement.

(b) Retention Bonus.  Executive shall be entitled to a retention bonus of
$200,000.00 payable ratably over a five-year period, on each annual anniversary
of the Executive’s employment date.  The net after-tax value of these funds is
expected to be used to purchase Company common stock, unless the value of
Executive’s then investment in Company common stock, excluding Company provided
equity benefits, exceeds the cumulative retention bonus paid through such
anniversary date.

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(c) Regular Bonuses.  Based upon achievement of the goals and objectives agreed
to in the performance development planning process with the Board, Executive may
be eligible for a performance or other bonuses, in accordance with any plan
established for senior officer of the Company or solely for Executive.  Any
bonus plan in which Executive shall be entitled to participate, and the formula
for determining such bonus, shall be approved by the Board from year to year.

(d) Company Stock Options.  Upon the successful completion of 90 days of
employment, Executive shall receive a grant of 25,000 Company stock options,
which will vest in equal annual installments over a five-year period on each
annual anniversary of the grant date, provided Executive remains in employment
of the Bank on such date and subject to such other terms and conditions as may
be set forth in a stock option award agreement among the Company and Executive.

(e) Benefit Plans.  Executive will be entitled to participate in all employee
benefit plans, arrangements and perquisites offered to employees and officers of
the Company.  Without limiting the generality of the foregoing provisions of
this Section 3(e), Executive also will be entitled to participate in any
employee benefit plans including but not limited to retirement plans, pension
plans, profit-sharing plans, health-and-accident plans, or any other employee
benefit plan or arrangement made available by the Company in the future to
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.  In
addition, Executive will be entitled to participate in a non-qualified deferred
compensation plan which will allow the Executive to defer up to 100% of his Base
Salary per year, subject to applicable tax withholding.  Executive will also
receive a $600.00 automobile allowance per month of employment and a $100.00
monthly cell phone allowance.

(f) Vacation and Paid Time Off.  Executive will be entitled to paid vacation
time each year during the term of this Agreement measured on a calendar year
basis, in accordance with the Company’s customary practices, as well as sick
leave, holidays and other paid absences in accordance with the Company’s
policies and procedures for officers.  Executive will be entitled to 25 days of
paid time off annually.

(g) Expense Reimbursements.  The Company will reimburse Executive for all
reasonable travel, entertainment and other reasonable expenses incurred by
Executive during the course of performing his obligations under this Agreement,
including, without limitation, fees for memberships in such organizations as
Executive and the Board mutually agree are necessary and appropriate in
connection with the performance of his duties under this Agreement, upon
substantiation of such expenses in accordance with applicable policies and
procedures of the Company.  All reimbursements pursuant to this Section 3(g)
shall be paid promptly by the Company and in any event no later than thirty (30)
days following the date on which the expense reimbursement was requested,
provided however, that any such expense is reimbursed no later than the last day
of the calendar year immediately following the year in which the expense is
incurred.

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(h) To the extent not specifically set forth in this Section 3, any compensation
payable or provided under this Section 3 shall be paid or provided no later than
two and one-half (2.5) months after the calendar year in which such compensation
is no longer subject to a substantial risk of forfeiture within the meaning of
Treasury Regulation Section 1.409A-1(d).
4.
TERMINATION AND TERMINATION PAY. 

Subject to Section 5 of this Agreement which governs the occurrence of a Change
in Control, Executive’s employment under this Agreement may be terminated in the
following circumstances:
(a) Death.  Executive’s employment under this Agreement will terminate upon his
death during the term of this Agreement, in which event Executive’s estate or
beneficiary shall be paid Executive’s Base Salary at the rate in effect at the
time of Executive’s death for a period of one (1) year following Executive’s
death (payable in accordance with the regular payroll practices of the Company).
(b) Disability.  Termination of Executive’s employment based on “Disability”
shall mean termination because of any permanent and totally physical or mental
impairment that restricts Executive from performing all the essential functions
of normal employment.  In the event of Executive’s termination due to
Disability, Executive will be entitled to disability benefits, if any, provided
under a long term disability plan sponsored by the Company, if applicable.
(c) Termination for Cause.  The Board may immediately terminate his employment
at any time for “Cause.”  Executive shall have no right to receive compensation
or other benefits for any period after termination for Cause, except for already
vested benefits.  Termination for “Cause” shall mean termination because of, in
the good faith determination of the Board, Executive’s:

  (i)

personal dishonesty;

  (ii)

incompetence;

  (iii)

willful misconduct;

  (iv)

breach of fiduciary duty involving personal profit;

  (v)

intentional failure to perform stated duties;

  (vi)

willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order, or

  (vii)

material breach by Executive of any provision of this Agreement.

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(d) Voluntary Termination by Executive.  In addition to his other rights to
terminate his employment under this Agreement, Executive may voluntarily
terminate employment during the term of this Agreement (other than “With Good
Reason” as defined below) upon at least thirty (30) days prior written notice to
the Board.  Upon Executive’s voluntary termination, Executive will receive only
his earned but unpaid compensation and vested rights and benefits as of the date
of his termination.
(e) Termination Without Cause or With Good Reason.
(i)
The Board may immediately terminate Executive’s employment at any time for a
reason other than Cause (a termination “Without Cause”), and Executive may, by
written notice to the Board, terminate this Agreement at any time within ninety
(90) days following an event constituting “Good Reason,” as defined below (a
termination “With Good Reason”); provided, however, that the Company shall have
thirty (30) days to cure the “Good Reason” condition, but the Company may waive
its right to cure.  Any termination of Executive’s employment, other than
Termination for Cause shall have no effect on or prejudice the vested rights of
Executive under the Company’s qualified or non-qualified retirement, pension,
savings, thrift, profit-sharing or bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or other employee benefit plans or programs, or
compensation plans or programs in which Executive was a participant.

(ii)
In the event of termination as described under Section 4(e)(i) and subject to
the requirements of Section 4(e)(v), the Company shall pay Executive, or in the
event of Executive’s subsequent death, Executive’s beneficiary or estate, as the
case may be, as severance pay, a cash lump sum payment equal to the Base Salary
(at the rate in effect as of his date of termination) that Executive would have
earned had he remained employed with the Company from his date of termination
until, and including, the last day of the remaining term of this Agreement. Such
payment shall be made to Executive within ten (10) days following Executive’s
date of termination, or if later, following the seventh (7th) day after
Executive’s execution of the Release required under Section 4(e)(iv) hereof.

(iii)
 “Good Reason” exists if, without Executive’s express written consent, any of
the following occurs:

(A)
the failure of the Company to appoint or re-elect Executive to the Executive
Position;

(B)
a material reduction in Executive’s Base Salary or benefits provided in this
Agreement (other than a reduction or elimination of Executive’s benefits under
one or more benefit plans maintained by the Company as part of a good faith,
overall reduction or elimination of such plans or benefits applicable to all
participants in a manner that does not discriminate against Executive (except as
such discrimination may be necessary to comply with applicable law));

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(C)
a change in Executive’s Executive Position to be one of lesser authority or a
material reduction in Executive’s authority, duties or responsibilities from the
position and attributes associated with the Executive Position;

(D)
a relocation of Executive’s principal place of employment by more than
twenty-five (25) miles from Executive’s principal place of employment as of the
initial Effective Date of this Agreement; or

(E)
a material breach of this Agreement by the Company.

(iv)
Notwithstanding the foregoing, Executive shall not be entitled to any payments
or benefits under this Section 4(e) unless and until Executive executes a
release of his claims (“Release”), satisfactory in form to the Company, against
the Company, the Bank and any affiliate, and their officers, directors,
successors and assigns, releasing said persons from any and all claims, rights,
demands, causes of action, suits, arbitrations or grievances relating to the
employment relationship, including claims under the Age Discrimination in
Employment Act (“ADEA”), but not including claims for benefits under
tax-qualified plans or other benefit plans in which Executive is vested, claims
for benefits required by applicable law or claims with respect to obligations
set forth in this Agreement that survive the termination of this Agreement.  In
order to comply with the requirements of Code Section 409A and the ADEA, the
Release shall be provided to Executive no later than the date of his Separation
from Service and Executive shall have no fewer than twenty-one (21) days to
consider the Release, and following Executive’s execution of the Release,
Executive shall have seven (7) days to revoke said Release.

5.

CHANGE IN CONTROL.

(a) Change in Control Defined.  For purposes of this Agreement, the term “Change
in Control” shall mean the occurrence of any of the following events:
(i)
Merger:  The Company or the Bank merges into or consolidates with another
entity, or merges another bank or corporation into the Company or the Bank, and
as a result, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by persons who
were stockholders of the Company or the Bank immediately before the merger or
consolidation;

(ii)
Acquisition of Significant Share Ownership:  There is filed, or is required to
be filed, a report on Schedule 13D or another form or schedule (other than
Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended, if the schedule discloses that the filing person or
persons acting in concert has or have become the beneficial owner of 25% or more
of a class of the Company’s or the Bank’s voting securities; provided, however,
this clause (ii) shall not apply to beneficial ownership of the Company’s or the
Bank’s voting shares held in a fiduciary capacity by an entity of which the
Company directly or indirectly beneficially owns 50% or more of its outstanding
voting securities;

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(iii)
Change in Board Composition:  During any period of two consecutive years,
individuals who constitute the Company’s or Bank’s Board of Directors at the
beginning of the two-year period cease for any reason to constitute at least a
majority of the Company’s or Bank’s Board of Directors; provided, however, that
for purposes of this clause (iii), each director who is first elected by the
board (or first nominated by the board for election by the stockholders or
corporators) by a vote of at least two-thirds (2/3) of the directors who were
directors at the beginning of the two-year period or who is appointed to the
Board as the result of a directive, supervisory agreement or order issued by the
primary federal regulator of the Bank or the Company or by the Federal Deposit
Insurance Corporation (“FDIC”) shall be deemed to have also been a director at
the beginning of such period; or

(iv)
Sale of Assets:  The Company or the Bank sells to a third party all or
substantially all of its assets.

(b) Change in Control Benefits.  Upon the occurrence of Executive’s termination
Without Cause or With Good Reason on or after the effective time of a Change in
Control, the Company (or any successor) shall pay Executive, or in the event of
Executive’s subsequent death, Executive’s beneficiary or estate, as severance
pay, an amount equal to three (3) times the sum of (i) his highest rate of Base
Salary, and (ii) the highest annual bonus paid to, or earned by, Executive
during the current calendar year of Executive’s date of termination or either of
the two (2) calendar years immediately preceding Executive’s date of
termination.  Such payment shall be made in a lump sum within ten (10) days
following Executive’s date of termination.  Notwithstanding the foregoing, the
payment provided in this Section 5(b) shall be payable to Executive in lieu of
any payment that is payable under Section 4(e).
(c) Termination within Six Months Prior to Change in Control.  In the event of
Executive’s termination of employment under Section 4(e) within six (6) months
prior to a Change in Control, Executive shall be entitled to the difference, if
any, between the benefit received under Section 4(e) and the benefit available
to Executive under this Section 5 upon the effective date of the Change in
Control.  Such benefit shall be payable in a cash lump sum payment to the former
Executive within ten (10) days following the effective date of the Change in
Control.

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6.
COVENANTS OF EXECUTIVE.

(a) Non-Solicitation/Non-Compete.  Executive hereby covenants and agrees that,
for a period of one (1) year following his termination of employment with the
Company (other than a termination of employment following a Change in Control),
Executive shall not, without the written consent of the Company, either directly
or indirectly:
(i)
solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of the Company, or any of its respective
subsidiaries or affiliates, to terminate his employment and accept employment or
become affiliated with, or provide services for compensation in any capacity
whatsoever to, any business whatsoever that competes with the business of the
Company, or any of their direct or indirect subsidiaries or affiliates, that has
headquarters or offices within twenty-five (25) miles of any location(s) in
which the Company has business operations or has filed an application for
regulatory approval to establish an office (the “Restricted Territory”);

(ii)
become an officer, employee, consultant, director, independent contractor,
agent, joint venturer, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, commercial bank, credit union,
bank or bank holding company, insurance company or agency, any mortgage or loan
broker or any other entity that competes with the business of the Company or any
of their direct or indirect subsidiaries or affiliates, that: (i) has a
headquarters within the Restricted Territory or (ii) has one or more offices,
but is not headquartered, within the Restricted Territory, but in the latter
case, only if Executive would be employed, conduct business or have other
responsibilities or duties within the Restricted Territory; or

(iii)
solicit, provide any information, advice or recommendation or take any other
action intended (or that a reasonable person acting in like circumstances would
expect) to have the effect of causing any customer of the Company to terminate
an existing business or commercial relationship with the Company.

(b) Non-disparagement.  Executive agrees that, during the term and thereafter,
he will not, directly or indirectly, alone or in conjunction with any other
party, make statements to customers or suppliers of the Company and/or the Bank
or to other members of the public that are in any way disparaging or negative
towards the Company or the Bank, or the products or services of either, or the
Company’s or the Bank’s representatives, directors, or employees.  The Company
agrees that, during the term and thereafter, the Company will not, directly or
indirectly, alone or in conjunction with any other party, make statements to
customers or suppliers of the Company and/or the Bank or to other members of the
public that are in any way disparaging or negative towards the Executive.

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(c) Confidentiality.  Executive recognizes and acknowledges that the knowledge
of the business activities, plans for business activities, and all other
proprietary information of the Company, as it may exist from time to time, are
valuable, special and unique assets of the Company.  Executive will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities or any other similar
proprietary information of the Company to any person, firm, corporation, or
other entity for any reason or purpose whatsoever unless expressly authorized by
the Board or required by law.  Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Company.  Further, Executive may disclose
information regarding the business activities of the Company to any Company
regulator having regulatory jurisdiction over the activities of the Company
pursuant to a formal regulatory request.  In the event of a breach or threatened
breach by Executive of the provisions of this Section, the Company will be
entitled to an injunction restraining Executive from disclosing, in whole or in
part, the knowledge of the past, present, planned or considered business
activities of the Company or any other similar proprietary information, or from
rendering any services to any person, firm, corporation, or other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed.  Nothing herein will be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from Executive.
(d) Information/Cooperation.  Executive shall, upon reasonable notice, furnish
such information and assistance to the Company as may be reasonably required by
the Company, in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party; provided, however, that
Executive shall not be required to provide information or assistance with
respect to any litigation between Executive and the Company or any other
subsidiaries or affiliates.
 (e) Reliance.  Except as otherwise provided, all payments and benefits to
Executive under this Agreement shall be subject to Executive’s compliance with
this Section 6, to the extent applicable.  The parties hereto, recognizing that
irreparable injury will result to the Company, its business and property in the
event of Executive’s breach of this Section 6, agree that, in the event of any
such breach by Executive, the Company will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive and all persons acting for or with Executive. Executive
represents and admits that Executive’s experience and capabilities are such that
Executive can obtain employment in a business engaged in other lines of business
than the Company, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood.  Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies available
to them for such breach or threatened breach, including the recovery of damages
from Executive
.

7.

SOURCE OF PAYMENTS.

All payments provided in this Agreement shall be timely paid by check or direct
deposit from the general funds of the Company (or any successor of the
Company).  Notwithstanding any provision in this Agreement to the contrary,
there will be no duplication of benefits between this Agreement and any
employment agreement to which the Executive may be subject with the Bank.  To
the extent payments and benefits, as provided for under this Agreement, are paid
or received by Executive under an employment agreement in effect between
Executive and the Bank, the payments and benefits paid by the Bank will be
subtracted from any amount or benefit due simultaneously to Executive under
similar provisions of this Agreement.

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8.
     EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Company or any predecessor
of the Company and Executive, except that this Agreement shall not affect or
operate to reduce the re-location assistance offered under the Offer Letter
dated June 3, 2020 between the Bank and the Executive or any benefit or
compensation inuring to Executive under another plan, program or agreement
(other than an employment agreement) between the Company and the Executive.
9.
   NO ATTACHMENT; BINDING ON SUCCESSORS.

(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and of
no effect.
(b) The Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company’s obligations under
this Agreement, in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place.
10.  MODIFICATION AND WAIVER.

 
(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.
11.
 REQUIRED PROVISIONS.
Notwithstanding anything herein contained to the contrary, the following
provisions shall apply:
(a) The Board may terminate Executive’s employment at any time, but any
termination by the Company’s Board other than termination for Cause shall not
prejudice Executive’s right to compensation or other benefits under this
Agreement.  Executive shall have no right to receive compensation or other
benefits for any period after Executive’s termination for Cause.

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(b) Notwithstanding anything else in this Agreement to the contrary (with the
exception of Section 4(c)(i)), Executive’s employment shall not be deemed to
have been terminated unless and until Executive has a Separation from Service
within the meaning of Code Section 409A.  For purposes of this Agreement, a
“Separation from Service” shall have occurred if the Company and Executive
reasonably anticipate that either no further services will be performed by
Executive after the date of termination (whether as an employee or as an
independent contractor) or the level of further services performed is less than
fifty (50) percent of the average level of bona fide services in the thirty-six
(36) months immediately preceding the termination.  For all purposes hereunder,
the definition of Separation from Service shall be interpreted consistent with
Treasury Regulation Section 1.409A-1(h)(ii).   Notwithstanding the foregoing,
this Section 11(b) is not applicable in the event of the Executive’s termination
for Cause.
(c) Notwithstanding the foregoing, if Executive is a “specified employee” (i.e.,
a “key employee” of a publicly traded company within the meaning of Section 409A
of the Code and the final regulations issued thereunder) and any payment under
this Agreement is triggered due to Executive’s Separation from Service (other
than due to Disability or death), then solely to the extent necessary to avoid
penalties under Section 409A of the Code, no payment shall be made during the
first six (6) months following Executive’s Separation from Service.  Rather, any
payment which would otherwise be paid to Executive during such period shall be
accumulated and paid to Executive in a lump sum on the first day of the seventh
month following such Separation from Service.  All subsequent payments shall be
paid in the manner specified in this Agreement.
12.   SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13.
 GOVERNING LAW. 
This Agreement shall be governed by the laws of State of Arizona, but only to
the extent not superseded by federal law.
14.
 ARBITRATION. 
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a
single arbitrator mutually acceptable to the Company and Executive, sitting in a
location selected by the Company within fifty (50) miles from the Bank’s office
located in Scottsdale, Arizona, in accordance with the rules of the American
Arbitration Association’s National Rules for the Resolution of Employment
Disputes then in effect.  Judgment may be entered on the arbitrator’s award in
any court having jurisdiction.

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15.
 PAYMENT OF LEGAL FEES.

To the extent that such payment(s) may be made without triggering penalty under
Code Section 409A, all reasonable legal fees paid or incurred by Executive
pursuant to any dispute relating to this Agreement shall be paid or reimbursed
by the Company, provided that the dispute is resolved in Executive’s favor, and
such reimbursement shall occur no later than sixty (60) days after the end of
the year in which the dispute is settled or resolved in Executive’s favor.
16.
 INDEMNIFICATION.

The Company shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) for the term of the Agreement and for a
period of six (6) years thereafter to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by him
in connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his having been a director or officer of the
Company or the Bank or any subsidiary or affiliate of the Company or the Bank
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys’ fees and
the cost of reasonable settlements (such settlements must be approved by the
Board or the board of directors of the Bank, as appropriate); provided, however,
neither the Company nor Bank shall be required to indemnify or reimburse
Executive for legal expenses or liabilities incurred in connection with an
action, suit or proceeding arising from any illegal or fraudulent act committed
by Executive.
17.
 NOTICE.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:

To the Company:
Bancorp 34, Inc.
500 East 10th Street
Alamogordo, New Mexico  88310
Attn: Randal L. Rabon, Director
 
To Executive:
Most recent address on file with the Company
 
   

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 
BANCORP 34, INC.
         
By:      /s/ Randal L. Rabon
 
Name:  Randal L. Rabon
 
Title:    Board Chairman
                 
EXECUTIVE
          /s/ James T. Crotty
 
James T. Crotty

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