**1.3****Permitted Activities**. The Executive shall devote the Executive’s entire businesstime, attention and energies to the business of the Employer and shall not during the Term beengaged (whether or not during normal business hours) in any other business or professionalactivity, whether or not such activity is pursued for gain, profit or other pecuniary advantage,but as long as the following activities do not interfere with the Executive’s obligations to theEmployer, this shall not be construed as preventing the Executive from:(a) investing the Executive’s personal assets in any manner which will not require anyservices on the part of the Executive in the operation or affairs of the entity and in whichthe Executive’s participation is solely that of an investor; provided that such investmentactivity following the Effective Date shall not result in the Executive owning beneficiallyat any time one percent (1%) or more of the equity securities of any Competing Business;(b) investing the Executive’s personal assets in any manner which will not require anysubstantial services on the part of the Executive in the operation or affairs of an entitythat is not a Competing Business and in which the Executive’s participation is principallythat of an investor; or(c) participating in civic and professional affairs and organizations and conferences,preparing or publishing papers or books, teaching or serving on the board of directors of anentity so long as any such participation does not interfere with the ability of theExecutive to effectively discharge the Executive’s duties hereunder; provided further, thatthe Chief Executive Officer of the Employer may direct the Executive in writing to resignfrom any such organization and/or cease such activities should the Chief Executive Officerof the Employer reasonably conclude that continued membership and/or activities of the typeidentified would not be in the best interests of the Employer.**2. ****Term****.**This Agreement shall remain in effect for the Term. If the Agreement is in effectat the end of the Initial Term, the Term shall be renewed automatically for successive twelve-monthperiods unless and until one party gives written notice to the other of its or her/his intent notto extend this Agreement with such written notice to be given not less than one hundred eighty(180) days prior to the end of the Initial Term or any such twelve-month period. In the event suchnotice of non-extension is properly given, this Agreement shall terminate at the end of theremaining Term then in effect, subject to earlier termination in connection with the termination ofthe Executive’s employment pursuant to Section 4 hereof. If the Effective Date does not fall on orbefore January 14, 2011, this Agreement shall become null and void as of January 14, 2011.
 
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**3. ****Compensation**. The Employer shall pay the Executive the following during the Term,except as otherwise provided below:**3.1****Annual Base Salary and Commencement Bonus**.(a) The Executive shall be compensated at an initial annual base rate of Three HundredThousand Dollars ($300,000) (the “Annual Base Salary”). The Executive’s Annual Base Salary shallbe reviewed by the Board of Directors at least annually for adjustments, as determined by the Boardof Directors based on its evaluation of the Executive’s performance. The Executive’s Annual BaseSalary shall be payable in accordance with the Employer’s normal payroll practices.(b) Within 15 business days following the Effective Date, the Bank shall pay to the Executivea one-time commencement bonus of Fifty Thousand Dollars ($50,000) in a lump sum payment. If theExecutive experiences a Termination of Employment for any other than a reason described in Section4.1(a)(2), 4.1(b)(2), 4.1(c) or 4.1(f) within (i) one (1) year of the Effective Date, then theExecutive shall repay to the Bank one hundred percent (100%) of such commencement bonus; (ii) two(2) years of the Effective Date, then the Executive shall repay to the Bank sixty-six andtwo-thirds percent (66 2/3%) of such commencement bonus; and (iii) three (3) years of the EffectiveDate, then the Executive shall repay to the Bank thirty-three and one-third percent (33 1/3%) ofsuch commencement bonus.**3.2****Annual Incentive Compensation****.**The Executive shall be eligible to receive annualbonus compensation, if any, as may be determined by the Compensation and Development Committee ofthe Board of Directors of the Bank based on performance measures established by the Compensationand Development Committee of the Board of Directors of the Bank consistent with the Employer’sstrategic planning process and in consultation with the Executive, pursuant to any incentivecompensation program as may be adopted from time to time by the Compensation and DevelopmentCommittee of the Board of Directors of the Bank. The maximum annual bonus opportunity for anyannual period shall be no less than one hundred percent (100%) of the Executive’s Annual BaseSalary. Any annual bonus earned shall be payable, in cash or in securities of the Bank or theCompany, or any combination thereof, in the year following the year in which the bonus is earned inaccordance with the Employer’s normal practices for the payment of short-term incentives. To beentitled to any payment of incentive compensation from the Employer, the Executive must be employedby the Employer on the date such payment is made. The parties anticipate the granting of equityincentives of a type and nature preliminarily outlined in the attached Schedule A.**3.3****Equity Compensation****.**The Executive shall be entitled to long-term equityincentive awards in the discretion of the Compensation and Development Committee of the Board ofDirectors of the Bank (or any committee thereof) based upon and/or subject to any performancemeasures as may be established by the granting entity; provided, however, that, in general, awardsshall be made at such times and shall be subject to such terms and conditions that are no lessfavorable than awards granted to similarly situated executives. In the event of the formation ofthe Company, the Bank shall cause the Board of Directors of the Company (or any committee thereof)to consider grants of long-term incentives awards to the Executive in accordance with the intentexpressed in the immediately preceding sentence. The granting of any and all forms of long-termequity compensation to the Executive is subject to applicable restrictions imposed by federal andstate banking laws.
 
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**3.4****Relocation Benefits, Temporary Living, and Commuting****.**(a) The Executive agrees to initiate relocation to the Charlotte, North Carolina areawithin one year of the Effective Date. Employer shall reimburse the Executive forreasonable expenses relating to such relocation to the Charlotte area that are actuallyincurred during the 18-month period that begins on the Effective Date, provided suchexpenses are approved in advance in writing by the Compensation and Development Committee ofthe Board of Directors of the Bank in its sole discretion. If the Executive experiences aTermination of Employment for any other than a reason described in Section 4.1(a)(2),4.1(b)(2), 4.1(c) or 4.1(f) within (i) one (1) year of the Bank’s initial disbursement ofsuch relocation expenses, then the Executive shall repay to the Bank one hundred percent(100%) of such reimbursement amount; (ii) two (2) years of the Bank’s initial disbursementof such relocation expenses, then the Executive shall repay to the Bank sixty-six andtwo-thirds percent (66 2/3%) of such reimbursement amount; and (iii) three (3) years of theBank’s initial disbursement of such relocation expenses, then the Executive shall repay tothe Bank thirty-three and one-third percent (33 1/3%) of such reimbursement amount.(b) Prior to the Executive’s relocation to the Charlotte, North Carolina area, Employershall reimburse the Executive for actually incurred temporary living and commuting expensesin accordance with this subsection. Employer will reimburse the Executive for up to $5,000for temporary living expenses for the first month of the Term and up to $1,750 per month forthe eight (8) months thereafter. Employer will reimburse the Executive for up to $400 perweek for commuting expenses during the first nine (9) months of the Term. The Executivemust submit receipts documenting the actual temporary living and commuting expenses incurredin order to receive reimbursement. If the Executive experiences a Termination of Employmentfor any other than a reason described in Section 4.1(a)(2), 4.1(b)(2), 4.1(c) or 4.1(f)within (i) one (1) year of the Bank’s initial disbursement of any such living / commutingexpenses, then the Executive shall repay to the Bank one hundred percent (100%) of suchreimbursements; (ii) two (2) years of the Bank’s initial disbursement of any such living /commuting expenses, then the Executive shall repay to the Bank sixty-six and two-thirdspercent (66 2/3%) of such reimbursements; and (iii) three (3) years of the Bank’s initialdisbursement of any such living / commuting expenses, then the Executive shall repay to theBank thirty-three and one-third percent (33 1/3%) of such reimbursements.**3.5****Business and Professional Education Expenses; Memberships****.**The Employerspecifically agrees to reimburse the Executive, in accordance with the reimbursement policies fromtime to time adopted by the Board of Directors, for reasonable and necessary business expensesincurred by the Executive in the performance of the Executive’s duties hereunder; provided,however, that the Executive shall, as a condition of any such reimbursement, submit verification ofthe nature and amount of such expenses in accordance with such reimbursement policies and insufficient detail to comply with rules and regulations promulgated by the United States TreasuryDepartment. In addition, the Employer shall reimburse the Executive for educational expensesrelated to the Executive’s professional development and for membership in professional and civicorganizations to the extent such activities are consistent with the Employer’s strategicobjectives, subject in each instance to advance approval by the Board of Directors. The Executiveacknowledges that the Employer makes no representation with respect to the taxability ornontaxability of the benefits provided under this Section 3.5.
 
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**3.6****Paid Leave****.**The Executive shall be entitled to thirty (30) days of paid leave percalendar year, prorated for partial calendar years. A maximum of ten (10) days of accrued paidleave may be carried over to an immediately succeeding calendar year. The provisions of thisSection 3.6 shall apply notwithstanding any more or less generous paid leave policy then maintainedby the Employer.**3.7****Benefits****.**In addition to the benefits specifically described in this Agreement,the Executive shall be entitled to such benefits as may be available from time to time to similarlysituated employees. All such benefits shall be awarded and administered in accordance with theEmployer’s standard policies and practices.**3.8****Withholding****.**The Employer may deduct from each payment of compensation hereunderall amounts required to be deducted and withheld in accordance with applicable federal and stateincome, FICA and other withholding requirements. The Executive is advised to consult with theExecutive’s own tax professional regarding all tax matters related to compensation and benefitsfrom the Company. To the extent any payments made pursuant to this Agreement are subject to therequirements of Code Section 409A, the applicable terms of this Agreement (and any relatedCompany-sponsored plans) shall be interpreted so as to comply with Code Section 409A. Nonetheless,in the event that any payment or benefit (or portion thereof) under this Agreement or the plansreferenced herein shall be deemed not to comply with Code Section 409A, then the Employer, theBoard and their designees and agents shall not be liable to the Executive in any way.**3.9****Apportionment of Obligations****.**In the event the Company becomes a party to thisAgreement, the obligations for the payment of the amounts otherwise payable pursuant to thisSection 3 and in Section 4 shall be apportioned between the Company and the Bank as they may agreefrom time to time in their sole discretion. The satisfaction of the obligations in this Section 3and Section 4 shall be subject to any approvals or non-objections from, and any conditions orrestrictions imposed by, any regulator of the Employer.**3.10****Reimbursement of Expenses; In-Kind Benefits****.**All expenses eligible forreimbursements described in this Agreement must be incurred by the Executive during the Term ofthis Agreement to be eligible for reimbursement. All in-kind benefits described in this Section 3must be provided by the Employer during the Term of this Agreement. The amount of reimbursableexpenses incurred, and the amount of in-kind benefits provided, in one taxable year shall notaffect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxableyear. Each category of reimbursement shall be paid as soon as administratively practicable, but inno event shall any such reimbursement be paid after the last day of the calendar year following thecalendar year in which the expense was incurred. Neither rights to reimbursement nor in-kindbenefits are subject to liquidation or exchanges for other benefits.
 
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**3.11****Clawback of Incentive Compensation****.**The Executive agrees to repay any incentivecompensation previously paid or otherwise made available to the Executive that is subject torecovery under any applicable law (including any rule of any exchange or service through which thesecurities of the Employer are then traded) where such incentive compensation was in excess of whatshould have been paid or made available because thedetermination of the amount due was based, in whole or in part, on materially inaccuratefinancial information of the Employer. The Executive agrees to return promptly any such incentivecompensation identified by the Employer. If the Executive fails to return such incentivecompensation promptly, the Executive agrees that the amount of such incentive compensation may bededucted from any and all other compensation owed to the Executive. The Executive acknowledgesthat the Employer may take appropriate disciplinary action (up to, and including, Termination ofEmployment) if the Executive fails to return such incentive compensation. The provisions of thisSection 3.11 shall remain in effect for the period required by applicable law.**4.****Termination; Suspension or Reduction of Benefits****.****4.1****Termination of Employment****.**During the Term, the Executive’s Termination ofEmployment under this Agreement may only occur as follows:(a) By the Employer:(1) for Cause;(2) without Cause (other than pursuant to Section 4.1(a)(3) below) at any time,provided that the Board of Directors of either the Company or the Bank shall givethe Executive thirty (30) days prior written notice of its intent; or(3) in the event that a regulator for the Employer requires the Executive’sremoval from service as an Executive Vice President and Chief Risk Officer of theBank and/or the Company.(b) By the Executive:(1) for any reason (other than pursuant to Section 4.1(b)(2)), provided thatthe Executive shall give the Employer thirty (30) days’ prior written notice of theExecutive’s intent to effect the Executive’s Termination of Employment; or(2) for Good Reason, provided that the Executive shall give the Employer theprior written notice described in Section 24(p).(c) Upon the Executive becoming subject to a Disability.(d) At any time upon mutual, written agreement of the parties.(e) Upon expiration of the Term.(f) Notwithstanding anything in this Agreement to the contrary, the Term shall endautomatically upon the Executive’s death.
 
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If the Agreement becomes null and void pursuant to the last sentence of Section 2 because the Termfailed to commence on or before January 14, 2011, no party shall have any obligations to, or rightsagainst, any other party under this Agreement.**4.2****Severance****.**If, during the Term, the Executive experiences a Termination ofEmployment, either by the Employer without Cause pursuant to Section 4.1(a)(2) or by the Executivefor Good Reason pursuant to Section 4.1(b)(2), then, upon the Executive’s Termination ofEmployment, the Employer will pay severance to the Executive in an amount equal to two (2) timesthe Executive’s Annual Base Salary at the highest rate in effect in the twelve-month periodimmediately preceding the Termination of Employment, with such amount payable in substantiallyequal cash installments not less frequently than monthly over a period of twenty-four (24) months,commencing on the date determined by the Employer but in no event later than sixty (60) daysfollowing the date of the Executive’s Termination of Employment.**4.3****Change of Control****.**If, within six (6) months following a Change of Control, theExecutive voluntarily resigns, with or without Good Reason, the Executive shall receive, asliquidated damages, in lieu of all other claims and payments, an amount equal to two (2) times theExecutive’s Annual Base Salary at the highest rate in effect in the twelve-month period immediatelypreceding the Termination of Employment, with such amount payable in substantially equal cashinstallments not less frequently than monthly over a period of twenty-four (24) months, commencingon the date determined by the Employer but in no event later than sixty (60) days following thedate of the Executive’s Termination of Employment.**4.4****Parachute Payment Reduction****.**In no event shall any payment described in thisAgreement exceed the amount permitted by Code Section 280G. Therefore, if the aggregate presentvalue (determined in accordance with the provisions of Code Section 280G) of both the paymentsunder this Agreement and all other payments to the Executive in the nature of compensation (the“Aggregate Payments”) would result in a “parachute payment,” as defined under Code Section 280G,then the Aggregate Payments shall not be greater than an amount equal to 2.99 multiplied byExecutive’s “base amount” for the “base period”, as those terms are defined under Code Section280G. In the event the Aggregate Payments are required to be reduced pursuant to this subsection,the portions of the Aggregate Payments that would be paid latest in time will be reduced first andif multiple portions of the Aggregate Payments to be reduced are paid at the same time, anynon-cash payments will be reduced before any cash payments, and any remaining cash payments will bereduced pro rata.**4.5****Effect of Termination of Employment****.**(a) Upon Executive’s Termination of Employment hereunder for any reason, the Employershall have no further obligations to the Executive or the Executive’s estate with respect tothis Agreement, except for the payment of any amount earned and owing under this Agreementand payment set forth in Section 4.2 or 4.3, if applicable.
 
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(b) Notwithstanding any other provision of this Agreement to the contrary, as acondition of the Employer’s payment of any amount in connection with the Executive’sTermination of Employment, the Executive must execute within such period of time followingTermination of Employment as is permitted by the Employer (and not timelyrevoke during any revocation period provided pursuant to such release) a release andnon-disparagement agreement in the form provided by the Employer. All payments of severanceshall accrue from the date of the Executive’s Termination of Employment and, notwithstandingthe timing provisions under Sections 4.2 and 4.3, shall be made or commence on the sixtieth(60th) day following the Executive’s Termination of Employment, with any accruedbut unpaid severance being paid on the date of the first payment.(c) Notwithstanding any provision in the Agreement to the contrary, to the extentnecessary to avoid the imposition of tax on the Executive under Code Section 409A, anypayments that are otherwise payable to the Executive within the first six (6) monthsfollowing the effective date of Termination of Employment, shall be suspended and paid assoon as practicable following the end of the six-month period following such effective dateif, immediately prior to the Executive’s Termination of Employment, the Executive isdetermined to be a “specified employee” (within the meaning of Code Section409A(a)(2)(B)(i)) of the Employer (or any related “service recipient” within the meaning ofCode Section 409A and the regulations thereunder). Any payments suspended by operation ofthe foregoing sentence shall be paid as a lump sum within thirty (30) days following the endof such six-month period. Payments (or portions thereof) that would be paid latest in timeduring the six-month period will be suspended first.(d) Any purported termination of the Executive’s employment which does not rise to thelevel of a Termination of Employment shall not entitle the Executive to any of the paymentsor benefits described in Section 4.(e) If the Executive is a member of the Board of Directors of either the Company or theBank and the Executive’s employment is terminated by the Employer or by the Executivepursuant to Section 4.1, the Executive shall immediately resign from the Executive’sposition(s) on the Board(s) of Directors, effective as of the date the Executive’semployment is terminated.(f) Notwithstanding anything contained in this Agreement to the contrary, no paymentsshall be made pursuant to Section 4 or any other provision herein in contravention of therequirements of Section 2[18(k)] of the Federal Deposit Insurance Act (12 U.S.C. 1828(k)).**4.6****Regulatory Action****.**(a) If the Executive is removed and/or permanently prohibited from participating in theconduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of theFederal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations ofthe Employer under this Agreement shall terminate, as of the effective date of such order,except for the payment of Annual Base Salary due and owing under Section 3.1 on theeffective date of said order, and reimbursement under Section 3.5 of expenses incurred as ofthe effective date of termination.
 
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(b) If the Executive is suspended and/or temporarily prohibited from participating inthe conduct of the Employer’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) ofthe FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Employer under thisAgreement shall be suspended as of the date of service, unless stayed by appropriateproceedings. If the charges in the notice are dismissed, the Employer shall reinstate (inwhole or in part) any of its obligations which were suspended.(c) If the Employer is in default (as defined in Section 3(x)(1) of the FDIA), allobligations under this Agreement shall terminate as of the date of default, but the vestedrights of the parties shall not be affected.(d) All obligations under this Agreement shall be terminated, except to the extent adetermination is made that continuation of the contract is necessary for the continuedoperation of the Employer (1) by the director of the Federal Deposit Insurance Corporation(the “FDIC”) or his or her designee (the “Director”), at the time the FDIC enters into anagreement to provide assistance to or on behalf of the Employer under the authoritycontained in Section 13(c) of the FDIA; or (2) by the Director, at the time the Directorapproves a supervisory merger to resolve problems related to operation of the Employer whenthe Employer is determined by the Director to be in an unsafe and unsound condition. Anyrights of the Executive that have already vested, however, shall not be affected by suchaction.(e) All obligations under this Agreement are further subject to such conditions,restrictions, limitations and forfeiture provisions as may separately apply pursuant to anyapplicable state banking laws.**5.****Employer Information****.****5.1****Ownership of Employer Information****.**All Employer Information received ordeveloped by the Executive or by the Employer while the Executive is employed by the Employer willremain the sole and exclusive property of the Employer.**5.2****Obligations of the Executive****.**The Executive agrees:(a) to hold Employer Information in strictest confidence;(b) not to use, duplicate, reproduce, distribute, disclose or otherwise disseminateEmployer Information or any physical embodiments of Employer Information to any unauthorizedrecipient; and(c) in any event, not to take any action causing or fail to take any action necessaryin order to prevent any Employer Information from losing its character or ceasing to qualifyas Confidential Information or a Trade Secret.
 
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In the event that the Executive is required by law to disclose any Employer Information, theExecutive will not make such disclosure unless (and then only to the extent that) the Executive hasbeen advised by independent legal counsel (whose reasonable fees and expenses shall be paid byEmployer) that such disclosure is required by law and then only after prior written notice is givento the Employer when the Executive becomes aware that such disclosure has been requested and isrequired by law. This Section 5 shall survive for a period of two (2) years following terminationof this Agreement for any reason with respect to Confidential Information, and shall survivetermination of this Agreement for any reason for so long as is permitted by applicable law, withrespect to Trade Secrets.**5.3****Delivery upon Request or Termination****.**Upon request by the Employer, and in anyevent upon the Executive’s Termination of Employment with the Employer, the Executive will promptlydeliver to the Employer all property belonging to the Employer and its Affiliates, including,without limitation, all Employer Information then in the Executive’s possession or control.**6. ****Non-Competition****.**The Executive agrees that during the Executive’s employment by theEmployer hereunder, and in the event of the Executive’s Termination of Employment, regardless ofthe reason, for a period of one (1) year thereafter, the Executive will not (except on behalf of orwith the prior written consent of the Employer), within the Area, either directly or indirectly, onthe Executive’s own behalf or in the service or on behalf of others, perform for any CompetingBusiness any services which are the same as or essentially the same as the services the Executiveprovided for the Employer.**7. ****Non-Solicitation of Customers****.**The Executive agrees that during the Executive’semployment by the Employer hereunder, and in the event of the Executive’s Termination ofEmployment, regardless of the reason, for a period of one (1) year thereafter, the Executive willnot (except on behalf of or with the prior written consent of the Employer) on the Executive’s ownbehalf or in the service or on behalf of others, solicit, divert or appropriate or attempt tosolicit, divert or appropriate, any business from any of the Employer’s customers with whom theExecutive has or had material contact during the last two (2) years of the Executive’s employmentwith Employer, for purposes of providing products or services that are competitive with thoseprovided by the Employer. For purposes of the preceding sentence, “customers” shall also includeprospective customers actively sought by the Employer.**8. ****Non-Solicitation of Employees****.**The Executive agrees that during the Executive’semployment by the Employer hereunder, and in the event of the Executive’s Termination ofEmployment, regardless of the reason, for a period of one (1) year thereafter, the Executive willnot (except on behalf of or with the prior written consent of the Employer) on the Executive’s ownbehalf or in the service or on behalf of others, solicit, recruit or hire away or attempt tosolicit, recruit or hire away, any employee of the Employer with whom the Executive had materialcontact during the last two (2) years of the Executive’s employment, whether or not such employeeis a full-time employee or a temporary employee of the Employer, such employment is pursuant towritten agreement, for a determined period, or at will.
 
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**9. ****Remedies**. The Executive agrees that the covenants contained in Sections 5 through 8 ofthis Agreement are of the essence of this Agreement; that each of the covenants is reasonable andnecessary to protect the business, interests and properties of the Employer, and that irreparablelossand damage will be suffered by the Employer should the Executive breach any of the covenants.Therefore, the Executive agrees and consents that, in addition to all the remedies provided by lawor in equity, the Employer shall be entitled to a temporary restraining order and temporary andpermanent injunctions to prevent a breach or contemplated breach of any of the covenants.Furthermore, in addition to any other remedies, the Executive agrees that any violation of thecovenants in Sections 5 through 8 will result in the immediate forfeiture of any remaining paymentthat otherwise is or may become due under Section 4.2 or 4.3, if applicable. The Executive furtheragrees that should the Executive breach any of the covenants contained in Sections 5 through 8 ofthis Agreement, the Executive shall repay to the Employer a portion of any amounts previouslyreceived by the Executive pursuant to Section 4. The amount to be repaid shall be equal to theaggregate amount payable (whether or not paid) multiplied by a fraction the numerator of whichshall be twenty-four (24) minus the number of consecutive, full calendar months immediatelyfollowing the Executive’s termination of employment during which the Executive was not in breach ofSections 5 through 8 of this Agreement and the denominator of which is twenty-four (24). TheEmployer and the Executive agree that all remedies available to the Employer or the Executive, asapplicable, shall be cumulative.**10. ****Severability**. The parties agree that each of the provisions included in this Agreementis separate, distinct and severable from the other provisions of this Agreement and that theinvalidity or unenforceability of any Agreement provision shall not affect the validity orenforceability of any other provision of this Agreement. Further, if any provision of thisAgreement is ruled invalid or unenforceable by a court of competent jurisdiction because of aconflict between the provision and any applicable law or public policy, the provision shall beredrawn to make the provision consistent with, and valid and enforceable under, the law or publicpolicy.**11. ****No Set-Off by the Executive**. The existence of any claim, demand, action or cause ofaction by the Executive against the Employer whether predicated upon this Agreement or otherwise,shall not constitute a defense to the enforcement by the Employer of any of its rights hereunder.**12. ****Notice**. All notices, requests, waivers and other communications required or permittedhereunder shall be in writing and shall be either personally delivered, sent by reputable overnightcourier service or mailed by first class mail, return receipt requested, to the recipient at theaddress below indicated:       If to the Employer: Park Sterling Bank    Attn: Chairman    1043 E. Morehead Street, Suite 201    Charlotte, NC 28204       If to the Executive: Nancy J. Foster    6 Wildwood Road    Larchmont, NY 10538
 
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or such other address or to the attention of such other person as the recipient party shall havespecified by prior written notice to the sending party. All such notices, requests, waivers andothercommunications shall be deemed to have been effectively given: (a) when personally delivered tothe party to be notified; (b) when sent by confirmed facsimile to the party to be notified; (c)five (5) business days after deposit in the United States Mail postage prepaid by certified orregistered mail with return receipt requested at any time other than during a generaldiscontinuance of postal service due to strike, lockout, or otherwise (in which case such notice,request, waiver or other communication shall be effectively given upon receipt) and addressed tothe party to be notified as set forth above; or (d) two (2) business days after deposit with anational overnight delivery service, postage prepaid, addressed to the party to be notified as setforth above with next-business-day delivery guaranteed. A party may change its or her/his noticeaddress given above by giving the other party ten (10) days’ written notice of the new address inthe manner set forth above.**13. ****Assignment**. The rights and obligations of the Employer under this Agreement shallinure to the benefit of and shall be binding upon the successors and assigns of the Employer, asapplicable, including without limitation, a purchaser of all or substantially all the assets of theEmployer. If the Agreement is assigned pursuant to the foregoing sentence, the assignment shall beby novation and the Employer shall have no further liability hereunder, and the successor orassign, as applicable, shall become the “Employer” hereunder, but the Executive will not be deemedto have experienced a Termination of Employment by virtue of such assignment. The Agreement is apersonal contract and the rights and interest of the Executive may not be assigned by theExecutive. This Agreement shall inure to the benefit of and be enforceable by the Executive andthe Executive’s personal or legal representatives, executors, administrators, successors, heirs,distributees, devisees and legatees.**14. ****Waiver**. A waiver by one party to this Agreement of any breach of this Agreement by anyother party to this Agreement shall not be effective unless in writing, and no waiver shall operateor be construed as a waiver of the same or another breach on a subsequent occasion.**15. ****Mediation**. Except as provided in Section 16 hereof, if any dispute arises out of orrelates to this Agreement, or a breach thereof, and if the dispute can not be settled throughdirect discussions between the parties, the parties agree to first endeavor to settle the disputein an amicable manner by mediation under the Commercial Mediation Rules of the American ArbitrationAssociation before resorting to any other process for resolving the dispute.**16. ****Applicable Law and Choice of Forum**. This Agreement shall be construed and enforcedunder and in accordance with the laws of the State of North Carolina, without regard to itsconflict of rule principles. The parties agree that any appropriate state court located inMecklenburg County, North Carolina or federal court for the Western District of North Carolinashall have exclusive jurisdiction of any case or controversy arising under or in connection withthis Agreement shall be a proper forum in which to adjudicate such case or controversy. Theparties consent and waive any objection to the jurisdiction or venue of such courts.**17. ****Interpretation**. Words importing any gender include all genders. Words importing thesingular form shall include the plural and vice versa. The terms “herein,” “hereunder,” “hereby,”“hereto,” “hereof” and any similar terms refer to this Agreement. Any captions, titles or headingspreceding the text of any article, section or subsection herein are solely for convenience ofreference and shall not constitute part of this Agreement or affect its meaning, construction oreffect.
 
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**18. ****Entire Agreement**. This Agreement embodies the entire and final agreement of theparties on the subject matter stated in this Agreement. No amendment or modification of thisAgreement shall be valid or binding upon the Employer or the Executive unless made in writing andsigned by all parties. All prior understandings and agreements relating to the subject matter ofthis Agreement are hereby expressly terminated.**19. ****Mutual Non-disparagement**. The Employer agrees that during the Term and for a period oftwo years thereafter, each will not make any statement (written or oral) that could reasonably beperceived as disparaging to the Executive. The Executive agrees that during the Term and for aperiod of two years thereafter, the Executive will not make any statement (written or oral) thatcould reasonably be perceived as disparaging to the Employer or any person or entity that theExecutive reasonably should know is an affiliate of the Employer.**20. ****Rights of Third Parties**. Nothing herein expressed is intended to or shall be construedto confer upon or give to any person, firm or other entity, other than the parties hereto and theirpermitted assigns, any rights or remedies under or by reason of this Agreement.**21. ****Survival**. The obligations of the parties pursuant to Sections 3.11, 5 through 9, 15,16 and 19, as applicable, shall survive the Executive’s Termination of Employment hereunder for theperiod designated under each of those respective sections.**22. ****Representation Regarding Restrictive Covenants****.**The Executive represents that theExecutive is not and will not become a party to any non-competition or non-solicitation agreementor any other agreement which would prohibit the Executive from entering into this Agreement orproviding the services for the Employer contemplated by this Agreement on or after the EffectiveDate. In the event the Executive is subject to any such agreement, this Agreement shall berendered null and void and the Employer shall have no obligations to the Executive under thisAgreement.**23. ****Joinder of Company**. In the event the Company is formed and desires to become a partyto this Agreement, the Executive and the Bank shall enter into such amendments to the Agreement andexecute such consents as may be necessary to reflect the addition of the Company as a party to theAgreement. No such amendments to the Agreement shall materially alter the terms of this Agreementwithout the consent of the affected party.**24. ****Definitions**. Whenever used in this Agreement, the following terms and their variantforms shall have the meanings set forth below:(a) **“****Affiliate****”**shall mean any entity which controls, is controlled by, or is undercommon control with another entity. For this purpose, “control” means ownership of more than fiftypercent (50%) of the ordinary voting power of the outstanding equity securities of an entity.
 
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(b) **“****Agreement****”**shall mean this Agreement and any exhibits incorporated hereintogether with any amendments hereto made in the manner described in this Agreement.(c) **“****Area****”**shall mean a radius of twenty-five (25) miles or, at the election of theEmployer upon written notice to the Executive, a radius of fifteen (15) miles, from each officemaintained by the Employer at the time a breach of Section 6 of the Agreement is alleged by theEmployer, provided that the preceding shall not apply to an office first established by theEmployer after the end of the Term. It is the express intent of the parties that the Area asdefined herein is the area where the Executive performs services on behalf of the Employer underthis Agreement.(d) **“****Board of Directors****”**shall mean the board of directors of the Bank or the Companyor both, as the context indicates, and includes any committee thereof or other designee.(e) **“****Business of the Employer****”**shall mean the business conducted by the Employer,which is the business of commercial and consumer banking.(f) **“****Cause****”**shall mean:(1) A material breach of the terms of this Agreement by the Executive not cured by theExecutive within thirty (30) days after the Executive’s receipt of Employer’s written noticethereof, including, without limitation, failure by the Executive to perform the Executive’sduties and responsibilities in the manner and to the extent required under this Agreement;(2) Any act by the Executive of fraud against, material misappropriation from, ormaterial dishonesty to either the Company or the Bank;(3) Conviction of the Executive of a crime involving breach of trust or moral turpitudeor any felony;(4) Conduct by the Executive that amounts to willful misconduct, gross and willfulinsubordination, gross neglect or inattention to or material failure to perform theExecutive’s duties and responsibilities hereunder, including prolonged absences without thewritten consent of the Board of Directors; provided that the nature of such conduct shall beset forth with reasonable particularity in a written notice to the Executive who shall haveten (10) days following delivery of such notice to cure such alleged conduct, provided thatsuch conduct is, in the reasonable discretion of the Board of Directors, susceptible to acure;(5) the exhibition of a standard of behavior within the scope of or related to theExecutive’s employment that is materially disruptive to the orderly conduct of theEmployer’s business operations (including, without limitation, substance abuse, sexualharassment or sexual misconduct) in the reasonable opinion of the Board of Directors of theCompany or the Bank (with the Executive abstaining from participating in the considerationof, and vote on, such matter);
 
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(6) Receipt of any form of notice, written or otherwise, that any regulatory agencyhaving jurisdiction over the Employer intends to institute any form of formal or informalregulatory action against the Executive; or(7) Executive’s removal and/or permanent prohibition from participating in the conductof the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FederalDeposit Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)).(g) **“****Change of Control****”**means a “change in the ownership or effective control of acorporation, or a change in the ownership of a substantial portion of the assets of a corporation”within the meaning of Code Section 409A, provided, however, that for purposes of determining an“effective change of control, ” “50 percent” shall be used instead of “30 percent” and for purposesof determining a “substantial portion of the assets of a corporation,” “85 percent” shall be usedinstead of “40 percent.” For purposes of the preceding sentence, “a corporation” refers to theBank unless and until the Company is formed and thereafter shall refer to the Company.Notwithstanding the foregoing, in the event of a merger, consolidation, reorganization, shareexchange or other transaction as to which the holders of the capital stock of the Bank or theCompany before the transaction continue after the transaction to hold, directly or indirectlythrough a holding company or otherwise, shares of capital stock of the Bank or the Company (orother surviving company) representing more than fifty percent (50%) of the value or ordinary votingpower to elect directors of the capital stock of the Bank or the Company (or other survivingcompany), such transaction shall not constitute a Change of Control.(h) **“****Code****”**shall mean the Internal Revenue Code of 1986, as amended.(i) **“****Company****”**means the parent bank holding company of the Bank that may be formedfollowing the Effective Date.(j) **“****Competing Business****”**shall mean any entity (other than the Employer and itsAffiliates) that is conducting business that is the same or substantially the same as the Businessof the Employer.(k) **“****Confidential Information****”**means data and information relating to the business ofthe Employer and its Affiliates (which does not rise to the status of a Trade Secret) which is orhas been disclosed to the Executive or of which the Executive became aware as a consequence of orthrough the Executive’s relationship to the Employer and its Affiliates and which has value to theEmployer and its Affiliates and is not generally known to its competitors. ConfidentialInformation shall not include any data or information that has been voluntarily disclosed to thepublic by the Employer or its Affiliates, provided that such public disclosure shall not be deemedto be voluntary when made without authorization by the Executive or any other employee of Employer,or that has been independently developed and disclosed by others, or that otherwise enters thepublic domain through lawful means.
 
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(l) **“****Disability****”**shall mean that the Executive suffers from a physical or mentaldisability or infirmity that qualifies the Executive for disability benefits under any accident andhealth plan maintained by the Employer that provides income replacement benefits due to disabilityor, if the Employer does not maintain such a plan, the Executive’s inability to perform theessential functions of the Executive’s job for a period of ninety (90) or more days, with orwithout reasonable accommodation, as a result of a physical or mental disability or infirmity, asreasonably determined by the Employer.(m) **“****Effective Date****”**shall mean the later of (i) January 14, 2011; or (ii)confirmation from federal and state banking regulators that each have no objection to theemployment of the Executive in the capacity(ies) indicated by this Agreement.(n) **“****Employer****”**means the Bank and, if the Company is formed and becomes a party tothis Agreement, the Company.(o) **“****Employer Information****”**means Confidential Information and Trade Secrets.(p) **“****Good Reason****”**shall mean any of the following which occurs on or after theEffective Date:(1) a material reduction of the Executive’s Annual Base Salary from its then currentrate without the Executive’s consent, other than a reduction that also is applied tosubstantially all other executive officers of the Employer if Executive’s reduction issubstantially proportionate to, or no greater than, the reduction applied to substantiallyall other executive officers; or(2) a material diminution in the authority, responsibilities or duties of the Executivehereunder without the Executive’s consent;provided, however, that for a Termination of Employment by the Executive to be for Good Reason, theExecutive must notify the Employer in writing of the event giving rise to Good Reason within thirty(30) days following the occurrence of the event (or, if later, thirty (30) days following theExecutive’s knowledge of occurrence of the event), the event must remain uncured after theexpiration of sixty (60) days following the delivery of written notice of such event to theEmployer by the Executive, and the Executive must resign effective no later than sixty (60) daysfollowing the Employer’s failure to cure the event and must give at least thirty (30) days advancewritten notice prior to the Executive’s effective date of resignation.(q) **“****Initial Term****”**shall mean that period of time commencing on the Effective Date andrunning until the earlier of (1) the close of business on the last business day immediatelypreceding the third anniversary of the Effective Date, or (2) any earlier termination of employmentof the Executive under this Agreement as provided for in Section 4.(r) **“****Term****”**shall mean the Initial Term and all subsequent extension periods.
 
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(s) **“****Termination of Employment****”**shall mean a termination of the Executive’s employmentwhere either (1) the Executive has ceased to perform any services for the Employer and allaffiliated companies that, together with the Employer, constitute the “service recipient” withinthe meaning of Code Section 409A and the regulations thereunder (collectively, the“Service Recipient”) or (2) the level of bona fide services the Executive performs for theService Recipient after a given date (whether as an employee or as an independent contractor)permanently decreases (excluding a decrease as a result of military leave, sick leave, or otherbona fide leave of absence if the period of such leave does not exceed six months, or if longer, solong as the Executive retains a right to reemployment with the Service Recipient under anapplicable statute or by contract) to no more than twenty percent (20%) of the average level ofbona fide services performed for the Service Recipient (whether as an employee or an independentcontractor) over the immediately preceding 36-month period (or the full period of service if theExecutive has been providing services to the Service Recipient for less than 36 months).(t) **“****Trade Secrets****”**means Employer or Affiliate information including, but not limitedto, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods,techniques, drawings, processes, financial data, financial plans, product plans or lists of actualor potential customers or suppliers which:(1) derives economic value, actual or potential, from not being generally known to, andnot being readily ascertainable by proper means by, other persons who can obtain economicvalue from its disclosure or use; and(2) is the subject of efforts that are reasonable under the circumstances to maintainits secrecy.**[Signatures on Next Page]**
 
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**IN WITNESS WHEREOF**, the Employer and the Executive have executed and delivered thisAgreement as of the date first shown above.         Bank:           Park Sterling Bank           By:         Signature              Print Name              Title           Executive:                Nancy J. Foster
 
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**Schedule A**