EXHIBIT
      10.18

    


    EMPLOYMENT
      AGREEMENT

    


    THIS
      AGREEMENT
      is
      entered into as of April 16, 2007, by and between SOUTHERN
      COMMUNITY BANK AND TRUST,
      a North
      Carolina banking corporation (hereinafter referred to as the “Bank”) and
JAMES
      C. MONROE
      of North
      Carolina (hereinafter referred to as the “Officer”).

    


    For
      and
      in consideration of their mutual promises, covenants and conditions hereinafter
      set forth, and other good and valuable consideration, the receipt and
      sufficiency of which hereby is acknowledged, the parties agree as
      follows:

    


    1.    Employment.
      The
      Bank agrees to employ the Officer and the Officer agrees to accept employment
      upon the terms and conditions stated herein as a Senior Vice President of the
      Bank. The Officer shall render such administrative and management services
      to
      the Bank as are customarily performed by persons situated in a similar capacity.
      The Officer shall promote the business of the Bank, including being active
      in at
      least two civic or community organizations in Forsyth County, and perform such
      other duties as shall, from time to time, be reasonably assigned by the Chief
      Executive Officer of the Bank. Upon the request of the Chief Executive Officer,
      the Officer shall disclose all business activities or commercial pursuits in
      which Officer is engaged, other than Bank duties.

    


    2.    Compensation.
      The
      Bank shall pay the Officer during the term of this Agreement, as compensation
      for all services rendered by him to the Bank, a base salary at the rate of
      $175,000 per annum, payable in cash not less frequently than monthly. The rate
      of such salary shall be reviewed by the Bank not less often than annually and
      if
      increased, shall not be decreased during the term of this Agreement. Such rate
      of salary, or increased rate of salary, as the case may be, may be further
      increased from time to time in such amounts as the Bank, in its discretion,
      may
      decide. In determining salary increases, the Bank shall compensate the Officer
      for increases in the cost of living and may also provide for performance or
      merit increases. Participation in the Bank’s incentive compensation, deferred
      compensation, discretionary bonus, profit-sharing, retirement and other employee
      benefit plans and participation in any fringe benefits shall not reduce the
      salary payable to the Officer under this Paragraph. In the event of a Change
      in
      Control (as defined in Paragraph 10), the Officer’s rate of salary shall be
      increased not less than five percent annually during the term of this Agreement.
      Any payments made under this Agreement shall be subject to such deductions
      as
      are required by law or regulation or as may be agreed to by the Bank and the
      Officer.

    


    3.    Discretionary
      Bonuses.
      During
      the term of this Agreement, the Officer shall be entitled, in an equitable
      manner with all other key management personnel of the Bank, to such
      discretionary bonuses as may be authorized, declared and paid by the Bank to
      key
      management employees. No other compensation provided for in this Agreement
      shall
      be deemed a substitute for the Officer’s right to such discretionary bonuses
      when and as declared by the Bank.

    


    4.    Participation
      in Retirement and Employee Benefit Plans; Fringe
      Benefits.
      The
      Officer shall be entitled to participate in any plan relating to deferred
      compensation, stock options, stock purchases, pension, thrift, profit sharing,
      group life insurance, medical coverage, disability coverage, education, or
      other
      retirement or employee benefits that the Bank has adopted, or may, from time
      to
      time adopt, for the benefit of its senior officers and for employees generally,
      subject to the eligibility rules of such plans.

     

    The
      Officer shall also be entitled to participate in any other fringe benefits
      which
      are now or may be or become applicable to the Bank’s senior officers, including
      the payment of reasonable expenses for continuing education to maintain
      professional designations, and any other benefits which are commensurate with
      the duties and responsibilities to be performed by the Officer under this
      Agreement. Additionally, the Officer shall be entitled to such vacation and
      sick
      leave as shall be established under uniform employee policies promulgated by
      the
      Bank. The Bank shall reimburse the Officer for all out-of-pocket reasonable
      and
      necessary business expenses that the Officer may incur in connection with his
      services on behalf of the Bank.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    5.    Term.
      The
      initial term of employment under this Agreement shall be for the period
      commencing upon the effective date of this Agreement and ending two calendar
      years from the effective date of this Agreement. On each anniversary of the
      effective date of this Agreement, the term of this Agreement shall automatically
      be extended for an additional one year period beyond the then effective
      expiration date unless written notice from the Bank or the Officer is received
      90 days prior to an anniversary date advising the other that this Agreement
      shall not be further extended; provided that the Chief Executive Officer shall
      review the Officer’s performance annually and make a specific determination
      pursuant to such review to renew this Agreement prior to the 90 days’
notice.

    


    6.    Loyalty;
      Noncompetition.
      

    (a)    The
      Officer shall devote his full efforts and entire business time to the
      performance of his duties and responsibilities under this
      Agreement.

    (b)    For
      and in consideration
      of the agreement by the parent corporation of the Bank, Southern Community
      Financial Corporation, to grant the Officer 10,000 options to purchase shares
      of
      its common stock
      during the term of this Agreement, or any renewals thereof, and for a period
      of
      two years after termination, the Officer agrees he will not, within the
“Restricted Area,” directly or indirectly, engage in any business that competes
      with the Bank or any of its subsidiaries without the prior written consent
      of
      the Bank; provided, however, that the provisions of this Paragraph shall not
      apply in the event the Officer’s employment is unilaterally terminated by the
      Bank for Cause, (as such term is defined in Paragraph 8(c) hereof) or in the
      event the Officer terminates his employment with the Bank after the occurrence
      of a “Termination Event” (as such term is defined in Paragraph 10(b) hereof)
      following a “Change of Control” (as such term is defined in Paragraph 10(d)
      hereof). The Restricted Area covers the following divisible list of territories:
      Forsyth, Guilford, Iredell, Rockingham, Stokes, Surry and Yadkin Counties,
      North
      Carolina, and within 15 miles of any Bank office operated during the term of
      this Agreement. The two-year restricted period, however, does not include any
      period of violation or period of time required for litigation to enforce the
      Officer’s agreement not to compete against the Bank. Notwithstanding the
      foregoing, the Officer shall be free, without such consent, to purchase or
      hold
      as an investment or otherwise, up to five percent of the outstanding stock
      or
      other security of any corporation that has its securities publicly traded on
      any
      recognized securities exchange or in any over-the counter
      market.

    (c)    The
      Officer agrees he will hold in confidence all knowledge or information of a
      confidential nature with respect to the business of the Bank or any subsidiary
      received by him during the term of this Agreement and will not disclose or
      make
      use of such information without the prior written consent of the Bank. The
      Officer agrees that he will be liable to the Bank for any damages caused by
      unauthorized disclosure of such information. Upon termination of his employment,
      the Officer agrees to return all records or copies thereof of the Bank or any
      subsidiary in his possession or under his control, which relate to the
      activities of the Bank or any subsidiary.

    (d)    The
      Officer acknowledges that it would not be possible to ascertain the amount
      of
      monetary damages in the event of a breach by the Officer under the provisions
      of
      this Paragraph 6. The Officer agrees that, in the event of a breach of this
      Paragraph 6, injunctive relief enforcing the terms of this Paragraph 6 is an
      appropriate remedy. If the scope of any restriction contained in this Paragraph
      6 is determined to be too broad by any court of competent jurisdiction, then
      such restriction shall be enforced to the maximum extent permitted by law and
      the Officer consents that the scope of this restriction may be modified
      judicially.

    


    7.    Standards.
      The
      Officer shall perform his duties and responsibilities under this Agreement
      in
      accordance with such reasonable standards expected of employees with comparable
      positions in comparable organizations and as may be established from time to
      time by the Chief Executive Officer. The Bank will provide the Officer with
      the
      working facilities and staff customary for similar executives and necessary
      for
      him to perform his duties.

    


    8.    Termination
      and Termination Pay.

    (a)    The
      Officer’s employment under this Agreement shall be terminated upon the death of
      the Officer during the term of this Agreement, in which event, the Officer’s
      estate shall be entitled to receive the compensation due the Officer through
      the
      last day of the calendar month in which his death shall have occurred and for
      a
      period of one month thereafter.

    (b)    The
      Officer’s employment under this Agreement may be terminated at any time by the
      Officer upon 60 days’ written notice to the Bank. Upon such termination, the
      Officer shall be entitled to receive compensation through the effective date
      of
      such termination.

    (c)    The
      Bank
      may terminate the Officer’s employment at any time, but any termination by the
      Bank, other than termination for Cause, shall not prejudice the Officer’s right
      to compensation or


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    other
      benefits under this Agreement. The Bank shall provide written notice specifying
      the grounds for termination for Cause. The Officer shall have no right to
      receive compensation or other benefits for any period after termination for
      Cause. Termination for Cause shall include termination because of the Officer’s
      personal dishonesty, incompetence, willful misconduct, breach of fiduciary
      duty
      involving personal profit, failure to perform stated duties, willful violation
      of any law, rule, or regulation (other than traffic violations or similar
      offenses) or final cease-and-desist order, or material breach of any provision
      of this Agreement. Notwithstanding such termination, the obligations under
      Paragraph 6(c) shall survive any termination of employment.

    (d)    Subject
      to the Bank’s obligations and the Officer’s rights under (i) Title I of the
      Americans with Disabilities Act, §504 of the Rehabilitation Act, and the Family
      and Medical Leave Act, and to (ii) the vacation leave, disability leave, sick
      leave and any other leave policies of the Bank, the Officer’s employment under
      this Agreement automatically shall be terminated in the event the Officer
      becomes disabled during the term of this Agreement and it is determined by
      the
      Bank that the Officer is unable to perform the essential functions of his job
      under this Agreement for sixty (60) business days or more during any 12-month
      period. Upon any such termination, the Officer shall be entitled to receive
      any
      compensation the Officer shall have earned prior to the date of termination
      but
      which remains unpaid, and shall be entitled to any payments provided under
      any
      disability income plan of the Bank which is applicable to the
      Officer.

    In
      the
      event of any disagreement between the Officer and the Bank as to whether the
      Officer is physically or mentally incapacitated such as will result in the
      termination of the Officer’s employment pursuant to this Paragraph 8(d), the
      question of such incapacity shall be submitted to an impartial physician
      licensed to practice medicine in North Carolina for determination and who will
      be selected by mutual agreement of the Officer and the Bank, or failing such
      agreement, by two (2) physicians (one (1) of whom shall be selected by the
      Bank
      and the other by the Officer), and such determination of the question of such
      incapacity by such physician or physicians shall be final and binding on the
      Officer and the Bank. The Bank shall pay the reasonable fees and expenses of
      such physician or physicians in making any determination required under this
      Paragraph 8(d).

    


    9.    Additional
      Regulatory Requirements.
      Notwithstanding anything contained in this Agreement to the contrary, it is
      understood and agreed that the Bank (or any of its successors in interest)
      shall
      not be required to make any payment or take any action under this Agreement
      if:

    (a)    the
      Bank
      is declared by any governmental agency having jurisdiction over the Bank
      (hereinafter referred to as “Regulatory Authority”) to be insolvent, in default
      or operating in an unsafe or unsound manner; or,

    (b)    in
      the
      opinion of counsel to the Bank, such payment or action (i) would be prohibited
      by or would violate any provision of state or federal law applicable to the
      Bank, including, without limitation, the Federal Deposit Insurance Act as now
      in
      effect or hereafter amended, (ii) would be prohibited by or would violate any
      applicable rules, regulations, orders or statements of policy, whether now
      existing or hereafter promulgated, of any Regulatory Authority, or (iii)
      otherwise would be prohibited by any Regulatory Authority.

    


    10.    Change
      in Control.

    (a)    In
      the
      event of a termination of the Officer’s employment in connection with, or within
      twenty-four (24) months after, a “Change in Control” (as defined in Subparagraph
      (d) below) of the Bank other than for Cause (as defined in Paragraph 8), the
      Officer shall be entitled to receive the payment set forth in Subparagraph
      (c)
      below. Said sum shall be payable as provided in Subparagraph (e)
      below.

    (b)    In
      addition to any rights the Officer might have to terminate this Agreement
      contained in Paragraph 8, the Officer shall have the right to terminate this
      Agreement upon the occurrence of any of the following events (the “Termination
      Events”) within twenty-four months following a Change in Control of the
      Bank:

    (i)    Officer
      is assigned any duties and/or responsibilities that are inconsistent with or
      constitute a demotion or reduction in his position, duties, responsibilities
      or
      status at the time of the Change in Control or with his reporting
      responsibilities or titles with the Bank in effect at such time, regardless
      of
      Officer's resulting position; or

    (ii)    Officer’s
      annual base salary rate is reduced below the annual amount in effect as of
      the
      effective date of a Change in Control or as the same shall have been increased
      from time to time following such effective date; or


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (iii)    Officer’s
      life insurance, medical or hospitalization insurance, disability insurance,
      stock options plans, stock purchase plans, deferred compensation plans,
      management retention plans, retirement plans or similar plans or benefits being
      provided by the Bank to the Officer as of the effective date of the Change
      in
      Control are reduced in their level, scope or coverage, or any such insurance,
      plans or benefits are eliminated, unless such reduction or elimination applies
      proportionately to all salaried employees of the Bank who participated in such
      benefits prior to such Change in Control; or 

    (iv)    Officer
      is transferred to a location, which is more than 35 miles from his current
      principal work location without the Officer’s express written
      consent.

    A
      Termination Event shall be deemed to have occurred on the date such action
      or
      event is implemented or takes effect. 

    (c)    In
      the
      event that the Officer terminates this Agreement pursuant to this Paragraph
      10,
      the Bank will be obligated to pay or cause to be paid to Officer liquidated
      damages in an amount equal to two (2) times the Officer’s “base amount” as
      defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended
      (the “Code”).

    (d)    For
      the
      purposes of this Agreement, the term Change in Control shall mean any of the
      following events:

    (i)    After
      the
      effective date of this Agreement, any “person” (as such term is defined in
      Section 7(j)(8)(A) of the Change in Bank Control Act of 1978), directly or
      indirectly, acquires beneficial ownership of voting stock, or acquires
      beneficial ownership of voting stock, or acquires irrevocable proxies or any
      combination of voting stock and irrevocable proxies, representing twenty-five
      percent (25%) or more of any class of voting securities of the Bank, or acquires
      control of, in any manner, the election of a majority of the Board of Directors
      of the Bank; or

    (ii)    The
      Bank
      consolidates or merges with or into another corporation, association or entity,
      or is otherwise reorganized, where the Bank is not the surviving corporation
      in
      such transaction; or

    (iii)    All,
      or
      substantially all, of the assets of the Bank are sold or otherwise transferred
      to or are acquired by any other corporation, association or other person, entity
      or group.

    Notwithstanding
      the other provisions of this Paragraph 10, a transaction or event shall not
      be
      considered a Change in Control if, prior to the consummation or occurrence
      of
      such transaction or event, Officer and Bank agree in writing that the same
      shall
      not be treated as a Change in Control for purposes of this
      Agreement.

    (e)    Such
      amounts payable pursuant to this Paragraph 10 shall be paid, at the option
      of
      the Officer, either in one lump sum or in equal monthly payments following
      termination of this Agreement.

    (f)    Following
      a Termination Event, which gives rise to Officer’s rights hereunder, the Officer
      shall have twelve (12) months from the date of occurrence of the Termination
      Event to terminate this Agreement pursuant to this Paragraph 10. Any such
      termination shall be deemed to have occurred only upon delivery to the Bank
      (or
      to any successor corporation) of written notice of termination that describes
      the Change in Control and the Termination Event. If Officer does not so
      terminate this Agreement within such twelve-month period, he shall thereafter
      have no further rights hereunder with respect to that Termination Event, but
      shall retain rights, if any, hereunder with respect to any other Termination
      Event as to which such period has not expired.

    (g)    It
      is the
      intent of the parties hereto that all payments made pursuant to this Agreement
      be deductible by the Bank for federal income tax purposes and not result in
      the
      imposition of an excise tax on the Officer. Notwithstanding anything contained
      in this Agreement to the contrary, any payments to be made to or for the benefit
      of the Officer which are deemed to be “parachute payments” as that term is
      defined in Section 280G of the Code, shall be modified or reduced to the extent
      deemed to be necessary by the Bank to avoid the imposition of excise taxes
      on
      the Officer under Section 4999 of the Code or the disallowance of a deduction
      to
      the Bank under Section 280(a) of the Code.

    (h)    In
      the
      event any dispute shall arise between the Officer and the Bank as to the terms
      or interpretation of this Agreement, including this Paragraph 10, whether
      instituted by formal legal proceedings or otherwise, including any action taken
      by the Officer to enforce the terms of this Paragraph 10 or in defending against
      any action taken by the Bank, the Bank shall reimburse the Officer for all
      costs
      and expenses, proceedings or actions, in the event the Officer prevails in
      any
      such action.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.    Successors
      and Assigns.

    (a)    This
      Agreement shall inure to the benefit of and be binding upon any corporate or
      other successor of the Bank which shall acquire, directly or indirectly, by
      conversion, merger, purchase or otherwise, all or substantially all of the
      assets of the Bank.

    (b)    Since
      the
      Bank is contracting for the unique and personal skills of the Officer, the
      Officer shall be precluded from assigning or delegating his rights or duties
      hereunder without first obtaining the written consent of the Bank.

    


    12.    Modification;
      Waiver; Amendments.
      No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing, signed by the Officer
      and on behalf of the Bank by such officer as may be specifically designated
      by
      the Chief Executive Officer. No waiver by either party hereto, at any time,
      of
      any breach by the other party hereto of, or compliance with, any condition
      or
      provision of this Agreement to be performed by such other party shall be deemed
      a waiver of similar or dissimilar provisions or conditions at the same or at
      any
      prior or subsequent time. No amendment or addition to this Agreement shall
      be
      binding unless in writing and signed by both parties, except as herein otherwise
      provided.

    


    13.    Applicable
      Law.
      This
      Agreement shall be governed in all respects whether as to validity,
      construction, capacity, performance or otherwise, by the laws of North Carolina,
      except to the extent that federal law shall be deemed to apply.

    


    14.    Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof.

    


    


    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement as of the day and year first hereinabove
      written.

     

    
      	 	 	 
	 	
              SOUTHERN
                COMMUNITY BANK AND TRUST

            
	 
 	 
 	 
 
	 	By:  	/s/
              F. Scott Bauer 
	 	
              
F.
              Scott Bauer
	 	Chief
              Executive Officer
	 	 
	 	 
	 	OFFICER
	 	 

	 	/s/ James C. Monroe, Jr. 
	 	
              
                
James
                C. Monroe