EXHIBIT 10.24
Addendum A
Southern Community Bank and Trust
Endorsement Split Dollar Agreement

This Endorsement Split Dollar Agreement (this “Agreement”) is entered into as of
this 14th day of March , 2007 by and between Southern Community Bank and Trust,
a North Carolina-chartered bank (the “Bank”), and F. Scott Bauer, an executive
of the Bank (the “Executive”). This Agreement shall append the Split Dollar
Policy Endorsement entered into on even date herewith or as subsequently
amended, by and between the aforementioned parties.

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank
is willing to divide the death proceeds of a life insurance policy on the
Executive’s life if the Executive dies while employed by the Bank, and

Whereas, the Bank will pay life insurance premiums from its general assets.

Now Therefore, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.

Article 1
General Definitions

Capitalized terms not otherwise defined in this Agreement are used herein as
defined in the Amended Salary Continuation Agreement dated as of the date of
this Agreement between the Bank and the Executive. The following terms shall
have the meanings specified.

1.1    “Administrator” means the administrator described in Article 7.

1.2    “Executive’s Interest” means the benefit set forth in section 2.2.

1.3    “Insured” means the Executive.

1.4    “Insurer” means each life insurance carrier for which there is a Split
Dollar Policy Endorsement attached to this Agreement.

1.5    “Net Death Proceeds” means the total death proceeds of the Policy minus
the cash surrender value.

1.6    “Policy” means the specific life insurance policy or policies issued by
the Insurer.

1.7    “Split Dollar Policy Endorsement” means the form required by the
Administrator or the Insurer to indicate the Executive’s interest, if any, in a
Policy on the Executive’s life.

Article 2
Policy Ownership/Interests

2.1    Bank Ownership. The Bank is the sole owner of the Policy and shall have
the right to exercise all incidents of ownership. The Bank shall be the
beneficiary of the remaining death proceeds of the Policy after the Executive’s
interest is paid according to section 2.2 below.

2.2    Death Benefit. Provided the Executive’s death occurs before the
Executive’s Separation from Service, at the Executive’s death the Executive’s
beneficiary designated in accordance with the Split Dollar Policy Endorsement
shall be entitled to 85 % of the Net Death Proceeds (the “Executive’s
Interest”). The Executive shall have the right to designate the beneficiary of
the Executive’s Interest. The Executive’s Interest shall be extinguished when
the Executive’s Separation from Service occurs and the Executive’s beneficiary
shall be entitled to no benefits under this Agreement thereafter.

2.3    Option to Purchase. Prior to the Executive’s Separation from Service, the
Bank shall not sell, surrender, or transfer ownership of the Policy while this
Agreement is in effect without first giving the Executive or the Executive’s
transferee the option to purchase the Policy for a period of 60 days from
written notice of such intention. The purchase price shall be an amount equal to
the cash surrender value of the Policy. The option to

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purchase the Policy shall lapse if not exercised within 60 days after the date
the Bank gives written notice of the Bank’s intention to sell, surrender, or
transfer ownership of the Policy. This provision shall not impair the right of
the Bank to terminate this Agreement.

2.4    Internal Revenue Code Section 1035 Exchanges. The Executive recognizes
and agrees that the Bank may after this Agreement is adopted wish to exchange
the Policy of life insurance on the Executive’s life for another contract of
life insurance insuring the Executive’s life. Provided that the Policy is
replaced (or intended to be replaced) with a comparable policy of life
insurance, the Executive agrees to provide medical information and cooperate
with medical insurance-related testing required by a prospective insurer for
implementing the Policy or, if necessary, for modifying or updating to a
comparable insurer.

Article 3
Premiums

3.1    Premium Payment. The Bank shall pay any premiums due on the Policy.

3.2    Economic Benefit. The Administrator shall annually determine the economic
benefit attributable to the Executive based on the life insurance premium factor
for the Executive’s age multiplied by the aggregate death benefit payable to the
Executive’s beneficiary. The “life insurance premium factor” is the minimum
factor applicable under guidance published pursuant to Treasury Reg. section
1.61-22(d)(3)(ii) or any subsequent authority.

3.3    Imputed Income. The Bank shall impute the economic benefit to the
Executive on an annual basis, by adding the economic benefit to the Executive’s
W-2, or if applicable, Form 1099.

Article 4
Assignment

The Executive may irrevocably assign without consideration all of the
Executive’s interest in the Policy and in this Agreement to any person, entity,
or trust established by the Executive or the Executive’s spouse. If the
Executive transfers all of the Executive’s interest in the Policy, then all of
the Executive’s interest in the Policy and in the Agreement shall be vested in
the Executive’s transferee, who shall be substituted as a party hereunder and
the Executive shall have no further interest in this Agreement.

Article 5
Insurer

The Insurer shall be bound by the terms of the Policy only. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits, and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.

Article 6
Claims and Review Procedures

6.1    Claims Procedure. Any person or entity who has not received benefits
under this Agreement that he or she believes should be paid (the “claimant”)
shall make a claim for benefits as follows -

   6.1.1    Initiation - Written Claim. The claimant initiates a claim by
submitting to the Administrator a written claim for the benefits. If the claim
relates to the contents of a notice received by the claimant, the claim must be
made within 60 days after the notice was received by the claimant. All other
claims must be made within 180 days after the date of the event that caused the
claim to arise. The claim must state with particularity the determination
desired by the claimant.

   6.1.2    Timing of Administrator Response. The Administrator shall respond to
the claimant within 90 days after receiving the claim. If the Administrator
determines that special circumstances require additional time for processing the
claim, the Administrator can extend the response period by an additional 90 days
by notifying the claimant in writing, before the end of the initial 90-day
period, that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Administrator expects
to render its decision.

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   6.1.3    Notice of Decision. If the Administrator denies part or all of the
claim, the Administrator shall notify the claimant in writing of the denial. The
Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth -

 
 
(a)
The specific reasons for the denial,

 
 
(b)
A reference to the specific provisions of this Agreement on which the denial is
based,

 
 
(c)
A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed,

 
 
(d)
An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures, and

 
 
(e)
A statement of the claimant’s right to bring a civil action under ERISA section
502(a) after an adverse benefit determination on review.

6.2    Review Procedure. If the Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the
Administrator of the denial, as follows -

   6.2.1    Initiation - Written Request. To initiate the review, the claimant
must file with the Administrator a written request for review within 60 days
after receiving the Administrator’s notice of denial.

   6.2.2    Additional Submissions - Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records, and other
information relating to the claim. Upon request and free of charge, the
Administrator shall also provide the claimant reasonable access to and copies of
all documents, records, and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

   6.2.3    Considerations on Review. In considering the review, the
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether the information was
submitted or considered in the initial benefit determination.

   6.2.4    Timing of Administrator Response. The Administrator shall respond in
writing to the claimant within 60 days after receiving the request for review.
If the Administrator determines that special circumstances require additional
time for processing the claim, the Administrator can extend the response period
by an additional 60 days by notifying the claimant in writing before the end of
the initial 60-day period that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Administrator expects to render its decision.

   6.2.5    Notice of Decision. The Administrator shall notify the claimant in
writing of its decision on review. The Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth -

 
 
(a)
The specific reasons for the denial,

 
 
(b)
A reference to the specific provisions of the Agreement on which the denial is
based,

 
 
(c)
A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of all documents, records, and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits, and

 
 
(d)
A statement of the claimant’s right to bring a civil action under ERISA section
502(a).

Article 7
Administration of Agreement

7.1    Administrator Duties. This Agreement shall be administered by an
Administrator, which shall consist of the Board or such committee as the Board
shall appoint. The Executive may be a member of the Administrator. The
Administrator shall also have the discretion and authority to (x) make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Agreement and (y) decide or resolve any and all
questions, including interpretations of this Agreement, as may arise in
connection with the Agreement.

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7.2    Agents. In the administration of this Agreement, the Administrator may
employ agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.

7.3    Binding Effect of Decisions. The decision or action of the Administrator
with respect to any question arising out of or in connection with the
administration, interpretation, and application of this Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.

7.4    Indemnity of Administrator. The Bank shall indemnify and hold harmless
the members of the Administrator against any and all claims, losses, damages,
expenses, or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Administrator
or any of its members.

7.5    Information. To enable the Administrator to perform its functions, the
Bank shall supply full and timely information to the Administrator on all
matters relating to the date and circumstances of the retirement, death, or
Separation From Service of the Executive, and such other pertinent information
as the Administrator may reasonably require.

Article 8
Miscellaneous

8.1    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 shall terminate upon the first to occur of (w) the
Executive’s Separation from Service, (x) distribution of the death benefit
proceeds in accordance with section 2.2 above, (y) termination of the Amended
Salary Continuation Agreement or termination of the Executive’s entitlement to
Amended Salary Continuation Agreement death benefits under Articles 3 or 5 of
the Amended Salary Continuation Agreement, or (z) provided the Bank first gives
notice to the Executive or the Executive’s transferee of the option, exercisable
for a period of 60 days, to purchase the Policy under section 2.3, the Bank’s
sale, surrender, or transfer of ownership of the Policy.

8.2    Binding Effect. This Agreement shall bind the Executive and the Bank and
their beneficiaries, survivors, executors, administrators, and transferees, and
any Policy beneficiary.

8.3    No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Bank nor does it interfere with the Bank’s right to discharge the Executive. It
also does not require the Executive to remain an employee nor interfere with the
Executive’s right to terminate employment at any time.

8.4    Successors; Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Executive, the Bank shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business or assets of the Bank to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform this Agreement if no
succession had occurred.

8.5    Applicable Law. This Agreement and all rights hereunder shall be governed
by and construed according to the laws of the State of North Carolina, except to
the extent preempted by the laws of the United States of America.

8.6    Entire Agreement. This Agreement and the Amended Salary Continuation
Agreement constitute the entire agreement between the Bank and the Executive
concerning the subject matter. No rights are granted to the Executive under this
Agreement other than those specifically set forth.

8.7    Severability. If any provision of this Agreement is held invalid, such
invalidity shall not affect any other provision of this Agreement not held
invalid, and each such other provision shall continue in full force and effect
to the full extent consistent with law. If any provision of this Agreement is
held invalid in part, such invalidity shall not affect the remainder of the
provision not held invalid, and the remainder of the provision together with all
other provisions of this Agreement shall continue in full force and effect to
the full extent consistent with law.

8.8    Headings. Headings and subheadings herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.

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8.9    Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice. Unless otherwise changed
by notice, notice shall be properly addressed to the Executive if addressed to
the address of the Executive on the books and records of the Bank at the time of
the delivery of such notice, and properly addressed to the Bank if addressed to
the board of directors, Southern Community Bank and Trust, 4605 Country Club
Road, Winston-Salem, North Carolina 27104.

In Witness Whereof, the Executive and a duly authorized representative of the
Bank have executed this Agreement as of the date first written above.
 
Executive:
  Bank:     Southern Community Bank and Trust
 
     
/s/ F. Scott Bauer
  By:
/s/ Jeff T. Clark
F. Scott Bauer
    Jeff T. Clark    
Its:
 President

Agreement to Cooperate with Insurance Underwriting Incident to Internal Revenue
Code section 1035 Exchange

I acknowledge that I have read the Endorsement Split Dollar Agreement and agree
to be bound by its terms, particularly the covenant on my part set forth in
section 2.5 of the Endorsement Split Dollar Agreement to provide medical
information and cooperate with medical insurance-related testing required by an
insurer to issue a comparable insurance policy to cover the benefit provided
under this Endorsement Split Dollar Agreement.

/s/ Jeff T. Clark
 
/s/ F. Scott Bauer 
Witness
 
F. Scott Bauer

 
 

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