Document:

Carolina Trust Bank 8-K12G3

 

Exhibit
10.10

 

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

 

THIS
PLAN is adopted as of the 1st day of August, 2007, by Carolina Trust Bank a banking corporation organized and existing under the
laws of the State of North Carolina, hereinafter referred to as the “Plan Sponsor”.

 

WITNESSETH

 

WHEREAS,
it is the consensus of the Board that the Participant’s services to the Plan Sponsor in the past have been of exceptional
merit and have constituted an invaluable contribution to the general welfare of the Plan Sponsor bringing it to its present status
of operating efficiency, and its present position in its field of activity; and.

 

WHEREAS,
the experience of the Participant, his knowledge of the affairs of the Plan Sponsor, his reputation and contacts in the industry
are so valuable that assurance of his continued services is essential for the future growth and profits of the Plan Sponsor and
it is in the best interests of the Plan Sponsor to arrange terms of continued employment for the Participant so as to reasonably
assure his remaining in the Plan Sponsor’s employment during his lifetime or until the age of retirement; and.

 

WHEREAS,
it is the desire of the Plan Sponsor that his services be retained as herein provided; and.

 

WHEREAS,
the Participant is willing to continue in the employ of the Plan Sponsor provided the Plan Sponsor agrees to pay to him or
his beneficiaries certain benefits in accordance with the terms and conditions hereinafter set forth; and.

 

WHEREAS,
the Plan Sponsor intends that the Plan shall at all times be administered and interpreted in such a manner as to constitute
an unfunded nonqualified deferred compensation plan for tax purposes and for purposes of Title I of ERISA. This Plan is not intended
to qualify for favorable tax treatment pursuant to IRC Section 401(a) of the Code or any successor section or statute.
This Plan is intended to comply with IRC Section 409A as created under The American Jobs Creation Act of 2004 (the “Jobs
Act of 2004”). It is both anticipated and expected that the terms and provisions of this Plan may need to be amended in
the future to assure continued compliance. The Plan Sponsor and the Participant acknowledge that fact and agree to take any and
all steps necessary to operate the plan in “good faith” based on their current understanding of the regulations;

 

NOW
THEREFORE, in consideration of services performed in the past and to be performed in the future as well as of the mutual promises
and covenants herein contained, it is agreed as follows:

 

ARTICLE
1

DEFINITIONS

 

DEFINITION
OF TERMS. Certain words and phrases are defined when first used in later Articles of this Plan. Whenever any words are used
herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and
whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural
or the singular-, as the case may be, in all cases where they would so apply, For the purpose of this Plan, unless otherwise clearly
apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

    	 

     

    

 

1.1         “Accrued
Benefit” shall mean the Participant’s Supplemental Retirement Benefit calculated for purposes of Generally Accepted
Accounting Principles (GAAP) and recorded on the books of the Plan Sponsor.

 

1.2         “Aggregated
Plans” shall mean this Plan and any other like-type plan or arrangement (nonaccount balance plan) of the Plan Sponsor
in which the Participant participates and to which the Plan or Applicable Guidance requires the aggregation of all such nonqualified
Deferred Compensation Plans in applying Code §409A and associated regulations.

 

1.3         “Annual
Compensation” shall mean the annual rate of base pay (excluding bonuses) on January 1st of each year.

 

1.4         “Applicable
Guidance” shall mean, as the context requires, Code §409A, Final Treasury Regulations §1.409A, or other
written Treasury or IRS guidance regarding or affecting Code §409A. Applicable Guidance also includes, through December
31, 2007, Notice 2005-1, Notice 2006-79 and Notice 2006-100.

 

1.5         “Beneficiary”
shall mean the person or persons, natural or otherwise, designated in writing by a Participant before his or her death to
receive Plan benefits in the event of the Participant’s death.

 

1.6         “Benefit
Computation Base” shall mean the average of the Participant’s “Annual Compensation” for the five (5)
completed years of employment immediately preceding the year- in which an event occurs giving rise to the need for
such calculation.

 

1.7         “Benefit
Eligibility Date” shall mean the time at which benefits shall become payable under the terms of the Plan, as specified
by the Plan Sponsor in the Participation Agreement.

 

1.8         “Board”
shall mean the board of director’s of the Plan Sponsor, unless specifically noted otherwise.

 

1.9         “Cause”
shall mean any of the following acts or circumstances: (i) willful destruction by the Participant of property of the Plan
Sponsor having a material value to the Plan Sponsor; (ii) fraud, embezzlement, theft, or comparable dishonest activity committed
by the Participant (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor); (iii) the Participant’s
conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving
fraud, dishonesty, or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor);
(iv) the Participant’s breach, neglect, refusal, or failure to materially discharge the Participant’s duties (other
than due to physical or mental illness) commensurate with the Participant’s title and function or the Participant’s
failure to comply with the lawful directions of a senior managing officer of the Plan Sponsor in any such case that is not cured
within fifteen (15) days after the Participant has received written notice thereof from such senior managing officer; or (v) any
willful misconduct by the Participant which may cause substantial economic or reputation injury to the Plan Sponsor, including,
but not limited to, sexual harassment.

 

1.10       “Claimant”
shall mean a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

 

1.11       “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

1.12       “Effective
Date” shall mean August 1, 2007.

 

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1.13       “Election
Form” shall mean the form or forms established, from time to time, by the Plan Administrator on which the Participant
makes certain designations as required under the terms of the Plan. The Participant Election Form may take the form of an electronic
communication followed by appropriate written confirmation according to specifications established by the Plan Administrator.

 

1.14       “Eligible
Employee” shall mean for any Plan Year (or applicable portion of a Plan Year), an Employee who is determined by the
Plan Sponsor, or its designee, to be a Participant under the Plan. If the Plan Sponsor determines that an Employee first becomes
an Eligible Employee during a Plan Year, the Plan Sponsor shall notify the individual in writing of its determination and of the
date during the Plan Year on which the individual shall first become a Plan Participant.

 

1.15       “Employee”
shall mean a person or entity, (in accordance with Treasury Regulations §1.409A-l(f)(l), and which is on the cash basis
method of accounting for Federal income tax purposes) providing services to the Plan Sponsor in the capacity of a common law Employee
of the Plan Sponsor.

 

1.16       “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

 

1.17       “Form
of Payment” shall mean the modal form of payments (e.g. monthly, quarterly, annual etc.) made to a Participant and/or
a Beneficiary under the permissible payment events defined in Article 3. Modal forms may be determined at the sole discretion
of the Plan Sponsor or may be options offered by the Plan Sponsor and selected by the Participant in the Participation Agreement.

 

1.18       “Legally
Binding Right” shall mean, with respect to compensation: (i) the Participant’s right to such compensation, granted
by the Plan Sponsor, after the Participant has performed the services which created the Legally Binding Right, and (ii) where
compensation may not be reduced unilaterally or eliminated by the Plan Sponsor or any other person after the services creating
the right to compensation has been performed. The Plan Sponsor, based on the facts and circumstances, will determine whether a
Legally Binding Right exists or does not exist with respect to compensation, in accordance with Treasury Regulation §1.409A-l(b)(l).

 

1.19       “Normal
Retirement Age” shall mean the later of; (a) date stated by the Plan Sponsor in the Participation Agreement, or (b)
the date the Participant incurs a Separation from Service.

 

1.20       “Participant”
shall mean any Eligible Emplo3’ee: (i) who is selected to participate in this Plan, (ii) who elects to participate in
this Plan by signing a Participation Agreement, (iii) who completes and signs certain Election Form required by the Plan
Administrator, and (iv) whose signed Election Form are accepted by the Plan Administrator or, (v) a former Eligible Employee
who continues to be entitled to a benefit under this Plan.

 

1.21       “Participation
Agreement” shall mean the agreement executed by the Eligible Employee and Plan Administrator whereby the Eligible Employee
agrees to participate in the Plan.

 

1.22       “Payout
Period” shall mean the duration of benefit payments (e.g. 5 years, 10 years, lifetime etc.) made to a Participant
and/or a Beneficiary under the permissible payment events defined in Article 3. Payout Periods may be determined at the sole discretion
of the Plan Sponsor or may be options offered by the Plan Sponsor and selected by the Participant in the Participation Agreement.

 

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1.23       “Plan”
shall mean this Supplemental Executive Retirement Plan Agreement, the Participation Agreement, all Election Forms, the Trust,
(if any), and any other written documents relevant to the Plan. For purposes of applying Code §409A requirements, this
Plan is a non-account balance plan under Treasury Regulation §1.409-l(c)(2)(i)(A).

 

1.24       “Plan
Administrator” shall be the Plan Sponsor or its designee. A Participant in the Plan should not serve as a singular Plan
Administrator. If a Participant is part of a group of persons designated as a committee or Plan Administrator, then the
Participant may not participate in any activity or decision relating solely to his or her individual benefits under this Plan.
Matters solely affecting the applicable Participant will be resolved by the remaining committee members.

 

1.25       “Plan
Sponsor” shall mean the person or entity: (i) receiving the services of the Participant; (ii) with respect to whom the
Legally Binding Right to compensation arises; and (iii) all persons with whom such person or entity would be considered a
single employer under Code §414(b) or §414(c).

 

1.26       “Plan
Year” shall mean, for the first Plan Year, the period beginning on the Effective Date of the Plan and ending December
31 of such calendar year, and thereafter, a twelve (12) month period beginning January 1 of each calendar year and continuing
through December 31 of such calendar year.

 

1.27       “Section 409A”
shall mean Section 409A of the Code and the Treasury Regulations and other Applicable Guidance issued under that
Section.

 

1.28       “Separation
from Service” shall mean the occurrence of a Participant’s death, retirement, or “other termination of employment”
(as defined in Treasury Regulations §1,409A- 1 (h)(1)(ii)) with the Plan Sponsor (as defined in Treasury Regulations §1.409A-l(h)(3)).
However, a Separation from Service shall not occur if the Participant is on military leave, sick leave, or other bona fide leave
of absence if the period of such leave does not exceed six months, or if longer, so long as the Participant retains a right to
reemployment with the Plan Sponsor under an applicable statute or by contract.

 

1.29       “Service
Year” shall mean a Participant’s Taxable Year in which the Participant performs services which give rise to compensation.

 

1.30       “Specified
Employee” shall mean that the Participant also satisfies the definition of a “key employee” as such term
is defined in Code §416(i) (without regard to Section 416(i)(5)), However, the Participant is not a Specified Employee
unless any stock of the Plan Sponsor is publicly traded on an established securities market or otherwise, as defined in Code §1.897-l(m).
If the Participant is a key employee at any time during the twelve (12) months ending on the identification date (see below),
the Participant is a Specified Employee for the twelve (12) month period commencing on the first day of the fourth month following
the identification date. For purposes of this Article, the identification date is December 31, The determination of the Participant
as a Specified Employee shall be made by the Administrator in accordance with IRC Section 416(i), the “specified employee”
requirements of Section 409A, and Treasury Regulations.

 

1.31       “Supplemental
Retirement Benefit” shall mean a dollar amount payable to the Participant, for the Payout Period and in the Form of
Payment, as defined in the Participation Agreement.

 

1.32       “Survivor
Benefit” shall mean the dollar benefit payable to the Participant’s Beneficiary in the event the Participant dies
while in active employment of the Plan Sponsor or following active employment but prior to commencement of payments hereunder,
or the completion of payments hereunder, as defined in the Participation Agreement.

 

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1.33       “Taxable
Year” shall mean the twelve (12) consecutive month period ending each December 31.

 

1.34       “Treasury
Regulations” shall mean regulations promulgated by the Internal Revenue Service for the U.S. Department of the Treasury,
as they may be amended from time to time.

 

1.35       “Trust”
shall mean one or more trusts that may be established in accordance with the terms of this Plan.

 

1.36       “Vested
Accrued Benefit” shall mean the Accrued Benefit multiplied by a vesting schedule (if any), as defined in the Participation
Agreement.

 

1.37       “Year
of Service” shall mean each twelve (12) month period during which the Participant is employed on a full-time
basis by the Plan Sponsor, with a minimum of 1,000 hours of service, inclusive of any approved leaves of absence,
beginning on the Participant’s date of hire.

 

ARTICLE
2

Selection, Enrollment, Eligibility

 

2.1         Selection
by Plan Sponsor. Participation in the Plan shall be limited to a select group of management or highly compensated employees
of the Plan Sponsor, as determined by the Plan Sponsor in its sole and absolute discretion. The initial group of Eligible Employees
shall become Participants on the Effective Date. Any Eligible Employee selected as a Plan Participant after the Effective Date,
shall become a Participant on a date determined by the Plan Sponsor.

 

2.2         Re-Employment.
If a Participant who incurs a Separation from Service is subsequently re-employed, he or she may, at the sole and absolute
discretion of the Plan Administrator, become a Participant in accordance with the provisions of the Plan.

 

2.3         Enrollment
Requirements. As a condition of participation, each selected Employee shall complete, execute, and return to the Plan Administrator
a Participation Agreement and any Election Form(s) required by the Plan Administrator and within the time specified by the Plan
Administrator. In addition, the Plan Administrator shall establish such other enrollment requirements as it determines necessary
or advisable.

 

2.4         Eligibility;
Commencement of Participation. Provided that an Employee selected to participate in the Plan has met all enrollment requirements
set forth in the Plan and required by the Plan Administrator, the Employee shall commence participation in the Plan on the date
his or her Participation Agreement is executed by the Plan Sponsor.

 

2.5         Termination
of Participation, If the Plan Administrator determines in good faith that a Participant no longer qualifies as a member of
a select group of management or highly compensated employees, as membership in such group is determined in accordance with Section 201(2),
301(a)(3) and 401(a)(1) of ERISA, the Plan Administrator shall have the right, in its sole discretion, to cease further benefit
accruals hereunder.

 

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ARTICLE
3

BENEFITS

 

3.1         Normal
Retirement Benefit. If the Participant remains in the service of the Plan Sponsor until reaching his Normal Retirement Age,
the Participant shall be entitled to a Supplemental Retirement Benefit as stated and payable in the form and duration defined
in the Participation Agreement.

 

3.2         Death
Prior to Commencement of Benefit Payments. If the Participant dies prior to commencement of benefit payments hereunder, the
Participant’s Beneficiary shall be entitled to a benefit in the amount, form, and duration defined in the Participation
Agreement.

 

3.3         Death
Subsequent to Commencement of Benefit Payments. In the event the Participant dies while receiving payments, but prior to receiving
all such payments due and owing hereunder, the unpaid balance of the payments shall continue to be paid to the Participant’s
Beneficiary for the remainder of the Payout Period.

 

3.4         Disability
Benefit. In the event the Participant becomes disabled, as defined below, prior to the commencement of benefit payments hereunder,
the Participant shall be entitled to receive a Disability Benefit in the amount, form, and duration defined in the Participation
Agreement. If the Participant incurs a Separation of Service pursuant to this Article, the Participant shall receive the Disability
Benefit in lieu of any other benefit available under this Plan. For purposes of this Agreement, “Disability” shall
be defined as a condition of the Participant whereby he or she either: (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees
of the Plan Sponsor. The Administrator will determine whether the Participant has incurred a Disability based on its own good
faith determination and may require the Participant to submit to reasonable physical and mental examinations for this purpose.
The Participant will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security
Administration, Railroad Retirement Board, or in accordance with a disability insurance program, provided that the definition
of disability applied under such disability insurance program complies with the requirements of Treasury Regulation §1.409A-3(i)(4)
and authoritative guidance.

 

3.5         Separation
from Service Benefit. If a Participant’s employment is terminated voluntarily, or involuntarily but not for “Cause”,
at any time prior to his Normal Retirement Date, the Participant shall be entitled to the Vested Accrued Benefit in the amount,
form, and duration defined in the Participation Agreement.

 

3.6         Change
in Control Benefit. If a Change in Control event occurs prior to the Participant attaining his or her Normal Retirement Age,
and If the Participant incurs a Separation of Service pursuant to this Article, the Participant shall be entitled to receive a
dollar benefit in the amount, form, and duration defined in the Participation Agreement. For purposes of this Agreement, “Change
in Control” shall mean the occurrence of a Change in Control event, within the meaning of Treasury’ Regulations §1,409A-3(i)(5)
and described in any of subparagraph (a), (b), or (c), (collectively referred to as “Change in Control Events”), or
any combination of the Change in Control Events. To constitute a Change in Control Event with respect to the Participant or Beneficiary,
the Change in Control Event must relate to: (i) the Plan Sponsor for whom the Participant is performing services at the time of
the Change in Control Event; (ii) the Plan Sponsor that is liable for the payment of the Accrued Benefit (or all Plan Sponsors
liable for the payment if more than one Plan Sponsor is liable); or (iii) a Plan Sponsor that is a majority

 

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shareholder
of a Plan Sponsor identified in clause (i) or (ii), or any Plan Sponsor in a chain of Plan Sponsors in which each Plan Sponsor
is a majority’ shareholder of another Plan Sponsor in the chain, ending in a Plan Sponsor identified in clause (i) or (ii).

 

(a)          Change
in Ownership. A Change in Ownership occurs if a person, or a group of persons acting together, acquires more than fifty percent
(50%) of the stock of the Plan Sponsor, measured by voting power or value. Incremental increases in ownership by a person or group
that already owns fifty percent (50%) of the Plan Sponsor do not result in a Change of Ownership, as defined in Treasury Regulations
§1.409A-3(i)(5)(v).

 

(b)          Change
in Effective Control. A Change in Effective Control occurs if, over a twelve (12) month period: (i) a person or group acquires
stock representing thirty percent (30%) of the voting power of the Plan Sponsor; or (ii) a majority of the members of the Board
of the ultimate parent Plan Sponsor is replaced by directors not endorsed by the persons who were members of the Board before
the new directors’ appointment, as defined in Treasury Regulations §1.409A-3(i)(5)(vi).

 

(c)          Change
in Ownership of a Substantial Portion of Corporate Assets. Change in Control based on the sale of assets occurs if a person
or group acquires forty percent (40%) or more of the gross fair market value of the assets of a Plan Sponsor over a twelve (12)
month period. No change in control results pursuant to this Article (c) if the assets are transferred to certain entities controlled
directly or indirectly by the shareholders of the transferring corporation, as defined in Treasury Regulations §1.409A-3(i)(5)(vii).

 

3.7         Termination
for Cause Prior To Plan Retirement Date. If the Plan Sponsor terminates the Participant’s employment for “Cause”,
then the Participant shall not be entitled to any benefits under the terms of this Agreement.

 

3.8         Prohibition
on Acceleration of Payments. Notwithstanding anything in this Plan to the contrary, neither the Plan Sponsor nor a Participant
may accelerate the time or schedule of any payment or amount scheduled to be paid under this Plan, except as otherwise permitted
by Treasury Regulations §1.409A-3(j)(4). The Plan Sponsor shall deny any change made to an election if the Plan Sponsor determines
that the change violates the requirements of authoritative guidance. However, the Plan Sponsor shall permit the acceleration of
the time or schedule of payment to pay the Participant at any time the arrangement fails to meet the requirements of Code Section 409A
and the Treasury Regulations and other guidance promulgated thereunder. Such payment shall not exceed the amount required to be
included in income as the result of the failure to comply with the requirements of Code Section 409A.

 

3.9         Delay
in Payment by Plan Sponsor.

 

(a)          A
payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision
will not fail to meet the requirements of establishing a permissible payment event, The delay in the payment will not constitute
a subsequent deferral election, so long as the Plan Sponsor treats all payments to similarly situated Participants on a reasonably
consistent basis.

 

(i)           Payments
subject to Section 162(m). A payment may be delayed to the extent that the Plan Sponsor reasonably anticipates that if
the payment were made as scheduled, the Plan Sponsor’s deduction with respect to such payment would not be permitted due
to the application of Code §162(m). If a payment is delayed, such payment must be made either;

 

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(1)          during
the Participant’s first taxable year in which the Plan Sponsor reasonably anticipates, or should reasonably anticipate,
that if the payment is made during such year, the deduction of such payment will not be barred by application of Code §162(m)
or,

  

(2)          during
the period beginning with the date of the Participant’s Separation from Service and ending on the later of the last da)’
of the Taxable Year of the Plan Sponsor in which the Participant separates from service or the 15lh day of the third
month following the Participant’s Separation from Service. Where any scheduled payment to a specific Participant in the
Plan Sponsor’s Taxable Year is delayed in accordance with this Article, the delay in payment will be treated as a subsequent
deferral election unless all scheduled payments to the Participant that could be delayed in accordance with this Article are also
delayed. Where the payment is delayed to a date on or after the Participant’s Separation from Service, the payment will
be considered a payment upon a Separation from Service for purposes of the rules under Treasury Regulations §l,409A-3(i)(2)
(payments to specified employees upon a separation from service) and, the 6 month delay rule will apply for Specified Employees.

 

(ii)          Payments
that would violate Federal securities laws or other applicable law. A payment may be delayed where the Plan Sponsor reasonably
anticipates that the malting of the payment will violate Federal securities laws or other applicable law provided that the payment
is made at the earliest date at which the Plan Sponsor reasonably anticipates that the making of the payment will not cause such
violation, The making of a payment that would cause inclusion in gross income or the application of any penalty provision or other
provision of the Internal Revenue Code is not treated as a violation of applicable law.

 

(iii)         Other
events and conditions. The Plan Sponsor may delay a payment upon such other events and conditions as the Commissioner of the
IRS may prescribe.

 

(iv)         Not
withstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Plan Sponsor to continue
as a going concern.

 

(b)          Treatment
of Payment as Made on Designated Payment Date. Each payment under this Plan is deemed made on the required payment date even
if the payment is made after such date, provided the payment is made by the latest of: (i) the end of the calendar year in which
the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) in case the Plan Sponsor
cannot calculate the payment amount on account of administrative impracticality which is beyond the Participant’s control
(or the control of the Participant’s estate), in the first calendar year in which payment is practicable; (iv) in case the
Plan Sponsor does not have sufficient funds to make the payment without jeopardizing the Plan Sponsor’s solvency, in the
first calendar year in which the Plan Sponsor’s funds are sufficient to make the payment.

 

3.10       Subsequent
Changes in the Time or Form of Payment. If permitted by the Plan Sponsor, a Participant may elect to change the time or form
of payments (collectively, “payment elections”), provided the following conditions are met:

 

(i)           Such
change will not take effect until at least twelve (12) months after the date on which the new payment election is made and approved
by the Plan Administrator;

 

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(ii)          If
the change of payment election relates to a payment based on Separation from Service or on a Change in Control, or if the payment
is at a Specified Time or pursuant to a Fixed Schedule, the change of payment election must result in payment being deferred for
a period of not less than five (5) years from the date such payment would otherwise have been paid (or in the case of a life annuity
or installment payments treated as a single payment, five (5) years from the date the first amount was scheduled to be paid);

 

(iii)         If
the change of payment election relates to a payment at a Specified Time or pursuant to a Fixed Schedule, the Participant or Plan
Sponsor must make the change of payment election not less than twelve (12) months before the date the payment is scheduled to
be paid (or in the case of a life annuity or installment payments treated as a single payment, twelve (12) months before the date
the first amount was scheduled to be paid).

 

3.11       Unsecured
General Creditor Status of Participant.

 

(a)          Payment
to the Participant or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of
the general, unrestricted assets of the Plan Sponsor and no person shall have any interest in any such asset by virtue of any
provision of this Plan. The Plan Sponsor’s obligation hereunder shall be an unfunded and unsecured promise to pay money
in the future. To the extent that any person acquires a right to receive payments from the Plan Sponsor under the provisions hereof,
such right shall be no greater than the right of any unsecured general creditor of the Plan Sponsor and no such person shall have
or acquire any legal or equitable right, interest, or claim in or to any property or assets of the Plan Sponsor.

 

(b)          In
the event that the Plan Sponsor purchases an insurance policy or policies insuring the life of a Participant or employee, to allow
the Plan Sponsor to recover or meet the cost of providing benefits, in whole or in part, hereunder, no Participant or Beneficiary
shall have any rights whatsoever in said policy or the proceeds therefrom. The Plan Sponsor or the Trustee of the Trust (if any)
shall be the primary owner and beneficiary of any such insurance policy or properly and shall possess and may exercise all incidents
of ownership therein. No insurance policy with regard to any director, “highly compensated employee”, or “highly
compensated individual” as defined in IRS Section 101(j) shall be acquired before satisfying the Section 101(j)
“Notice and Consent” requirements.

 

(c)          In
the event that the Plan Sponsor purchases an insurance policy or policies on the life of a Participant as provided for above,
then all of such policies shall be subject to the claims of the creditors of the Plan Sponsor.

 

(d)          If
the Plan Sponsor chooses to obtain insurance on the life of a Participant in connection with its obligations under this Plan,
the Participant hereby agrees to take such physical examinations and to truthfully and completely supply such information as may
be required by the Plan Sponsor or the insurance company designated by the Plan Sponsor.

 

3.12       Facility
of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Plan Administrator
may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains
his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent
payee. Any such distribution shall fully discharge the Plan Sponsor and the Plan Administrator from further liability on account
thereof.

 

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3.13       Excise
Tax Limitation. In the event that any payment or benefit (within the meaning of Code §280G(b)(2) of the Code) to
the Participant or for the Participant’s benefit paid or payable or distributed or distributable (including, but not limited
to, the acceleration of the time for the vesting or payment of such benefit or payment) pursuant to the terms of this Plan or
otherwise in connection with, or arising out of, the Participant’s employment with the Plan Sponsor or any of its Affiliates
or a Change in Control within the meaning of Code §280G of the Code (a “Payment” or “Payments”),
would be subject to the excise tax imposed by Code §4999 of the Code (the “Excise Tax”), then the Payments
shall be reduced (but not below zero) but only to the extent necessary that no portion thereof shall be subject to the excise
tax imposed by Code §4999 (the “Section 4999 Limit”). Unless the Participant shall have given prior
written notice specifying a different order to the Plan Sponsor to effectuate the limitations described in the preceding sentence,
the Plan Sponsor shall reduce or eliminate the Payments by first reducing or eliminating those Payments or benefits which are
not payable in cash and then by reducing or eliminating cash Payments, in each case in reverse order beginning with payments or
benefits which are to be paid the farthest in time. Any notice given by the Participant pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or agreement governing the Participant’s rights and entitlements
to any benefits or compensation.

 

ARTICLE
4

BENEFICIARY DESIGNATION

 

4.1         Designation
of Beneficiaries.

 

(a)          The
Participant may designate any person or persons (who may be named contingently or successively) to receive any benefits payable
under the Plan upon the Participant’s death, and the designation may be changed from time to time by the Participant by
filing a new designation. Each designation will revoke all prior designations by the Participant and shall be in the Form prescribed
by the Administrator, and shall be effective only when filed in writing with the Administrator during the Participant’s
lifetime.

 

(b)          In
the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living
Beneficiary validly named by the Participant, the Plan Sponsor shall pay the benefit payment to the Participant’s spouse,
if then living, and if the spouse is not then living to the Participant’s then living descendants, if any, per stirpes,
and if there are no living descendants, to the Participant’s estate. In determining the existence or identity of anyone
entitled to a benefit payment, the Plan Sponsor may rely conclusively upon information supplied by the Participant’s personal
representative, executor, or administrator.

 

(c)          If
a question arises as to the existence or identity of anyone entitled to receive a death benefit payment under the Plan, or if
a dispute arises with respect to any death benefit payment under the Plan, the Plan Sponsor may distribute the payment to the
Participant’s estate without liability for any tax or other consequences, or may take any other action which the Plan Sponsor
deems to be appropriate.

 

4.2         Information
to be Furnished by Participants and Beneficiaries; Inability to Locate Participants or Beneficiaries. Any communication, statement,
or notice addressed to the Participant or to a Beneficiary at his or her last post office address as shown on the Plan Sponsor’s
records shall be binding on the Participant or Beneficiary for all purposes of this Plan, The Plan Sponsor shall not be obligated
to search for any Participant or Beneficiary beyond the sending of a registered letter to the last known address.

 

    	Page 10 of 17 

     

    

 

ARTICLE
5

ADMINISTRATION

 

5.1         Administrator
Duties. The Administrator shall be responsible for the management, operation, and administration of the Plan. The Administrator
shall act at meetings by affirmative vote of a majority of its members. Any action permitted to be taken at a meeting may be taken
without a meeting if, prior to such action, a unanimous written consent to the action is signed by all members and such written
consent is filed with the minutes of the proceedings of the Administrator, provided, however that no member may vote or act upon
any matter which relates solely to the Participant. The Chair, or any other member or members of the Administrator designated
by the Chair, may execute any certificate or other written direction on behalf of the Administrator. When making a determination
or calculation, the Administrator shall be entitled to rely on information furnished by the Participant or the Plan Sponsor. No
provision of this Plan shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any
duty similar to any fiduciary duty under ERISA or other law.

 

5.2         Administrator
Authority. The Administrator shall enforce this Plan in accordance with its terms, shall be charged with the general administration
of this Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

 

(a)          To
construe and interpret the terms and provisions of this Plan;

 

(b)          To
compute and certify the amount and kind of benefits payable to the Participant and their Beneficiaries; to determine the time
and manner in which such benefits are paid; and to determine the amount of any withholding taxes to be deducted;

 

(c)          To
maintain all records that may be necessary for the administration of this Plan;

 

(d)          To
provide for the disclosure of all information and the filing or provision of all reports and statements to the Participant, Beneficiaries,
and governmental agencies as shall be required by law;

 

(e)          To
make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent
with the terms hereof;

 

(f)           To
administer this Plan’s claims procedures;

 

(g)          To
approve election forms and procedures for use under this Plan; and

 

(h)          To
appoint a plan record keeper or any other agent, and to delegate to them such powers and duties in connection with the administration
of this Plan as the Administrator may from time to time prescribe.

 

5.3         Binding
Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection
with the administration, interpretation, and application of this Plan and the rules and regulations promulgated hereunder shall
be final and conclusive and binding upon all persons having any interest in this Plan.

 

5.4         Compensation,
Expenses, and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator
is authorized at the expense of the Plan Sponsor to employ such legal counsel and/or Plan record keeper as it may

 

    	Page 11 of 17 

     

    

 

deem
advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this
Plan shall be paid by the Plan Sponsor.

 

5.5         Plan
Sponsor Information. To enable the Administrator to perform its functions, the Plan Sponsor shall supply full and timely information
to the Administrator, on all matters relating to the compensation of the Participant, the date and circumstances of the Disability,
death, or Separation from Service of the Participant, and such other pertinent information as the Administrator may reasonably
require.

 

5.6         Periodic
Statements. Under procedures established by the Administrator, Participant shall be provided a statement of his Accrued Benefit
on an annual basis.

 

ARTICLE
6

CLAIMS PROCEDURE

 

6.1         Claims
Procedure. This Article is based on final regulations issued by the Department of Labor and published in the Federal Register
on November 21, 2000 and codified in Section 2560.503-1 of the Department of Labor Regulations. If any provision of this
Article conflicts with the requirements of those regulations, the requirements of those regulations will prevail.

 

(a)          Claim.
The Participant or Beneficiary (hereinafter referred to as a “Claimant”) who believes he or she is entitled to
any Plan benefit under this Plan ma)’ file a claim with the Plan Sponsor. The Plan Sponsor shall review the claim itself
or appoint an individual or entity to review the claim.

 

(b)          Claim
Decision. The Claimant shall be notified within ninety (90) days after the claim is filed whether the claim
is allowed or denied, unless the claimant receives written notice from the Plan Sponsor or appointee of the Plan Sponsor prior
to the end of the ninety (90) day period stating that special circumstances require an extension of the time for
decision. Such extension is not to extend beyond the day which is one hundred eighty (180) days after the day the
claim is filed. If the Plan Sponsor denies the claim, it must provide to the Claimant, in writing or by electronic communication:

 

(i)           The
specific reasons for such denial;

 

(ii)          Specific
reference to pertinent provisions of this Plan on which such denial is based;

 

(iii)         A
description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation
why such material or such information is necessary; and

 

(iv)         A
description of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of
the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of the appeal of the
denial of the benefits claim.

 

(c)          Review
Procedures. A request for review of a denied claim must be made in writing to the Plan Sponsor within sixty (60) days after
receiving notice of denial. The decision upon review will be made within sixty (60) days after the Plan Sponsor’s receipt
of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will
be rendered not later than one hundred twenty

 

    	Page 12 of 17 

     

    

 

(120)
days after receipt of a request for review. A notice of such an extension must be provided to the Claimant within the initial
sixty (60) day period and must explain the special circumstances and provide an expected date of decision. The reviewer shall
afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information, and records and
to submit issues and comments in writing to the Plan Sponsor. The reviewer shall take into account all comments, documents, records,
and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered
in the benefit determination. Upon completion of its review of an adverse initial claim determination, the Plan Sponsor will give
the Claimant, in writing or by electronic notification, a notice containing:

 

(i)           its
decision;

 

(ii)          the
specific reasons for the decision;

 

(iii)         the
relevant Plan provisions on which its decision is based;

 

(iv)         a
statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all
documents, records and other information in the Plan’s files which is relevant to the Claimant’s claim for benefit;

 

(v)          a
statement describing the Claimant’s right to bring an action for judicial review under ERISA Section 502(a); and

 

(vi)         If
an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination on review,
a statement that a copy of the rule, guideline, protocol or other similar criterion will be provided without charge to the Claimant
upon request.

 

(d)          Calculation
of Time Periods. For purposes of the time periods specified in this Article, the period of time during which a benefit determination
is required to be made begins at the time a claim is filed in accordance with this Plan procedures without regard to whether all
the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant’s
failure to submit all information necessary, the period for making the determination shall be tolled from the date the notification
is sent to the Claimant until the date the Claimant responds.

 

(e)          Failure
of Plan to Follow Procedures. If the Plan Sponsor fails to follow the claims procedure required by this Article, a Claimant
shall be deemed to have exhausted the administrative remedies available under this Plan and shall be entitled to pursue any available
remedy under Section 502(a) of ERISA on the basis that this Plan has failed to provide a reasonable claims procedure that
would yield a decision on the merits of the claim.

 

(f)           Failure
of Claimant to Follow Procedures. A Claimant’s compliance with the foregoing provisions of this Article is a mandatory
prerequisite to the Claimant’s right to commence any legal action with respect to any claim for benefits under the Plan.

 

6.2         Arbitration
of Claims. All claims or controversies arising out of or in connection with this Plan shall, subject to the initial review
provided for in the foregoing provisions of this Article, be resolved through arbitration. Except as otherwise mutually agreed
to by the parties, any arbitration shall be administered under and by the Judicial Arbitration & Mediation Services, Inc.
(“JAMS”), in accordance with the JAMS procedures then in effect. The arbitration shall be

 

    	Page 13 of 17 

     

    

 

held
in the JAMS office nearest to where the Claimant is or was last employed by the Plan Sponsor or at a mutually agreeable location.
The prevailing part}’ in the arbitration shall have the right to recover its reasonable attorney’s fees, disbursements,
and costs of the arbitration (including enforcement of the arbitration decision), subject to any contrary determination by the
arbitrator.

 

ARTICLE
7

AMENDMENT AND TERMINATION

 

7.1         Amendment.
The Plan Sponsor reserves the right to amend this Plan at any time to comply with Section 409A and other Applicable Guidance
or for any other purpose, provided that such amendment will not cause the Plan to violate the provisions of Section 409A.
Except to the extent necessary to bring this Plan into compliance with Section 409A, no amendment or modification shall be
effective to decrease the value or vested percentage of a Participant’s Accrued Benefit in existence at the time an amendment
or modification is made to the Plan.

 

7.2         Plan
Termination. The Plan Sponsor reserves the right to terminate this Plan in accordance with one of the following, subject to
the restrictions imposed by Section 409A and authoritative guidance:

 

(a)          Corporate
Dissolution or Bankruptcy. This Plan may be terminated within twelve (12) months of a corporate dissolution taxed under Code §331,
or with the approval of a Plan Sponsor bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), and distributions may
then be made to the Participant provided that the amounts payable under this Plan are included in the Participants’ gross
income in the latest of:

 

(i)           The
calendar year in which the Plan termination occurs;

 

(ii)          The
calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or

 

(iii)         The
first calendar year in which the payment is administratively practicable.

 

(b)          Change
in Control. This Plan may be terminated within the thirty (30) clays preceding or the twelve (12) months following a Change
in Control. This Plan will then be treated as terminated only if all substantially similar arrangements sponsored by the Plan
Sponsor are terminated so that all participants in all similar arrangements are required to receive all amounts of compensation
deferred under the terminated arrangements within twelve (12) months of the date of termination of the: arrangements.

 

(c)          Discretionary
Termination, The Plan Sponsor may also terminate this Plan and make distributions provided that:

 

(i)           All
plans sponsored by the Plan Sponsor that would be aggregated with any terminated arrangements under Treasury Regulations §l.409A-l(c)
are terminated;

 

(ii)          No
payments, other than payments that would be payable under the terms of this plan if the termination had not occurred, are made
within twelve (12) months of this plan termination;

 

    	Page 14 of 17 

     

    

 

(iii)         All
payments are made within twenty-four (24) months of this plan termination; and

 

(iv)         Neither
the Plan Sponsor nor any of its affiliates adopts a new plan that would be aggregated with any terminated plan if the same Participant
participated in both arrangements at any time within three (3) years following the date of termination of this Plan.

 

(v)          The
termination does not occur proximate to a downturn in the financial health of the Plan Sponsor.

 

ARTICLE
8

THE TRUST

 

8.1         Establishment
of Trust. The Plan Sponsor may establish a grantor trust (the “Trust”), of which the Plan Sponsor is the grantor,
within the meaning of subpart E, part I, subchapter J, subtitle A of the Code, to pay benefits under this Plan. If the Plan Sponsor
establishes a Trust, all benefits payable under this Plan to a Participant shall be paid directly by the Plan Sponsor from the
Trust. To the extent such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Plan
Sponsor. The Trust, (if any), shall be a grantor trust which conforms to the terms of the model trust as described in IRS Revenue
Procedure 92-64, I.R.B. 1992-33, as same may be amended or modified from time to time. If the Plan Sponsor establishes a Trust,
the assets of the Trust will be subject to the claims of the Plan Sponsor’s creditors in the event of its insolvency. Except
as may otherwise be provided under the Trust, the Plan Sponsor shall not be obligated to set aside, earmark, or escrow any funds
or other assets to satisfy its obligations under this Plan, and the Participant and/or his or her designated Beneficiaries
shall not have any property interest in any specific assets of the Plan Sponsor other than the unsecured right to receive payments
from the Plan Sponsor, as provided in this Plan.

 

8.2         Interrelationship
of the Plan and the Trust. The provisions of this Plan shall govern the rights of a Participant to receive distributions
pursuant to this Plan. The provisions of the Trust (if established) shall govern the rights of the Participant and the creditors
of the Plan Sponsor to the assets transferred to the Trust. The Plan Sponsor and each Participant shall at all times remain liable
to carry out its obligations under this Plan. The Plan Sponsor’s obligations under this Plan may be satisfied with Trust
assets distributed pursuant to the terms of the Trust.

 

8.3         Contribution
to the Trust. Amounts may be contributed by the Plan Sponsor to the Trust at the sole discretion of the Plan Sponsor.

 

ARTICLE
9

MISCELLANEOUS

 

9.1         Validity.
In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein. To the extent any provision of this Plan is determined by the Plan Administrator (acting in good faith), the
Internal Revenue Service, the United States Department of the Treasury, or a court of competent jurisdiction to fail to comply
with Section 409A of the Code or authoritative guidance with respect to any Participant or Participants, such provision
shall have no force or effect with respect to such Participant or Participants.

 

    	Page 15 of 17 

     

    

 

9.2         Nonassignability.
Neither any Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate, alienate, or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part hereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable.
No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment (except to the extent
the Plan Sponsor may be required to garnish amounts from payments due under this Plan pursuant to applicable law), or sequestration
for the payment of any debts, judgments, alimony, or separate maintenance owed by a Participant or any other person, be transferable
by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency, or be transferable
to a spouse as a result of a property settlement or otherwise. If any Participant, Beneficiary, or successor in interest is adjudicated
bankrupt or purports to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber transfer, hypothecate,
alienate, or convey in advance of actual receipt, the amount, if any, payable hereunder, or any part thereof, the Plan Administrator,
in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary,
or successor in interest in such manner as the Plan Administrator shall direct.

 

9.3         Not
a Contract of Employment. The terms and conditions of this Plan shall not he deemed to constitute a contract of employment
between the Plan Sponsor and the Participant. Nothing in this Plan shall be deemed to give a Participant the right to be retained
in the sendee of the Plan Sponsor as an employee or otherwise or to interfere with the right of the Plan Sponsor to discipline
or discharge the Participant at any time.

 

9.4         Unclaimed
Benefits. In the case of a benefit payable on behalf of such Participant, if the Plan Administrator is unable to locate the
Participant or Beneficiary to whom such benefit is payable, such Plan benefit may be forfeited to the Plan Sponsor upon the Plan
Administrator’s determination. Notwithstanding the foregoing, if, subsequent to any such forfeiture, the Participant or
Beneficiary to whom such Plan benefit is payable makes a valid claim for such Plan benefit, such forfeited Plan benefit shall
be paid by the Plan Administrator to the Participant or Beneficiary, without interest, from the date it would have otherwise been
paid.

 

9.5         Governing
Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the
State of North Carolina without regard to its conflicts of laws principles.

 

9.6         Notice.
Any notice, consent or demand required or permitted to be given under the provisions of this Plan shall be in writing and
shall be signed by the party giving or making the same. If such notice, consent, or demand is mailed, it shall be sent by United
States certified mail, postage prepaid, addressed to the addressee’s last known address as shown on the records of the Plan
Sponsor. The date of such mailing shall be deemed the date of notice consent or demand. Any person may change the address to which
notice is to be sent by giving notice of the change of address in the manner aforesaid.

 

9.7         Coordination
with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under this Plan are
in addition to any other benefits available to such Participant under any other plan or program for employees of the Plan Sponsor.
This Plan shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be
expressly provided herein.

 

9.8         Compliance.
A Participant shall have no right to receive payment with respect to the Participant’s Accrued Benefit until all legal
and contractual obligations of the Plan Sponsor relating to establishment of the Plan and the making of such payments shall have
been complied with in full.

 

    	Page 16 of 17 

     

    

 

9.9         Compliance
with Section 409A and Authoritative Guidance. Notwithstanding anything in this Plan to the contrary, all provisions of
this Plan, including but not limited to the definitions of terms, elections to defer, and distributions, shall be made in accordance
with and shall comply with Section 409A and any authoritative guidance. The Plan Sponsor will amend the terms of this Plan
retroactively, if necessary, to the extent required to comply with Section 409A and any authoritative guidance. No provision
of this Plan shall be followed to the extent that following such provision would result in a violation of Section 409A or
the authoritative guidance, and no election made by a Participant hereunder, and no change made by a Participant to a previous
election, shall be accepted by the Plan Sponsor if the Plan Sponsor determines that acceptance of such election or change could
violate any of the requirements of Section 409A or the authoritative guidance. This Plan and any accompanying forms shall
be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A and the authoritative
guidance, including, without limitation, any such Treasury Regulations or other guidance that may be issued after the date hereof.

 

IN
WITNESS WHEREOF, the Plan Sponsor has signed this Plan document as of August 1, 2007.

 

	ATTEST/WITNESS	 	For:     Carolina
    Trust Bank
	 	 	 
	/s/
    Sue S. Stamey	 	/s/
    J. Michael Cline
	(Signature)	 	(Signature)
	 	 	 
	Sue
    S. Stamey	 	J.
    Michael Cline
	(Print
    Name)	 	(Print
    Name)
	 	 	 
	 	 	President
    & CEO
	 	 	(Title)

 

Page 16 of 17Carolina Trust Bank 8-K12G3

 

Exhibit 10.11 

 

CAROLINA
TRUST BANK

2001 INCENTIVE STOCK OPTION PLAN

 

Carolina
Trust Bank, a North Carolina corporation (the “Corporation”), does herein set forth the terms of the its 2001 Incentive
Stock Option Plan (the “Plan”) which was adopted by the Corporation’s Board of Directors (the “Board”)
subject to approval by the Corporation’s shareholders, as provided in Paragraph 21 hereof, and by the appropriate regulatory
authorities, as provided by law.

 

1.          Purpose
of the Plan. The purpose of this Plan is to provide for the grant of Incentive Stock Options (an “Option”
or “Options”) qualifying for the tax treatment afforded by Section 422 of the Internal Revenue Code of 1986,
as amended, to eligible officers and employees of the Corporation (“Eligible Employees”) who wish to invest in the
Corporation’s common stock, par value $5.00 per share (the “Common Stock”). The Corporation believes that participation
in the ownership of the Corporation by Eligible Employees will be to the mutual benefit of the Corporation and Eligible Employees.
The existence of this Plan will make it possible for the Corporation and any of its subsidiaries to attract capable individuals
to employment in key employee positions.

 

2.          Administration
of the Plan. (a) This Plan shall be administered by the Compensation Subcommittee of the Executive Committee of
the Board (the “Committee”). The Committee shall consist of at least three (3) members of the Board, all of whom shall
qualify as disinterested persons as provided in Section 16(b), and the rules and regulations promulgated thereunder, of the
Securities Exchange Act of 1934, as amended. The members of the Committee shall be appointed by the Board and shall serve at the
pleasure of the Board, which may remove members from, add members to, or fill vacancies in the Committee.

 

(b)            The
Committee shall decide to whom Options shall be granted under this Plan, the number of shares as to which Options shall be granted,
the Option Price (as hereinafter defined) for such shares and such additional terms and conditions for such Options as the Committee
deems appropriate. The Committee shall interpret the Plan and prescribe, amend and rescind any rules and regulations regarding
the Plan. AH interpretations and constructions of the Plan by the Committee shall be final and conclusive.

 

(c)            A
majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which
a quorum is present, or acts approved unanimously in writing by the Committee, shall be considered as valid actions by the Committee.

 

(d)            The
Board and the Committee may designate any officers or employees of the Corporation to assist in the administration of this Plan.
The Board and the Committee may authorize such individuals to execute documents on its behalf and may delegate to them such other
ministerial and limited discretionary duties as the Board may deem fit.

 

3.          Shares
of Common Stock Subject to the Plan. The number of shares of Common Stock that shall be available initially
for Options under this Plan is Sixty eight thousand six hundred and thirty one (68,631), subject to adjustment as provided in
Paragraph 14 hereof. Common Stock subject to Options which expire or terminate prior to exercise of the Options shall lapse
and such shares shall again be available for future grants of Options under this Plan.

 

    	 

    	 

    

  

4.          Eligibility.
Options under this Plan may be granted to any Eligible Employee as determined by the Committee. An individual may hold more
than one Option under this or other plans adopted by the Corporation.

 

5.          Grant
of Options. (a) The Committee may authorize the grant of Options to certain current officers and employees
of the Corporation. Such Options shall be granted based upon the past service and the continued participation of those individuals
in the management of the Corporation.

 

(b)           Upon
the forfeiture of an Option for whatever reason prior to the expiration of the Option Period (as defined in Paragraph 9 hereof)
the shares of Common Stock covered by a forfeited Option shall be available for the granting of additional Options to Eligible
Employees during the remaining term of this Plan upon such terms and conditions as may be determined by the Committee. The number
of additional Options to be granted to specific Eligible Employees during the term of this Plan shall be determined by the Committee
as provided in Subparagraph 2(b) hereof.

 

6.          Option
Price. (a) The price per share of each Option granted under this Plan (the “Option Price”) shall
be determined by the Committee as of the effective date of grant of such Option. In no event shall the Option Price be less than
100% of the fair market value of the Common Stock on the date of grant. If an Optionee (as hereinafter defined) at the time that
an Option is granted owns stock possessing more than ten (10%) of the total combined voting power of all classes of stock of the
Corporation, then the Option Price per share of each Option granted under this Plan shall be no less than 110% of the fail- market
value of the Common Stock on the date of grant and such Option shall not be exercisable more than five (5) years from the date
of grant. An Option shall be considered as granted on the date that the Committee acts to grant such Option or such later date
as the Committee shall specify in an Option Agreement (as hereafter defined).

 

(b)            The
fair market value of a share of Common Stock shall be determined as follows:

 

(i)           
 If on the date as of which such determination is being made, the Common Stock is admitted to trading on a
securities exchange or exchanges for which actual sale prices are regularly reported, or actual sale prices are otherwise
regularly published, the fair market value of a share of Common Stock shall be deemed to be equal to the mean of the closing
sale price as reported on each of the five (5) trading days immediately preceding the date as of which such determination is
made; provided, however,
that, if a closing sale price is not reported for each of the five (5) trading days immediately preceding the date as of
which such determination.is made, then the fair market value shall be equal to the mean of the closing sale prices on those
trading days for which such price is available.

 

(ii)           If
on the date as of which such determination is made, no such closing sale prices are reported, but quotations for the Common Stock
are regularly listed on the National Association of Securities Dealers Nasdaq system or another comparable system (“System”),
the fair market value of a share of Common Stock shall be deemed to be equal to the mean of the average of the closing bid and
asked prices for such Common Stock quoted on such system on each of the five (5) trading days preceding the date as of which such
determination is made. If a closing bid and asked price is not available for each of the five (5) trading days, then the fair
market value shall be equal to the mean of the average of the closing bid and asked prices on those trading days during the five-day
period for which such prices are available.

 

    	 - 2 -

    	 

    

  

(iii)           If
no such quotations are available, the fair market value of a share of Common Stock shall be deemed to be the average of the closing
bid and asked prices furnished by a professional securities dealer making a market in the Common Stock, as selected by the Committee,
for the trading date first preceding the date as of which such determination is made.

 

If
the Common Stock has not been listed on any market or System or if the Committee determines that the price as determined above
does not represent the fair market value of a share of Common Stock, the Committee may then consider such other factors as it
deems appropriate and then fix the fair market value for the purposes of this Plan.

 

7.          Payment
of Option Price. Payment for shares subject to an Option must be made in cash.

 

8.          Terms
and Conditions of Grant of Options. Each Option granted pursuant to this Plan shall be evidenced by a written Incentive
Stock Option Agreement (the “Option Agreement”) with each Eligible Employee (the “Optionee”) to whom an
Option is granted. The Option Agreement shall be in such form as the Committee shall adopt and may contain such terms and conditions
as the Committee may determine.

 

9.          Option
Period. Each Option Agreement shall set forth a period during which such Option may be exercised (the “Option Period”);
provided, however, that the Option Period shall not exceed ten (10) years after the date of grant of such Option
as specified in the Option Agreement.

 

10.         Limitations
on Grant of Incentive Stock Options. (a) Notwithstanding any other provision of this Plan, no person shall be granted
an Option under this Plan which would cause such person’s “annual vesting amount” to exceed $100,000. With respect
to any calendar year, a person’s “annual vesting amount” is the aggregate fair market value of stock subject
to incentive stock options which are first exercisable during such calendar year. The aggregate fair market value of stock with
respect to which incentive stock options are first exercisable during any calendar year shall be determined by taking into account
all incentive stock options granted to such person under all incentive stock options plans of the Corporation or of any of its
parent or subsidiary corporations.

 

(b)            Notwithstanding
any other provision of this Plan, no person shall be granted an Option or Options under this Plan which would result in the total
number of shares granted to such Optionee to exceed 40%. of the shares allocated to this Plan, or, if greater, the maximum permitted
by the Commissioner of Banks of North Carolina (hereinafter the “Commissioner of Banks”).

 

11.         Exercise
of Incentive Stock Options. (a) An Option shall be exercised by written notice to the Committee signed by
an Optionee or by such other person as may be entitled to exercise such Option. The written notice shall state the number of shares
with respect to which an Option is being exercised and shall either be accompanied by the payment of the aggregate Option Price
for such shares or shall fix a date (not more than ten (10) business days from the date of such notice) by which the payment of
the aggregate Option Price will be made. An Optionee shall not exercise an Option to purchase less than 100 shares, unless the
Committee otherwise approves, or unless the partial exercise is for the remaining share available under such Option.

 

    	 - 3 -

    	 

    

  

(b)            A
certificate or certificates for the shares of Common Stock purchased by the exercise of an Option shall be issued in the regular
course of business subsequent to the exercise of such Option and the payment therefore. During the Option Period, no person entitled
to exercise any Option granted under this Plan shall have any of the rights or privileges of a shareholder with respect to any
shares of Common Stock issuable upon exercise of such Option, until certificates representing such shares shall have been issued
and delivered and the individual’s name entered as a shareholder of record on the books of the Corporation for such shares.

 

12.         Effect
of Termination of Employment, Retirement, Disability or Death.

 

(a)            In
the event of the termination of employment of an Optionee either by reason of (i) being Discharged for Cause or (ii) voluntary
separation on the part of such Optionee for a reason other than retirement or disability, any Option or Options granted to the
Optionee under this Plan, to the extent not previously exercised or surrendered by the Optionee or expired, shall immediately
terminate. “Discharged for Cause” shall include termination at the sole discretion of the Board because of such Optionee’s
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure
to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses),
a final cease and desist order, or material breach of any provision of any employment agreement that such Optionee may have with
the Corporation.

 

(b)            In
the event of the termination of employment of an Optionee as a result of such Optionee’s retirement, such Optionee shall
have the right to exercise any Option or Options granted to the Optionee under this Plan, to the extent that they have not previously
been exercised or surrendered by the Optionee or expired, for a period of three (3) months after the date of retirement, but in
no event may any Option be exercised later than the end of the Option Period provided in such Option Agreement in accordance with
Paragraph 9 hereof. Notwithstanding any other provision contained herein, or in any Option Agreement, upon retirement, any
Option then held by an Optionee shall be exercisable immediately in full. For purposes of this Plan, the term “retirement”
shall mean (i) termination of an Optionee’s employment under conditions which would constitute retirement Under any tax
qualified retirement plan maintained by the Corporation or (ii) attaining age 65.

 

(c)            In
the event of the termination of employment of an Optionee by reason of such Optionee’s disability, such Optionee shall have
the right to exercise any Options held by the Optionee, to the extent that they previously have not been exercised or surrendered
by the Optionee or expired, notwithstanding any limitations placed on the exercise of such Options by this Plan or an Option Agreement,
immediately in full and at any time within twelve (12) months after the last date on which such Optionee provides services as
an officer or an employee of the Corporation before being disabled, but in no event may any Option be exercised later than the
end of the Option Period provided in the Option Agreement .in accordance with Paragraph 9 hereof. For purposes of this Plan,
the term “disability” shall be defined in-the same manner as such term is defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.

 

(d)            In
the event that an Optionee should die while employed by the Corporation, or within three (3) months after retirement, any Option
or Options granted to the Optionee under this Plan and not previously exercised or surrendered by the Optionee or expired shall
vest and shall be exercisable, according to their respective terms, by the personal representative of such Optionee or by any
person or persons who acquired such Options by bequest or inheritance from such Optionee, notwithstanding any limitations placed
on the exercise of such Options by this Plan or any Option Agreement, immediately in full and at any time within twelve (12) months
after the

 

    	 - 4 -

    	 

    

  

date of death of such Optionee, but in no event may any Option be exercised later than the end of the Option Period
provided in such Option Agreement in accordance with Paragraph 9 hereof. Any references herein to an Optionee shall be deemed
to include any person entitled to exercise an Option under the terms of this Plan after the death of such Optionee.

 

13.        Effect
of Plan on Employment Status. The fact that the Committee has granted an Option to an Optionee under this
Plan shall not confer on such Optionee any right to employment with the Corporation, or to a position as an officer or an employee
of the Corporation, nor shall it limit the right of the Corporation to remove such Optionee from any position held by the Optionee
or to terminate the Optionee’s employment at any time.

 

14.        Adjustment
Upon Changes in Capitalization; Dissolution or Liquidation.

 

(a)            In
the event of a change in the number of shares of the Common Stock outstanding by reason of a stock dividend, stock split, recapitalization,
reorganization, merger, exchange of shares, or other similar capital adjustment, prior to the termination of an Optionee’s
rights under this Plan, equitable proportionate adjustments shall be made by the Committee in (i) the number and kind of
shares which remain available under this Plan and (ii) the number, kind, and the Option Price of shares subject to unexercised
Options under this Plan. The adjustments to be made shall be determined by the Committee and shall be consistent with such change
or changes in the Corporation’s total number of outstanding shares; provided,
however, that no adjustment shall change the aggregate
Option Price for the exercise of Options granted under this Plan.

 

(b)            The
grant of Options under this Plan shall not affect in any way the right or power of the Corporation or its shareholders to make
or authorize any adjustment, recapitalization, reorganization, or other change in the Corporation’s capital structure or
its business, or any merger of the Corporation, or to issue bonds, debentures, preferred or other preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer
of all or any part of the Corporation’s assets or business.

 

(c)            Upon
the effective date of the dissolution or liquidation of the Corporation, or of a reorganization or merger of the Corporation with
one or more other corporations in which the Corporation is not the surviving corporation, or the transfer of all or substantially
all of the assets or shares of the Corporation to another person or entity, or a tender offer approved by the Board (any such
transaction being hereinafter referred to as an “Acceleration Event”), this Plan and any Options granted hereunder
shall terminate unless provision is made in writing in connection with such Acceleration Event for the continuance of this Plan
and for the assumption of Options granted hereunder, or the substitution for such Options of new options for the shares of the
successor corporation, or a parent or a subsidiary thereof, with such appropriate adjustments, as may be determined or approved
by the Committee or the successor to the Corporation, to the number, kind and Option Price of shares subject to such substituted
options in which event this-Plan and Options granted hereunder, or the new options substituted therefore, shall continue in the
manner and under the terms so provided, but any vesting periods or other restrictions on exercise that would otherwise apply shall
no longer be applicable. Upon the occurrence of any Acceleration Event in which provision is not made for the continuance of this
Plan and for the assumption of Options granted hereunder, or the substitution for such Options of new options for the shares of
a successor corporation or a parent or a subsidiary thereof, each Optionee to whom an Option has been granted under this Plan
(or such person’s personal representative, the executor or administrator of such person’s estate, or any person who
acquired the right to exercise such Option from such person by bequest of inheritance) shall be entitled, prior the effective
date of any

 

    	 - 5 -

    	 

    

  

Acceleration Event, (i) to exercise, in whole or in part, the Optionee’s rights under any Option granted to
the Optionee without any regard to any restrictions on exercise that would otherwise apply, or (ii) to surrender any such Option
to the Corporation in exchange for receipt of cash equivalent to the amount by which the fair market value of the shares of Common
Stock such person would have received had such person exercised the Option in full immediately prior to consummation of such Acceleration
Event exceeds the applicable aggregate Option Price. To the extent that a person, pursuant to this Subparagraph 14(c), has
a right to exercise or surrender any Option on account of a Acceleration Event which such person otherwise would not have had
at that time, such right shall be contingent upon the consummation of the Acceleration Event.

 

15.        Non-Transferability.
Any Option granted under this Plan shall not be assignable or transferable except, in the case of the death of an Optionee,
by will or by the laws of descent and distribution. In the event of the death of an Optionee, the personal representative, the
executor or the administrator of such Optionee’s estate,
or the person or persons who acquired by bequest or inheritance the rights to exercise such Option, may exercise Or surrender
any Option or portion thereof to the extent not previously exercised or surrendered by an Optionee or expired, in accordance with
the terms of the Option Agreement, prior to the expiration of the exercise period as specified in Subparagraph 12(d) hereof.

 

16.        Tax
Withholding. The employer of a person granted an Option under this Plan shall have the right to deduct or otherwise effect
a withholding or payment of any amount required by federal or state laws to be withheld or paid with respect to the grant, exercise
or surrender for cash of any Option or the sale of stock acquired upon the exercise of an Option in order for the employer to
obtain a tax deduction otherwise available as a consequence of such grant, exercise, surrender for cash, or sale, as the case
may be.

 

17.        Listing
and Registration of Option Shares. Any Option granted under the Plan shall be subject to the requirement that if at any
time the Committee shall determine, in its sole discretion, that the listing, registration, or qualification of the shares of
Common Stock covered thereby upon any securities exchange or under any state or federal law or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in connection with, the granting of such Option or
the issuance or purchase of shares thereunder, such Option may not be exercised in whole or in part unless and until such listing,
registration, or qualification consent, or approval shall have been effected or obtained free of any conditions not acceptable
to the Committee.

 

18.        Exculpation
and Indemnification. In connection with this Plan, no member of the Committee shall be personally liable
for any act or omission to act in such person’s capacity as a member of the Committee, nor for any mistake in judgment made
in good faith, unless arising out of, or resulting from, such person’s own bad faith, gross negligence, willful misconduct,
or criminal acts. To the extent permitted by applicable law and regulation, the Corporation shall indemnify and hold harmless
the members of the Committee, and each other officer of employee of the Corporation to whom any duty or power relating to the
administration or interpretation of this Plan may be assigned or delegated, from and against any and all liabilities (including
any amount paid in settlement of a claim with approval of the Board) and any costs or expense (including reasonable counsel fees)
incurred by such person arising out of, or as a result of, such person’s duties, responsibilities, and obligations under
this Plan, other than such liabilities, costs,

 

    	 - 6 -

    	 

    

  

and expenses as may arise out of, or result from, the bad faith, gross negligence,
willful misconduct, or criminal acts of such persons.

 

19.        Amendment
and Modification of the Plan. The Board may at any time and from time to time amend or modify this Plan in any respect;
provided, however, that no amendment or modification shall be made that increases the total number of shares covered
by this Plan or effects any change in the categories of persons who may receive Options under this Plan or materially increases
the benefits accruing to Optionees under this Plan unless such change is approved by the holders of two thirds of the shares of
Common Stock. Any amendment or modification of this Plan shall not materially reduce the benefits under any Option theretofore
granted to an Optionee under this Plan without the consent of such Optionee or the permitted transferee thereof.

 

20.        Termination
and Expiration of the Plan. This Plan may be abandoned, suspended, or terminated at any time by the Board;
provided, however,
that abandonment, suspension, or termination of this Plan shall not affect any Options then outstanding under this Plan. No Option
shall be granted pursuant to this Plan after ten (10) years from the effective date of this Plan as provided in Paragraph 21
hereof.

 

21.        Effective
Date; Shareholder Approval. This Plan has been adopted by the Board. This Plan shall not be effective until approved by
the Commissioner of Banks and by the holders of two thirds of the shares of Common Stock.

 

22.        Captions
and Headings; Gender and Number. Captions and paragraph headings used herein are for convenience only, do not modify or
affect the meaning of any provision herein, are not a part hereof, and shall not serve as a basis for interpretation or in construction
of this Plan. As used herein, the masculine gender shall include the feminine and neuter, the singular number the plural, .and
vice versa, whenever such meanings are appropriate.

 

23.        Expenses
of Administration of Plan. All costs and expenses incurred in the operation and administration of this Plan shall be borne
by the Corporation.

 

24.        Governing
Law. Without regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control
the validity, interpretation, performance, and enforcement of this Plan.

 

25.        Inspection
of Plan. A copy of this Plan, and any amendments thereto or modification thereof, shall be maintained by
the Secretary of the Corporation and shall be shown to any proper person making inquiry about it.

 

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7 -

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