monthly. Executive’s salary shall be fixed for 2008 and 2009. As soon as practical afterJanuary 1 of 2010 and each year thereafter during the Term of Employment, Executive’s salary willbe reviewed by the Board of Directors of the Bank for the upcoming calendar year and Executiveshall be entitled to receive annually an increase (but in no event a decrease from the annualsalary for the prior calendar year) in such amount, if any, as may be determined by the Board ofDirectors.          3.2 Management Incentives and Discretionary Bonuses.     (a) During the Term of Employment, Executive shall be entitled, in an equitable mannerbased on the terms of any bonus and incentive plans that have been approved or may, fromtime to time, be approved by the Bank’s Board of Directors, with all other key managementpersonnel, to such incentives and discretionary bonuses as may be authorized, declared andpaid by the Board of Directors to the Bank’s key management employees. For 2008 and 2009,Executive shall be awarded a bonus equivalent to an annualized $46,000 (the bonus for 2008being prorated based on the number of days actually employed by the Bank during the year);provided, however, that Executive must be employed by the Bank on the lastday of each respective year to receive the bonus and furtherprovided thatExecutive’s bonus for 2008 shall be contingent upon the Bank’s achievement of at least an11% reduction in the ratio of non-performing loans (as defined in Section 3.2(c) below) tototal loans (comparing the June 30, 2008 ratio to the December 31, 2008 ratio) and thatExecutive’s bonus for 2009 shall be contingent upon the Bank’s return to month-to-monthprofitability (determined after appropriate provisions are made to maintain the allowancefor loan loss at an adequate level) before the end of 2009. Beginning in 2010, and subjectto the limitations set forth in Section 3.2(b) below, the bonus shall be based on meeting orexceeding certain performance criteria to be established by the Board of Directors and shallbe paid by March 15 of the following year. It is anticipated that the performance criteriashall consist of targeted objectives in the following areas: (i) earnings (as defined inSection 3.2(c) below); (ii) asset growth; and (iii) asset quality. If the targets in theseareas are met, then the Board of Directors intends to award Executive an annual bonus equalto 20% of Executive’s Base Salary (the “Standard Bonus”). If actual earnings exceed thebudgeted target, then the Board of Directors anticipates that Executive will be eligible foran increase in his bonus equal to 10% of such excess earnings up to the point where theaggregate bonus equals 60% of his Base Salary for the year in question. It is anticipatedthat any increase in bonus over the Standard Bonus shall be based on exceeding targetedobjectives in the established performance criteria. No other compensation provided for inthis Agreement shall be deemed a substitute for the Executive’s right to such incentives anddiscretionary bonuses when and as declared by the Board.     (b) In order to be eligible for any incentives described above beginning in 2010 andbeyond under Section 3.2(a), the Board of Directors must determine that the goals set forthin Section 3.2(a) have been met and must further determine that: (i) the Bank has been andcontinues to be run in a safe, sound and balanced fashion as evidenced by qualitativeassessments; (ii) the Bank has achieved soundness and balance in the areas of asset quality,liquidity, capital, management, earnings and sensitivity to interest rate risk, with theCAMELS rating being only one indicator of having achieved this goal; and
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(iii) that the overall financial condition of the Bank will not be adversely affected bypayment of such cash incentive. These determinations shall be made by the Board ofDirectors of the Bank in its sole and absolute discretion. The Executive shall have theopportunity to present evidence to the Board of Directors regarding the attainment of theconditions set forth in Section 3.2(a) but shall otherwise recuse himself from any decisionsregarding the same. In addition to the foregoing, the parties acknowledge that any paymentof bonuses to Executive may be limited by administrative actions or agreements imposed uponthe Bank by the Georgia Banking and Finance (the “DBF”) and/or the FDIC.     (c) For purposes of this Section 3.2, “earnings” shall mean net income beforeincome taxes, extraordinary items and the cumulative effect of an accounting change on priorperiods and “non-performing loans” shall mean the sum of: (i) nonaccrual loans; (ii)loans that are at least 30 days past due; and (iii) any other loans that are determined tobe non-performing by the DBF or the FDIC.1          3.3 Stock Options. With the execution of this Agreement, Executive has been awardedstock options to purchase 133,333 shares of the common stock of Southern Community Bancshares,Inc., the Bank’s holding company (the “Company”). The exercise price of the options is $4.00. Thestock options shall vest as follows: 15,000 immediately, 23,667 on the first anniversary of thegrant date, 23,667 on the second anniversary of the grant date, 23,666 on the third anniversary ofthe grant date, 23,666 on the fourth anniversary of the grant date, and 23,666 on the fifthanniversary of the grant date.          The stock options are evidenced by a separate incentive stock option grant agreement betweenthe Company and Executive (the “Grant Agreement”). In the event of a conflict between the terms ofthis Agreement and the Grant Agreement, the terms of the Grant Agreement shall control.          3.4 Director Service. Subject to continued re-election by the Bank’s shareholder andpossible removal pursuant to the Bank’s bylaws, Executive shall serve on the Board of Directors ofthe Bank and shall be entitled to receive directors’ fees for such service on the same basis asother directors. Any fees, stock option grants or other compensation received by Executive on thesame basis as other directors will be additional compensation and supplement the compensation andbenefits otherwise provided for in this Employment Agreement. In the event that the Executive’semployment hereunder is terminated for any reason whatsoever, such termination shall constitute aresignation by the Executive as a member of the Board of Directors of the Bank.          3.5 Additional Benefits. During the Term of Employment, Executive shall be providedwith such employee benefits and benefit levels, including health, life and disability insurance, anannual car allowance of $25,000 (which covers fuel, maintenance, insurance and all other vehiclerelated expenses), and a membership in social, professional and civic clubs which the Board ofDirectors in its discretion determines to be in keeping with a level commensurate with asimilarly-situated financial institution. These benefits shall be provided and maintained at alevel of not less than what is in effect at the time this Agreement is executed. 1 This paragraph needs to be completed to address David’scomment from his July 7, 2008 email to Carolyn.
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Throughout the Term of Employment, Executive shall also be entitled to reimbursement forreasonable business expenses incurred by him in the performance of his duties hereunder. Duringthe Executive’s Term of Employment hereunder, Executive shall receive four (4) weeks paid vacationduring each year of employment.     4. TERMINATION.          4.1 Death, Disability or Resignation. This Agreement may be terminated before theexpiration of the Term of Employment upon the occurrence of any one of the following events:     (a) Upon Executive’s death, this Agreement shall terminate immediately. Any salary andany other amounts that may be due Executive from the Bank at the time of his death (whetherpursuant to benefits plans or otherwise) shall be paid to the executor or administrator ofhis estate.     (b) Executive may terminate this Agreement upon 60 days prior written notice to theBank, in which case Executive shall receive only his salary and any other amounts due to himfrom the Bank (whether pursuant to benefit plans or otherwise) through the date oftermination.     (c) The Bank may terminate this Agreement upon Executive’s “Total Disability.” As usedin this Agreement, “Total Disability” means any physical or mental disorder that rendersExecutive incapable of performing his normal duties and services under this Agreement for aperiod of one hundred twenty (120) days in any consecutive twelve (12) month period, asdetermined by a licensed physician selected by mutual agreement of the Bank and theExecutive or the Executive’s legal representative. If this Agreement is terminated as aresult of the Executive’s “Total Disability,” the Executive’s compensation hereunder shallterminate and the Executive shall be paid in accordance with such long-term disability plansof the Bank as may be in effect at that time. The Executive’s compensation, title andstatus shall continue during any such period of disability until the date of terminationexcept that the Bank may provide disability insurance to cover the Executive during any partof such disability period and the Bank’s obligation for the Executive’s compensation for anysuch period shall be reduced by the amount of any such insurance proceeds which theExecutive receives.          4.2 For Cause. This Agreement may be terminated by the Board of Directors of the Bankfor “Cause” for any of the following reasons:     (a) failure of Executive to follow reasonable written instructions or policies of theBoard of Directors of the Bank;     (b) gross negligence or willful misconduct of Executive materially damaging to thebusiness of the Bank;     (c) conviction of Executive of a crime involving breach of trust, moral turpitude,theft or fraud;
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     (d) the failure by the Executive to perform substantially his duties other than anyfailure resulting from incapacity due to physical or mental illness;     (e) willful commission by Executive of (i) acts involving dishonesty or fraud or (ii)criminal acts causing harm to the Bank;     (f) a willful misrepresentation by the Executive to the stockholder or the Board ofDirectors of the Bank which causes substantial injury to the Bank; or     (g) a request by any state or federal authority regulating the Bank that the Executivebe removed from his office as President and Chief Executive Officer.Except for the reasons described in (c), (e), (f) or (g) above, for which no notice shall berequired prior to termination, the Bank shall notify Executive in writing of the specific reasonsfor the termination for “Cause” and the Executive will be allowed thirty (30) days to reply inwriting to the accusation before any termination for “Cause”. If the Executive is terminated for“Cause,” he shall receive only his salary and any other amounts due to him from the Bank (whetherpursuant to benefit plans or otherwise) through the date of termination.          4.3 Without Cause. The Bank may immediately terminate this Agreement at any time“without Cause” by giving the Executive written notice of the termination date. If this Agreementis terminated pursuant to this Section 4.3, and provided that Executive is not entitled toseverance following a Change in Control in accordance with Section 5, then:     (i) Executive shall be paid severance compensation in an amount equal to hisannual “Base Salary” (as defined in Section 3.1) then in effect which shall be paidover a twelve (12)-month period commencing from the termination date in suchinstallments and intervals as if the Executive had remained employed;provided, however, that the payments pursuant to this clause (i)shall only be made if Executive executes a release substantially in the form ofExhibit A attached hereto and all applicable consents have been obtainedpursuant to Part 359 of the FDIC’s rules and regulations; and     (ii) Executive shall be paid any other amounts owing to the Executive by theBank under this Agreement at such termination date, which amounts shall be paidwithin thirty (30) days after such termination date.If this Agreement is terminated “without Cause”, and if and to the extent that the Executive timelyelects COBRA continuation coverage, the Bank will pay to Executive on a monthly basis the cost ofCOBRA continuation coverage, less the amount of premiums by active employees receiving the samecoverage for a period of twelve (12) months from the termination date or such lesser period as theExecutive continues to have COBRA coverage.          Anything in this Agreement to the contrary notwithstanding, upon a termination “without Cause”pursuant to this Section 4.3, Executive’s sole rights and remedies against the Bank arising out ofany such termination of his employment hereunder are to receive the severance compensation and theother amounts and benefits as are explicitly set forth in this Section 4.3.
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          5. CHANGE IN CONTROL. In the event of a “Change in Control” during the Term ofEmployment, as defined herein, and the Executive either (i) is terminated by the Bank (except “forCause” as defined in Section 4.2 above), during the one-year period after the Change in Controlbecomes effective, from his employment hereunder but before he reaches age 70, or (ii) voluntarilyresigns from his employment effective as of the first anniversary of the date of the Change inControl (provided that Executive must provide 60 days prior written notice to the Bank of suchresignation), then Executive shall be entitled to receive severance compensation in an amount equalto one hundred percent (100%) of his Base Salary then in effect and any other amounts owing toExecutive at the time of such termination date, which shall be paid in a lump sum within 14 daysfollowing the date of termination or resignation; provided that Executive executes a release,substantially in the form of Exhibit A, and all applicable consents have been obtainedpursuant to Part 359 of the FDIC’s rules and regulations.          For purposes of this Section 5, “Change in Control” of the Bank shall mean the occurrence ofany of the following events that does not also constitute a Non-Control Transaction:     (i) During any twelve (12) month period the individuals who are members of theBoard of Directors of the Bank or the Company (the “Incumbent Board”), cease for anyreason to constitute at least 50% of the Board of the Bank or the Company; provided,however, that if the election, or nomination for election by the Bank’s or Company’sshareholders, of any new director was approved in advance by a vote of at least 50%of the Incumbent Board, such new director shall, for purposes of this Agreement, beconsidered as a member of the Incumbent Board.     (ii) A future acquisition of any voting securities of the Bank or the Company(the “Voting Securities”) by any “Person” (as the term “person” is used for purposesof Section 13(d) or 14(d) of the Exchange Act), or more than one Person acting as agroup, immediately after which such Person or Persons has “Beneficial Ownership”(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or moreof the combined voting power of the Bank’s or the Company’s then outstanding VotingSecurities; provided, however, that the event described in this paragraph (ii) shallnot be deemed to be a Change in Control by virtue of any of the followingacquisitions: (A) by the Bank or the Company, (B) by any employee benefit plan (orrelated trust) sponsored or maintained by the Bank or the Company, or (C) by anunderwriter temporarily holding securities pursuant to an offering of suchsecurities.     (iii) When any one Person, or more than one Person acting as a group, acquires(or has acquired during the twelve (12)-month period ending on the date of the mostrecent acquisition by such Person or Persons) assets from the Bank or the Companythat have a total gross fair market value equal to or more than 40% of the totalgross fair market value of all of the assets of such entity (determined withoutregard to any liabilities associated with such assets) immediately prior to suchacquisition or acquisitions, without regard to assets transferred to: (A) ashareholder or owner of the entity (immediately before the
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asset transfer) in exchange for or with respect to its stock, (B) anorganization, 50% or more of the total value or voting power of which is owneddirectly or indirectly, by the entity immediately after the transfer, (C) a Person,or more than one Person acting as a group, that owns, directly or indirectly, 50% ormore of the total value or voting power of the entity immediately after the transferor (D) an organization, at least 50% of the total value or voting power of which isowned, directly or indirectly, by a Person, or more than one Person acting as agroup, that owns, directly or indirectly, 50% or more of the total value or votingpower of the entity immediately after the transfer.          A “Non-Control Transaction” means any merger, consolidation or reorganization or similartransaction in which:     (i) the shareholders of the Bank or the Company immediately before such merger,consolidation, reorganization or similar transaction, own, directly or indirectlyand in substantially the same proportion as their ownership of the common stock ofthe Bank or the Company immediately before such transaction, immediately followingsuch transaction, at least 50% of the combined voting power of the outstandingvoting securities of the corporation resulting from such merger, consolidation orreorganization (the “Surviving Corporation”); and     (ii) immediately following such merger, consolidation or reorganization,members of the Incumbent Board shall constitute at least 50% of the members of theboard of directors of the Surviving Corporation.          For purposes of this Agreement, “Change in Duties or Salary” of Executive shall mean any of:(i) a change in duties and responsibilities of Executive from those duties and responsibilities ofExecutive for the Bank in effect at the time a Change in Control occurs, which change results inthe assignment of duties and responsibilities inferior to those duties and responsibilities of Bankat the time such Change in Control occurs; (ii) a reduction in rate of annual salary from such ratein effect at the time of Change in Control; or (iii) a change in the place of assignment of Bankfrom Fayetteville, Georgia, to any other city or geographical location that is located further than10 miles from the principal office of the Bank in Fayetteville, Georgia.          Notwithstanding the foregoing, this paragraph shall apply if all or any portion of thepayments and benefits provided to an Executive under this Agreement, or any other payment orbenefit (including under any plan or arrangement adopted in the future), would otherwise constitute“excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of1986, as amended (the “Code”), that are subject to the tax imposed by Section 4999 of the Code (orsimilar tax and/or assessment). If, after the application of such tax and/or assessment, theamount of such payment and benefits would be less than if the payment and benefits had been reducedto an amount that would result in there being no excess parachute payments, then such payments andbenefits shall be so reduced (the minimum extent necessary) so that no excess parachute paymentsresult. If reduction is necessary hereunder, the Executive shall elect which of the payments andbenefits shall be reduced. Determination of whether payments and benefits would constitute excessparachute payments, and the amount of reduction
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so that no excess parachute payments shall exist, shall be made, at the Bank’s expense, by theindependent accounting firm employed by the Bank immediately prior to the occurrence of any changeof control of the Bank or Company which would result in the imposition of such tax.     6. NONCOMPETE AND NON-SOLICITATION COVENANTS.          6.1 Definitions. In this Agreement the following terms shall have the meanings setforth below:     (a) “Affiliate” shall be used to indicate a relationship to a specified person, firm,corporation, partnership, association or entity, and shall mean any person, firm,corporation, partnership, association or entity that, directly or indirectly or through oneor more intermediaries, controls, is controlled by or is under common control with suchperson, firm, corporation, partnership, association or entity.     (b) “Applicable Period” shall mean twelve (12) months following the effective date ofthe termination of this Agreement.     (c) “Area” shall mean the geographic area within the following Georgia Counties:Henry, Fayette, Coweta, Clayton and Spalding.     (d) “Competing Business” shall mean a federally insured financial institution.          6.2 Agreement Not to Compete. The Executive hereby agrees that during his employmentby the Bank, and for the Applicable Period thereafter, he will not (except on behalf of, or withthe prior written consent of, the Bank) for a Competing Business located within the Area, eitherdirectly or indirectly, on his own behalf, or in the service or on behalf of others, as aprincipal, partner, officer, director, manager, supervisor, administrator, consultant, executiveemployee or in any other capacity which involves the duties and responsibilities similar to thoseundertaken for the Bank as described in Section 1, work for, engage or participate in any suchCompeting Business, or control or own (other than ownership of less than five percent (5%) of theoutstanding voting securities of an entity whose voting securities are traded on a nationalsecurities exchange or quoted on an Automated Quotation System sponsored by the Financial IndustryRegulatory Authority), a beneficial interest in, any Competing Business.          6.3 Agreement Not to Solicit Customers. The Executive agrees that during hisemployment by the Bank and for the Applicable Period thereafter, he will not, without the priorwritten consent of the Bank, either directly or indirectly, on his own behalf or in the service oron behalf of others, solicit, divert or appropriate, or attempt to solicit, divert or appropriate,to any Competing Business any customer or client or actively sought prospective customer or clientof the Bank or any Affiliate located in the Area who was serviced by or under the supervision ofthe Executive in the course of his employment within the one (1) year period immediately prior tothe termination of the Executive’s employment with the Bank.          6.4 Agreement Not to Solicit Employees. The Executive agrees that during hisemployment by the Bank and for the Applicable Period thereafter, he will not, either directly orindirectly, on his own behalf or in the service or on behalf of others, solicit for employment
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any person who was employed by the Bank or any of its Affiliates during the Executive’s Termof Employment, whether or not such employee was a full-time, a part-time or a temporary employeeand whether or not such employment was pursuant to a written agreement and whether or not suchemployment was for a determined period or was at will.     7. OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION.          7.1 Definitions. The following capitalized terms used in this Section 7 shall havethe meanings assigned to them below, which definitions shall apply to both the singular and theplural forms of such terms:          *“Confidential Information”*means all information regarding the Bank, its activities, businessor clients that is the subject of reasonable efforts by the Bank to maintain its confidentialityand that is not generally disclosed by practice or authority to persons not employed by the Bank,but that does not rise to the level of a Trade Secret. “Confidential Information” shall include,but is not limited to, financial plans and data concerning the Bank; management planninginformation; business plans; operational methods; market studies; marketing plans or strategies;product development techniques or plans; customer lists; details of customer contracts; current andanticipated customer requirements; past, current and planned research and development; businessacquisition plans; and new personnel acquisition plans. “Confidential Information” shall notinclude information that has become generally available to the public by the act of one who has theright to disclose such information without violating any right or privilege of the Bank. Thisdefinition shall not limit any definition of “confidential information” or any equivalent termunder state or federal law.          *“Trade Secret”*means all information, without regard to form, including, but not limited to,technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method,a technique, a drawing, a process, financial data, financial plans, product plans, distributionlists or a list of actual or potential customers, advertisers or suppliers which is not commonlyknown by or available to the public and which information: (A) derives economic value, actual orpotential, from not being generally known to, and not being readily ascertainable by proper meansby, other persons who can obtain economic value from its disclosure or use; and (B) is the subjectof efforts that are reasonable under the circumstances to maintain its secrecy. Without limitingthe foregoing, Trade Secret means any item of confidential information that constitutes a “tradesecret(s)” under the common law or statutory law of the State of Georgia.          7.2 Restriction on Disclosure and Use of Confidential Information and Trade Secrets.Executive understands and agrees that the Confidential Information and Trade Secrets constitutevaluable assets of the Bank and its affiliated entities, and may not be converted to Executive’sown use. Accordingly, Executive hereby agrees that Executive shall not, directly or indirectly, atany time during the Term of Employment and a period extending one year thereafter (the “RestrictedPeriod”) reveal, divulge, or disclose to any person not expressly authorized by the Bank anyConfidential Information, and Executive shall not, directly or indirectly, at any time during theRestricted Period use or make use of any Confidential Information in connection with any businessactivity other than that of the Bank. Throughout the term of this Agreement and at all times afterthe date that this Agreement terminates for any reason, Executive shall not
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directly or indirectly transmit or disclose any Trade Secret of the Bank to any Person, andshall not make use of any such Trade Secret, directly or indirectly, for himself or for others,without the prior written consent of the Bank. The parties acknowledge and agree that thisAgreement is not intended to, and does not, alter either the Bank’s rights or Executive’sobligations under any state or federal statutory or common law regarding trade secrets and unfairtrade practices.          Anything herein to the contrary notwithstanding, Executive shall not be restricted fromdisclosing or using Confidential Information or Trade Secrets that are required to be disclosed bylaw, court order or other legal process; *provided, however,*that in the event disclosure isrequired by law, Executive shall provide the Bank with prompt notice of such requirement so thatthe Bank may seek an appropriate protective order prior to any such required disclosure byExecutive.          7.3 Return of Property. Upon request by the Bank, and in any event upon terminationof the employment of the Executive with the Bank for any reason, the Executive will promptlydeliver to the Bank all property belonging to the Bank, including, without limitation, allConfidential Information and all Trade Secrets (and all physical embodiments thereof) then in hiscustody, control or possession.          7.4 Termination. The Executive shall maintain and observe the obligations ofconfidentiality contained in this Agreement with respect to Confidential Information during theterm of his employment with the Bank and at all times following the termination of such employmentfor any reason whatsoever.     8. INJUNCTIVE RELIEF. The Executive agrees that the covenants and agreementscontained in Sections 6 and 7 of this Agreement, and the subsections of these Sections, are of theessence of this Agreement; that each of such covenants is reasonable and necessary to protect andpreserve the interests and properties of the Bank and the business of the Bank; that the Bank isengaged in active business throughout the Area; that irreparable loss and damage will be sufferedby the Bank should the Executive breach any of such covenants and agreements; and that, in additionto other remedies available to it, the Bank shall be entitled to both temporary and permanentinjunctions to prevent a breach or contemplated breach by the Executive of any of such covenants oragreements.     9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between theparties hereto regarding employment of Executive, and supersedes and replaces any prior agreementbetween the parties.     10. ASSIGNMENT. None of the parties hereto may assign this Agreement without theprior written consent of the other parties hereto except that the Bank may assign the Agreement toa successor in interest who agrees, either by consent or by operation of law, to assume the Bank’sobligations under this Agreement.     11. SEVERABILITY. Each section and subsection of this Agreement constitutes aseparate and distinct understanding, covenant and provision hereof. In the event that anyprovision of this Agreement shall finally be determined to be unlawful, such provision shall be
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deemed to be severed from this Agreement, but every other provision of this Agreement shallremain in full force and effect.     12. GOVERNING LAW. This Agreement shall in all respects be interpreted, construed andgoverned by and in accordance with the laws of the State of Georgia.     13. RIGHTS OF THIRD PARTIES. Nothing herein expressed or implied is intended to orshall be construed to confer upon or give to any person, firm or other entity, other than theparties hereto and their permitted assigns, any rights or remedies under or by reason of thisAgreement.     14. AMENDMENT. This Agreement may not be amended orally but only by an instrument inwriting duly executed by the parties hereto.     15. CODE SECTION 409A. Notwithstanding any other provision of this Agreement, it isintended that any payments or benefit which is provided pursuant to or in connection with thisAgreement which is considered to be deferred compensation subject to Section 409A of the Code shallbe provided and paid in such form and at such time, including, without limitation, payment only inconnection with a permissible payment event as complies with the applicable requirements of CodeSection 409A to avoid the unfavorable tax consequences provided therein for noncompliance. IfExecutive is a “specified employee” (as defined in Section 409A of the Code) and any of the Bank’sor Company’s stock is publicly traded on an established securities market or otherwise, thenpayment of any amount or provision of any benefit under this Agreement which is considered to bedeferred compensation subject to Section 409A of the Code shall be deferred for six (6) months asrequired by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”). In the event suchpayments are otherwise due to be made in installments or periodically during the 409A DeferralPeriod, the payments which would otherwise have been made in the 409A Deferral Period shall beaccumulated and paid in lump sum as soon as the 409A Deferral Period ends, and the balance of thepayments shall be made as otherwise scheduled. For purposes of this Agreement, any termination ofemployment will be read to mean a “separation from service” within the meaning of Section 409A ofthe Code where it is reasonably anticipated that no further services would be performed after suchdate or that the level of bona fide services Executive would perform after that date (whether as anemployee or independent contractor) would permanently decrease to less than fifty percent (50%) ofthe average level of bona fide services performed over the immediately preceding thirty-six (36)month period. With respect to any reimbursement provided under this Agreement, (a) suchreimbursements shall be made within sixty (60) days from the submission date, (b) the amount ofexpenses eligible for reimbursement during one calendar year shall not affect the expenses eligiblefor reimbursement in any other calendar year, and (c) the right to reimbursement shall not besubject to liquidation or exchange for other benefits.     16. NOTICES. Any notice or other document or communication permitted or required tobe given to Executive pursuant to the terms hereof shall be deemed given if personally delivered toExecutive or sent to him postage prepaid, by registered or certified mail, at________, or at any such other address as Executive shall have notified the Bankin writing. Any notice or other document or other communication permitted or required to be givento the Bank pursuant to the terms hereof shall be deemed given if personally
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delivered or sent to the Bank, postage prepaid, by registered or certified mail, at 525 NorthJeff Davis Drive, Fayetteville, Georgia 30214, or at such other address as the Bank shall havenotified Executive in writing. All notices personally delivered shall be deemed received on thedate delivered. All notices sent by postage-prepaid, registered or certified mail shall be deemedreceived on the actual date of receipt, or when refused or returned because of failure to claim ifmailed return-receipt requested.     17. WAIVER. The waiver by either party hereto of a breach of any provision of thisAgreement by the other shall not operate or be construed as a waiver of any subsequent breach ofthe same or any other provision of this Agreement by the breaching party.***(Signatures on following page.)***
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     **IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed anddelivered as of the day and year first above written.      **SOUTHERN COMMUNITY BANK** [BANKSEAL]          By:  /s/ Thomas D. Reese, Chairman                 **   EXECUTIVE**