EXHIBIT
      10(xx)

     

    Amended
      Employment Agreement

    


    This
      Amended
      Employment Agreement
      (this
“Agreement”) is entered into effective as of this24 day of October, 2007, by and
      among W. Keith Betts (the “Executive”),
      Crescent Financial Corporation, a North Carolina corporation (the
“Corporation”), and Crescent State Bank, a North Carolina-chartered bank and
      wholly owned subsidiary of the Corporation (the “Bank”). The Corporation and the
      Bank are hereinafter sometimes referred to together or individually as
“Employer.”

    


    Whereas,
      the
      Executive possesses unique skills, knowledge, and experience relating to the
      banking business and is expected to make significant contributions to the
      profitability, growth, and financial strength of the Corporation and
      affiliates,

    


    Whereas,
      Employer desires to assure itself of the continuity of management and desires
      to
      establish minimum severance benefits for certain of its officers and other
      key
      employees,

    


    Whereas,
      Employer desires to provide additional inducement for the Executive to remain
      in
      the employ of the Employer,

    


    Whereas,
      the
      Executive, the Corporation, and Port City Capital Bank, a wholly owned
      subsidiary of the Corporation that has merged into the Bank, are parties to
      an
      Employment Agreement dated as of September 1, 2006, but the Executive and the
      Employer intend that this Agreement restate the previous employment agreement
      in
      its entirety, incorporating into this Agreement the terms of the September
      1,
      2006 Employment Agreement as amended hereby, and

    


    Whereas,
      none of
      the conditions or events included in the definition of the term “golden
      parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
      Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
      Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists
      or,
      to the best knowledge of Employer, is contemplated insofar as Employer or any
      affiliates are concerned.

    


    Now
      Therefore,
      in
      consideration of these premises, the mutual covenants contained herein, and
      other good and valuable consideration the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto agree as follows.

    


    Article
      1

    Employment

    


    1.1 Employment.
      The
      Executive shall serve as Executive Vice President of the Bank according to
      the
      terms and conditions of this Agreement. The Executive hereby accepts employment
      according to the terms and conditions of this Agreement and for the period
      stated in section 1.3.

    


    1.2 Duties.
      As
      Executive Vice President of the Bank, the Executive shall serve the Bank
      faithfully, diligently, competently, and to the best of the Executive’s ability.
      The Executive shall also serve as a non-voting member of the loan committee
      of
      the Bank’s board of directors. The Executive shall exclusively devote full time,
      energy, and attention to the promotion of the Bank’s interests throughout the
      term of this Agreement. During the two-year period commencing when Port City
      Capital Bank merges into the Bank, the Executive shall report to the President
      and Chief Executive Officer of the Bank or any successor thereto. Without the
      written consent of the Corporation’s board of directors, during the term of this
      Agreement the Executive shall not render services to or for any person, firm,
      corporation, or other entity or organization in exchange for compensation,
      regardless of the form in which such compensation is paid and regardless of
      whether it is paid directly or indirectly to the Executive. However, the
      Executive may serve with or without compensation as an officer or director
      of
      any charitable or civic organization. Nothing in this section 1.2 shall prevent
      the Executive from managing personal investments and affairs, however, provided
      that doing so does not interfere with the proper performance of the Executive’s
      duties.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    1.3 Term.
      The
      initial term of this Agreement shall be for a period of three years, commencing
      September 1, 2006. On the first anniversary of September 1, 2006 and on each
      anniversary thereafter this Agreement shall be extended automatically for one
      additional year unless the Bank’s board of directors determines that the term
      shall not be extended. If the board of directors determines not to extend the
      term, it shall promptly notify the Executive in writing. If the board of
      directors decides not to extend the term of this Agreement, this Agreement
      shall
      nevertheless remain in force until its term expires. The board of directors’
decision not to extend the term of this Agreement shall not – by
      itself – give the Executive any rights under this Agreement to claim an
      adverse change in his position, compensation, or circumstances or otherwise
      to
      claim entitlement to severance benefits under Article 4 of this Agreement.
      References herein to the term of this Agreement shall refer to the initial
      term,
      as the same may be extended. Unless sooner terminated, the Executive’s
      employment shall terminate when the Executive attains age 65.

    


    Article
      2

    Compensation
      and Other Benefits

    


    2.1 Base
      Salary.
      In
      consideration of the Executive’s performance of the obligations under this
      Agreement, Employer shall pay or cause to be paid to the Executive a salary
      at
      the annual rate of not less than $175,000, payable in monthly installments.
      The
      Executive’s salary shall be reviewed annually by the Compensation Committee of
      the Bank’s board of directors or by the board committee having jurisdiction over
      executive compensation. The Executive’s salary shall be increased no less
      frequently than annually to account for cost of living increases. The
      Executive’s salary also may be increased beyond the amount necessary to account
      for cost of living increases at the discretion of the committee having
      jurisdiction over executive compensation. However, the Executive’s salary shall
      not be reduced. The Executive’s salary, as the same may be increased from time
      to time, is referred to in this Agreement as the “Base
      Salary.”

    


    2.2 Benefit
      Plans and Perquisites.
      The
      Executive shall be entitled throughout the term of this Agreement to participate
      in any and all officer or employee compensation, bonus, incentive, and benefit
      plans in effect from time to time, including without limitation stock option
      plans and other stock-based compensation, incentive, bonus, or purchase plans,
      or plans providing pension, medical, dental, disability, and group life
      benefits, including Employer’s 401(k) Plan, and to receive any and all other
      fringe benefits provided from time to time, provided that the Executive
      satisfies the eligibility requirements for any such plans or
      benefits.

    


    (a) Club
      dues.
      During
      the term of this Agreement, the Employer shall pay or cause to be paid the
      Executive’s continued membership dues in civic and/or country clubs in an amount
      up to $750 per month.

    


    (b) Reimbursement
      of business expenses.
      The
      Executive shall be entitled to reimbursement for all reasonable business
      expenses incurred performing the Executive’s obligations under this Agreement,
      including but not limited to all reasonable business travel and entertainment
      expenses incurred while acting at the request of or in the service of Employer
      and reasonable expenses for attendance at annual and other periodic meetings
      of
      trade associations.

    


    2.3 Vacation.
      The
      Executive shall be entitled to paid annual vacation and sick leave in accordance
      with the policies established from time to time by Employer, but in no event
      fewer than four weeks of vacation per year. The Executive shall schedule at
      least five consecutive days of vacation per year. The timing of vacations shall
      be scheduled in a reasonable manner by the Executive. The Executive shall not
      be
      entitled to any additional compensation for failure to use allotted vacation
      or
      sick leave nor shall the Executive be entitled to accumulate unused sick leave
      from one year to the next, unless authorized by the Bank’s board of directors to
      do so.

    


    2.4 Supplemental
      Retirement Plan.
      The
      Bank and the Executive have entered into a Salary Continuation Agreement dated
      as of October 24, 2007. Unless the Salary Continuation Agreement explicitly
      provides otherwise, whether benefits are properly payable to the Executive
      under
      the Salary Continuation Agreement shall be determined solely by reference to
      that agreement, as the same may be amended.


    
      
        
        

      

      
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    Article
      3

    Employment
      Termination

    


    3.1 Termination
      because of Death or Disability.
      (a)
Death.
      The
      Executive’s employment shall terminate automatically on the date of the
      Executive’s death. If the Executive dies in active service to Employer, for 12
      months after the Executive’s death Employer shall assist the Executive’s family
      with continuing health care coverage under COBRA substantially identical to
      that
      provided before the Executive’s death. In addition, if the Executive’s
      employment terminates because of death the Executive’s estate shall be entitled
      to any payments owing under section 6.2, as provided in section
      6.2.

    


    (b) Disability.
      By
      delivery of written notice 30 days in advance to the Executive, Employer may
      terminate the Executive’s employment if the Executive is disabled. For purposes
      of this Agreement, the Executive shall be considered “disabled”
if
      an
      independent physician selected by Employer and reasonably acceptable to the
      Executive or the Executive’s legal representative determines that, because of
      illness or accident, the Executive is unable to perform the Executive’s duties
      for a period of 90 consecutive days. The Executive shall not be considered
      disabled, however, if the Executive returns to work on a full-time basis within
      30 days after Employer gives notice of termination due to disability. If the
      Executive’s employment terminates because of disability, the Executive shall
      receive the salary earned through the date on which termination became
      effective, any unpaid bonus or incentive compensation due to the Executive
      for
      the calendar year preceding the calendar year in which the termination became
      effective, any payments the Executive is eligible to receive under any
      disability insurance program in which the Executive participates, such other
      benefits to which the Executive may be entitled under Employer’s benefit plans,
      policies, and agreements, and any benefits provided for elsewhere in this
      Agreement. In addition, if the Executive’s employment terminates because of
      disability the Executive shall be entitled to any payments owing under section
      6.2, as provided in section 6.2.

    


    3.2 Involuntary
      Termination with Cause.
      Employer may terminate the Executive’s employment with Cause. If the Executive’s
      employment terminates with Cause, the Executive shall receive the salary to
      which the Executive was entitled through the date on which termination became
      effective and any other benefits to which the Executive may be entitled under
      Employer’s benefit plans and policies in effect on the termination date. For
      purposes of this Agreement “Cause”
means
      any of the following –

    


    (1) an
      intentional act of fraud, embezzlement, or theft by the Executive in the course
      of employment. An act or failure to act on the Executive’s part shall be
      considered intentional if it is not in good faith and if it is without a
      reasonable belief that the action or failure to act is in the Employer’s best
      interests. No act or failure to act on the part of the Executive shall be deemed
      to have been intentional if it was due primarily to an error in judgment or
      negligence, or

    


    (2) intentional
      violation by the Executive of any applicable law or significant policy of
      Employer that, in Employer’s reasonable judgement, results in an adverse effect
      on Employer, regardless of whether the violation leads to criminal prosecution
      or conviction. For purposes of this Agreement applicable laws include any
      statute, rule, regulatory order, statement of policy, or final cease-and-desist
      order of any governmental agency or body having regulatory authority over
      Employer, or


    
      
        
        

      

      
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    (3) the
      Executive’s gross negligence or gross neglect of duties in the performance of
      duties, or

    


    (4) intentional
      wrongful damage by the Executive to the business or property of Employer,
      including without limitation the reputation of Employer, which in Employer’s
      reasonable judgment causes material harm to Employer, or

    


    (5) a
      breach
      by the Executive of fiduciary duties or misconduct involving dishonesty, in
      either case whether in the Executive’s capacity as an officer or as a director,
      or

    


    (6) a
      breach
      by the Executive of this Agreement that, in the Employer’s reasonable judgment,
      is a material breach, which breach is not corrected by the Executive within
      10
      days after receiving written notice of the breach, or

    


    (7) removal
      of the Executive from office or permanent prohibition of the Executive from
      participating in the Bank’s affairs by an order issued under section 8(e)(4) or
      (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1),
      or

    


    (8) conviction
      of the Executive for or plea of no contest to a felony or conviction of or
      plea
      of no contest to a misdemeanor involving moral turpitude, or the actual
      incarceration of the Executive for five consecutive days or more,
      or

    


    (9) the
      occurrence of any event that results in the Executive being excluded from
      coverage, or having coverage limited for the Executive as compared to other
      executives of the Bank, under the Bank’s blanket bond or other fidelity or
      insurance policy covering its directors, officers, or employees.

    


    3.3 Voluntary
      Termination by the Executive Without Good Reason.
      If the
      Executive terminates employment without Good Reason, the Executive shall receive
      the Base Salary and expense reimbursement to which the Executive is entitled
      through the date on which termination becomes effective, and any payments owing
      under section 6.2, as provided in section 6.2.

    


    3.4 Involuntary
      Termination Without Cause and Voluntary Termination with Good
      Reason.
      With
      written notice to the Executive 90 days in advance, the Employer may terminate
      the Executive’s employment without Cause. Termination shall take effect at the
      end of the 90-day period. With advance written notice to the Employer as
      provided in clause (y),
      the
      Executive may terminate employment for Good Reason. If the Executive’s
      employment terminates involuntarily without Cause or voluntarily but with Good
      Reason, the Executive shall be entitled to the benefits specified in Article
      4
      of this Agreement, except as may be provided in Article 4, and any payments
      owing under section 6.2, as provided in section 6.2. For purposes of this
      Agreement a voluntary termination by the Executive shall be considered a
      voluntary termination with Good Reason if the conditions stated in both clauses
      (x)
      and
      (y)
      are
      satisfied –

    


    (x) a
      voluntary termination by the Executive shall be considered a voluntary
      termination with Good Reason if any of the following occur without the
      Executive’s advance written consent, and the term Good Reason shall mean the
      occurrence of any of the following without the Executive’s advance written
      consent –

    


    (1) a
      material diminution of the Executive’s Base Salary,

    


    (2) a
      material diminution of the Executive’s authority, duties, or
      responsibilities,



    
      
        
        

      

      
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    (3) a
      material diminution in the authority, duties, or responsibilities of the
      supervisor to whom the Executive is required to report,

    


    (4) a
      material diminution in the budget over which the Executive retains
      authority,

    


    (5) a
      material change in the geographic location at which the Executive must perform
      services for the Employer, or

    


    (6) any
      other
      action or inaction that constitutes a material breach by the Employer of this
      Agreement.

    


    (y) the
      Executive must give notice to the Employer of the existence of one or more
      of
      the conditions described in clause (x)
      within
      90 days after the initial existence of the condition, and the Employer shall
      have 30 days thereafter to remedy the condition. In addition, the Executive’s
      voluntary termination because of the existence of one or more of the conditions
      described in clause (x)
      must
      occur within 12 months after the initial existence of the
      condition.

    


    Article
      4

    Severance
      Compensation

    


    4.1 Severance.
      If the
      Employer terminates the Executive’s employment without Cause or if the Executive
      voluntarily terminates employment for Good Reason, the Executive shall be
      entitled to –

    


    (a) Cash
      severance.
      A
      lump-sum severance payment in cash in the amount of two and one half times
      his
      Base Salary, payable within 30 days after the Executive’s employment
      termination. Cash severance compensation shall not be payable, however, if
      the
      Executive’s employment terminates after a Change in Control of the Corporation.
      For purposes of this Agreement a Change in Control means a change in control
      as
      defined in Internal Revenue Code section 409A and rules, regulations, and
      guidance of general application thereunder issued by the Department of the
      Treasury, including –

    


    (1) Change
      in ownership:
      a
      change in ownership of the Corporation occurs on the date any one person or
      group accumulates ownership of Corporation stock constituting more than 50%
      of
      the total fair market value or total voting power of Corporation
      stock,

    


    (2) Change
      in effective control:
      (x)
      any one
      person or more than one person acting as a group acquires within a 12-month
      period ownership of Corporation stock possessing 30% or more of the total voting
      power of Corporation stock, or (y)
      a
      majority of the Corporation’s board of directors is replaced during any 12-month
      period by directors whose appointment or election is not endorsed in advance
      by
      a majority of the Corporation’s board of directors, or

    


    (3) Change
      in ownership of a substantial portion of assets:
      a
      change in ownership of a substantial portion of the Corporation’s assets occurs
      if in a 12-month period any one person or more than one person acting as a
      group
      acquires from the Corporation assets having a total gross fair market value
      equal to or exceeding 40% of the total gross fair market value of all of the
      Corporation’s assets immediately before the acquisition or acquisitions. For
      this purpose, gross fair market value means the value of the Corporation’s
      assets, or the value of the assets being disposed of, determined without regard
      to any liabilities associated with the assets.

    


    (b) Cash-out
      of the value of unvested stock options.
      The
      Executive shall be entitled to receive from Employer an amount equal to the
      intrinsic value of any unvested stock options and the value of any unvested
      restricted stock or other equity-based compensation as of the effective date
      of
      termination. Amounts payable under this paragraph (b) shall be paid in a single
      lump sum in cash by the earlier of (x)
      90 days
      after the Executive’s employment termination or (y)
      March
      15 of the year after the year in which the Executive’s employment terminates.
      The intrinsic value of unvested stock options means the per share closing price
      of Corporation common stock on the date of the Executive’s employment
      termination less the per share exercise price of the unvested stock options,
      multiplied by the number of unvested options.


    
      
        
        

      

      
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        (c)
          Outplacement
          and support.
          Employer shall pay or cause to be paid to the Executive
          reasonable outplacement expenses in an amount up to $25,000, and for one
          year
          after termination Employer shall provide the Executive with the use of
          office
          space and reasonable office support facilities, including secretarial
          assistance.

      

    

    


    Article
      5

    Confidentiality
      and Creative Work

    


    5.1 Non-disclosure.
      The
      Executive covenants and agrees not to reveal to any person, firm, or corporation
      any confidential information of any nature concerning Employer or its business,
      or anything connected therewith. As used in this Article 5, the term
“confidential
      information”
means
      all of the Corporation’s and its affiliates’ confidential and proprietary
      information and trade secrets in existence on the date hereof or existing at
      any
      time during the term of this Agreement, including but not limited to
–

    


    (a) the
      whole
      or any portion or phase of any business plans, financial information, purchasing
      data, supplier data, accounting data, or other financial
      information,

    


    (b) the
      whole
      or any portion or phase of any research and development information, design
      procedures, algorithms or processes, or other technical
      information,

    


    (c) the
      whole
      or any portion or phase of any marketing or sales information, sales records,
      customer lists, prices, sales projections, or other sales information,
      and

    


    (d) trade
      secrets, as defined from time to time by the laws of the State of North
      Carolina.

    


    Despite
      anything to the contrary in this Agreement, confidential information excludes
      information that – as of the date hereof or at any time after the date
      hereof – is published or disseminated without obligation of confidence or
      that becomes a part of the public domain by or through action of Employer or
      otherwise than by or at the direction of the Executive. This section 5.1 does
      not prohibit disclosure required by an order of a court having jurisdiction
      or a
      subpoena from an appropriate governmental agency or disclosure made by the
      Executive in the ordinary course of business and within the scope of the
      Executive’s authority.

    


    5.2 Return
      of Materials.
      The
      Executive agrees to deliver or return to Employer upon employment termination
      or
      as soon thereafter as possible all written information and any other similar
      items furnished by Employer or prepared by the Executive in connection with
      the
      Executive’s services hereunder. The Executive will retain no copies thereof
      after termination of this Agreement or termination of the Executive’s
      employment.

    


    5.3 Injunctive
      Relief.
      The
      Executive acknowledges that it is impossible to measure in money the damages
      that will accrue to Employer if the Executive fails to observe the obligations
      imposed by this Article 5. Accordingly, if Employer institutes an action to
      enforce the provisions hereof, the Executive hereby waives the claim or defense
      that an adequate remedy at law is available to Employer, and the Executive
      agrees not to urge in any such action the claim or defense that an adequate
      remedy at law exists.

    


    5.4 Affiliates’
      Confidential Information is Covered; Confidentiality Obligation Survives
      Termination.
      For
      purposes of this Agreement, the term “affiliate”
of
      the
      Corporation includes but is not limited to the Bank, any bank successor to
      the
      Bank, and any entity that directly, or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with
      the
      Bank. The rights and obligations set forth in this Article 5 shall survive
      termination of this Agreement.


    
      
        
        

      

      
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    5.5 Creative
      Work.
      The
      Executive agrees that all creative work and work product, including but not
      limited to all technology, business management tools, processes, software,
      patents, trademarks, and copyrights developed by the Executive during the term
      of this Agreement, regardless of when or where such work or work product was
      produced, constitutes work made for hire, all rights of which are owned by
      Employer. The Executive hereby assigns to the Corporation and to the Bank all
      rights, title, and interest, whether by way of copyrights, trade secret,
      trademark, patent, or otherwise, in all such work or work product, regardless
      of
      whether the same is subject to protection by patent, trademark, or copyright
      laws.

    


    Article
      6

    Competition
      After Employment Termination

     

    6.1 Covenant
      Not to Solicit Employees.
      The
      Executive agrees not to solicit the services of any officer or employee of
      the
      Employer for one year after the Executive’s employment termination.

    


    6.2 Covenant
      Not to Compete.
      (a) For
      and in consideration of the “payments” (as defined below), without advance
      written consent of the Employer the Executive covenants and agrees not to
      compete directly or indirectly with the Employer for the “non-compete term” (as
      defined below) after employment termination, plus any period during which the
      Executive is in violation of this covenant not to compete and any period during
      which the Employer seeks by litigation to enforce this covenant not to compete.
      For purposes of this section –

    


    (1) the
      term
“compete” means

    


    (a) providing
      financial products or services on behalf of any financial institution for any
      person residing in the territory,

    


    (b) assisting
      (other than through the performance of ministerial or clerical duties) any
      financial institution in providing financial products or services to any person
      residing in the territory, or

    


    (c) inducing
      or attempting to induce any person who was a customer of the Employer at the
      date of the Executive’s employment termination to seek financial products or
      services from another financial institution.

    


    (2) the
      words
“directly or indirectly” means –

    


    (a) acting
      as
      a consultant, officer, director, independent contractor, or employee of any
      financial institution, de
      novo
      institution in organization, or organizational group in competition or intending
      to be in competition with the Employer in the territory, or

    


    (b) communicating
      to such financial institution the names or addresses or any financial
      information concerning any person who was a customer of the Employer at the
      Executive’s employment termination.

    


    (3) the
      term
“customer” means any person to whom the Employer is providing financial products
      or services on the date of the Executive’s employment termination.

    


    (4) the
      term
“financial institution” means any bank, savings association, or bank or savings
      association holding company, or any other institution, the business of which
      is
      engaging in activities that are financial in nature or incidental to such
      financial activities as described in section 4(k) of the Bank Holding Company
      Act of 1956, other than the Employer or one of its affiliated
      corporations.


    
      
        
        

      

      
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    (5) “financial
      product or service” means any product or service that a financial institution or
      a financial holding company could offer by engaging in any activity that is
      financial in nature or incidental to such a financial activity under section
      4(k) of the Bank Holding Company Act of 1956 and that is offered by the Employer
      or an affiliate on the date of the Executive’s employment termination, including
      but not limited to banking activities and activities that are closely related
      and a proper incident to banking.

    


    (6) the
      term
“person” means any individual or individuals, corporation, partnership,
      fiduciary, or association.

    


    (7) the
      term
“territory” means New Hanover County and any counties contiguous
      thereto.

    


    (8) the
      term
“non-compete term” shall be a period of two years if the Executive’s employment
      terminates before September 1, 2011; shall be a period of one year if the
      Executive’s employment terminates after September 1, 2011, but before September
      1, 2013; and after September 1, 2013, there shall be no period of time in which
      Executive is not permitted to “compete” as defined herein.

    


    (9) the
      term
“payments” shall mean the payment by the Employer of $78,333 to the Executive on
      September 1, 2006, and the payment of an equivalent amount on each of the first
      two anniversaries of that date.

    


    (b) If
      any
      provision of this section or any word, phrase, clause, sentence, or other
      portion thereof (including, without limitation, the geographical and temporal
      restrictions contained therein) is held to be unenforceable or invalid for
      any
      reason, the unenforceable or invalid provision or portion shall be modified
      or
      deleted so that the provisions hereof, as modified, are legal and enforceable
      to
      the fullest extent permitted under applicable law.

    


    6.3 Specific
      Performance.
      The
      Executive’s covenants contained in Article 6 shall survive termination of the
      Executive’s employment for any reason, and shall be enforceable after such
      termination. Without intending to limit the remedies available to the
      Corporation and the Bank, the Executive agrees that damages at law are an
      insufficient remedy for violation by the Executive of the covenants contained
      in
      this Agreement. Accordingly, the Executive hereby agrees that either of the
      Corporation or the Bank may apply for and is entitled to injunctive relief
      in
      any court of competent jurisdiction to restrain the breach or threatened breach
      of, or otherwise to specifically enforce, any of the covenants of this Article
      6, in each case without proof of actual damages, in addition to any other
      remedies that may be available under applicable law. The Executive hereby waives
      the claim or defense that an adequate remedy at law is available to the
      Corporation or the Bank, and the Executive agrees not to urge in any action
      or
      proceeding the claim or defense that an adequate remedy at law
      exists.

    


    Without
      limiting the generality of the foregoing, without limiting the remedies
      available to the Corporation or the Bank for violation of this Agreement, and
      without constituting an election of remedies, if the Executive violates any
      of
      the terms of Article 6 he shall forfeit on the Executive’s own behalf and that
      of beneficiary(ies) any rights to and interest in any severance or other
      benefits under this Agreement and this Agreement shall thereafter be null,
      void,
      and of no further force or effect.

    


    6.4 Article
      6 Survives Termination.
      The
      rights and obligations set forth in this Article 6 shall survive termination
      of
      this Agreement.


    
      
        
        

      

      
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    Article
      7

    Miscellaneous

    


    7.1 Successors
      and Assigns.
      (a)
This
      Agreement is binding on successors.
      This
      Agreement shall be binding upon Employer and any successor to Employer,
      including any persons acquiring directly or indirectly all or substantially
      all
      of the business or assets of Employer by purchase, merger, consolidation,
      reorganization, or otherwise. But this Agreement and Employer’s obligations
      under this Agreement are not otherwise assignable, transferable, or delegable
      by
      Employer. By agreement in form and substance satisfactory to the Executive,
      Employer shall require any successor to all or substantially all of the business
      or assets of Employer expressly to assume and agree to perform this Agreement
      in
      the same manner and to the same extent Employer would be required to perform
      had
      no succession occurred.

    


    (b) This
      Agreement is enforceable by the Executive’s heirs.
      This
      Agreement shall inure to the benefit of and be enforceable by the Executive’s
      personal or legal representatives, executors, administrators, successors, heirs,
      distributees, and legatees.

    


    (c) This
      Agreement is personal and is not assignable.
      This
      Agreement is personal in nature. Without written consent of the other parties,
      no party shall assign, transfer, or delegate this Agreement or any rights or
      obligations under this Agreement, except as expressly provided herein. Without
      limiting the generality or effect of the foregoing, the Executive’s right to
      receive payments hereunder is not assignable or transferable, whether by pledge,
      creation of a security interest, or otherwise, except for a transfer by the
      Executive’s will or by the laws of descent and distribution. If the Executive
      attempts an assignment or transfer that is contrary to this section 7.1,
      Employer shall have no liability to pay any amount to the assignee or
      transferee.

    


    7.2 Governing
      Law, Jurisdiction and Forum.
      This
      Agreement shall be construed under and governed by the internal laws of the
      State of North Carolina, without giving effect to any conflict of laws provision
      or rule (whether of the State of North Carolina or any other jurisdiction)
      that
      would cause the application of the laws of any jurisdiction other than the
      State
      of North Carolina. By entering into this Agreement, the Executive acknowledges
      that the Executive is subject to the jurisdiction of both the federal and state
      courts in the State of North Carolina. Any actions or proceedings instituted
      under this Agreement shall be brought and tried solely in courts located in
      Wake
      County, North Carolina, or in the federal court having jurisdiction in Cary,
      North Carolina. The Executive expressly waives the right to have any such
      actions or proceedings brought or tried elsewhere.

    


    7.3 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties concerning the
      employment of the Executive by Employer, and any oral or written statements,
      representations, agreements, or understandings made or entered into prior to
      or
      contemporaneously with the execution of this Agreement are hereby rescinded,
      revoked, and rendered null and void. This Agreement amends and restates in
      its
      entirety the Employment Agreement dated as of September 1, 2006 between the
      Executive and the Employer.

    


    7.4 Notices.
      Any
      notice under this Agreement shall be deemed to have been effectively made or
      given if in writing and personally delivered, delivered by mail properly
      addressed in a sealed envelope, postage prepaid by certified or registered
      mail,
      delivered by a reputable overnight delivery service, or sent by facsimile.
      Unless otherwise changed by notice, notice shall be properly addressed to the
      Executive if addressed to the address of the Executive on the books and records
      of the Employer at the time of the delivery of such notice, and properly
      addressed to Employer if addressed to Crescent Financial Corporation, 1005
      High
      House Road, Cary, North Carolina 27513, Attention: Corporate
      Secretary.

    


    7.5 Severability.
      In the
      case of conflict between any provision of this Agreement and any statute,
      regulation, or judicial precedent, the latter shall prevail, but the affected
      provisions of this Agreement shall be curtailed and limited solely to the extent
      necessary to bring them within the requirements of law. If any provision of
      this
      Agreement is held by a court of competent jurisdiction to be indefinite,
      invalid, void or voidable, or otherwise unenforceable, the remainder of this
      Agreement shall continue in full force and effect unless that would clearly
      be
      contrary to the intentions of the parties or would result in an
      injustice.

    


    7.6 Captions
      and Counterparts.
      The
      captions in this Agreement are solely for convenience. The captions in no way
      define, limit, or describe the scope or intent of this Agreement. This Agreement
      may be executed in several counterparts, each of which shall be deemed to be
      an
      original but all of which together shall constitute one and the same
      instrument.


    
      
        
        

      

      
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    7.7 No
      Duty to Mitigate.
      Employer hereby acknowledges that it will be difficult and could be impossible
      (x)
      for the
      Executive to find reasonably comparable employment after employment termination,
      and (y)
      to
      measure the amount of damages the Executive may suffer as a result of
      termination. Additionally, Employer acknowledges that its general severance
      pay
      plans do not provide for mitigation, offset, or reduction of any severance
      payment received thereunder. The Employer further acknowledges that the payment
      of severance benefits under this Agreement is reasonable and shall be liquidated
      damages. The Executive shall not be required to mitigate the amount of any
      payment provided for in this Agreement by seeking other employment. Moreover,
      the amount of any payment provided for in this Agreement shall not be reduced
      by
      any compensation earned or benefits provided as the result of employment of
      the
      Executive or as a result of the Executive being self-employed after employment
      termination.

    


    7.8 Amendment
      and Waiver.
      This
      Agreement may not be amended, released, discharged, abandoned, changed, or
      modified except by an instrument in writing signed by each of the parties
      hereto. The failure of any party hereto to enforce at any time any of the
      provisions of this Agreement shall not be construed to be a waiver of any such
      provision or affect the validity of this Agreement or any part thereof or the
      right of any party thereafter to enforce each and every such provision. No
      waiver or any breach of this Agreement shall be held to be a waiver of any
      other
      or subsequent breach.

    


    7.9 Consultation
      with Counsel and Interpretation of this Agreement.
      The
      Executive acknowledges and agrees that the Executive has had the assistance
      of
      counsel of the Executive’s choosing in the negotiation of this Agreement, or the
      Executive has chosen not to have the assistance of counsel. Both parties hereto
      having participated in the negotiation and drafting of this Agreement, they
      hereby agree that there shall not be strict interpretation against either party
      in connection with any review of this Agreement in which interpretation thereof
      is an issue.

    


    7.10 Compliance
      with Internal Revenue Code Section 409A.
      Employer and the Executive intend that their exercise of authority or discretion
      under this Agreement shall comply with section 409A of the Internal Revenue
      Code
      of 1986. If when the Executive’s employment terminates the Executive is a
      specified employee, as defined in section 409A of the Internal Revenue Code
      of
      1986, and if any payments under this Agreement will result in additional tax
      or
      interest to the Executive because of section 409A, then despite any contrary
      provision of this Agreement the Executive shall not be entitled to the payments
      until the earliest of (x)
      the
      date that is at least six months after termination of the Executive’s employment
      for reasons other than the Executive’s death, (y)
      the
      date of the Executive’s death, or (z)
      any
      earlier date that does not result in additional tax or interest to the Executive
      under section 409A. As promptly as possible after the end of the period during
      which payments are delayed under this provision, the entire amount of the
      delayed payments shall be paid to the Executive in a single lump sum. If any
      provision of this Agreement does not satisfy the requirements of section 409A,
      such provision shall nevertheless be applied in a manner consistent with those
      requirements. If any provision of this Agreement would subject the Executive
      to
      additional tax or interest under section 409A, Employer shall reform the
      provision. However, Employer shall maintain to the maximum extent practicable
      the original intent of the applicable provision without subjecting the Executive
      to additional tax or interest, and Employer shall not be required to incur
      any
      additional compensation expense as a result of the reformed provision.
      References in this Agreement to section 409A of the Internal Revenue Code of
      1986 include rules, regulations, and guidance of general application issued
      by
      the Department of the Treasury under Internal Revenue Code section
      409A.


    
      
        
        

      

      
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    In
      Witness Whereof,
      the
      parties have executed this Employment Agreement as of the date first written
      above.


     

    
      	
              Executive

            	
              Crescent
                Financial Corporation

            
	 	 
	
                
                /s/ W. Keith Betts

            	
            	
              By:

            
	
              W.
                Keith Betts

            	 
	 	
              Its:

            
	 	 
	 	
              Crescent
                State Bank

            
	 	
              By:

            
	 	 
	 	
              Its:

            


    

    


    
      
        
        

      

      
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