AMENDMENT NUMBER FOUR TO THE
EMPLOYMENT AGREEMENT

 

This AMENDMENT NUMBER FOUR TO THE EMPLOYMENT AGREEMENT (“Amendment”) is made and
entered into this 26th day of July, 2012 by and between SOUTHERN COMMUNITY BANK
AND TRUST (the “Bank”) and James C. Monroe (the “Executive”). The effectiveness
of this Amendment is subject to the consummation (the “Closing”) of the
transactions contemplated by the Agreement and Plan of Merger by and among
Southern Community Financial Corporation (the “Company”), Capital Bank Financial
Corp. (the “Purchaser”) and Winston 23 Corporation (“Merger Sub”), dated March
26, 2012 (the “Merger Agreement”), and if the Closing does not occur because the
Merger Agreement is terminated, this Amendment shall not become effective and
will be of no force or effect.

 

WHEREAS, the Executive is currently employed with the Bank under an Employment
Agreement dated April 16, 2007, as amended (the “Employment Agreement”),
pursuant to which he currently serves as Treasurer;

 

WHEREAS, the amendment of the Employment Agreement is required in order to
comply with Section 7.2(g) of the Merger Agreement;

 

WHEREAS, Paragraph 12 of the Employment Agreement provides that the Employment
Agreement may be modified by the mutual written consent of the Bank and the
Executive;

 

WHEREAS, as a predicate to the entering into of the Merger Agreement by
Purchaser and Merger Sub and a condition to the Closing, in order to preserve
the value and goodwill of the Company and the Bank, the Merger Agreement
contemplates, among other things, that the Executive shall enter into this
Amendment, which shall become effective upon the Closing;

 

WHEREAS, within fifteen days of executing this Amendment, the Bank shall pay the
Executive one hundred dollars ($100), less applicable withholdings, in
connection with his execution of this Amendment (the “Amendment Bonus”); and

 

WHEREAS, the parties to the Employment Agreement desire to amend the Employment
Agreement as provided in this Amendment.

 

NOW, THEREFORE, in consideration of the Amendment Bonus, mutual covenants and
agreements set forth below and other good and valuable consideration, including
the payment of the Merger Consideration (as defined in the Merger Agreement) in
connection with the Closing with respect to shares of Company common stock,
stock options and restricted stock held by the Executive, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Employment Agreement shall be amended as follows:

 

1.The following sentence is hereby added to the end of Paragraph 1 of the
Employment Agreement:

 

Notwithstanding anything in this Employment Agreement to the contrary, following
the consummation of the transactions contemplated by the Agreement and Plan of
Merger by and among the Southern Community Financial Corporation (the
“Company”), Capital Bank Financial Corp. (the “Purchaser”) and Winston 23
Corporation (“Merger Sub”), dated March 26, 2012 (the “Merger Agreement”), the
Officer shall no longer serve as Treasurer and shall no longer have the duties
and responsibilities associated with such position and shall instead have the
position, titles, duties and responsibilities as assigned from time to time by
the Chief Executive Officer of the Purchaser or his designee following the
Closing Date (as defined in the Merger Agreement).”

 

 

 

 

 

2.The second to last sentence of Paragraph 2 is hereby deleted in its entirety.

 

3.Paragraph 8(c) is hereby amended to read as follows:

 

“The Bank may terminate the Officer’s employment at any time with or without
Cause (as defined below) upon 15 days written notice to the Officer, except with
respect to a termination of employment for Cause which shall be immediately
effective upon the Bank providing written notice of such termination of
employment. Upon termination of employment by the Company, the Officer shall be
entitled to receive compensation through the effective date of such termination
of employment, and, except as set forth in Paragraph 10, shall have no right to
receive compensation or other benefits for any period after the date of
termination of employment. Termination for Cause shall include termination
because of the Officer’s personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. Notwithstanding such termination, the
obligations under Paragraph 6(c) shall survive any termination of employment.”

 

4.Paragraph 10(a) is hereby deleted in its entirety and replaced with
“[INTENTIONALLY OMITTED].”

 

5.             Paragraph 10(b) is hereby deleted in its entirety and replaced
with “[INTENTIONALLY OMITTED]” and all references to “Termination Events” (and
the concepts and rights associated therewith) in the Employment Agreement are
hereby removed from the Employment Agreement and are no longer applicable.

 

6.Paragraph 10(c) is hereby amended to read as follows:

 

“In the event that the Officer remains employed by the Bank through the earlier
of (i) the 60th day following the data conversion date (as determined by the
Purchaser) and (ii) the date that is six months immediately following the
Closing Date (the “Retention Date”), the Officer shall be entitled to a payment
equal to $199,900 (plus any interest that accrues at a rate equal to the annual
mid-term applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code for the month during which the Closing Date occurs, with such interest to
accrue from the date that is six months following the Closing Date through the
date that a payment is made to the Officer) (the “Full Change in Control
Payment”) to be paid in accordance with Paragraph 10(e); provided, however, that
if the Officer’s employment is terminated by the Bank without Cause (as defined
in Paragraph 8 of this Agreement) prior to the Retention Date, he will be
eligible to receive the Full Change in Control Payment to be paid in accordance
with Paragraph 10(e). In the event that the Officer resigns for any reason
(other than the reasons set forth in the last sentence of this Paragraph 10(c))
prior to the Retention Date, then the Officer will be eligible to receive a
payment equal to $99,900 (the “Partial Change in Control Payment” and each of
the Partial Change in Control Payment and the Full Change in Control Payment, as
applicable, a “Change in Control Payment”) in lieu of the Full Change in Control
Payment, to be paid in accordance with Paragraph 10(e). For the avoidance of
doubt, in the event that the Officer’s employment is terminated by the Bank for
Cause at any time, whether prior to, on or after the Retention Date, he will not
be entitled to any Change in Control Payment. Notwithstanding anything to the
contrary set forth in this Paragraph 10(c), if, prior to the Retention Date, the
Officer resigns his employment due to his being transferred to a work location
which is more than 30 miles from his current work location (other than any
ordinary business related travel) or if his duties and responsibilities are
significantly and materially adversely changed and are no longer reasonably
related to his work experience with the Company prior to the Closing Date, such
a resignation shall be deemed to be a termination of the Officer’s employment
without Cause for the purposes of this Section 5.”

 

 

 

 

 

7.Paragraph 10(e) is hereby amended to read as follows:

 

“The applicable Change in Control Payment payable pursuant to Paragraph 10(c)
shall, subject to the Officer’s execution and non-revocation of a waiver and
release in a form acceptable to the Bank within 30 days of the date of the
Officer’s termination of employment, be paid to the Officer, (i) if the
Officer’s date of termination of employment occurs on or prior to the second
anniversary of the Closing Date, in a lump sum on the 60th day following the
date of termination, and (ii) if the Officer’s date of termination of employment
occurs following the second anniversary of the Closing Date, in installments in
an amount equal to the base salary payments paid to the Officer immediately
prior to the date of termination of employment (or with respect to the last
installment, such lesser amount as to ensure that the Change in Control Payment
is paid in full, but not more than such amount), on each regular payroll date
beginning on the first regular payroll date after the 60th day following the
date of termination of employment and ending on the payroll date on which the
Change in Control Payment has been paid in full to the Officer.”

 

8.Paragraph 10(f) is hereby deleted in its entirety and replaced with
“[INTENTIONALLY OMITTED]”.

 

9.A new Paragraph 10(i) is hereby added and reads as follows:

 

“If the Officer receives a Change in Control Payment, he shall not be entitled
to any payments or benefits under Paragraph 8 of this Agreement, other than base
salary earned through the date on which the Officer’s employment terminates.
With the exception of: (i) amounts payable pursuant to the Amended Salary
Continuation Agreement to which the Officer and the Bank are party; and (ii)
vested amounts credited to the Officer’s account(s) under the Bank’s 401(k)
Plan, the Officer shall not be eligible to receive any severance, retention or
change in control payments or benefits, whether under this Agreement or pursuant
to any other agreement, plan, policy or arrangement maintained by the Company,
the Bank or any of their affiliates, and the Officer hereby agrees that he has
no entitlement to any additional amounts under any such agreement, plan, policy
or arrangement other than his rights under the Salary Continuation Agreement
between the Officer and the Bank, as amended as provided under the Merger
Agreement.”

 

10.           This Amendment may be executed in counterparts, each of which
shall be an original, with the same effect as if the signatures affixed thereto
were upon the same instrument.

 

11.           None of the Purchaser, the Company, the Bank nor any of their
respective affiliates shall be required to incur any additional compensation
expense in connection with this Amendment due to the application of Section 409A
of the Internal Revenue Code of 1986, as amended.

 

12.           The parties to this Amendment have read this Amendment, understand
it and voluntarily accept its terms and the parties agree that there shall not
be strict interpretation against either party in connection with any review of
this Amendment in which interpretation thereof is an issue. The Executive
further acknowledges that: (i) this Amendment is executed voluntarily and
without any duress or undue influence on the part or behalf of the Company, the
Bank or any of their respective affiliates; (ii) this entire Amendment is
written in a manner calculated to be understood by him; (iii) he has been
advised by the Bank to seek the advice of legal counsel before entering into
this Amendment; (iv) the Executive has been provided with a reasonable period of
time to consider the terms and conditions of this Amendment; (v) the Executive
is fully aware of the legal and binding effect of this Amendment; and (vi) to
the extent he executes this Amendment he does so knowingly and voluntarily and
only after consulting his attorney or affirmatively waiving his right to consult
with his attorney. In addition, the Executive acknowledges and agrees that he
has had the assistance of counsel of his choosing in the negotiation of this
Amendment, including with respect to tax matters, or he has chosen not to have
the assistance of counsel.

 

 

 

 

 

 

13.           This Amendment shall be governed by and construed in accordance
with the laws of the State of North Carolina.

 

14.           Except as amended hereby, the Employment Agreement shall remain in
full force and effect and is hereby ratified and confirmed in all respects by
the parties to the Employment Agreement.

 

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first set forth above.

 

Executive   Southern Community Financial Corporation                         /s/
James C. Monroe, Jr.   By: /s/ James Hastings