EXHIBIT 10(xxvi)

Amendment to Employment Agreement

This Amendment to Employment Agreement (this “Amendment”) is entered into
effective as of this 31st day of December, 2010 by and among Michael G. Carlton
(the “Executive”), Crescent Financial Corporation, a North Carolina corporation
(the “Corporation”), and Crescent State Bank, a North Carolina-chartered bank
and wholly owned subsidiary of Crescent Financial Corporation (the “Bank”) and
amends that certain Employment Agreement effective as of September 10, 2008
among the aforesaid parties (the “Agreement”).  The Corporation and the Bank are
hereinafter sometimes referred to together or individually as the “Employer.”

Whereas, the Executive and the Employer desire to clarify and conform certain
provisions of the Agreement in order to comply with Section 409A of the Internal
Revenue Code of 1986 (“IRC”).

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

1.  Section 4.3(b) of the Agreement is amended to read as follows in order to
limit the outplacement reimbursement period to two years:

(b)           Outplacement and support.  If the Employer terminates the
Executive’s employment without Cause or if the Executive terminates employment
with Good Reason, the Employer shall pay or cause to be paid to the Executive
reasonable outplacement expenses incurred during the two year period after
termination in an amount up to $25,000 and for one year after termination the
Employer shall provide the Executive with the use of office space and reasonable
office support facilities, including secretarial assistance.

2.  The following section 5.3(c) is added to the Agreement in order to clarify
the time of payment of Gross-Up Payment Amounts:

(c)  Payment of Gross-Up Payment.  All payments to be made under this section
5.3 (other than the Underpayment described in section 5.3(b)) must be made
(i) where the Employer is required to withhold the related excise or other
applicable taxes, when the Employer is required to withhold such taxes, but in
no event later than the end of the Executive’s taxable year next following the
Executive’s taxable year in which the Employer is required to remit the
applicable taxes or (ii) where such taxes are not required to be remitted by the
Employer, as soon as practical after the determination of the amount due, but in
no event later than the end of the Executive’s taxable year next following the
Executive’s taxable year in which the related taxes are remitted to the taxing
authorities by the Executive.  In the event any Underpayment described in
section 5.3(b) or other reimbursement is payable under this section 5.3 as a
result of a tax audit or litigation addressing the existence or amount of a tax
liability, such amount must be paid by the end of the Executive’s taxable year
following the Executive’s taxable year in which the taxes that are the subject
of the audit or litigation are remitted to the taxing authorities or, where no
such taxes are remitted, the end of the Executive’s taxable year following the
year in which the audit is completed or there is a final and non-appealable
settlement or the resolution of the litigation.  If any Underpayment becomes
payable to the Executive other than as a result of a tax audit or litigation,
such amount shall be paid no later than the end of the Executive’s taxable year
next following the Executive’s taxable year in which the Executive remits the
applicable taxes.

3.  Section 7.9 of the Agreement is amended to read as follows in order (a) to
limit the reimbursement period to six years, (b) to prorate the previously
stated reimbursement cap over six taxable years beginning with the taxable year
in which a Change in Control occurs ($41,667 per year) and (c) to increase the
reimbursement cap to $250,000 per year:
 
1

--------------------------------------------------------------------------------

 
7.9           Payment of Legal Fees.  The Employer is aware that after a Change
in Control management of the Employer could cause or attempt to cause the
Employer to refuse to comply with its obligations under this Agreement, or could
institute or cause or attempt to cause the Employer 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.  The Employer desires that the Executive not be required to incur
the expenses associated with the enforcement of 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.  The Employer desires that the Executive not be forced
to negotiate settlement of rights under this Agreement under threat of incurring
expenses.  Accordingly, if after a Change in Control occurs it appears to the
Executive that (x) the Employer has failed to comply with any of its obligations
under this Agreement, or (y) the Employer 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 Employer irrevocably authorizes the Executive from time to time to retain
counsel of the Executive’s choice, at the Employer’s expense as provided in this
section 7.9, to represent the Executive in the initiation or defense of any
litigation or other legal action, whether by or against the Employer or any
director, officer, stockholder, or other person affiliated with the Employer, in
any jurisdiction.  Despite any existing or previous attorney-client relationship
between the Employer and any counsel chosen by the Executive under this section
7.9, the Employer irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel, and the Employer 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 and incurred during the six
year period after a Change in Control occurs shall be paid or reimbursed to the
Executive by the Employer 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 for each taxable year of the Executive, whether suit be brought or not,
and whether or not incurred in trial, bankruptcy, or appellate proceedings.  The
Employer’s obligation to pay the Executive’s legal fees provided by this section
7.9 operates separately from and in addition to any legal fee reimbursement
obligation the Employer may have with the Executive under any separate
employment, severance, or other agreement between the Executive and the
Employer.  Despite anything in this section 7.9 to the contrary however, the
Employer shall not be required to pay or reimburse the Executive’s legal
expenses if doing so would violate section 18(k) of the Federal Deposit
Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit
Insurance Corporation [12 CFR 359.3].

4.  The following is added at the end of section 7.11 of the Agreement in order
to incorporate IRC Section 409A reimbursement rules:

With regard to any provision herein that provides for reimbursement of expenses
or in-kind benefits that are subject to Section 409A of the Internal Revenue
Code of 1986, except as permitted by said Section 409A, (i) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit, and (ii) the amount of expenses eligible for reimbursement, or
in-kind benefits, provided during any taxable year of the Executive shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year of the Executive, provided that (ii) above
shall not be violated with regard to expenses reimbursed under any arrangement
covered by Section 105(b) of the Internal Revenue Code of 1986 solely because
such expenses are subject to a limit related to the period the arrangement is in
effect. All reimbursements shall be reimbursed in accordance with the Employer’s
reimbursement policies but in no event later than the end of the Executive’s
taxable year following the Executive’s taxable year in which the related expense
is incurred.

In Witness Whereof, the parties have executed this Amendment to Employment
Agreement as of the date first written above.

Witnesses
 
Crescent Financial Corporation
         
   
   
By:
   
         
   
   
Its:
   

 
2

--------------------------------------------------------------------------------

 
Witnesses
 
Crescent State Bank
         
   
   
By:
   
         
 
   
Its:
 

Witnesses
  Executive        
   
         
Michael G. Carlton
 
     

County of Wake
)
 
  ) ss:
State of North Carolina)
 

Before me this ___ day of December, 2010, personally appeared the above named
____________________ and Michael G. Carlton, who acknowledged that they did sign
the foregoing instrument and that the same was their free act and deed.

 
   
 (Notary Seal)
Notary Public
     
My Commission Expires:

 
3

--------------------------------------------------------------------------------