AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT 

 

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and
among Piedmont Community Bank Holdings, Inc. (“Piedmont”), a Delaware
corporation, Crescent Financial Bancshares, Inc. (“Crescent Financial”), a
Delaware Corporation, and Crescent State Bank (the “Bank”), a state bank
chartered under the laws of North Carolina, and Scott Custer (the “Executive”)
effective as of January 1, 2012 (the “Effective Date”).

 

In consideration of 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:

 

Section 1. Term. Piedmont will employ Executive, and Executive accepts
employment with Piedmont, upon the terms and conditions set forth in this
Agreement, for the period beginning on December 16, 2009, (the “Original
Effective Date”), and ending on the earlier of the third anniversary of the
Original Effective Date or as provided in Section 5 (the “Initial Employment
Period”). Crescent Financial will employ Executive, and Executive accepts
employment with Crescent Financial, upon the terms and conditions set forth in
this Agreement, for the period beginning on November 18, 2011 and ending upon
the expiration of the Initial Employment Period. The Bank will employ Executive,
and Executive accepts employment with the Bank, upon the terms and conditions
set forth in this Agreement, for the period beginning December 30, 2011 and
ending upon the expiration of the Initial Employment Period. This Agreement
shall continue for successive one (1) year terms (each a “Subsequent Employment
Period”) unless written notice is delivered by Piedmont, Crescent Financial, or
the Bank to Executive, or by Executive to Piedmont, Crescent Financial, and the
Bank at least ninety (90) days before the expiration of this Agreement or
Executive’s employment is terminated as provided in Section 5 before the
expiration of this Agreement. The Initial Employment Period and any Subsequent
Employment Period are collectively referred to as the “Employment Period.” In
the event that a party has given written notice of non-renewal, and the
Executive’s employment with Piedmont, Crescent Financial, the Bank, or any one
or combination of them nevertheless continues after the expiration of the
Employment Period, such post-expiration employment shall be “at-will” and any
party may terminate such employment with or without notice and for any reason or
no reason.

 

Section 2. Position and Duties.

 

(a)     Piedmont Position. During the Employment Period, Executive will serve as
Chief Executive Officer of Piedmont, reporting directly to the Board of
Directors of Piedmont (“Piedmont Board”), and will be nominated as a director of
Piedmont, and if nominated as a director or appointed as an officer by the Board
of any Affiliate of Piedmont, will serve as a director (subject to any required
shareholder approval) or officer of such Affiliate. Executive will have duties
as assigned by the Piedmont Board that are consistent with the duties of chief
executive officers of bank holding companies.

 

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(b)     Crescent Financial Position. Effective as of November 18, 2011,
Executive will serve as Chief Executive Officer of Crescent Financial and
effective as of December 6, 2011 Executive will serve as President of Crescent
Financial, reporting directly to the Board of Directors of Crescent Financial
(“Crescent Financial Board”). Executive will have duties as assigned by Crescent
Financial Board that are consistent with the duties of chief executive officers
and presidents of bank holding companies.

 

(c)     Crescent Bank Position. Effective as of December 30, 2011, Executive
will serve as Chief Executive Officer of the Bank, reporting directly to the
Board of Directors of the Bank (the “Bank Board”). Executive will have duties as
assigned by the Bank Board that are consistent with the duties of chief
executive officers of consumer and commercial banks.

 

(d)     Responsibilities. Executive will devote his best efforts and all of his
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Employer Group. Executive will perform his duties and responsibilities to
the best of his abilities in a diligent, trustworthy, businesslike and efficient
manner in accordance with Piedmont’s, Crescent Financial’s, and the Bank’s
policies and applicable law.

 

(e)     Definition of Affiliate and Employer Group. For purposes of this
Agreement, “Affiliate” means, with respect to any specified individual,
corporation, limited liability company, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization, or other
entity (“Person”), at any time, each Person, directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such specified
Person at such time. For purposes of this Agreement, the “Employer Group” means
Piedmont, Crescent Financial, the Bank and each of their respective Affiliates.
Unless context clearly indicates otherwise, references to the “Employer Group”
shall be construed to refer to the Employer Group as a whole, any individual
member, or any combination of members thereof.

 

Section 3. Salary and Benefits.

 

(a)     Salary. During the Initial Employment Period, the Employer Group will
pay Executive a salary (“Salary”) at a rate of $320,000 per annum as
compensation for all services as an officer, employee and director of the
Employer Group. During any Subsequent Employment Period, Executive will receive
Salary in the amount determined by the Crescent Financial Board in its sole
discretion, which will not be less than $300,000 per annum. Salary will be
payable in regular installments in accordance with the general payroll practices
of Crescent Financial.

 

(b)     Bonus. For each calendar year during the Employment Period beginning
with 2012 (each, a “Bonus Year”), Executive will be eligible to receive a
performance bonus (“Bonus”) of up to two times Salary, based on the Employer
Group’s achievement of performance measures, which may include: Asset Size;
Return on Assets; Return on Equity; Efficiency Ratio; Quality of Deposits; Risk
Based Assessment of Loan Portfolio; Loan Quality; Data Quality; Regulatory
Relationships; and/or Quality and Depth of Management Team. The specific
performance measures for each Bonus Year during the Term will be determined by
the Crescent Financial Board, as advised by the Compensation Committee of the
Crescent Financial Board, in its sole discretion, after consultation with the
Executive. The determination whether the Executive has achieved the performance
measures for each Bonus Year, and the amount of the Bonus to be awarded for each
Bonus Year, will be determined by the applicable Board of Directors, as advised
by the Compensation Committee of such Board of Directors, in its sole
discretion. It is understood by Executive, Piedmont, Crescent Financial, and the
Bank that bonuses at a level approaching two times base salary will only be
awarded at a time when Piedmont or the Employer Group, as applicable, is
considerably larger and highly profitable, and that if Piedmont or the Employer
Group, as applicable, does not grow very significantly from its initial
platform, then cash Bonus awards are unlikely. Executive must be employed by the
Employer Group as of the last business day of a Bonus Year to be eligible for a
Bonus for such Bonus Year. Any Bonus awarded to Executive will be paid within
two and a half months after the end of the Bonus Year for which the Bonus is
awarded.

 

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(c)     Stock Options. The total option pool for the senior executive team
(which may include senior executives of Affiliates acquired by Piedmont) is ten
percent (10%) of Piedmont’s equity. The Piedmont Board will award the Executive
options in an amount up to 2 percent of equity issued in connection with each
and every round of Piedmont financing after Piedmont’s first round
financing, subject to: (i) the limits of the total option pool, taking into
account option awards made to other members of the senior executive team, and
(ii) the terms and conditions of the stock option plan and form of stock option
award adopted by the Piedmont Board in connection with the issuance of such
options, which award will include provisions for immediate vesting of options
after the occurrence of both (1) a “Change of Control” (except for a change in
control which results from the issuance or transfer of shares in connection with
obtaining new financing or acquisitions) and (2) a termination without “Cause”
(as defined below) or a resignation for “Good Reason” (within six months after
the occurrence of the event constituting good reason). For purposes of vesting
stock options, the terms “Change in Control” and “Good Reason” will be defined
in the Stock option plan and/or award to be consistent with Internal Revenue
Code Section 409A regulations.

 

(d)     Benefits. During the Employment Period, Executive will be entitled to
those benefits to which senior executives of Piedmont, Crescent Financial, or
the Bank become entitled under benefit plans and programs approved by the
respective Boards of Directors (collectively, the “Benefits”), including any
medical, dental, disability, life insurance and/or 401(k) plans, subject to all
of the terms of such benefit plans applicable to any such Benefits.

 

(e)     Reimbursement of Business Expenses. During the Employment Period, the
Employer Group will reimburse Executive for all reasonable out-of-pocket
expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with Piedmont’s, Crescent Financial’s, or the
Bank’s policies, as applicable, in effect from time to time with respect to
travel, entertainment and other business expenses, subject to Piedmont’s,
Crescent Financial’s, or the Bank’s requirements, as applicable, with respect to
reporting and documentation of such expenses, provided, however, that
reimbursements shall not be made for expenses submitted after the end of the
calendar year following the calendar year in which the expenses were incurred.

 

(f)     Withholdings and Deductions. All payments made under this Agreement by
the Employer Group shall be subject to all required federal, state and local
withholdings and such deductions as Executive may instruct the Employer Group to
take that are authorized by applicable law.

 

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(g)     Apportionment of Obligations. The obligations for the payment of the
amounts otherwise payable pursuant to this Section 3 and in Sections 4 and/or 5
may be apportioned between the members of the Employer Group for which Executive
is performing services as they may agree from time to time in their sole
discretion. Any payment of such obligations by any member of the Employer Group
directly to the Executive shall extinguish the obligations of all other members
of the Employer Group to the extent of such payments. The satisfaction of the
obligations in this Section 3 and Section 5 shall be subject to any approvals or
non-objections from, and any conditions or restrictions imposed by, any
applicable regulator of Piedmont, Crescent Financial, or the Bank.

 

(h)     Clawback of Incentive Compensation. Executive agrees to repay any
incentive compensation previously paid or otherwise made available to him that
is subject to recovery under any applicable law (including any rule of any
exchange or service through which the securities of Piedmont or any Affiliate
are then traded) where such incentive compensation was in excess of what should
have been paid or made available because the determination of the amount due was
based, in whole or in part, on materially inaccurate financial information of
the Employer Group. The Executive agrees to return promptly any such incentive
compensation identified by the Employer Group. If the Executive fails to return
such incentive compensation promptly, the Executive agrees that the amount of
such incentive compensation may be deducted from any and all other compensation
owed to the Executive by the Employer Group. The Executive acknowledges that the
Employer Group may take appropriate disciplinary action (up to, and including,
termination of employment) if the Executive fails to return such incentive
compensation. The provisions of this subsection 3(h) shall be modified to the
extent, and remain in effect for the period, required by applicable law.

 

Section 4. [Reserved.]

 

Section 5. Termination. a) This Agreement will terminate on the date of
Executive’s death. Piedmont, Crescent Financial, or the Bank may terminate
Executive’s employment during the Employment Period by the delivery of a written
notice that Executive’s employment is being terminated as of a specified date,
for reasons of Disability (as defined herein), Cause (as defined herein) or
“Without Cause” (for any reason other than death, Disability, or Cause). For
purposes of this Agreement, “Cause” will mean, in the applicable Board of
Directors’ good faith determination, Executive’s: (i) failure (except where due
to Executive’s illness or injury) or refusal to perform, or neglect or
unsatisfactory performance of, his duties hereunder which is not corrected by
Executive within 30 days of receipt by Executive of written notice from
Piedmont, Crescent Financial, or the Bank, as applicable, of such failure,
neglect, refusal, or unsatisfactory performance, which notice will specifically
set forth the factual basis for and the actions required to correct the same;
(ii) commission of any intentional act that has the intended effect of injuring
the reputation or business of the Employer Group; (iii) use of illegal drugs;
(iv) commission of any act involving moral turpitude; (v) refusal to follow the
lawful directions of any Board of Directors to whom Executive reports, or
failure or refusal to cooperate with Piedmont, Crescent Financial, or the Bank,
or at such entity’s request, any governmental or regulatory agency or entity, in
providing information with respect to any act or omission by Executive in his
capacity as an officer, director, executive, agent or fiduciary of Piedmont,
Crescent Financial, or the Bank or any Affiliate of any of the foregoing for
which Executive has rendered service in such capacity; (vi) violation of
Piedmont, Crescent Financial, or the Bank policies, or any statute or
regulation, in the performance of Executive’s duties, (vii) breach of the duty
of loyalty, or commission of any other act or omission involving dishonesty,
disloyalty, fraud, gross negligence or willful misconduct with respect to
Piedmont, Crescent Financial, or the Bank or any Affiliate of any of the
foregoing; (viii) breach of Section 7 or Section 8 of this Agreement; (ix)
material breach of any provision of this Agreement (other than Section 7 or
Section 8) which is not cured within ten (10) days after written notice thereof
to Executive; (x) conviction of, or a plea of guilty or no contest or similar
plea with respect to a felony, or any misdemeanor which involves either fraud,
dishonesty or financial impropriety, or which results in the incarceration of
Executive; (xi) commission by Executive of an act of fraud, dishonesty or
embezzlement with respect to any Person. For purposes of this Agreement,
“Disability” will mean, in the Board’s good faith determination, a physical or
mental impairment that prevents or can be reasonably expected to prevent the
performance by Executive of his duties hereunder for a continuous period of 90
calendar days, or for more than a total of 75 business days, in any 12-month
period, subject to the reasonable accommodation provisions of the Americans with
Disabilities Act and other applicable state or local laws.

 

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(b)     If Executive resigns from the Employer Group during the Employment
Period (which would be in violation of this Agreement) or is terminated for
Cause by Piedmont, Crescent Financial, or the Bank: (i) Executive will solely be
paid his Salary and any Benefits accrued through the last day of his employment;
(ii) Executive will not be entitled to receive his Salary or any Benefits for
periods after the termination of the Employment Period, or any Performance Bonus
for the year in which employment terminated; and (iii) Executive’s rights with
respect to vested and unvested stock options will be determined as provided in
Piedmont’s stock option plan. In the event of Executive’s death or termination
by Piedmont, Crescent Financial, and the Bank because of Disability, Executive
will be paid: (x) his Salary and any Benefits accrued through the last day of
his employment; (y) any Benefits to which he is entitled by reason of death or
Disability pursuant to the terms of employee benefit plans in which he is a
participant; and (z) Executive’s rights with respect to vested and unvested
stock options will be determined as provided in Piedmont’s stock option plan. If
Piedmont, Crescent Financial, and the Bank terminate Executive’s employment
Without Cause during the Employment Period, Executive will be paid his Salary
and any Benefits accrued through the last day of his employment, and, in
addition, so long as Executive continues to comply with Sections 6, 7 and 8 of
this Agreement, Executive will be entitled to receive: (A) monthly severance
payments for a period of eighteen (18) months based on the Salary in effect at
the time employment is terminated commencing within sixty (60) days following
the Executive’s termination of employment; provided, however, that if the sixty
(60) day period begins in one calendar year and ends in the following calendar
year, no severance will be paid prior to the first day of such following
calendar year; and (B) Executive’s rights with respect to vested and unvested
stock options will be determined as provided in Piedmont’s stock option plan. As
a condition precedent to Executive’s right to receive the severance payments set
forth in subsections 5(b)(A) and (B), Executive must sign a release of claims
against Piedmont, Crescent Financial, the Bank and each of their officers,
directors, employees and agents, and Affiliates, and each Affiliate’s officers,
directors, employees and agents, in a form acceptable to Piedmont, Crescent
Financial, and the Bank. Piedmont, Crescent Financial, and the Bank will provide
the release to the Executive in sufficient time so that any applicable
revocation period provided therein will expire prior to the end of the sixty
(60) day period following termination of employment. For purposes of this
Agreement “termination of employment” and all similar terms shall mean a
“separation from service” within the meaning of Internal Revenue Code Section
409A.

 

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Section 6. Intellectual Property Rights. a) For purposes of this Agreement,
“Works” shall mean intellectual property and proprietary rights, including
without limitation, ideas, designs, concepts, techniques, inventions,
discoveries and works of authorship, whether or not patentable or protectible by
copyright or as a mask work, and whether or not reduced to practice, including,
without limitation, devices, processes, trade secrets, formulas, techniques,
compositions of matter, computer software programs, mask works and methods,
together with any improvements thereon or thereto, derivative works made
therefrom and know how related thereto.

 

(b)     Executive hereby agrees that all Works made, conceived, developed or
reduced to practice, in whole or in part, solely by Executive or jointly with
others, either during or after his term of employment with the Employer Group,
if such Works are (i) made through the use of any of the Confidential
Information or any of the Employer Group’s equipment, facilities, supplies or
time, or (ii) result from any work performed by Executive for the Employer
Group, shall belong exclusively to the Employer Group and shall be deemed part
of the Confidential Information for purposes of this Agreement whether or not
fixed in a tangible medium of expression. Without limiting the foregoing,
Executive agrees that all such Works shall be deemed to be “works made for hire”
under the U.S. Copyright Act of 1976, as amended, and that the Employer Group
shall be deemed the author and owner thereof, provided that in the event and to
the extent such Works are determined not to constitute “works made for hire” as
a matter of law, Executive hereby irrevocably assigns and transfers to the
Employer Group the entire right, title and interest, domestic and foreign, of
Executive in and to such Works. The Employer Group shall have the right to
obtain and to hold in its own name, copyrights, registrations or such other
protection as may be appropriate to the subject matter, and any extensions and
renewals thereof. Executive agrees to give the Employer Group, and any person
designated by the Employer Group, any assistance the Employer Group deems
necessary or appropriate to perfect the rights defined in this Paragraph 6.

 

(c)     Executive will promptly disclose in writing (which may be by e-mail) to
the Piedmont Board, or its designee, every Work made, conceived, developed or
reduced to practice, in whole or in part, solely by Executive or jointly with
others, in connection with the business of the Employer Group either (i) during
the Employment Period, whether or not Executive believes the Work to have been
made, conceived, developed or reduced to practice within the course and scope of
his employment, or (ii) after the termination of employment, if such Work is
made through the use of Confidential Information or any of the Employer Group’s
equipment, facilities, supplies or time, or results from any work performed by
Executive for the Employer Group.

 

(d)     Executive agrees to (i) keep and maintain adequate and current records
(in the form of notes, drawings, software, object code, source code, manuals,
plans, research, specifications, designs, documentation, data, processes,
procedures, discoveries, models or in other appropriate forms) of all Works,
which records shall be available at all times to the Employer Group and shall
remain the sole property of the Employer Group; and (ii) assist the Employer
Group, both during and subsequent to his employment with the Employer Group, in
obtaining and enforcing for the Employer Group’s own benefit patents,
copyrights, mask work rights, trade secret rights and other legal protections in
any and all countries for any and all Works made by Executive (in whole or in
part), the rights to which belong to or have been assigned to the Employer Group
pursuant to this Agreement. Upon request, Executive will execute all
applications, assignments, instruments and papers and perform all acts that the
Employer Group or its counsel may deem necessary or desirable to obtain or
enforce any and all such patents, copyrights, mask work rights, trade secret
rights and other legal protections in such Works and otherwise to protect the
interests of the Employer Group therein. The Employer Group agrees to bear all
expenses which it causes to be incurred by Executive in assigning, obtaining,
maintaining and enforcing said patents, copyrights, trade secret rights, mask
work rights and other legal protections in accordance with this Agreement.

 

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(e)     Executive understands that utilization of the Works is in the sole
discretion of the Employer Group, and that the Employer Group is not obligated
to develop, market or otherwise use any device or product.

 

Section 7. Confidential Information. a) Executive shall not at any time disclose
or use for the benefit of others any information relative to the activities of
the Employer Group which is of a secret or confidential nature, including
without limitation financial information, contracts, contract proposals and
negotiations, business plans, administration procedures and dealings with any
customer or other business relationship of the Employer Group. Specifically,
Executive acknowledges that his duties and responsibilities will put Executive
in a position of acquiring and creating Confidential Information (as that term
is defined below), including without limitation Works as defined in Section 6 of
this Agreement, concerning the Employer Group, the disclosure of which to
competitors of the Employer Group or others could cause the Employer Group to
suffer substantial and irreparable damage. Executive acknowledges, therefore,
that it is in the Employer Group’s legitimate business interest to restrict
Executive’s disclosure or use of such Confidential Information (and other
Company Property) for any purpose other than the services provided by Executive
to the Employer Group and to limit the possibility of any potential
appropriation of such Confidential Information (and other Company Property) by
Executive for his own benefit or the benefit of the Employer Group’s competitors
and to the detriment of the Employer Group.

 

(b)     Executive hereby agrees and acknowledges that “Confidential Information”
shall mean all non-public information, whether or not created or maintained in
written or electronic form, which constitutes, relates or refers to any and all
of the following: financial data; strategic business plans; acquisition plans;
product development information (or other proprietary product data); marketing
plans; processes; inventions; devices; Works; and all other non-public,
proprietary or confidential information of, concerning or provided by or on
behalf of the Employer Group, or the Employer Group’s clients, including without
limitation, the terms and existence of this Agreement (provided, however, that
Executive may disclose the terms and existence of this Agreement to his personal
attorneys, immediate family, and/or accountants or in response to an inquiry of
a governmental agency, court order or subpoena, or in order to enforce this
Agreement). In addition, Executive may disclose his W-2 earnings, his job title,
and the provisions of Paragraph 8 to potential or future employers. All of the
foregoing is merely illustrative and Confidential Information is not limited to
those illustrations. Information that is or becomes known or available to the
public through no act or negligent omission by Executive is not Confidential
Information.

 

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(c)     Executive agrees and acknowledges that “Company Property” shall mean all
property and resources of the Employer Group, including without limitation, all
Confidential Information, the Employer Group’s computer system and all software,
e-mail and databases, telephone and facsimile services and all other
administrative or support services provided by the Employer Group. All Company
Property and Confidential Information is owned and/or held by and for the
Employer Group exclusively, is intended for authorized, job-related purposes on
behalf of the Employer Group only and shall not be used for any non-job-related
purposes, nor for any amount of personal use that is not de minimus. Further,
without limitation, Executive shall not, directly or indirectly, except in the
course of his duties hereunder (a) remove from the Employer Group’s premises, or
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity, any Confidential Information or non-public Company
Property, except as may be required by law, court order or subpoena and only
after reasonable prior notice to the Employer Group where possible; or (b) make
use of any Confidential Information or Company Property for any purpose outside
the course of performing the authorized duties of his employment, including to
benefit himself or any other person or entity.

 

(d)     Executive understands that the Employer Group, from time to time, may
enter into agreements with other parties which impose obligations or
restrictions on the Employer Group regarding inventions or Works (as defined in
Section 6(a)) made during the course of the performance of such agreements or
regarding the confidential nature of such performance, or otherwise receive from
third parties confidential or proprietary information (“Third Party
Information”) subject to a duty on the Employer Group’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the Employment Period and thereafter, Executive agrees to be
bound by all such obligations and restrictions of which Executive has notice,
will hold Third Party Information in the strictest confidence, will not disclose
(to anyone other than Employer Group personnel who need to know such information
in connection with their work for the Employer Group) or use, except in
connection with his work for the Employer Group, Third Party Information unless
expressly authorized by the Employer Group in writing, and will otherwise take
all action necessary to discharge the obligations to the Employer Group arising
in connection with such Third Party Information. Nothing in this Agreement
prevents Executive from responding to a governmental inquiry, court order or
subpoena, provided Executive gives the Employer Group reasonable advance notice,
when possible.

 

Section 8. Non-Compete, Non-Solicitation. Executive acknowledges and agrees that
the Employer Group has provided and will continue to provide Executive with
Confidential Information (as defined in Paragraph 7 of this Agreement), that the
Employer Group’s business and profitability depend to a significant degree on
such Confidential Information remaining confidential, and that the covenants in
Paragraphs 7 and 8 of this Agreement are reasonable and necessary to protect the
Confidential Information and trade secrets of the Employer Group. Accordingly,
Executive agrees that Executive shall not (except with prior written consent of
the Piedmont Board), directly or indirectly, as an owner, member, shareholder,
employee, independent contractor, partner, consultant, joint venturer, investor,
lender or otherwise, and whether acting alone or together with others:

 

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(a)     during the Employment Period, and for a period of eighteen months after
Executive’s employment with the entire Employer Group ends for any reason,
engage in North Carolina, South Carolina, Virginia or any other state in which
the Employer Group conducts substantial business (the “Territory”) in any
activities which are competitive with any business conducted by the Employer
Group, except that nothing herein contained shall bar Executive from ownership
of less than one percent (1%) of the number of outstanding shares of any
securities listed for trading on any national exchange of a competitive
business.

 

(b)     during the Employment Period and for a period of two years after
Executive’s employment with the entire Employer Group ends for any reason, call
upon, solicit, induce or encourage any customer with whom the Employer Group
transacted business in the one year period before Executive’s employment
terminated to: (i) reduce or terminate its business relationship with the
Employer Group; or (ii) to enter into or become the subject of any direct or
indirect contractual or business arrangement with another bank that has offices
or conducts substantial business in the Territory.

 

(c)     during the Employment Period and for a period of two years after
Executive’s employment with the entire Employer Group ends for any reason,
recruit, employ, hire or retain or attempt to recruit, employ, hire or retain,
directly or by assisting others, any other employees of the Employer Group, or
contact or communicate with any other employees of the Employer Group for the
purpose of inducing, encouraging or assisting such other employees to terminate
their employment with the Employer Group. For purposes of this Section 8(c),
“other employees” shall refer to employees who are still actively employed by
the Employer Group at the time of the attempted contacting, communicating,
recruiting, employing, hiring or retaining.

 

Section 9. Enforcement. Piedmont, Crescent Financial, the Bank and Executive
agree that if, at the time of enforcement of Section 6, 7 or 8, a court holds
that any restriction stated in any such Section is unreasonable under
circumstances then existing, then the maximum period, scope or geographical area
reasonable under such circumstances will be substituted for the stated period,
scope or area. Because Executive’s services are unique and because Executive has
access to information of the type described in Sections 6, 7 and 8, Piedmont,
Crescent Financial, the Bank and Executive agree that money damages would be an
inadequate remedy for any breach of Section 6, 7 or 8. Therefore, in the event
of a breach of Section 6, 7 or 8, Piedmont, Crescent Financial, or the Bank may,
in addition to other rights and remedies existing in its favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
of Section 6, 7 or 8. The provisions of Sections 6, 7, 8 and 9 are intended to
be for the benefit of the Employer Group and their respective successors and
assigns, each of which may enforce such provisions and each of which (other than
Piedmont, Crescent Financial, or the Bank, each as to its own rights) is an
express third-party beneficiary of such provisions and this Agreement generally.
The existence of any claim or cause of action which Executive may have against
the Employer Group shall not constitute a defense or bar to the enforcement of
Section 6, 7 or 8, but may, at his option, be asserted as a counterclaim. The
provisions of this Section 9 shall not be construed as a waiver by Piedmont,
Crescent Financial, or the Bank of any rights which it or any of them may have
to damages or any other remedy against Executive for violation of Section 6, 7
or 8. Executive acknowledges that he has read carefully and had the opportunity
to consult with legal counsel regarding the provisions of Sections 6, 7, 8 and
9.

 

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Section 10. Representations and Warranties of Executive. Executive represents
and warrants to the Employer Group as follows:

 

(a)     Other Agreements. Executive represents and warrants that he is not in
breach of any agreement or other obligation requiring Executive to preserve the
confidentiality of any information, client lists, trade secrets or other
confidential information or any agreement not to compete or interfere with any
prior employer, that he has provided copies of all such agreements to Piedmont
before signing this Agreement, and that neither the execution of this Agreement
nor the performance by Executive of his obligations hereunder will conflict
with, result in a breach of, or constitute a default under, any agreement or
obligation to which Executive is a party or to which Executive may be subject.
Executive acknowledges and warrants that he will not bring to the Employer Group
or use in the performance of his duties under this Agreement any documents or
materials of any kind of a former employer or other Person that he is not
legally authorized or permitted to use.

 

(b)     Prior Conduct. Executive further represents and warrants that Executive:
(i) is not currently under investigation or been served with a subpoena by any
government agency or self-regulatory organization; (ii) has not engaged in any
violation of any statute, regulation or rule governing banks or bank holding
companies; and (iii) has not been convicted of or pled no lo contendere to any
crime, or have been determined by any government agency or self-regulatory
organization to have violated any statute, regulation or rule governing banks or
bank holding companies.

 

(c)     Authorization. This Agreement when executed and delivered will
constitute a valid and legally binding obligation of Executive, enforceable
against Executive in accordance with its terms.

 

Section 11. Survival of Representations, Warranties and Covenants. All
representations and warranties contained herein will survive the execution and
delivery of this Agreement. The provisions of Sections 6, 7, 8, 9, 13 and 14
shall survive the expiration of this Agreement, and the termination of
Executive’s employment and/or the Employment Period for any reason.

 

Section 12. Condition Precedent. This Agreement is contingent upon the
completion of background checks acceptable to Piedmont, Crescent Financial, and
the Bank and on Executive’s supplying required documentation of his eligibility
to work in the United States.

 

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Section 13. Indemnification. To the fullest extent permitted by law, Piedmont,
Crescent Financial, or the Bank, as applicable, shall indemnify Executive with
respect to any actions, proceedings, investigations, or inquiries (collectively,
“Actions”) commenced against or relating to Executive in his capacity as an
officer, director, executive, agent or fiduciary or former officer, director,
executive, agent or fiduciary of Piedmont, Crescent Financial, or the Bank, or
any Affiliate of any of the foregoing, for which Executive may render service in
such capacity, whether by or on behalf of Piedmont, Crescent Financial, or the
Bank, shareholders or any of the foregoing or third parties, including, without
limitation, any governmental agency or entity, and Piedmont, Crescent Financial,
or the Bank, as applicable, shall advance to Executive on a timely basis an
amount equal to the reasonable fees and expenses incurred in defending such
Actions, after receipt of an itemized request for such advance, and an
undertaking from Executive to repay the amount of such advance, with interest at
a reasonable rate from the date of the request, as determined by Piedmont,
Crescent Financial, or the Bank, as applicable, if it shall ultimately be
determined that Executive is not entitled (as a matter of law or by judicial
determination) to be indemnified against such expenses. This indemnity shall
survive any termination of employment under this Agreement and is in addition to
and not in limitation of any other right to indemnification or exoneration to
which Executive is entitled at law, or under the governing organizational
documents and/or policies of Piedmont, Crescent Financial, or the Bank, as
applicable. Each of Piedmont, Crescent Financial, and the Bank agrees to use its
best efforts to secure and maintain officers’ and directors’ liability
insurance, including coverage for Executive, to the extent not already procured.

 

Section 14. Miscellaneous.

 

(a)     Notices. All notices, demands or other communications to be given or
delivered by reason of the provisions of this Agreement will be in writing and
will be deemed to have been given (i) on the date of personal delivery to the
recipient, if to Executive, to the Chairman of the Piedmont Board, if to
Piedmont, to the Chairman of the Crescent Financial Board, if to Crescent
Financial, or to the Chairman of the Bank Board, if to the Bank or (ii) on the
date of transmission when sent by telecopy or facsimile machine to the number
shown below on the date of such confirmed facsimile or telecopy transmission
(provided that a confirming copy is sent via overnight mail), if sent at or
before 5 p.m. on such date, or on the business day following the date of
transmission if sent after 5 p.m., or (iii) on the business day following the
date of deposit when properly deposited for next day delivery by a nationally
recognized commercial overnight delivery service, prepaid; or (iv) on the date
received by a recipient when properly deposited in the United States mail,
certified or registered mail, postage prepaid, return receipt requested. Such
notices, demands and other communications will be sent to each party at the
address indicated for such party below:

 

Notices to Executive, to:

 

Scott Custer

3600 Glenwood Avenue, Suite 300

Raleigh, North Carolina 27612

 

Notices to Piedmont, to:

 

Piedmont Community Bank Holdings, Inc.

3600 Glenwood Avenue

Suite 300

Raleigh, North Carolina 27612

Attention: Adam Abram, Chairman of the Board

 

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Notices to Crescent Financial, to:

 

Crescent Financial Bancshares, Inc.

3600 Glenwood Ave

Suite 300

Raleigh, North Carolina 27512

Attention: Chairman of the Board

 

Notices to the Bank, to:

 

Crescent State Bank

1005 High House Road

Cary, North Carolina 27513

Attention: Chairman of the Board

 

with a copy (which will not constitute notice to Piedmont, Crescent Financial,
or the Bank), to:

 

Kenneth Henderson, Esq.

Jay P. Warren, Esq.

Bryan Cave LLP

1290 Avenue of the Americas

33rd Floor

New York, New York 10104

 

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

 

(b)     Consent to Amendments. No modification, amendment or waiver of any
provision of this Agreement will be effective against any party hereto unless
such modification, amendment or waiver is approved in a writing executed by such
party. No course of dealing between Piedmont, Crescent Financial, the Bank, or
any one or combination of them, on the one hand, and Executive on the other
hand, or any delay in exercising any rights hereunder will operate as a waiver
by any of the parties hereto of any rights hereunder.

 

(c)     Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. Notwithstanding the foregoing, this Agreement may
not be assigned by Executive and any such assignment shall be null and void.
This Agreement may be assigned by Piedmont, Crescent Financial, or the Bank to
any of Affiliate of any of the foregoing, or to any successor, or to any
purchaser of substantially all of the assets of any of the foregoing.

 

(d)     Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.

 

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(e)     Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement.

 

(f)     Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a substantive part of this
Agreement.

 

(g)     Governing Law. Issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement will be governed by,
and construed in accordance with, the laws of the State of North Carolina,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of North Carolina or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of North Carolina. In furtherance of the foregoing, the law of the State
of North Carolina will control the interpretation and construction of this
Agreement, even though under North Carolina’s choice of law or conflict of law
analysis, the substantive law of some other jurisdiction would ordinarily apply.

 

(h)     Waiver of Jury Trial. Each party to this Agreement hereby waives, to the
fullest extent permitted by law, any right to trial by jury of any claim,
demand, action, or cause of action (i) arising under this Agreement or (ii) in
any way connected with or related or incidental to the employment relationship
between Executive, on the one hand, and Piedmont, Crescent Financial, the Bank,
or any one or combination of them, on the other, or the termination of any such
relationship for any reason. Each party to this Agreement hereby agrees and
consents that any such claim, demand, action, or cause of action will be decided
by court trial without a jury and that the parties to this Agreement may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of the parties hereto to the waiver of their right to
trial by jury.

 

(i)     Submission to Jurisdiction. ANY AND ALL SUITS, LEGAL ACTIONS OR
PROCEEDINGS ARISING OUT OF THIS AGREEMENT OR THE EMPLOYMENT RELATIONSHIP BETWEEN
THE PARTIES WILL BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA OR THE
UNITED STATES DISTRICT COURT WHICH HAVE JURISDICTION OVER THE COUNTY IN WHICH
PIEDMONT HEADQUARTERS ARE LOCATED AT THE TIME ANY SUCH PROCEEDINGS ARE COMMENCED
AND WHICH HAVE JURISDICTION OVER AN ACTION OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR THE EMPLOYMENT RELATIONSHIP BETWEEN EXECUTIVE, ON THE ONE HAND, AND
PIEDMONT, CRESCENT FINANCIAL, THE BANK, OR ANY ONE OR COMBINATION OF THEM, ON
THE OTHER. EACH PARTY HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE JURISDICTION
OF SUCH COURTS FOR THE PURPOSE OF SUCH SUITS, LEGAL ACTIONS OR PROCEEDINGS. TO
THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY
SUCH SUIT, LEGAL ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER
WAIVES ANY CLAIM THAT ANY SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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(j)     Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the parties hereto, and no presumption or burden of proof
will arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement. The use of the word “including” in this
Agreement will be by way of example rather than by limitation.

 

(k)     Entire Agreement. Except as otherwise expressly set forth in this
Agreement, this Agreement embodies the complete agreement and understanding
among the parties to this Agreement with respect to the subject matter of this
Agreement, and supersedes and preempts any prior understandings, agreements, or
representations by or among the parties or their predecessors, written or oral,
which may have related to the subject matter of this Agreement in any way,
including the Proposed Terms of Employment signed by Executive on August 28,
2009 and the employment agreement by and between the Executive and Piedmont
effective as of December 16, 2009.

 

 

(Signatures on the following page)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement as of the dates written below effective as of the Effective Date.

 

  Piedmont Community Bank Holdings, Inc.       By: /s/ J Adam Abram     Name: J
Adam Abram     Title:   Chairman   Dated:  April  4, 2012       Crescent
Financial Bancshares, Inc.       By: /s/ Terry S. Earley     Name: Terry S.
Earley     Title:   Chief Financial Officer   Dated:  April  4, 2012      
Crescent State Bank       By: /s/ Lee H. Roberts     Name: Lee H. Roberts    
Title:   Chief Operating Officer   Dated:  April  4, 2012         /s/ Scott
Custer   Scott Custer         Dated:  April  4, 2012

 

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