Exhibit 10.2


    
      

    

     

    Exhibit
      10.2

     

     

    
      	
              Appalachian
                Community Bank

              Salary
                Continuation Agreement

            


    

    


    


    APPALACHIAN
      COMMUNITY BANK

    SALARY
      CONTINUATION AGREEMENT

    [As
      Amended]

    


    


    THIS
      SALARY CONTINUATION AGREEMENT, as amended (the “Agreement”) is adopted as of the
      11th day of August, 2006, by and among APPALACHIAN COMMUNITY BANK, a
      state-chartered commercial bank located in Ellijay, Georgia (the "Bank"),
      APPALACHIAN BANCSHARES, INC., the parent company of the Bank (the “Holding
      Company”), and JOSEPH T. MOSS, JR. (the "Executive").

     

    The
      purpose of this Agreement is to provide to the Executive, as a member of a
      select group which contributes materially to the continued growth, development
      and future business success of the Bank and the Holding Company, the specified
      benefits, as well as incentives for continued employment with the Bank and
      Holding Company, as set forth herein. This Agreement shall be unfunded for
      tax
      purposes and for purposes of Title I of the Employee Retirement Income Security
      Act of 1974 (“ERISA”), as amended from time to time. The Bank will pay the
      benefits provided under this Agreement from its general assets.

    


    The
      Bank,
      the Holding Company and the Executive, for and in consideration of the above
      stated contributions of the Executive and other good and valuable consideration,
      do hereby agree as follows:

    


    Article
      1

    Definitions

    


    Whenever
      used in this Agreement, the following words and phrases shall have the meanings
      specified:

    


    
      	
              1.1

            	
              “Accrual
                Balance”
                means the liability that should be accrued by the Bank, under Generally
                Accepted Accounting Principles (”GAAP”), for the Bank’s obligation to the
                Executive under this Agreement, by applying the Discount Rate. Any
                amortization method, if acceptable under GAAP, may be used to determine
                the Accrual Balance. However, once chosen, the method must be consistently
                applied. The Accrual Balance for each Plan Year shall be reported
                annually
                by the Bank to the Executive in the form of Schedule
                A
                of
                this Agreement. 

            


    

    


    
      	
              1.2

            	
              “Beneficiary”
                means each designated person, or the estate of the deceased Executive,
                entitled to benefits, if any, upon the death of the Executive, and
                as
                otherwise determined pursuant to Article 3 and Article
                4.

            


    

    


    
      	
              1.3

            	
              “Beneficiary
                Designation Form”
                means the form established from time to time by the Plan Administrator
                that the Executive completes, signs and returns to the Plan Administrator
                to designate one or more
                Beneficiaries.

            


    

    


    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    


    


    
      	
              1.4

            	
              “Change
                of Control”
                means the occurrence of any of the following
                conditions:

            


    

    


    (i)        
      Any
      “Person” [which term, for purposes of this Section 1.4, shall mean an individual
      (other than the Executive), individuals acting in concert or as a “group” under
      the Securities Exchange Act of 1934, or a corporation, partnership, trust or
      other form of entity, (other than the Holding Company, the Bank, a securities
      underwriter of the shares of the Holding Company or the Bank, a corporation
      owned by stockholders of the Holding Company in the same proportions as their
      ownership of stock in the Holding Company, or a fiduciary holding securities
      under an employee benefit plan of the Holding Company or Bank)] becomes,
      directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under
      the Securities Exchange Act of 1934) of securities of the Holding Company or
      Bank which represent twenty-five percent (25%) or more of the voting power
      of
      the then outstanding securities of the Holding Company or Bank; or

    


    (ii)        
      Any
      Person acquires, directly or indirectly, the ability to control the election
      of
      a majority of the directors of either the Bank or the Holding Company;
      or

    


    (iii)  
          Any
      Person acquires, directly or indirectly, the ability to exercise a controlling
      influence over the management of policies of either the Holding Company or
      the
      Bank; or

    


    (iv)   
       During
      any period of two (2) consecutive years, the “Continuing Directors” (which term,
      for purposes of this Section 1.4, means these individuals who, (a) at the
      beginning of such two-year period, constitute the board of directors of either
      the Holding Company or the Bank or (b) whose election or nomination as directors
      of the Holding Company or the Bank were approved by a vote of least two-thirds
      of these previously elected directors) cease for any reason to constitute at
      least two-thirds of the board of directors of either the Holding Company or
      the
      Bank; or

    


    (v)        
      The
      consummation of a merger or statutory share exchange of the Holding Company
      or
      the Bank with any Person, other than a merger or statutory share exchange which
      would (a) result in the voting securities of the Holding Company or Bank
      outstanding immediately prior thereto, continuing to represent at least
      seventy-five percent (75%) of the combined voting power of the voting securities
      of the Holding Company, Bank or such other surviving entity, outstanding
      immediately after such merger or statutory share exchange, in substantially
      the
      same proportions as their ownership immediately prior to such merger or
      statutory share exchange, or (b) effect or implement a recapitalization of
      the
      Holding Company or Bank (or similar transaction), in which no Person acquires
      more than fifty percent (50%) of the combined voting power of the
      then-outstanding securities of the Holding Company or Bank; or

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      


    

     

    
 

    (vi)        
      The
      shareholders of the Holding Company or Bank approve a plan of complete
      liquidation of the Holding Company or the Bank, or an agreement for the sale
      or
      disposition by the Holding Company or the Bank of all or substantially all
      of
      the assets of the Holding Company or the Bank.

    


    
      	
              1.5

            	
              “Change
                of Control Benefit”
                means the benefit provided to the Executive under Section 2.4 of
                this
                Agreement, and as set forth in Schedule
                A
                of
                this Agreement, pursuant to the terms of this Agreement. The amount
                of the
                Change of Control Benefit, as determined under Section 2.4 and as
                set
                forth in Schedule
                A,
                is an annual amount equal to the projected annual benefit to be paid
                to
                the Executive at the Executive’s Normal Retirement Age, as set forth in
                Section 2.1.1, which annual amount shall be paid to the Executive
                in equal
                monthly payments for each of the fifteen (15) consecutive twelve
                (12)
                month periods next following the Executive’s Normal Retirement
                Age.

            


    

    


    
      	
              1.6

            	
              “Code”
                means the Internal Revenue Code of 1986, as
                amended.

            


    

    


    
      	
              1.7

            	
              “Disability”
                means the Executive’s suffering a sickness, accident or injury which has
                been determined by the insurance carrier of any individual or group
                disability insurance policy covering the Executive, or by the Social
                Security Administration, or by the Board of Executives of the Bank
                or the
                Holding Company, to be a disability rendering the Executive totally
                and
                permanently disabled. The Executive, upon the request of the Plan
                Administrator, must submit proof of Disability, satisfactory to the
                Plan
                Administrator, including, if required, the determination thereof
                by the
                insurance carrier or Social Security Administration.
                

            


    

    


    
      	
              1.8

            	
              “Disability
                Benefit”
                means the benefit provided to the Executive under Section 2.3 of
                this
                Agreement, and as set forth in Schedule
                A
                of
                this Agreement, pursuant to the terms of this Agreement. The amount
                of the
                Disability Benefit, as determined under Section 2.3 and as set forth
                in
                Schedule
                A,
                is an annual amount equal to the projected annual benefit to be paid
                to
                the Executive at the Executive’s Normal Retirement Age, as set forth in
                Section 2.1.1, which annual amount shall be paid to the Executive
                in equal
                monthly payments for each of the fifteen (15) consecutive twelve
                (12)
                month periods next following the Executive’s Normal Retirement Age.
                

            


    

    


    
      	
              1.9

            	
              “Discount
                Rate”
                means the rate used by the Plan Administrator for determining the
                Accrual
                Balance. The initial Discount Rate is seven percent (7%). However,
                the
                Plan Administrator, in its sole discretion, may adjust the Discount
                Rate
                to maintain the rate within reasonable standards according to
                GAAP.

            


    

    


    
      	
              1.10

            	
              “Early
                Termination”
                means the Termination of Employment before Normal Retirement Age,
                for
                reasons other than death, Disability, Termination for Cause or following
                a
                Change of Control.

            


    

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      


    

    


    


    
      	
              1.11

            	
              “Early
                Termination Benefit”
                means the benefit provided to the Executive under Section 2.2 of
                this
                Agreement, and as set forth in Schedule
                A
                of
                this Agreement, as updated annually pursuant to the terms of this
                Agreement. The amount of the Early Termination Benefit, as determined
                under Section 2.2 and as set forth in Schedule
                A,
                is a one-time, lump-sum amount to be paid to the Executive within
                thirty
                (30) days following the Executive’s Early Termination Date, or at such
                later date as may be required by applicable
                law.

            


    

    


    
      	
              1.12

            	
              “Early
                Termination Date”
                means the date on which Early Termination
                occurs.

            


    

    


    
      	
              1.13

            	
              “Effective
                Date”
                means April 1, 2006.

            


    

    


    
      	
              1.14

            	
              “Normal
                Retirement Age”
                means the earlier of the Executive’s 65th
                birthday or the date upon which the Executive completes 20 years
                of
                employment with the Bank and/or Holding
                Company.

            


    

    


    
      	
              1.15

            	
              “Normal
                Retirement Benefit”
                means the benefit provided to the Executive pursuant to the provisions
                of
                Section 2.1 of this Agreement, and as set forth in Schedule
                A
                of
                this Agreement, as updated annually pursuant to the terms of this
                Agreement. The amount of the Normal Retirement Benefit, as determined
                under Section 2.1 and as set forth in Schedule
                A,
                is an annual amount to be paid to the Executive in equal monthly
                payments
                for each of the fifteen (15) consecutive twelve (12) month periods
                next
                following the Executive’s Normal Retirement
                Date.

            


    

    


    
      	
              1.16

            	
              “Normal
                Retirement Date”
                means the date of the Executive’s Termination of Employment (other than a
                Termination for Cause) occurring on or after the Executive’s Normal
                Retirement Age. 

            


    

    


    
      	
              1.17

            	
              “Plan
                Administrator”
                means the plan administrator described in Article
                8.

            


    

    


    
      	
              1.18

            	
              “Plan
                Year”
                means each twelve-month period commencing on the Effective
                Date.

            


    

    


    
      	
              1.19

            	
              “Termination
                for Cause”
                has that meaning set forth in Article
                5.

            


    

    


    
      	
              1.20

            	
              “Termination
                of Employment”
                means that the Executive ceases to be employed by the Bank or the
                Holding
                Company for any reason, voluntary or involuntary, other than by reason
                of
                a leave of absence approved by the Bank or the Holding
                Company.

            


    

    


    Article
      2

    Benefits
      During Lifetime

    


    
      	
              2.1

            	
              Normal
                Retirement Benefit.
                The benefit payable to the Executive under this Section 2.1 is the
                Normal
                Retirement Benefit, an annual benefit set forth in Schedule
                A
                of
                this Agreement (as updated annually) for the Plan Year during which
                the
                Executive’s Normal Retirement Date occurs. Upon the Executive’s Normal
                Retirement Date, the Bank shall pay to the Executive the Normal Retirement
                Benefit, as described in this Section 2.1, in lieu of any other benefit
                under this Article.

            


    

    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      



    

    


    
      	
               

            	 


    

    
      	 	
              2.1.1

            	
              Amount
                of Benefit.
                The annual benefit under this Section 2.1 for the first Plan Year
                is One
                Hundred Fifty Thousand Dollars ($150,000). Commencing
                on the first day of the second Plan Year, and on the first day of
                each
                Plan Year thereafter, the annual benefit shall be increased three
                percent
                (3%) from the previous Plan Year, to a projected annual benefit of
                Two
                Hundred Twenty Thousand Dollars ($220,000) at the Executive’s Normal
                Retirement Age. 

            


    

    


    
      	 	
              2.1.2

            	
              Payment
                of Benefit.
                The Bank shall pay the Normal Retirement Benefit to the Executive
                in equal
                monthly installments, commencing on the first day of the month following
                the Executive’s Normal Retirement Date. This annual benefit shall be paid
                to the Executive for each of the fifteen (15) consecutive twelve
                (12)
                month periods next following the Executive’s Normal Retirement Date, for a
                total of 180 consecutive equal monthly
                payments.

            


    

    


    
      	
              2.2

            	
              Early
                Termination Benefit.
                Upon the Executive’s Early Termination, the Bank shall pay to the
                Executive the Early Termination Benefit, as described in this Section
                2.2,
                in lieu of any other benefit under this
                Article.

            


    

    


    
      	 	
              2.2.1

            	
              Amount
                of Benefit.
                The benefit payable to the Executive under this Section 2.2 is the
                Early
                Termination Benefit, a one-time, lump-sum amount set forth on Schedule
                A
                of
                the Agreement (as updated annually) for the Plan Year during which
                the
                Executive’s Early Termination Date occurs. The amount of the Early
                Termination Benefit payable to the Executive in any Plan year shall
                be
                equal to the Executive’s Accrual Balance accrued under this Agreement for
                such Plan Year.

            


    

    


    
      	 	
              2.2.2

            	
              Payment
                of Benefit.
                The Bank shall pay the Early Termination Benefit to the Executive,
                as a
                one-time, lump-sum amount, within thirty (30) days following the
                Executive’s Early Termination Date, or at such later date as may be
                required by applicable law.

            


    

    


    
      	
              2.3

            	
              Disability
                Benefit.
                Upon the Executive’s Termination of Employment due to Disability prior to
                Normal Retirement Age, the Bank shall pay to the Executive the benefit
                described in this Section 2.3, in lieu of any other benefit under
                this
                Article.

            


    

    


    
      	 	
              2.3.1

            	
              Amount
                of Benefit.
                The benefit payable to the Executive under this Section 2.3 is the
                Disability Benefit, an annual benefit set forth on Schedule
                A
                of
                the Agreement (as updated annually) for the Plan Year during which
                the
                Termination of Employment occurs. The annual amount of the Disability
                Benefit payable to the Executive hereunder shall be equal to the
                annual
                amount of Executive’s Normal Retirement Benefit determined under this
                Agreement for the Plan Year in which the Executive’s Termination of
                Employment occurs.

            


    

    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      



    

    


    
      	 	
              2.3.2

            	
              Payment
                of Benefit.
                The Bank shall pay the Disability Benefit to the Executive in equal
                monthly installments, commencing with the month following the Executive’s
                Normal Retirement Age. This annual benefit shall be paid to the Executive
                for each of the fifteen (15) consecutive twelve (12) month periods
                next
                following the Executive’s Normal Retirement Age, for a total of 180
                consecutive equal monthly payments.

            


    

    


    
      	
              2.4

            	
              Change
                of Control Benefit.
                Upon a Change of Control followed by the Executive’s Termination of
                Employment (other than a Termination for Cause), the Bank shall pay
                to the
                Executive the Change of Control Benefit, as described in this Section
                2.4,
                in lieu of any other benefit under this Article.
                

            


    

     

    
      	 	
              2.4.1

            	
              Amount
                of Benefit.
                The benefit under this Section 2.4 is the Change of Control Benefit,
                an
                annual benefit in the amount set forth on Schedule
                A
                of
                this Agreement (as updated annually) for the Plan Year during which
                Termination of Employment occurs. 

            


    

    


    
      	 	
              2.4.2

            	
              Payment
                of Benefit. 
                The Bank shall pay the Change of Control Benefit to the Executive
                in equal
                monthly installments commencing with the month following the Executive’s
                Normal Retirement Age. This annual benefit shall be paid to the Executive
                for each of the next fifteen (15) consecutive years next following
                the
                Executive’s Normal Retirement Age, for a total of 180 consecutive equal
                monthly payments.

            


    

    


    
      	
              2.5

            	
              Failure
                to be Nominated or Reelected.
                Upon the failure of the Executive to be terminated or reelected as
                a
                director of either of the Bank or the Holding Company (for any reason
                other than for a Termination for Cause), the Bank shall pay to the
                Executive the benefit described in this Section
                2.5.

            


    

    


    
      	 	
              2.5.1

            	
              Amount
                of Benefit.
                The benefit payable under this Section 2.5 is an annual benefit in
                an
                amount equal to the projected annual benefit to be paid to the Executive
                at the Executive’s Normal Retirement Age, as set forth in Section 2.1.1 of
                this Agreement.

            


    

    


    
      	 	
              2.5.2.

            	
              Payment
                of Benefit.
                The benefit payable under this Section 2.5 shall be paid to the Executive
                in equal monthly installments commencing with the month following
                the
                Executive’s Normal Retirement Age. This annual benefit shall be paid to
                the Executive for each of the fifteen (15) consecutive years next
                following the Executive’s Normal Retirement Age, for a total of 180
                consecutive equal monthly payments.

            


    

    


    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      



    

    Article
      3

    Death
      Benefits

    


    
      	
              3.1

            	
              Death
                During Active Employment.
                If the Executive dies while in the active employment of the Bank
                and the
                Holding Company, the Bank shall pay to the Beneficiary the benefit
                described in this Section 3.1. This benefit shall be paid in lieu
                of the
                benefits under Article 2.

            


    

    


    
      	 	
              3.1.1

            	
              Amount
                of Benefit.
                The benefit under this Section 3.1 is the Pre-Retirement Death Benefit,
                an
                annual benefit set forth on Schedule
                A
                of
                this Agreement for the Plan Year in which the Executive dies, in
                an amount
                equal to the projected annual benefit to be paid to the Executive
                at the
                Executive’s Normal Retirement Age, as set forth in Section 2.1.1 of this
                Agreement. 

            


    

    


    
      	 	
              3.1.2

            	
              Payment
                of Benefit.
                The Bank shall pay the Pre-Retirement Death Benefit, to the Beneficiary
                in
                equal monthly installments, commencing with the month following the
                Executive’s death. The Pre-Retirement Death Benefit shall be paid to the
                Beneficiary (as provided under this Article 3 and Article 4) for
                a period
                of fifteen (15) consecutive twelve (12) month periods next following
                the
                death of the Executive, for a total of 180 consecutive equal monthly
                payments.

            


    

    


    
      	
              3.2

            	
              Death
                During Payment of a Benefit.
                If the Executive dies after any benefit payments have commenced under
                Article 2 of this Agreement, but before receiving all such payments,
                the
                Bank shall pay the remaining benefits to the Beneficiary at the same
                time
                and in the same amounts that would have been paid to the Executive
                had the
                Executive survived.

            


    

    


    
      	
              3.3

            	
              Death
                After Termination of Employment But Before Payment of a Benefit
                Commences. If
                the Executive is entitled to any benefit payments under Article 2
                of this
                Agreement, but dies prior to the commencement of said benefit payments,
                the Bank shall pay the same benefit payments to the Beneficiary that
                the
                Executive was entitled to prior to death, except that the benefit
                payments
                shall commence on the first day of the month following the date of
                the
                Executive’s death.

            


    

    


    
      	
              3.4

            	
              Death
                of a Beneficiary prior to Full Payment of Benefit.
                If a Beneficiary dies prior to receipt of the full benefits to be
                paid to
                the Beneficiary under this Agreement, the remaining benefit payments,
                otherwise payable to the Beneficiary under the terms of this Agreement,
                shall be paid to the personal representative of the estate of the
                Beneficiary. The personal representative of the estate of the Beneficiary,
                and any beneficiary to whom such benefits are paid by or from the
                Beneficiary’s estate, shall each be a “Beneficiary” for purposes of this
                Agreement.

            


    

    
      	
               

            	 


    

    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    


    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      

 

    

    Article
      4

    Beneficiaries

    


    
      	
              4.1

            	
              Beneficiary
                Designation.
                The Executive shall have the right, at any time, to designate a
                Beneficiary(ies) to receive any benefits payable under this Agreement
                upon
                the death of the Executive. The Beneficiary designated under this
                Agreement may be the same as or different from the beneficiary designation
                under any other benefit plan of the Bank in which the Executive
                participates. 

            


    

    


    
      	
              4.2

            	
              Beneficiary
                Designation: Change.
                The Executive shall designate a Beneficiary by completing and signing
                the
                Beneficiary Designation Form, and delivering it to the Plan Administrator
                or its designated agent. The Executive's Beneficiary designation
                shall be
                deemed automatically revoked if the Beneficiary predeceases the Executive
                or if the Executive names a spouse as Beneficiary and the marriage
                is
                subsequently dissolved. The Executive shall have the right to change
                a
                Beneficiary by completing, signing and otherwise complying with the
                terms
                of the Beneficiary Designation Form and the Plan Administrator’s rules and
                procedures, as in effect from time to time. Upon the acceptance by
                the
                Plan Administrator of a new Beneficiary Designation Form, all Beneficiary
                designations previously filed shall be cancelled. The Plan Administrator
                shall be entitled to rely on the last Beneficiary Designation Form
                filed
                by the Executive and accepted by the Plan Administrator prior to
                the
                Executive’s death.

            


    

    


    
      	
              4.3

            	
              Acknowledgment.
                Except as otherwise specifically provided in this Agreement, no
                designation or change in designation of a Beneficiary shall be effective
                until received, accepted and acknowledged in writing by the Plan
                Administrator, or its designated
                agent.

            


    

    


    
      	
              4.4

            	
              No
                Beneficiary Designation.
                If the Executive dies without a valid beneficiary designation, or
                if all
                designated Beneficiaries predecease the Executive, then the Executive’s
                spouse, if married to Executive at the date of Executive’s death, shall be
                the designated Beneficiary. If the Executive has no spouse at the
                Executive’s date of death, the benefits shall be made to the personal
                representative of the Executive's estate. The personal representative
                of
                the Executive’s estate and any beneficiary to whom such benefits are paid
                by or from the Executive’s estate, shall each be a “Beneficiary” for
                purposes of this Agreement.

            


    

    
      	
               

            	 


    

    
      	
              4.5

            	
              Facility
                of Payment.
                If the Plan Administrator determines in its discretion that a benefit
                is
                to be paid to a minor, to a person declared incompetent, or to a
                person
                incapable of handling the disposition of that person’s property, the Plan
                Administrator may direct payment of such benefit to the guardian,
                legal
                representative or person having the care or custody of such minor,
                incompetent person or incapable person. The Plan Administrator may
                require
                proof of incompetence, minority or guardianship as it may deem appropriate
                prior to distribution of the benefit. Any payment of a benefit shall
                be a
                payment for the account of the Executive and the Executive’s Beneficiary,
                as the case may be, and shall be a complete discharge of any liability
                under the Agreement for such payment
                amount.

            


    

    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

     

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      
 

    

    


    Article
      5

    General
      Limitations

    


    
      	
              5.1
                

            	
              Termination
                for Cause.
                Notwithstanding any provision of this Agreement to the contrary,
                the Bank
                shall not pay any benefit under this Agreement if the board of directors
                or shareholders of either the Bank or the Holding company terminates
                the
                Executive's employment for:

            


    

    


    
      	 	
              (a)
                

            	
              Gross
                negligence or gross neglect of duties to the
                Bank;

            


    

    


    
      	 	
              (b)
                

            	
              Commission
                of a felony or of a gross misdemeanor involving moral turpitude;
                

            


    

    


    
      	 	
              (c)
                

            	
              Fraud
                or willful violation of any law or significant Bank policy committed
                in
                connection with the Executive's employment and resulting in a material
                adverse effect on the Bank; or

            


    

    


    
      	 	
              (d)
                

            	
              Issuance
                of an order for removal of the Executive by the banking regulators
                of the
                Bank or the Holding Company.

            


    

    


    
      	
              5.2

            	
              Suicide
                or Misstatement.
                The Bank shall not pay any benefit under this Agreement if the Executive
                commits suicide within two years after the Effective Date. In addition,
                the Bank shall not pay any benefit under this Agreement if the Executive
                has made any material misstatement of fact on any application for
                life
                insurance owned by the Bank on the Executive’s
                life.

            


    

    


    
      	
              5.3

            	
              Competition
                After Termination of Employment.
                The Bank shall not pay any benefit under this Agreement if the Executive,
                without the prior written consent of the Bank or, if earlier, within
                1
                year from the Executive’s Termination of Employment, engages in, directly
                or indirectly, as a sole proprietor, as a partner in a partnership,
                or as
                a holder of more than five percent (5%) of the voting shares in a
                corporation, or becomes associated with, in the capacity of employee,
                director, officer, principal, agent or trustee, any enterprise conducted
                within a 25-mile radius of any office of the Bank existing at the
                time of
                the Executive’s Termination of Employment, which enterprise is, or may
                deemed to be, competitive with the business of banking carried on
                by the
                Bank as of the date of the Executive’s Termination of Employment. 
                This section shall not apply to a Termination of Employment (other
                than a
                Termination for Cause) following a Change of Control or to an Early
                Termination which was involuntary on the part of the
                Executive.

            


    

    


    Article
      6

    Claims
      And Review Procedures

    


    
      	
              6.1

            	
              Claims
                Procedure.
                An Executive or Beneficiary (“claimant”) who has not received benefits
                under the Agreement that he or she believes should be paid shall
                make a
                claim for such benefits as follows:

            


    

    


    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      

 

    

    
      	 	
              6.1.1

            	
              Initiation
                - Written Claim.
                The claimant initiates a claim by submitting to the Plan Administrator
                a
                written claim for the benefits.

            


    

    


    
      	 	
              6.1.2

            	
              Timing
                of Plan Administrator Response.
                The Plan Administrator shall respond to such claimant within 90 days
                after
                receiving the claim. If the Plan Administrator determines that special
                circumstances require additional time for processing the claim, the
                Plan
                Administrator can extend the response period by an additional 90
                days by
                notifying the claimant in writing, prior to the end of the initial
                90-day
                period, that an additional period is required. The notice of extension
                must set forth the special circumstances and the date by which the
                Plan
                Administrator expects to render its
                decision.

            


    

    


    
      	 	
              6.1.3

            	
              Notice
                of Decision.
                If the Plan Administrator denies part or all of the claim, the Plan
                Administrator shall notify the claimant in writing of such denial.
                The
                Plan Administrator shall write the notification in a manner calculated
                to
                be understood by the claimant. The notification shall
                include:

            


    

    


    (a) The
      specific reasons for the denial;

    (b) A
      reference to the specific provisions of the Agreement on which the denial is
      based;

    (c) A
      description of any additional information or material necessary for the claimant
      to perfect the claim and an explanation of why it is needed; and

    (d) A
      description of the applicable review procedures and the time limits applicable
      to such procedures. 

    


    
      	
              6.2

            	
              Review
                Procedure.
                If the Plan Administrator denies part or all of the claim, the claimant
                shall have the opportunity for a full and fair review by the Plan
                Administrator of the denial, as
                follows:

            


    

    


    
      	 	
              6.2.1

            	
              Initiation
                - Written Request.
                To initiate the review, the claimant, within 60 days after receiving
                the
                Plan Administrator’s notice of denial, must file with the Plan
                Administrator a written request for
                review.

            


    

    


    
      	 	
              6.2.2

            	
              Additional
                Submissions - Information Access.
                The claimant shall then have the opportunity to submit written comments,
                documents, records and other information relating to the claim. The
                Plan
                Administrator shall also provide the claimant, upon request and free
                of
                charge, reasonable access to, and copies of, all documents, records
                and
                other information relevant to the claimant’s claim for
                benefits.

            


    

    


    
      	 	
              6.2.3

            	
              Considerations
                on Review.
                In considering the review, the Plan Administrator shall take into
                account
                all materials and information the claimant submits relating to the
                claim,
                without regard to whether such information was submitted or considered
                in
                the initial benefit determination.

            


    

    


    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      

 

    

    


    
      	 	
              6.2.4

            	
              Timing
                of Plan Administrator Response.
                The Plan Administrator shall respond in writing to such claimant
                within 60
                days after receiving the request for review. If the Plan Administrator
                determines that special circumstances require additional time for
                processing the claim, the Plan Administrator can extend the response
                period by an additional 60 days by notifying the claimant in writing,
                prior to the end of the initial 60-day period, that an additional
                period
                is required. The notice of extension must set forth the special
                circumstances and the date by which the Plan Administrator expects
                to
                render its decision.

            


    

    


    
      	 	
              6.2.5

            	
              Notice
                of Decision.
                The Plan Administrator shall notify the claimant in writing of its
                decision on review. The Plan Administrator shall write the notification
                in
                a manner calculated to be understood by the claimant. The notification
                shall include: 

            


    

    


    (a) The
      specific reasons for the denial;

    (b) A
      reference to the specific provisions of the Agreement on which the denial is
      based; and

    (c) A
      statement that the claimant is entitled to receive, upon request and free of
      charge, reasonable access to, and copies of, all documents, records and other
      information relevant to the claimant’s claim for benefits. 

    


    Article
      7

    Amendments
      and Termination

    


    This
      Agreement may be amended or terminated only by a written agreement signed by
      the
      Bank and the Executive. Provided, however, if the Bank’s Board of Directors
      determines that the Executive is no longer a member of a select group of
      management or highly compensated employees, as that phrase applies to ERISA,
      for
      reasons other than death, Disability or retirement, the Bank may amend or
      terminate this Agreement. Upon such amendment or termination, the Bank shall
      pay
      benefits to the Executive as if Early Termination occurred on the date of such
      amendment or termination, regardless of whether Early Termination actually
      occurs. Additionally, the Bank may also amend this Agreement to conform with
      written directives to the Bank from its banking regulators.

    


    Article
      8

    Administration
      of Agreement

    


    
      	
              8.1

            	
              Plan
                Administrator Duties.
                This Agreement shall be administered by a Plan Administrator which
                shall
                consist of the Board, or such committee or person(s) as the Board
                shall
                appoint. The Executive may be a member of the Plan Administrator.
                The Plan
                Administrator shall also have the discretion and authority to (i)
                make,
                amend, interpret and enforce all appropriate rules and regulations
                for the
                administra-tion of this Agreement and (ii) decide or resolve any
                and all
                ques-tions including interpretations of this Agreement, as may arise
                in
                connection with the Agreement.

            


    

    


    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    


    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      
 

    

    


    
      	
              8.2

            	
              Agents.
                In the administration of this Agreement, the Plan Administrator may
                employ
                agents and delegate to them such administrative duties as it sees
                fit,
                (including acting through a duly appointed representative), and may
                from
                time to time consult with counsel who may be counsel to the
                Bank.

            


    

    


    
      	
              8.3

            	
              Binding
                Effect of Decisions.
                The decision or action of the Plan Administrator with respect to
                any
                question arising out of or in connection with the administration,
                interpretation and application of the Agreement and the rules and
                regulations promulgated hereunder shall be final and conclusive and
                binding upon all persons having any interest in the Agreement. No
                Executive or Beneficiary shall be deemed to have any right, vested
                or
                nonvested, regarding the continued use of any previously adopted
                assumptions, including but not limited to the Discount
                Rate.

            


    

    


    
      	
              8.4

            	
              Indemnity
                of Plan Administrator.
                The Bank shall indemnify and hold harmless the members of the Plan
                Administrator against any and all claims, losses, damages, expenses
                or
                liabilities arising from any action or failure to act with respect
                to this
                Agreement, except in the case of willful misconduct by the Plan
                Administrator or any of its
                members.

            


    

    


    
      	
              8.5

            	
              Bank
                Information.
                To enable the Plan Administrator to perform its functions, the Bank
                shall
                supply full and timely information to the Plan Administrator on all
                matters relating to the date and circum-stances of the retirement,
                Disability, death, or Termination of Employment of the Executive,
                and such
                other pertinent information as the Plan Administrator may reasonably
                require.

            


    

    


    
      	
              8.6

            	
              Annual
                Statement.
                The Plan Administrator shall provide to the Executive, within 120
                days
                after the end of each Plan Year, in the form of Schedule
                A
                of
                this Agreement, a statement setting forth the benefits payable under
                this
                Agreement. It is hereby agreed that such annual statement, in the
                form of
                Schedule
                A,
                shall be incorporated into, and thereby shall be a part of, this
                Agreement.

            


    

    


    Article
      9

    Miscellaneous

    


    
      	
              9.1

            	
              Binding
                Effect.
                This Agreement shall bind the Executive, the Company and the Bank,
                and
                their beneficiaries, survivors, executors, successors, administrators
                and
                transferees.

            


    

    


    
      	
              9.2

            	
              No
                Guarantee of Employment.
                This Agreement is not a policy or contract regarding the continued
                employment of the Executive, as a director of the Bank and/or the
                Holding
                Company. It does not give the Executive the right to remain as an
                employee
                or director of the Bank or the Holding Company, nor does it interfere
                with
                the right of the Bank or the Holding Company, or their respective
                shareholders, to remove the Executive from office. It also does not
                require the Executive to remain a director of the Bank or Holding
                Company
                nor interfere with the Executive's right to terminate employment
                with the
                Bank or Holding Company at any
                time.

            


    

    


    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

     

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      
 

    

    


    
      	
              9.3

            	
              Non-Transferability.
                Benefits under this Agreement cannot be sold, transferred, assigned,
                pledged, attached or encumbered in any
                manner.

            


    

    


    
      	
              9.4

            	
              Tax
                Withholding.
                The Bank shall withhold any taxes that, in its reasonable judgment,
                are
                required to be withheld from the benefits provided under this Agreement.
                The Executive acknowledges that the Bank’s sole liability regarding taxes
                is to forward any amounts withheld to the appropriate taxing
                authority(ies).

            


    

    


    
      	
              9.5

            	
              Applicable
                Law.
                The Agreement and all rights hereunder shall be governed by the laws
                of
                the State of Georgia, except to the extent preempted by the laws
                of the
                United States of America. Further, the parties intend for this Agreement,
                including the payment of benefits hereunder, to comply with the provisions
                of Section 409A of the Internal Revenue Code of 1986, as said Section
                may
                be amended from time to time, and, therefore, hereby agree that the
                provisions of this Agreement and the benefits payable hereunder shall
                be,
                and hereby are, modified, but only to the extent necessary, to achieve
                compliance therewith. 

            


    

    


    
      	
              9.6

            	
              Unfunded
                Arrangement.
                The Executive and Beneficiary (and any other parties with rights
                under
                this Agreement) are general unsecured creditors of the Bank for the
                payment of benefits under this Agreement. The benefits represent
                the mere
                promise by the Bank to pay such benefits. The rights to benefits
                are not
                subject in any manner to anticipation, alienation, sale, transfer,
                assignment, pledge, encumbrance, attachment, or garnishment by creditors.
                Any insurance on the Executive's life is a general asset of the Bank
                to
                which the Executive and Beneficiary have no preferred or secured
                claim.

            


    

    


    
      	
              9.7

            	
              Reorganization. Neither
                the Bank nor the Holding Company shall merge or consolidate into
                or with
                another company or bank, or reorganize, or sell substantially all
                of its
                assets to another company or bank, firm, or person unless such succeeding
                or continuing company, bank, firm, or person agrees to assume and
                discharge the obligations of the Bank and Holding Company under this
                Agreement. Upon the occurrence of such event, the terms “Bank” and
                “Holding Company”, as used in this Agreement, shall also be deemed to
                refer to the successor or survivor company or
                bank.

            


    

    


    
      	
              9.8

            	
              Entire
                Agreement. This
                Agreement constitutes the entire agreement between and among the
                Bank, the
                Holding Company and the Executive as to the subject matter hereof.
                No
                rights are granted to the Executive by virtue of this Agreement other
                than
                those specifically set forth
                herein.

            


    

    


    
      	
              9.9

            	
              Interpretation.
                Wherever the fulfillment of the intent and purpose of this Agreement
                requires, and the context will permit, the use of the masculine gender
                includes the feminine and use of the singular includes the
                plural.

            


    

    


    
      	
              9.10

            	
              Alternative
                Action.
                In the event it shall become impossible for the Bank, the Holding
                Company
                or the Plan Administrator to perform any act required by this Agreement,
                the Bank, the Holding Company or Plan Administrator may in its discretion
                perform such alternative act as most nearly carries out the intent
                and
                purpose of this Agreement and is in the best interests of the
                Bank.

            


    

    


    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      
 

    

    


    
      	
              9.11

            	
              Headings.
                Article and section headings are for convenient reference only and
                shall
                not control or affect the meaning or construction of any of its
                provisions.

            


    

    


    
      	
              9.12

            	
              Validity.
                In case any provision of this Agreement shall be illegal or invalid
                for
                any reason, said illegality or invalidity shall not affect the remaining
                parts hereof, but this Agreement shall be construed and enforced
                as if
                such illegal and invalid provision has never been inserted
                herein.

            


    

    


    
      	
              9.13

            	
              Notice.
                Any notice or filing required or permitted to be given to the Bank
                or Plan
                Administrator under this Agreement shall be sufficient if in writing
                and
                hand-delivered, or sent by registered or certified mail, to the address
                below: 

            


    

     

    
      	
              Appalachian
                Community Bank

            
	
              829
                Industrial Blvd.

            
	
              Ellijay,
                Georgia 30540

            


    

     

    Such
      notice shall be deemed given as of the date of delivery or, if delivery is
      made
      by mail, as of the date shown on the postmark on the receipt for registration or
      certification.

    


    Any
      notice or filing required or permitted to be given to the Executive under this
      Agreement shall be sufficient if in writing and hand-delivered, or sent by
      mail,
      to the last known address of the Executive.

    


    


    IN
      WITNESS WHEREOF, the Executive and a duly authorized representative of each
      of
      the Bank and Holding Company have signed this Agreement on the 11th day of
      August, 2006.

    


    
      	 	
              “EXECUTIVE:”

            
	 	 
	 	 
	 	
              Joseph
                T. Moss, Jr., 

            
	 	
              President
                and Chief Operating Officer

            
	 	 
	 	 
	 	
              “BANK:”

            
	 	 
	 	
              Appalachian
                Community Bank

            
	 	 
	 	
              By:
                /s/ Tracy R. Newton

            
	 	 
	 	
              Title:
                Chief Executive Officer

            


    

    


    


    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    


    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      



    

    


    


    
      	 	
              “HOLDING
                COMPANY:”

            
	 	 
	 	
              Appalachian
                Bancshares, Inc.

            
	 	 
	 	
              By:  
                Tracy R. Newton

            
	 	 
	 	
              Title: 
                Chief Executive Officer

            


    

     

     

     

     

    
 

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    


     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

                BENEFICIARY
                  DESIGNATION
                  FORM

              


      

      


    

     

    I
      designate the following as beneficiary of benefits under the Agreement payable
      following my death:

    


    Primary: _______________________________________________________________________

    


    _____________________________________________________________________________

    


    Contingent: ____________________________________________________________________

    


    _____________________________________________________________________________

    


    Note:
      To name a trust as beneficiary, please provide the name of the trustee(s) and
      the exact
      name and date of the trust agreement.

    


    I
      understand that I may change these beneficiary designations by delivering a
      new
      written designation to the Plan Administrator. I further understand that the
      designations will be automatically revoked if the beneficiary predeceases me,
      or, if I have named my spouse as beneficiary and our marriage is subsequently
      dissolved.

    


    
      	
              Name:        
                    _______________________________

            	 
	 	 
	
              Signature:     _______________________________

            	
              Date:     _______

            


    

    


    


    
      
        	
                SPOUSAL
                  CONSENT (Required if Spouse not named beneficiary):

                


                I
                  consent to the beneficiary designation above, and acknowledge that
                  if I am
                  named beneficiary and our marriage is subsequently dissolved, the
                  designation will be automatically revoked.

                


                Spouse
                  Name: _______________________________

                


                Signature: __________________________________      
                  Date: _______

              


      

    

     

    


    


    


    Received
      by the Plan Administrator this ________ day of ___________________,
      20___.

    


    By: _________________________________

    


    Title: ________________________________

    


    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    
       

      
        	
                Appalachian
                  Community Bank

                Salary
                  Continuation Agreement

              


      

      



    

    SCHEDULE
      A

    


    (For
      the Year Ending March 31, 20__)

    


    


    
      	
              Executive
                Name

            	
              Joseph
                T. Moss, Jr.

            	 	
              Plan
                Anniversary Date

            	
              04/01

            
	
              Normal
                Retirement Age

            	
              *

            	 	
              Normal
                Retirement Date (Estimated)

            	 


    

     

     

     

    
      	
              Discount
                Rate

            	
              Plan
                Year Ending

            	
              Accrual
                Balance

            	
              Normal
                Retirement 

              Benefit

              (annual
                benefit

              Amount)

            	
              Early
                Termination Benefit

              (one-time,
                lump-sum benefit amount)

            	
              **

              Disability
                Benefit

              (annual
                benefit amount)

            	
              **

              Change
                of Control Benefit

              (annual
                benefit amount)

            	
              **

              Pre-retirement
                Death Benefit

              (annual
                benefit amount)

            
	
              7%

            	 	
              $

            	
              $

            	
              $

            	
              $

            	
              $

            	
              $

            


    

     

     

    


     

    


     

    The
      parties to this Salary Continuation Agreement hereby further agree that this
      Schedule
      A
      shall be
      updated annually to include any changes in the Accrual Balance and the various
      benefit levels described hereon. Further, this Schedule
      A,
      as it
      now exists and as it may be further updated, is and shall continue to be a
      part
      of this Salary Continuation Agreement.

    


    


    *The
      earlier of Age 65 or the Age at which a Executive completes 20 years of
      employment as a director of the Bank and/or the Holding
      Company.

    


    **This
      annual benefit amount to be entered here for the Executive should be the
      projected annual benefit amount set forth in Section 2.1.1 of the
      Agreement.