Exhibit 10(x)

BANK OF OAK RIDGE

SALARY CONTINUATION AGREEMENT

This SALARY CONTINUATION AGREEMENT (this “Agreement”) is made and entered into
as of this 1st day of January, 2006, by and between Bank of Oak Ridge, a bank
chartered under North Carolina law (the “Bank”), and L. William Vasaly III, its
Senior Vice President and Chief Credit Officer (the “Executive”).

WHEREAS, the Executive has contributed substantially to the success of the Bank,
and the Bank desires that the Executive continue in its employ,

WHEREAS, to encourage the Executive to remain an employee of the Bank, the Bank
is willing to provide salary continuation benefits to the Executive. The Bank
will pay the benefits from its general assets,

WHEREAS, none of the conditions or events included in the definition of the term
“golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the
Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal
Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)]
exists or, to the best knowledge of the Bank, is contemplated insofar as the
Bank is concerned, and

WHEREAS, the parties hereto intend that this Agreement shall be considered an
unfunded arrangement maintained primarily to provide supplemental retirement
benefits for the Executive, and to be considered a non-qualified benefit plan
for purposes of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Executive is fully advised of the Bank’s financial status.

NOW THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Executive and the Bank hereby agree as follows.

Article 1

Definitions

The following words and phrases used in this Agreement have the meanings
specified.

1.1 “Accrual Balance” means the liability that should be accrued by the Bank
under generally accepted accounting principles (“GAAP”) for the Bank’s
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion No. 12, as amended by Statement of Financial Accounting
Standards No. 106, and the calculation method and discount rate specified
hereinafter. The Accrual Balance shall be calculated assuming a level principal
amount and interest as the discount rate is accrued each period. The principal
accrual is determined such that when it is credited with interest each month,
the Accrual Balance at Normal Retirement Age equals the present value of the
normal retirement benefits. The discount rate means the rate used by the Plan
Administrator for determining the Accrual Balance. The rate is based on the
yield on a 20-year corporate bond rated Aa by Moody’s,

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rounded to the nearest  1/4%. The initial discount rate is 6.00%. In its sole
discretion, the Plan Administrator may adjust the discount rate to maintain the
rate within reasonable standards according to GAAP.

1.2 “Beneficiary” means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive,
determined according to Article 4.

1.3 “Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Executive completes, signs, and returns to
the Plan Administrator to designate one or more Beneficiaries.

1.4 “Change in Control” shall mean any one of the following events occurs,
provided the event constitutes a change in control within the meaning of
Internal Revenue Code section 409A and rules, regulations, and guidance of
general application thereunder issued by the Department of the Treasury, and
provided the occurrence of the event is objectively determinable and does not
require the exercise of judgment or discretion on the part of the Plan
Administrator or any other person –

(a) Change in Ownership of Bank of Oak Ridge: a change in ownership of the Bank
occurs on the date any one person or group accumulates ownership of the Bank’s
stock constituting more than 50% of the total fair market value or total voting
power of the Bank’s stock,

(b) Change in Effective Control of Bank of Oak Ridge: (1) any one person, or
more than one person acting as a group, acquires within a 12-month period
ownership of stock of the Bank possessing 35% or more of the total voting power
of the Bank’s stock, or (2) a majority of the Bank’s board of directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed in advance by a majority of the Bank’s board of directors, or

(c) Change in Ownership of a Substantial Portion of Bank of Oak Ridge’s Assets:
a change in the ownership of a substantial portion of the Bank’s assets occurs
on the date any one person, or more than one person acting as a group, acquires
assets from the Bank having a total gross fair market value equal to or
exceeding 40% of the total gross fair market value of all of the assets of the
Bank immediately before the acquisition or acquisitions. For this purpose, gross
fair market value means the value of the Bank’s assets, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with the assets.

For purposes of paragraphs (a) through (c) of this Section 1.4, persons shall be
considered to be acting as a group if they would be considered to be acting as a
group under Internal Revenue Code section 409A and rules, regulations, and
guidance of general application issued thereunder by the Department of the
Treasury.

 

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Anything in this Agreement to the contrary notwithstanding, a transaction in
which a company becomes the holding company for the Bank shall not be considered
a Change in Control for purposes of this Agreement, provided the offer, sale,
and issuance of shares of the holding company to Bank stockholders as part of
the holding company reorganization are exempt from registration under the
Securities Act of 1933 by section 3(a)(12) of that Act. If a holding company
reorganization occurs, references in this Section 1.4 to the Bank shall mean the
holding company instead, and after a holding company reorganization a sale of
all or substantially all the holding company’s assets includes sale of the Bank
alone.

1.5 “Code” means the Internal Revenue Code of 1986, as amended.

1.6 “Disability” means, because of a medically determinable physical or mental
impairment that can be expected to result in death or that can be expected to
last for a continuous period of at least 12 months, (a) the Executive is unable
to engage in any substantial gainful activity, or (b) the Executive is receiving
income replacement benefits for a period of at least three months under an
accident and health plan of the employer. Medical determination of disability
may be made either by the Social Security Administration or by the provider of
an accident or health plan covering employees of the Bank. Upon request of the
Plan Administrator, the Executive must submit proof to the Plan Administrator of
the Social Security Administration’s or provider’s determination.

1.7 “Early Termination” means Separation from Service before Normal Retirement
Age for reasons other than death, Disability, Termination for Cause or following
a Change in Control.

1.8 “Effective Date” means January 1, 2006.

1.9 “Intentional,” for purposes of this Agreement, no act or failure to act on
the part of the Executive shall be deemed to have been intentional if it was due
primarily to an error in judgment or negligence. An act or failure to act on the
Executive’s part shall be considered intentional if it is not in good faith and
if it is without a reasonable belief that the action or failure to act is in the
best interests of the Bank.

1.10 “Normal Retirement Age” means the Executive’s 65th birthday.

1.11 “Plan Administrator” means the plan administrator described in Article 8.

1.12 “Plan Year” means a twelve-month period commencing on January 1 and ending
on December 31 of each year. The initial Plan Year shall commence on the
effective date of this Agreement.

 

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1.13 “Separation from Service” means the Executive’s service as an executive and
independent contractor to the Bank and any member of a controlled group, as
defined in Code section 414, terminates for any reason, other than because of a
leave of absence approved by the Bank or the Executive’s death. For purposes of
this Agreement, if there is a dispute about the employment status of the
Executive or the date of the Executive’s Separation from Service, the Bank shall
have the sole and absolute right to decide the dispute unless a Change in
Control shall have occurred.

1.14 “Termination for Cause” and “Cause” shall have the same meaning specified
in any employment or severance agreement existing on the date hereof or entered
into after the date of this Agreement by the Executive and the Bank. If the
Executive is not a party to a severance or employment agreement containing a
definition of termination for cause, Termination for Cause means the Bank
terminates the Executive’s employment as a result of –

(a) the Executive’s gross negligence or gross neglect of duties or intentional
and material failure to perform stated duties after written notice thereof,
causing material harm to the Bank or affiliates, or

(b) disloyalty or dishonesty by the Executive in the performance of his duties,
or a breach of the Executive’s fiduciary duties for personal profit, in any case
whether in his capacity as a director or officer, or

(c) intentional wrongful damage by the Executive to the business or property of
the Bank or its affiliates, including without limitation the reputation of the
Bank, causing material harm to the Bank or affiliates, or

(d) a willful violation by the Executive of any applicable law or significant
policy of the Bank or an affiliate causing material harm to the Bank or
affiliates, regardless of whether the violation leads to criminal prosecution or
conviction. For purposes of this Agreement, applicable laws include any statute,
rule, regulatory order, statement of policy, or final cease-and-desist order of
any governmental agency or body having regulatory authority over the Bank, or

(e) the occurrence of any event that results in the Executive being excluded
from coverage, or having coverage limited for the Executive as compared to other
executives of the Bank, under the Bank’s blanket bond or other fidelity or
insurance policy covering its directors, officers, or employees, or

(f) the Executive is removed from office or permanently prohibited from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or
section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
(g)(1), or

 

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(g) conviction of the Executive for or plea of nolo contendere to a felony or
conviction of or plea of nolo contendere to a misdemeanor involving moral
turpitude, or the actual incarceration of the Executive for 45 consecutive days
or more.

Article 2

Lifetime Benefits

2.1 Normal Retirement Benefit. Unless Separation from Service occurs before
Normal Retirement Age, when the Executive attains the Normal Retirement Age the
Bank shall pay to the Executive the benefit described in this Section 2.1
instead of any other benefit under this Agreement. If the Executive’s Separation
from Service thereafter is a Termination for Cause or if this Agreement
terminates under Article 5, no further benefits shall be paid.

2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is $74,900.

2.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the Executive
in 12 equal monthly installments payable on the first day of each month,
beginning with the month immediately after the month in which the Executive
attains the Normal Retirement Age. The Normal Retirement annual benefit shall be
paid to the Executive for his lifetime.

2.2 Early Termination Benefit. Upon Early Termination, the Bank shall pay to the
Executive the benefit described in this Section 2.2 instead of any other benefit
under this Agreement.

2.2.1 Amount of Benefit. Subject to the vesting schedule noted in this
Section 2.2.1, the benefit under this Section 2.2 is calculated as the fixed
annual amount that fully amortizes the vested Accrual Balance existing at the
end of the month immediately before the month in which Separation from Service
occurs, amortizing that vested Accrual Balance over the period beginning with
the Executive’s Normal Retirement Age and ending when the Executive attains age
82 and taking into account interest at the discount rate or rates established by
the Plan Administrator. The Early Termination annual benefit amount for the
first Plan Year is the amount set forth for Plan Year 1 on Schedule A. The
Executive shall be entitled to an Early Termination annual benefit according to
a vesting schedule, as follows. As of the Effective Date, the Executive is 0%
vested in the Early Termination annual benefit. Provided the Executive remains
employed by the Bank, the Executive shall become vested in the Early Termination
annual benefit in equal annual 10% increments beginning on January 1, 2007 and
continuing on January 1 of each Plan Year thereafter until the Executive is 100%
vested.

2.2.2 Payment of Benefit. The Bank shall pay the annual benefit to the Executive
in 12 equal monthly installments payable on the first day of each month,
beginning with the later of (a) the seventh month after the Executive’s
Separation from Service, or (b) the month immediately after the month in which
the Executive attains the Normal Retirement Age. The annual benefit shall be
paid to the Executive for his lifetime.

 

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2.3 Disability Benefit. Upon Separation from Service because of Disability
before Normal Retirement Age, the Bank shall pay to the Executive the benefit
described in this Section 2.3 instead of any other benefit under this Agreement.

2.3.1 Amount of Benefit. The benefit under this Section 2.3 is calculated as the
fixed annual amount that fully amortizes the Accrual Balance existing at the end
of the month immediately before the month in which Separation from Service
occurs, amortizing that Accrual Balance over the period beginning with the
Executive’s Normal Retirement Age and ending when the Executive attains age 82
and taking into account interest at the discount rate or rates established by
the Plan Administrator. The Disability annual benefit amount for the first Plan
Year is the amount set forth for Plan Year 1 on Schedule A

2.3.2 Payment of Benefit. Beginning with the later of (a) the seventh month
after the Executive’s Separation from Service, or (b) the month immediately
after the month in which the Executive attains the Normal Retirement Age, the
Bank shall pay the Disability benefit to the Executive in 12 equal monthly
installments on the first day of each month. The annual benefit shall be paid to
the Executive for his lifetime.

2.4 Change-in-Control Benefit. If a Change in Control occurs after the date of
this Agreement but before Normal Retirement Age and before Separation from
Service, the Bank shall pay to the Executive the benefit described in this
Section 2.4 instead of any other benefit under this Agreement and the Bank shall
exercise its discretion to terminate this Agreement.

2.4.1 Amount of Benefit: The benefit under this Section 2.4 is the Accrual
Balance maintained by the Bank when the Change in Control occurs.

2.4.2 Payment of Benefit: The Bank shall pay the Change-in-Control benefit under
Section 2.4 of this Agreement to the Executive in one lump sum within three days
after the Change in Control. Payment of the Change-in-Control benefit shall
fully discharge the Bank from all obligations under this Agreement, except the
legal fee reimbursement obligation under Section 7.13.

2.5 Contradiction in Terms of Agreement and Schedule A. If there is a
contradiction in the terms of this Agreement and Schedule A attached hereto
concerning the actual amount of a particular benefit amount due the Executive
under Section 2.2, 2.3, or 2.4 hereof, then the actual amount of the benefit set
forth in the Agreement shall control. If the Plan Administrator changes the
discount rate employed for purposes of calculating the Accrual Balance, the Plan
Administrator shall prepare or cause to be prepared a revised Schedule A, which
shall supersede and replace any and all Schedules A previously prepared under or
attached to this Agreement.

 

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2.6 Savings Clause Relating to Compliance with Code Section 409A.
Notwithstanding any other provision of this Agreement, if when the Executive’s
employment terminates the Executive is a specified employee, as defined in Code
section 409A, and if any payments under Article 2 of this Agreement will result
in additional tax or interest to the Executive because of section 409A, the
Executive will not be entitled to the payments under Article 2 until the
earliest of (a) the date that is at least six months after termination of the
Executive’s employment for reasons other than the Executive’s death, (b) the
date of the Executive’s death, or (c) any earlier date that does not result in
additional tax or interest to the Executive under section 409A. If any provision
of this Agreement would subject the Executive to additional tax or interest
under section 409A, the Bank shall reform the provision. However, the Bank shall
maintain to the maximum extent practicable the original intent of the applicable
provision without subjecting the Executive to additional tax or interest, and
the Bank shall not be required to incur any additional compensation expense as a
result of the reformed provision. References in this Agreement to Code section
409A include rules, regulations, and guidance of general application issued by
the Department of the Treasury under Code section 409A.

Article 3

Death Benefits

3.1 Death During Active Service. If the Executive dies in active service to the
Bank before the Normal Retirement Age, the Executive’s Beneficiary shall be
entitled to (a) an amount in cash equal to the Accrual Balance at the time of
the Executive’s death (unless the Change-in-Control benefit under Section 2.4
shall have previously been paid), and (b) the benefit described in the Split
Dollar Agreement attached to this Agreement as Addendum A.

3.2 Death after Normal Retirement Age or After Separation from Service. If the
Executive dies after Normal Retirement Age or after Separation from Service and
the Executive is entitled to the normal retirement benefit provided by
Section 2.1, the Early Termination benefit provided by Section 2.2, or the
Disability benefit provided by Section 2.3, the Executive’s Beneficiary shall be
entitled to (a) an amount in cash equal to the Accrual Balance (or vested
percentage of the Accrual Balance in the case of benefits under Section 2.2)
remaining at the time of the Executive’s death (unless the Change-in-Control
benefit under Section 2.4 shall have previously been paid), and (b) the benefit
described in the Split Dollar Agreement. However, no benefits under this
Agreement or under the Split Dollar Agreement shall be paid or payable to the
Executive or the Executive’s Beneficiary if this Agreement is terminated under
Article 5.

Article 4

Beneficiaries

4.1 Beneficiary Designations. The Executive shall have the right to designate at
any time a Beneficiary to receive any benefits payable under this Agreement upon
the death of the Executive. The Beneficiary designated under this Agreement may
be the same as or different from the beneficiary designation under any other
benefit plan of the Bank in which the Executive participates.

 

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4.2 Beneficiary Designation: Change. The Executive shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form and delivering it to
the Plan Administrator or its designated agent. The Executive’s Beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing, and otherwise complying with the terms of
the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator before the Executive’s death.

4.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted, and acknowledged in writing by the
Plan Administrator or its designated agent.

4.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive’s spouse shall be the designated Beneficiary. If
the Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executive’s estate.

4.5 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative, or person having the care or custody of the minor, incapacitated
person, or incapable person. The Bank may require proof of incapacity, minority,
or guardianship as it may deem appropriate before distribution of the benefit.
Distribution shall completely discharge the Bank from all liability for the
benefit.

Article 5

General Limitations

5.1 Termination for Cause. Notwithstanding any provision of this Agreement to
the contrary, the Bank shall not pay any benefit under this Agreement and this
Agreement shall terminate if Separation from Service is a result of Termination
for Cause. Likewise, no benefits shall be paid under the Split Dollar Agreement
attached to this Agreement as Addendum A, and the Split Dollar Agreement also
shall terminate, if Separation from Service is a result of Termination for
Cause.

5.2 Misstatement. No benefits shall be paid under this Agreement or under the
Split Dollar Agreement, if the Executive makes any material misstatement of fact
on any application or resume provided to the Bank or on any application for
benefits provided by the Bank.

 

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5.3 Removal. If the Executive is removed from office or permanently prohibited
from participating in the Bank’s affairs by an order issued under section
8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
(g)(1), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order.

5.4 Default. Notwithstanding any provision of this Agreement to the contrary, if
the Bank is in “default” or “in danger of default,” as those terms are defined
in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all
obligations under this Agreement shall terminate.

5.5 FDIC Open-Bank Assistance. All obligations under this Agreement shall
terminate, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank, when the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Federal Deposit Insurance
Act section 13(c). 12 U.S.C. 1823(c). Rights of the parties that have already
vested shall not be affected by such action, however.

Article 6

Claims and Review Procedures

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

6.1.1 Initiation – Written Claim. The claimant initiates a claim by submitting
to the Bank a written claim for the benefits.

6.1.2 Timing of Bank Response. The Bank shall respond to the claimant within 90
days after receiving the claim. If the Bank determines that special
circumstances require additional time for processing the claim, the Bank may
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 state the special circumstances and the
date by which the Bank expects to render its decision.

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

 

  6.1.3.1 the specific reasons for the denial,

 

  6.1.3.2 a reference to the specific provisions of the Agreement on which the
denial is based,

 

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  6.1.3.3 a description of any additional information or material necessary for
the claimant to perfect the claim and an explanation of why it is needed,

 

  6.1.3.4 an explanation of the Agreement’s review procedures and the time
limits applicable to such procedures, and

 

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

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

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

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 Bank
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 Bank 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 Bank Response. The Bank shall respond in writing to the claimant
within 60 days after receiving the request for review. If the Bank determines
that special circumstances require additional time for processing the claim, the
Bank may 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 state the special
circumstances and the date by which the Bank expects to render its decision.

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

 

  6.2.5.1 the specific reason for the denial,

 

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  6.2.5.2 a reference to the specific provisions of the Agreement on which the
denial is based,

 

  6.2.5.3 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

 

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

Article 7

Miscellaneous

7.1 Amendments and Termination. Subject to Section 7.14 of this Agreement, this
Agreement may be amended solely by a written agreement signed by the Bank and by
the Executive, and except for termination occurring under Article 5 this
Agreement may be terminated solely by a written agreement signed by the Bank and
by the Executive.

7.2 Binding Effect. This Agreement shall bind the Executive, the Bank, and their
beneficiaries, survivors, executors, successors, administrators, and
transferees.

7.3 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 or interfere with the
Executive’s right to terminate employment at any time.

7.4 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

7.5 Successors; Binding Agreement. The Bank will 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, by an assumption
agreement in form and substance satisfactory to the Executive, 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 such
succession had occurred.

7.6 Tax Withholding. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement.

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

 

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7.8 Unfunded Arrangement. The Executive and Beneficiary are general unsecured
creditors of the Bank for the payment of benefits under this Agreement. The
benefits represent the mere promise by the Bank to pay benefits. Rights to
benefits are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Executive’s life is a general asset of the Bank
to which the Executive and Beneficiary have no preferred or secured claim.

7.9 Entire Agreement. This Agreement and the Split Dollar Agreement attached to
this Agreement as Addendum A constitute the entire agreement between the Bank
and the Executive as to the subject matter hereof. No rights are granted to the
Executive under this Agreement other than those specifically set forth herein.

7.10 Severability. If for any reason 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 such provision
together with all other provisions of this Agreement shall continue in full
force and effect to the full extent consistent with law.

7.11 Headings. Caption 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.

7.12 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, Bank of Oak Ridge, P.O. Box 2, 2211 Oak Ridge Road, Oak Ridge, North
Carolina 27310.

7.13 Payment of Legal Fees. The Bank is aware that after a Change in Control
management of the Bank could cause or attempt to cause the Bank to refuse to
comply with its obligations under this Agreement, or could institute or cause or
attempt to cause the Bank to institute litigation seeking to have this Agreement
declared unenforceable, or could take or attempt to take other action to deny
Executive the benefits intended under this Agreement. In these circumstances,
the purpose of this Agreement would be frustrated. It is the intention of the
Bank that the Executive not be required to incur the expenses associated with
the enforcement of his rights under this Agreement, whether by litigation or
other legal action, because the cost and expense thereof would substantially
detract from the benefits intended to be granted to the Executive hereunder. It
is the intention of the Bank that the Executive not be

 

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forced to negotiate settlement of his rights under this Agreement under threat
of incurring expenses. Accordingly, if after a Change in Control occurs it
appears to the Executive that (a) the Bank has failed to comply with any of its
obligations under this Agreement, or (b) the Bank or any other person has taken
any action to declare this Agreement void or unenforceable, or instituted any
litigation or other legal action designed to deny, diminish, or to recover from
the Executive the benefits intended to be provided to the Executive hereunder,
the Bank irrevocably authorizes the Executive from time to time to retain
counsel of his choice, at the expense of the Bank as provided in this
Section 7.13, to represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the Bank
or any director, officer, stockholder, or other person affiliated with the Bank,
in any jurisdiction. Notwithstanding any existing or previous attorney-client
relationship between the Bank and any counsel chosen by the Executive under this
Section 7.13, the Bank irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel, and the Bank and the Executive
agree that a confidential relationship shall exist between the Executive and
that counsel. The fees and expenses of counsel selected from time to time by the
Executive as provided in this section shall be paid or reimbursed to the
Executive by the Bank on a regular, periodic basis upon presentation by the
Executive of a statement or statements prepared by such counsel in accordance
with such counsel’s customary practices, up to a maximum aggregate amount of
$250,000, whether suit be brought or not, and whether or not incurred in trial,
bankruptcy, or appellate proceedings. The Bank’s obligation to pay the
Executive’s legal fees provided by this Section 7.13 operates separately from
and in addition to any legal fee reimbursement obligation the Bank may have with
the Executive under any separate employment, severance, or other agreement
between the Executive and the Bank.

7.14 Termination or Modification of Agreement Because of Changes in Law, Rules
or Regulations. The Bank is entering into this Agreement on the assumption that
certain existing tax laws, rules, and regulations will continue in effect in
their current form. If that assumption materially changes and the change has a
material detrimental effect on this Agreement, then the Bank reserves the right
to terminate or modify this Agreement accordingly, subject to the written
consent of the Executive, which shall not be unreasonably withheld. This
Section 7.14 shall become null and void effective immediately upon a Change in
Control.

Article 8

Administration of Agreement

8.1 Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator consisting of the board or such committee or person(s) as the
board shall appoint. The Executive may be a member of the Plan Administrator.
The Plan Administrator shall also have the discretion and authority to (a) make,
amend, interpret, and enforce all appropriate rules and regulations for the
administration of this Agreement and (b) decide or resolve any and all
questions, including interpretations of this Agreement, as may arise in
connection with the Agreement.

 

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8.2 Agents. In the administration of this Agreement, the Plan 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.

8.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation, and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement. No Executive or
Beneficiary shall be deemed to have any right, vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not
limited to the discount rate and calculation method described in Section 1.1.

8.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless
the members of the Plan 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 Plan
Administrator or any of its members.

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

 

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IN WITNESS WHEREOF, the Executive and a duly authorized officer of the Bank have
executed this Salary Continuation Agreement as of the date first written above.

 

EXECUTIVE:     BANK:     Bank of Oak Ridge

/s/ L. William Vasaly III

   

L. William Vasaly III

    By:  

/s/ Ronald O. Black

      Ronald O. Black     Its:   President and Chief Executive Officer

 

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BENEFICIARY DESIGNATION

BANK OF OAK RIDGE

SALARY CONTINUATION AGREEMENT

I, L. William Vasaly III, designate the following as beneficiary of any death
benefits under this Salary Continuation Agreement –

 

  Primary:   

 

 

 

  .   Contingent:   

 

 

 

  .

Note: To name a trust as beneficiary, please provide the name of the trustee(s)
and the exact name and date of the trust agreement.

I understand that I may change these beneficiary designations by filing a new
written designation with the Bank. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.

 

Signature:  

 

       L. William Vasaly III             Date:  

 

  , 2006   

Accepted by the Bank this              day of
                                             , 2006.

By:                                                              

Print Name:                                                  

Title:                                                              

 

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SCHEDULE A

BANK OF OAK RIDGE

SALARY CONTINUATION AGREEMENT

L. William Vasaly III

 

Plan
Year

   Plan Year
ending
December
31,    Age at
Plan
Year
end    Accrual
Balance @
6.00% (1)     Percent
vested     Early Termination
annual benefit
payable at Normal
Retirement Age (2)    Disability annual
benefit payable at
Normal Retirement
Age (2) 1    2006    54    $ 47,948     0 %   $ 0    $ 8,532 2    2007    55   
$ 98,854     10 %   $ 1,657    $ 16,567 3    2008    56    $ 152,900     20 %  
$ 4,827    $ 24,137 4    2009    57    $ 210,278     30 %   $ 9,380    $ 31,266
5    2010    58    $ 271,196     40 %   $ 15,192    $ 37,981 6    2011    59   
$ 335,871     50 %   $ 22,153    $ 44,306 7    2012    60    $ 404,536     60 %
  $ 30,158    $ 50,264 8    2013    61    $ 477,435     70 %   $ 39,113    $
55,875 9    2014    62    $ 554,830     80 %   $ 48,929    $ 61,161 10    2015
   63    $ 636,999     90 %   $ 59,525    $ 66,139 11    2016    64    $ 724,236
    100 %   $ 70,828    $ 70,828 12    October

2017

   65    $ 801,030  (3)   100 %   $ 74,900    $ 74,900

 

(1) Calculations are approximations. Benefit calculations are based on prior
year-end accrual balances. The accrual balance reflects payment at the beginning
of each month.

(2) The Early Termination benefit and the Disability benefit continue for the
Executive’s lifetime. Subject to vesting, the Early Termination and Disability
benefits are calculated as the fixed annual amount that fully amortizes the
Accrual Balance existing at the end of the month immediately before the month in
which Separation from Service occurs, amortizing that Accrual Balance over the
period beginning with the Executive’s Normal Retirement Age and ending when the
Executive attains age 82 and taking into account interest at the discount rate
or rates established by the Plan Administrator. Using a standard discount rate
(6.00%), Early Termination and Disability benefits are shown for illustrative
purposes only. The Early Termination and Disability benefits shown assume the
Executive’s Separation from Service occurs more than six months before the
Executive’s Normal Retirement Age, and that the Early Termination benefit or the
Disability benefit therefore becomes payable beginning in the month after the
Executive attains the Normal Retirement Age.

(3) The Executive attains the Normal Retirement Age on October 15, 2017. The
first monthly normal retirement benefit payment will be made on November 1,
2017.

If there is a contradiction between the terms of the Agreement and Schedule A
concerning the actual amount of a particular benefit amount due the Executive
under Section 2.2, 2.3, or 2.4 of the Agreement, then the actual amount of the
benefit set forth in the Agreement shall control. If the Plan Administrator
changes the discount rate employed for purposes of calculating the Accrual

 

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Balance, the Plan Administrator shall prepare or cause to be prepared a revised
Schedule A, which shall supersede and replace any and all Schedules A previously
prepared under or attached to the Agreement.

 

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