EXHIBIT 10.8
 
 
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1.
    
    Term. The initial term of this Agreement shall be for the period
commencing upon the effective date of this Agreement and ending three (3) calendar
years from the effective date of this Agreement. At each anniversary date of this
Agreement, the term automatically shall be extended for an additional three (3)
calendar years on the same terms and conditions set forth herein, unless the Company
shall give written notice to the Officer of its intention not to extend this Agreement
for an additional three (3) calendar years, which notice shall be given at least
thirteen (13) months prior to the next anniversary date.2.
    
    Change of Control.
     (i)
    
    Officer is assigned any duties and/or responsibilities that are
inconsistent with his duties or responsibilities at the time of the Change of
Control;(ii)
    
    Officers annual base salary is reduced below the amount in
effect as of the effective date of a Change of Control;(iii)
    
    Officers life insurance, medical or hospitalization
insurance, disability insurance, stock option plans, stock purchase plans,
deferred
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compensation plans, management retention plans, retirement plans, or similar
plans or benefits being provided by the Company to the Officer as of the
effective date of the Change of 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 Company who participated in such benefits prior to such
Change of Control; or(iv)
    
    Officer is required to transfer performance of his day-to-day
services required hereunder to a location which is more than fifty (50) miles
from the Officers current principal work location, without the Officers
express written consent.
 Any change in circumstances described by (i), (ii) or (iii) above must be a material
change in circumstances in order to qualify as a Termination Event. A Termination
Event shall be deemed to have occurred on the date such action or event is
implemented or takes effect.
   (i)
    
    After the effective date of this Agreement, any person (as
such term is defined 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 irrevocable proxies or any combination of voting stock and
irrevocable proxies, representing fifty percent (50%) or more of any class of
voting securities of the Corporation or the Bank, or acquires control of in any
manner the election of a majority of the directors of the Corporation or the
Bank;
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(ii)
    
    The Corporation or the Bank consolidates or merges with or into
another corporation, association, or entity, or is otherwise reorganized, where
the Corporation or the Bank is not the surviving corporation in such
transaction and the holders of the voting securities of the Corporation or the
Bank immediately prior to such acquisition own less than a majority of the
voting securities of the surviving entity immediately after the transaction; or(iii)
    
    All or substantially all of the assets of the Corporation or
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 2, a transaction or event
shall not be considered a Change of Control if, prior to the consummation or
occurrence of such transaction or event, the Officer and the Company agree in
writing that the same shall not be treated as a Change of Control for purposes of
this Agreement.
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3.
    
    Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation or the Bank,
which shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase, or otherwise, all or substantially all of the assets of the Corporation or
the Bank.4.
    
    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 and signed by the Officer, the Company, except as herein otherwise
provided. No waiver by any party hereto, at any time, of any breach by any party
hereto, or compliance with, any condition or provision of this Agreement to be
performed by such party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No amendments or additions
to this Agreement shall be binding unless in writing and signed by the parties, except
as herein otherwise provided.5.
    
    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.6.
    
    Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision hereof shall not
affect the validity or enforceability of the other provision hereof.
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7.
    
    Internal Revenue Code Section 409A. The parties intend that each
element of compensation potentially payable to the Officer hereunder either be exempt
from, or comply with, the requirements of Internal Revenue Code Section 409A, and that
any ambiguities in construction be interpreted to give effect to such intent.
  BANK:ATTEST:
    
    
    
    Bank of GraniteBy:
    
    /s/ Karen B. Warlick
    
    
    
    By:
    
    /s/ Jerry A. FeltsKaren B. Warlick
    
    
    
    
    
    Jerry A. FeltsChief Administrative Officer
    
    
    
    
    
    Chief Operating OfficerCORPORATION:ATTEST:
    
    
    
    Bank of Granite CorporationBy:
    
    /s/ Karen B. Warlick
    
    
    
    By:
    
    /s/ Jerry A. FeltsKaren B. Warlick
    
    
    
    
    
    Jerry A. FeltsChief Administrative
    
    
    
    
    
    Chief Operating OfficerOFFICER:/s/ R. Scott AndersonR. Scott Anderson
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