THIRD AMENDMENT


TO THE


MACON BANK


AMENDED AND RESTATED LONG TERM CAPITAL APPRECIATION
PLAN


 


 


THIS THIRD AMENDMENT is
adopted this 26th day of February, 2015, effective as of April 1, 2015, by Macon Bank, Inc., a North Carolina savings
bank located in Franklin, North Carolina (the “Bank”).


 


WHEREAS, the Bank previously
adopted the Macon Bank Amended and Restated Long Term Capital Appreciation Plan on December 15, 2004, effective January 1, 2005,
and subsequently adopted the First Amendment thereto on December 10, 2008, effective January 1, 2005, and the Second Amendment
thereto on March 16, 2011, effective February 28, 2011 (as amended, the “Plan”); and


 


WHEREAS, the Board of Directors
of the Bank has deemed it advisable to amend the Plan to provide for participant direction of investment for active participants
in the Plan, and to permit separated participants in the Plan to make an irrevocable election to direct the investment of their
remaining account balance in lieu of the fixed 8% annual rate of return currently provided for in the Plan.


 


NOW, THEREFORE the Plan
is hereby amended as follows, effective April 1, 2015 (the “Amendment Effective Date”):


 


Article I of the
Plan is amended by adding a new Section 1.2a immediately following Section 1.2, such Section 1.2a to read as follows:


 


1.2a      “Administrator”
means the person or entity appointed by the Committee to assist it with its administrative and record-keeping functions under the
Plan.


 


Article I of the
Plan is amended by adding a new Section 1.18a immediately following Section 1.18, such Section 1.18a to read as follows:


 


1.18a      “Earnings”
means Trust earnings, gain or loss applicable to a Participant’s Account. In the absence of a Trust, “Earnings”
means the Plan’s actual or notional earnings, gain or loss applicable to a Participant’s Account as described in Sections
2.3 and 2.3a.


 


Article I of the
Plan is amended by adding a new Section 1.28a immediately following Section 1.28, such Section 1.28a to read as follows:


 


1.28a      “Valuation
Date” means the last day of each calendar quarter and such other dates as the Bank and Trustee may determine.


 






    	 



     

    

Article II of the
Plan is amended by deleting Section 2.3 in its entirety and replacing it with a new Section 2.3, to read as follows:


 


2.3      Investment
Return on Deferrals. During the Plan Year, the Bank shall credit (or charge) the Participant’s Account that is attributable
to Deferrals and Initial Credits under Section 2.2 with an investment return equal to actual Earnings on his Account in accordance
with Section 2.3a below. Each Participant who (a) has not had a Termination from Service as of the Amendment Effective Date, or
(b) makes a valid election under Section 2.6 hereof, shall have the right to direct the investment of the Participant’s
Account. However, the Bank may specify any limitations on the Participant’s right of investment direction. The Participant
investment direction right is limited strictly to investment direction and the Participant will not be entitled to the distribution
of any Account asset except as the Plan otherwise permits. Except as otherwise provided in the Plan or Trust, all Plan assets,
including all incidents of ownership thereto, at all times will be the sole property of the Bank.


 


Article II of the
Plan is amended by adding a new Section 2.3a immediately following Section 2.3, such Section 2.3a to read as follows:


 


2.3a      Directed
Investment Accounts.


 


(a)      Participants may,
subject to a procedure established by the Committee (and applied in a uniform non-discriminatory manner), direct the Trustee, in
writing (or in such other form which is acceptable to the Trustee), to invest the accounts specified below in specific mutual funds
and/or the common stock of Entegra Financial Corporation, in accordance with the participant direction procedures specified by
the Committee. That portion of the interest of any Participant so directing will thereupon be considered a Participant’s Directed
Account. The balance of a Participant’s Account not so directed will be considered a Participant’s Non-Directed Account.


 


(b)      As of each Valuation
Date until there is no balance remaining in a Participant’s Accounts, all Participant Directed and Non-Directed Accounts
shall be charged or credited with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in the
market value using publicly listed fair market values when available or appropriate as follows:


 


(1)      To the
extent that the assets in a Participant’s combined Accounts are accounted for as pooled assets or investments, the allocation
of earnings, gains and losses of each Participant’s Directed Account shall be based upon the total amount of funds so invested
in a manner proportionate to the Participant’s share of such pooled investment; and


 


(2)      To the
extent that the assets in the Participant’s combined Accounts are accounted for as segregated assets, the allocation of earnings,
gains and losses from such assets shall be made on a separate and distinct basis.


 






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(c)      Directed Investment
Accounts Administration – Investment directions will be processed as soon as administratively practicable after proper
investment directions are received from the Participant. No guarantee is made by the Plan, the Bank, the Committee, the Administrator,
or the Trustee that investment directions will be processed on a daily basis, and no guarantee is made in any respect regarding
the processing time of an investment direction. Notwithstanding any other provision of the Plan, the Bank, the Administrator or
the Trustee reserves the right to not value an investment option on any given Valuation Date for any reason deemed appropriate
by the Bank, the Administrator or the Trustee. Furthermore, the processing of any investment transaction may be delayed for any
legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the
transmission of data, force majeure, the failure of a service provider to timely receive values or prices, and correction for errors
or omissions or the errors or omissions of any service provider). The processing date of a transaction will be binding for all
purposes of the Plan and considered the applicable Valuation Date for an investment transaction.


 


(d)      Default
Investment Fund – In the event that a Participant fails to make an investment election with regards to his Directed
Investment Account, such Account shall automatically be invested in the Plan’s Ameriprise Moderate Growth Fund available
for Directed Investment Accounts.


 


Article II of the
Plan is hereby amended by deleting Section 2.6 in its entirety and replacing it with a new Section 2.6, to read as follows:


 


2.6      Earnings Credits
on Final Account Balances for Separated Participants. Each Participant who had a Termination from Service prior to the Amendment
Effective Date may elect to (a) direct the investment of his unpaid Accounts in accordance with Section 2.3, or (b) continue to
have such unpaid Accounts credited with simple interest that shall accrue monthly on any unpaid balance at the rate of 8% per annum
as provided in the Plan prior to this Amendment. Such election opportunity shall be communicated to each eligible Participant in
a written Notice of Election form, which form shall be signed by the Participant and delivered to the Committee by any due date
specified in the Notice of Election form. Any election hereunder shall be irrevocable. In the event a Participant fails to return
a signed Notice of Election form on or before any due date specified in the Notice of Election form, such Participant shall be
deemed to have waived his right to make an election hereunder.


 


Article II of the
Plan is hereby amended by deleting Section 2.7 in its entirety and replacing it with a new Section 2.7, to read as follows:


 


2.7      Frozen Account
Balances. Notwithstanding anything else to the contrary in this Article II concerning Credits to Account, the Account balances
of all Participants who are not receiving payments of their Benefits as of the Freeze Date shall be frozen as of the Freeze
Date. No credits in the form of deferrals, credits of Capital Appreciation Rights, or earnings in the form of return on equity
or (under Section 2.3) or simple interest (under Section 2.6) shall be made on or after the Freeze Date and prior to the Amendment
Effective Date. Each Participant’s frozen Account balance shall be determined by the Committee as of the Freeze Date and
shall equal the sum of:


 






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(i)      all
Deferrals made by the Participant, Initial Credits made pursuant to Section 2.2 hereof, and any earnings credited pursuant to Section
2.3 hereof, and


 


(ii)      the
product obtained when each of the Participant’s Capital Appreciation Rights is multiplied by both the Participant’s
Vested Percentage and the applicable Appreciation Percentage.


 


Notwithstanding the foregoing,
on and after the Amendment Effective Date, the Account balances of all Participants who are not receiving payments of their Benefits
as of the Amendment Effective Date shall be credited with earnings (or charged with losses) in accordance with the provisions of
Section 2.3 of the Plan, as amended by this Third Amendment.


 


IN WITNESS WHEREOF,
the parties hereto have hereunto set their hands the day and year first above written.


 


	 	MACON BANK, INC.
	 	 	 
	 	By:	 
	 	 	 
	 	Title:	 


 


Witnessed by:


 





 



 






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