[exhibit104001.jpg]
BANK OF NORTH CAROLINA ENDORSEMENT SPLIT DOLLAR AGREEMENT This ENDORSEMENT SPLIT
DOLLAR AGREEMENT (this “Agreement”) is entered into as of this 12th day of
December, 2016 by and between Bank of North Carolina, a North Carolina-chartered
bank (the “Bank”), and Ronald J. Gorczynski, an executive of The Bank (the
“Executive”). WHEREAS, to encourage the Executive to remain an employee of The
Bank, The Bank is willing to divide the death proceeds of a life insurance
policy on the Executive’s life, and WHEREAS, The Bank will pay life insurance
premiums from its general assets. NOW THEREFORE, in consideration of the
foregoing premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows. ARTICLE 1 GENERAL DEFINITIONS Capitalized terms not otherwise defined
in this Agreement are used herein as defined in the December 12, 2016 Salary
Continuation Agreement between The Bank and the Executive. The following terms
shall have the meanings specified. 1.1 “Administrator” means the administrator
described in Article 7. 1.2 “Executive’s Interest” means the benefit set forth
in section 2.2. 1.3 “Insured” means the Executive. 1.4 “Insurer” means each life
insurance carrier for which there is a Split Dollar Policy Endorsement attached
to this Agreement. 1.5 “Net Death Proceeds” means the total death proceeds of
the Policy minus the cash surrender value immediately prior to the Executive’s
death. 1.6 “Policy” means the specific life insurance policy or policies issued
by the Insurer. 1.7 “Split Dollar Policy Endorsement” means the form required by
the Administrator or the Insurer to indicate the Executive’s interest, if any,
in a Policy on the Executive’s life. ARTICLE 2 POLICY OWNERSHIP/INTERESTS 2.1
The Bank Ownership. The Bank is the sole owner of the Policy and shall have the
right to exercise all incidents of ownership. The Bank shall be the beneficiary
of the remaining death proceeds of the Policy after the Executive’s interest is
paid according to section 2.2 below. 2.2 Death Benefit. Provided the Executive’s
death occurs before the earlier of (x) the date of the Executive’s Separation
from Service or (y) the date the Executive attains age 65, at the

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

 
[exhibit104002.jpg]
2 Executive’s death the Executive’s beneficiary designated in accordance with
the Split Dollar Policy Endorsement shall be entitled to the lesser of $886,275
or 100% of the Net Death Proceeds (the “Executive’s Interest”). Unless a Change
in Control occurs before the Executive’s Separation from Service, the
Executive’s Interest shall be extinguished at the earlier of the date of the
Executive’s Separation from Service or the date the Executive attains age 65 and
the Executive’s beneficiary shall be entitled to no benefits under this
Agreement for the Executive’s death occurring thereafter. If a Change in Control
occurs before the Executive’s Separation from Service, at the Executive’s death
the Executive’s beneficiary designated in accordance with the Split Dollar
Policy Endorsement shall be entitled to the Executive’s Interest whether the
Executive dies before or after Separation from Service. The Executive shall have
the right to designate the beneficiary of the Executive’s Interest. 2.3
Comparable Coverage. The Bank shall maintain the Policy in full force and
effect. The Bank may not amend, terminate, or otherwise abrogate the Executive’s
interest in the Policy unless The Bank replaces the Policy with a comparable
insurance policy to cover the benefit provided under this Agreement and executes
a new split dollar agreement and endorsement for the comparable insurance
policy. The Policy or any comparable policy shall be subject to claims of The
Bank’s creditors. 2.4 Internal Revenue Code Section 1035 Exchanges. The
Executive recognizes and agrees that The Bank may after this Agreement is
adopted wish to exchange the Policy of life insurance on the Executive’s life
for another contract of life insurance insuring the Executive’s life. Provided
that the Policy is replaced or intended to be replaced with a comparable policy
of life insurance, the Executive agrees to provide medical information and
cooperate with medical insurance-related testing required by a prospective
insurer for implementing the Policy or, if necessary, for modifying or updating
to a comparable insurer. ARTICLE 3 PREMIUMS 3.1 Premium Payment. The Bank shall
pay any premiums due on the Policy. 3.2 Economic Benefit. The Administrator
shall annually determine the economic benefit attributable to the Executive
based on the life insurance premium factor for the Executive’s age multiplied by
the aggregate death benefit payable to the Executive’s beneficiary. The “life
insurance premium factor” is the minimum factor applicable under guidance
published pursuant to Treasury Reg. section 1.61-22(d)(3)(ii) or any subsequent
authority. 3.3 Imputed Income. The Bank shall impute the economic benefit to the
Executive on an annual basis, by adding the economic benefit to the Executive’s
W-2, or if applicable, Form 1099. ARTICLE 4 ASSIGNMENT The Executive may
irrevocably assign without consideration all of the Executive’s interest in the
Policy and in this Agreement to any person, entity, or trust established by the
Executive or the Executive’s spouse. If the Executive transfers all of the
Executive’s interest in the Policy, all of the Executive’s interest in the
Policy and in the Agreement shall be vested in the Executive’s transferee, who
shall be substituted as a party hereunder and the Executive shall have no
further interest in this Agreement.

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

 
[exhibit104003.jpg]
ARTICLE 5 INSURER The Insurer shall be bound by the terms of the Policy only.
The Insurer shall not be bound by the provisions of this Agreement. ARTICLE 6
CLAIMS AND REVIEW PROCEDURES 6.1 Claims Procedure. The Bank will notify any
person or entity that makes a claim for benefits under this Agreement (the
“Claimant”) in writing, within 90 days after receiving Claimant’s written
application for benefits, of his or her eligibility or noneligibility for
benefits under the Agreement. If the Plan Administrator determines that the
Claimant is not eligible for benefits or full benefits, the notice will state
(w) the specific reasons for denial, (x) a specific reference to the provisions
of the Agreement on which the denial is based, (y) a description of any
additional information or material necessary for the Claimant to perfect his or
her claim, and a description of why it is needed, and (z) an explanation of the
Agreement’s claims review procedure and other appropriate information concerning
steps to be taken if the Claimant wishes to have the claim reviewed. If the Plan
Administrator determines that there are special circumstances requiring
additional time to make a decision, the Bank will notify the Claimant of the
special circumstances and the date by which a decision is expected to be made,
and may extend the time for up to an additional 90 days. 6.2 Review Procedure.
If the Claimant is determined by the Plan Administrator not to be eligible for
benefits, or if the Claimant believes that he or she is entitled to greater or
different benefits, the Claimant will have the opportunity to have his or her
claim reviewed by the Bank by filing a petition for review with the Bank within
60 days after receipt of the notice issued by the Bank. The Claimant’s petition
must state the specific reasons the Claimant believes entitle him or her to
benefits or to greater or different benefits. Within 60 days after receipt by
the Bank of the petition, the Plan Administrator will give the Claimant (and
counsel, if any) an opportunity to present his or her position verbally or in
writing, and the Claimant (or counsel) will have the right to review the
pertinent documents. The Plan Administrator will notify the Claimant of the Plan
Administrator’s decision in writing within the 60-day period, stating
specifically the basis of its decision, written in a manner to be understood by
the Claimant, and the specific provisions of the Agreement on which the decision
is based. If, because of the need for a hearing, the 60-day period is not
sufficient, the decision may be deferred for up to another 60 days at the
election of the Plan Administrator, but notice of this deferral will be given to
the Claimant. ARTICLE 7 ADMINISTRATION OF AGREEMENT 7.1 Administrator Duties.
This Agreement shall be administered by an Administrator, which shall consist of
The Bank’s board of directors or such committee as the board shall appoint. The
Executive may not be a member of the Administrator. The Administrator shall also
have the discretion and authority to (x) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Agreement and
(y) decide or resolve any and all questions, including interpretations of this
Agreement, as may arise in connection with the Agreement.

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

 
[exhibit104004.jpg]
7.2 Agents. In the administration of this Agreement, the Administrator may
employ agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel, who may be counsel to The Bank. 7.3 Binding Effect of
Decisions. The decision or action of the Administrator concerning any question
arising out of the administration, interpretation, and application of this
Agreement and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Agreement.
7.4 Indemnification of Administrator. The Bank shall indemnify and hold harmless
the members of the Administrator against any and all claims, losses, damages,
expenses, or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Administrator
or any of its members. 7.5 Information. To enable the Administrator to perform
its functions, The Bank shall supply full and timely information to the
Administrator on all matters relating to the date and circumstances of the
retirement, death, or Separation from Service of the Executive, and such other
pertinent information as the Administrator may reasonably require. ARTICLE 8
MISCELLANEOUS 8.1 Amendment and Termination of Agreement. This Agreement may be
amended or terminated solely by a written agreement signed by The Bank and the
Executive. However, this Agreement shall terminate upon the first to occur of
(x) distribution of the death benefit proceeds in accordance with section 2.2
above, or (y) the earlier of the date of the Executive’s Separation from Service
or the date the Executive attains age 65, or (z) termination of the December 12,
2016 Salary Continuation Agreement between Bank of North Carolina and the
Executive under Article 5 of that agreement. 8.2 Binding Effect. This Agreement
shall bind the Executive and The Bank and their beneficiaries, survivors,
executors, administrators, and transferees, and any Policy beneficiary. 8.3 No
Guarantee of Employment. This Agreement is not an employment policy or contract.
It does not give the Executive the right to remain an employee of The Bank nor
does it interfere with The Bank’s right to discharge the Executive. It also does
not require the Executive to remain an employee or interfere with the
Executive’s right to terminate employment at any time. 8.4 Successors; Binding
Agreement. By an assumption agreement in form and substance satisfactory to the
Executive, The Bank shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business or assets of The Bank to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that The Bank would be
required to perform this Agreement if no succession had occurred. 8.5 Applicable
Law. This Agreement and all rights hereunder shall be governed by and construed
according to the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.

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

 
[exhibit104005.jpg]
8.6 Entire Agreement. This Agreement constitutes the entire agreement between
The Bank and the Executive concerning the subject matter. No rights are granted
to the Executive under this Agreement other than those specifically set forth.
8.7 Severability. If any provision of this Agreement is held invalid, such
invalidity shall not affect any other provision of this Agreement not held
invalid, and each such other provision shall continue in full force and effect
to the full extent consistent with law. If any provision of this Agreement is
held invalid in part, such invalidity shall not affect the remainder of the
provision not held invalid, and the remainder of the provision together with all
other provisions of this Agreement shall continue in full force and effect to
the full extent consistent with law. 8.8 Headings. Headings and subheadings
herein are included solely for convenience of reference and shall not affect the
meaning or interpretation of any provision of this Agreement. 8.9 Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party may
designate by like notice. Unless otherwise changed by notice, notice shall be
properly addressed to the Executive if addressed to the address of the Executive
on the books and records of The Bank at the time of the delivery of such notice,
and properly addressed to The Bank if addressed to the board of directors, Bank
of North Carolina, 831 Julian Avenue, Thomasville, North Carolina 27360. IN
WITNESS WHEREOF, the Executive and a duly authorized representative of The Bank
have executed this Endorsement Split Dollar Agreement as of the date first
written above. EXECUTIVE: THE BANK: Bank of North Carolina /s/ Ronald J.
Gorczynski Ronald J. Gorczynski By: /s/ David B. Spencer Name: David B. Spencer
Its: Senior Executive Vice President and Chief Financial Officer AGREEMENT TO
COOPERATE WITH INSURANCE UNDERWRITING INCIDENT TO INTERNAL REVENUE CODE SECTION
1035 EXCHANGE I acknowledge that I have read the Endorsement Split Dollar
Agreement and agree to be bound by its terms, particularly the covenant on my
part set forth in section 2.4 of the Endorsement Split Dollar Agreement to
provide medical information and cooperate with medical insurance-related testing
required by an insurer to issue a comparable insurance policy to cover the
benefit provided under this Endorsement Split Dollar Agreement. /s/ David B.
Spencer /s/ Ronald J. Gorczynski Witness Ronald J. Gorczynski

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