Document:

Shareholder's Agreement

 Exhibit 10.1 
  

					
		 		 	PRIVILEGED AND CONFIDENTIAL
			
		 		 	Execution
Copy                                     
 

  
  
  
 May 23, 2008 
 SHAREHOLDERS’ AGREEMENT  
 by and
among 
 Barclays Wealth Trustees (Jersey) Limited 
 as Trustee of the First National Trust, 
 Polmos Bialystok S.A., 
 and 
 Peulla Enterprises Limited

 relating to the Shareholders’ 
 investments in 
 Peulla Enterprises Limited 
  

 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
	ARTICLE I DEFINITIONS	  	2
			
	Section   1.1	 	Certain Defined Terms	  	2
			
	ARTICLE II	 	CONSTRUCTION	  	7
			
	Section   2.1	 	Construction	  	7
	Section   2.2	 	Absence of Presumption	  	8
	Section   2.3	 	Headings; Definitions	  	8
		
	ARTICLE III GOVERNANCE AND MANAGEMENT OF THE COMPANY	  	8
			
	Section   3.1	 	General Principles and Purpose	  	8
	Section   3.2	 	Effective Management Control	  	8
	Section   3.3	 	The Board of Directors	  	9
	Section   3.4	 	Chairman	  	10
	Section   3.5	 	Key Decisions	  	10
	Section   3.6	 	Foundational Documents	  	12
	Section   3.7	 	No Conflicting Agreements	  	13
	Section   3.8	 	Deadlock	  	13
		
	ARTICLE IV CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICERS	  	13
			
	Section   4.1	 	New Management Company	  	13
	Section   4.2	 	Chief Executive Officer	  	14
	Section   4.3	 	Financial Controller	  	14
			
	ARTICLE V	 	RESTRICTIONS ON TRANSFER	  	15
			
	Section   5.1	 	General Restrictions on Transfer	  	15
	Section   5.2	 	Affiliate Transfers	  	15
	Section   5.3	 	No Other Transfers	  	16
	Section   5.4	 	Permitted Pledges	  	16
		
	ARTICLE VI EXIT OPTIONS	  	16
			
	Section   6.1	 	Put Option	  	16
	Section   6.2	 	Call Option	  	17
	Section   6.3	 	Option to Acquire New Management Co.	  	18
	Section   6.4	 	Right to Acquire “Kauffman” Brand or “Kauffman” Vodka	  	18
		
	ARTICLE VII NON-COMPETE; COMPETING INVESTMENT OPPORTUNITIES	  	20
			
	Section   7.1	 	Non-Compete	  	20
	Section   7.2	 	Future Opportunities	  	20
	Section   7.3	 	Post-Termination Non-Compete	  	20

  

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	ARTICLE VIII	 	ANNUAL BUDGET; INFORMATION AND ACCESS RIGHTS	  	21
			
	Section   8.1	 	Financial and Management Reporting	  	21
	Section   8.2	 	Approval of Annual Budget	  	21
	Section   8.3	 	Access	  	22
			
	ARTICLE IX	 	CONFIDENTIALITY	  	22
			
	Section   9.1	 	Confidential Information	  	22
	Section   9.2	 	Required Disclosure	  	23
			
	ARTICLE X	 	TERM	  	24
			
	Section 10.1	 	Effectiveness; Termination	  	24
	Section 10.2	 	Partial Termination	  	24
	Section 10.3	 	Effect of Termination; Survival	  	24
		
	ARTICLE XI FINANCING AND DIVIDEND POLICY; COOPERATION; RELATED PARTY TRANSACTIONS	  	24
			
	Section 11.1	 	General Assistance	  	24
	Section 11.2	 	Arm’s Length Agreements	  	24
	Section 11.3	 	License Agreement	  	24
	Section 11.4	 	Dividends	  	24
	Section 11.5	 	Future Funding	  	24
	Section 11.6	 	Shareholder Loans	  	25
	Section 11.7	 	Revised Business Plan	  	25
		
	ARTICLE XII MISCELLANEOUS	  	26
			
	Section 12.1	 	Notices	  	26
	Section 12.2	 	Governing Law	  	28
	Section 12.3	 	Dispute Resolution; Consent to Arbitration	  	28
	Section 12.4	 	Counterparts	  	29
	Section 12.5	 	Entire Agreement	  	29
	Section 12.6	 	Amendment, Modification and Waiver	  	29
	Section 12.7	 	Severability	  	29
	Section 12.8	 	Successors and Assigns; No Third-Party Beneficiaries	  	29
	Section 12.9	 	Publicity	  	30
	Section 12.10	 	Expenses	  	30
	Section 12.11	 	Specific Performance	  	30
			
	SCHEDULES:	 		  	
			
	Schedule 1	 	Calculation of Exercise Price for the Exit Options	  	
			
	EXHIBITS:	 		  	
			
	EXHIBIT A	 	Term Sheet for Management Agreement	  	

  

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 SHAREHOLDERS’ AGREEMENT 
 This SHAREHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of
May 23, 2008, by and among BARCLAYS WEALTH TRUSTEES (JERSEY) LIMITED as Trustee of the FIRST NATIONAL TRUST, a trust company incorporated under the laws of Jersey, having its registered office at 39-41, Broad Street, St. Helier,
JE4 5PS Jersey, Channel Islands (“Seller”), PEULLA ENTERPRISES LIMITED, a private limited liability company by shares incorporated under the laws of the Republic of Cyprus, whose registered office is located at 9th Floor, Capital Center, 2-4 Arch. Makarios Avenue, Nicosia 1065, Cyprus (“Company”), and POLMOS BIALYSTOK S.A., a joint stock company
incorporated under the laws of Poland, whose registered office is located at ul. Elewatorska No. 20, 15-950 Bialystok, Poland (“Purchaser”), (the Company, together with Seller and Purchaser, collectively, the
“Parties”, and each, individually, a “Party”). 
 RECITALS 
 WHEREAS, Seller, Purchaser and the Company, among other parties, have entered into that Share Purchase Agreement, dated as of May 23, 2008
(the “Share Purchase Agreement”), pursuant to the terms, and subject to the conditions, of which, among other things Seller has agreed to sell to Purchaser, and Purchaser has agreed to purchase from Seller, (i) 3,749
Class A Shares and (ii) 5,625 Class B Shares, in each case with all rights attaching to them at Closing (such sale and purchase, the “Investment”); 
 WHEREAS, immediately following the consummation of the Investment, (i) Seller will own an aggregate of 3,751 Class A Shares,
representing 50.01 per cent. of the issued and outstanding Class A Shares and 1,875 Class B Shares, representing 25.00 per cent. of the issued and outstanding Class B Shares and (ii) Purchaser will own an aggregate of 3,749
Class A Shares, representing 49.99 per cent. of the issued and outstanding Class A Shares and 5,625 Class B Shares, representing 75.00 per cent. of the issued and outstanding Class B Shares; 
 WHEREAS, pursuant to the Share Purchase Agreement, the execution and delivery of this Agreement is a condition precedent to the respective
obligations of Seller and Purchaser to consummate the Investment; 
 WHEREAS, Seller, Purchaser and the Company desire to enter into
this Agreement to set forth certain terms and conditions concerning the relationship between Seller, on the one hand, and Purchaser, on the other hand, as the shareholders in the Company and to provide for the orderly governance and management of
the Company and the Group (as defined herein) following the consummation of the Investment. 
  

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 AGREEMENT 
 NOW, THEREFORE, in consideration of the premises and covenants set forth below and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to
be legally bound, the Parties agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Section 1.1 Certain Defined Terms. For the purposes of
this Agreement, unless the context requires otherwise, the following terms shall have the following meanings; provided that capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed thereto in the Share
Purchase Agreement: 
 “Affiliate” shall mean, with respect to any person, any other person who directly or
indirectly controls, or is under common control with, or is controlled by, such first person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under
common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through ownership of voting securities or
partnership or other ownership interests, by contract or credit arrangement, as trustee or executor or otherwise; provided that, solely for purposes of this Agreement, Mark Kaoufman shall be deemed to be an Affiliate of Seller Shareholder.

 “Affiliated Transferee” shall mean (i) with respect to Seller Shareholder, Mark Kaoufman and/or any
Person that is, directly or indirectly, controlled by Mark Kaoufman and (ii) with respect to Purchaser Shareholder, CEDC any Affiliate thereof. 
 “Agreement” shall have the meaning ascribed to it in the Preamble. 
 “Annual Budget” shall have the meaning ascribed to it in Section 8.1(a). 
 “beneficial ownership” with respect to any security, shall mean possession, indirectly or directly, through ownership, contract, arrangement, understanding, relationship or otherwise, of the sole or shared power (i) to
vote, or direct the voting of, such security or (ii) to dispose, or direct the disposition of, such security, and the correlative terms “beneficially owns”, “beneficially own” and “beneficially
owned” shall be construed accordingly. 
 “Board” shall have the meaning ascribed to it in
Section 3.2(b). 
 “Budget Vote” shall have the meaning ascribed to it in
Section 8.2(b). 
 “Business” shall have the meaning ascribed to it in Section 3.1.

 “Business Day” shall mean any day other than a Saturday, Sunday or day on which banking institutions in
(i) Warsaw, Poland, (ii) Moscow, Russia or (iii) Nicosia, Cyprus are authorized or obligated by law to be closed; provided, however, that for purposes of counting Business Days elapsed in this Agreement, only Russian Business Days
shall be taken into account, but provided further, that any performance or payment that is required to be made on a Business Day after the lapse of a certain number of days shall be made on the next day that is Business Day taking into account all
of the foregoing jurisdictions. 
 “Business Plan” shall mean that business plan for the Group that has been
agreed between Mark Kaoufman and CEDC as of the date hereof. 
  

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 “Call Closing” shall have the meaning ascribed to it in
Section 6.2(e). 
 “Call Notice” shall have the meaning ascribed to it in
Section 6.2(d). 
 “Call Option” shall have the meaning ascribed to it in
Section 6.2(a). 
 “Call Shares” shall have the meaning ascribed to it in
Section 6.2(a). 
 “Chairman” shall have the meaning ascribed to it in Section 3.4.

 “Class A Shares” shall have the meaning ascribed to it in the Share Purchase Agreement. 

“Class B Shares” shall have the meaning ascribed to it in the Share Purchase Agreement. 
 “Cause” shall mean the removal of a Director or the CEO or the Financial Controller because of such person’s
(i) willful and continued failure to perform his or her duties as a director or officer of the Company, (ii) willful misconduct, fraud or gross negligence that results in a material financial injury to the Company or that could expose the
Company or the Group to civil or criminal penalties or fines, or (iii) conviction of any crime or felony. 
 “CEDC” shall mean Central European Distribution Corporation, a corporation incorporated under the laws of the State of Delaware in the United States of America, whose principal office is at 2 Bala Plaza, Suite 300, Bala
Cynwyd, Pennsylvania 19004, U.S.A. and the ultimate parent undertaking of Purchaser Shareholder. 
 “CEDC
Directors” shall have the meaning ascribed to it in Section 3.3(a)(i). 
 “CEDC Permitted
Pledge” shall mean a pledge by Purchaser Shareholder or CEDC or any of its Affiliates of any or all the Shares held by Purchaser Shareholder (or any Affiliate Transferee thereof) in favor of a financing party; provided (A) that
the pledge does not trigger any call option or termination right in favor of Moët Hennessy International under the Joint Venture Agreement and (B) that the terms of any such pledge shall provide that in the event of an enforcement of such
pledge, (i) CEDC or one of its Affiliates would be entitled, but not obligated, to acquire such pledged Shares; and (ii) to the extent that neither CEDC nor any of its Affiliates acquires all such pledged Shares, Mark Kaoufman or any of
his Affiliates would be entitled, but not obligated, to acquire such pledged Shares, at a price per Share not to exceed the price at which the Call Option would be exercised for the Seller Shareholder’s Shares, if it were exercised at the time
of the enforcement of the pledge, and (iii) to the extent that any of such pledged Shares are not acquired pursuant to either (i) or (ii) above, as a condition precedent to the vesting of title in any such pledged Shares, the acquirer
thereof shall adhere to the Agreement pursuant to Section 5.1(b). 
 “CEO” shall have the meaning
ascribed to it in Section 4.2(a). 
 “Closing” and “Closing Date” shall have the
respective meanings ascribed thereto in the Share Purchase Agreement. 
  

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 “Company Subsidiaries” means the direct and indirect Subsidiaries of the
Company and “Company Subsidiary” means any one of them; provided that for the avoidance of doubt, the Joint Venture shall not be deemed to be a Company Subsidiary. 
 “Confidential Information” shall have the meaning ascribed to it in Section 9.1(b). 
 “Directors” shall have the meaning ascribed to it in Section 3.3(a)(ii). 
 “Dispute” shall have the meaning ascribed to it in Section 12.3. 
 “EBIT” shall mean earnings before interest and tax. 
 “Exercise Price” shall have the meaning ascribed to it in Section 6.1(c). 
 “Exit Options” shall mean (i) the Put Option and (ii) the Call Option and “Exit Option” shall
mean either one of them. 
 “Financial Controller” shall have the meaning ascribed to it in
Section 4.3(a). 
 “First Notice” shall have the meaning ascribed to it in
Section 6.4(b). 
 “Governance Deadlock” shall have the meaning ascribed to it in
Section 3.8. 
 “Governmental Authority” shall mean any national, local, or international
government, regulatory agency, court, tribunal, commission or other governmental regulatory or self-regulatory entity. 
 “Group” shall mean the Company and the Company Subsidiaries and the expressions “members of the Group” and “Group Company” shall be construed accordingly to mean any of the Company or the
Company Subsidiaries. 
 “Group Confidential Information” shall have the meaning ascribed to it in
Section 9.1(b). 
 “Investment” shall have the meaning ascribed to it in the Recitals.

 “Joint Venture” shall mean MHWH Ltd., a private limited liability company by shares, incorporated in
Cyprus, and its Subsidiaries. 
 “Joint Venture Agreement” shall mean that Shareholder and Operating
Agreement, dated as of February 6, 2006, by and between Moët Hennessy International and Whitehall, as amended, waived or otherwise modified, relating to their participation in the Joint Venture. 
 “Key Decision” shall have the meaning ascribed to it in Section 3.5. 
 “Management Agreement” have the meaning ascribed to it in Section 4.1(c). 
 “Management Fee” shall have the meaning ascribed to it in Section 4.1(b). 
  

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 “MK Directors” shall have the meaning ascribed to it in
Section 3.3(a)(ii). 
 “MK Permitted Pledge” shall mean a pledge by Seller Shareholder or Mark
Kaoufman or any of his Affiliates of any or all the Shares held by Seller Shareholder (or any Affiliate Transferee thereof) in favor of a financing party; provided (A) that the pledge does not trigger any call option or termination right
in favor of Moët Hennessy International under the Joint Venture Agreement and (B) that the terms of any such pledge shall provide that in the event of an enforcement of such pledge, (i) Mark Kaoufman or any of his Affiliates would be
entitled, but not obligated, to acquire such pledged Shares; and (ii) to the extent that neither Mark Kaoufman nor any of his Affiliates acquires all of such pledged Shares, CEDC or any of its Affiliates would be entitled, but not obligated, to
acquire such pledged Shares at a price not to exceed the price at which the Call Option would be exercised, if it were exercised at the time of the enforcement of the Pledge, and (iii) to the extent that any of such pledged Shares are not
acquired pursuant to either (i) or (ii) above, as a condition precedent to the vesting of title in any such pledged Shares, the acquirer thereof shall adhere to the Agreement pursuant to Section 5.1(b). 
 “New Management Co” shall have the meaning ascribed to it in Section 4.1(a). 
 “Notice” shall have the meaning ascribed to it in Section 12.1(a). 
 “Offer” shall have the meaning ascribed to it in Section 6.4(c). 
 “Offer Notice” shall have the meaning ascribed to it in Section 6.4(c). 
 “Other Party Confidential Information” shall have the meaning ascribed to it in Section 9.1(a). 

“Party” shall have the meaning ascribed to it in the Preamble. 
 “Permitted Transfer” shall mean any Transfer permitted pursuant to this Agreement. 
 “Permitted Transferee” shall mean any transferee pursuant to a Permitted Transfer. 
 “Proportionate Share” shall have the meaning ascribed to it in Section 11.5(b). 
 “Purchaser Shareholder” shall mean Purchaser or any Permitted Transferee thereof (or any subsequent Permitted Transferee
of such Person) or any successors thereto; in each case for so long as such Person continues to beneficially own any Shares. 
 “Put Closing” shall have the meaning ascribed to it in Section 6.1(e). 
 “Put
Notice” shall have the meaning ascribed to it in Section 6.1(d). 
 “Put Option” shall
have the meaning ascribed to it in Section 6.1(a). 
  

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 “Put Shares” shall have the meaning ascribed to it in
Section 6.1(a). 
 “Related Party Transaction” shall mean any transaction, agreement or
arrangement with the Company in which any Shareholder or any of its Affiliates has a direct or indirect material or pecuniary interest. 
 “Representative” shall mean, with respect to any Person, its officers, directors, managers, employees, agents or other representatives (including any investment banker, attorney or accountant retained
by such Person). 
 “Requirements of Law” shall mean, with respect to any Person, any national, federal,
local or supranational law, ordinance, judgment, order, decree, injunction, permit, statute, treaty, rule or regulation or determination of (or an agreement with) an arbitrator, in each case binding on that Person or any amount of its property or
assets. 
 “Rules” shall have the meaning ascribed to it in Section 12.3(b). 
 “Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended. 
 “Seller Shareholder” shall mean Seller or any Permitted Transferee thereof (or any subsequent Permitted Transferee of
such Person); in each case for so long as such Person continues to beneficially own any Shares, provided that, and insofar as such Person continues to be at all times under the effective control of Mark Kaoufman unless otherwise agreed in writing by
CEDC. 
 “Shareholder” shall mean any of (i) the Purchaser Shareholder and (ii) the Seller
Shareholder. 
 “Shares” shall mean the Class A Shares and the Class B Shares and
“Share” shall mean any Class A Share or Class B Share. 
 “Share Purchase Agreement”
shall have the meaning ascribed to it in the Recitals. 
 “Subsidiary” shall mean, with respect to any
person (other than a natural person), any other person (other than a natural person) in which such person has ownership or control, direct or indirect, of more than fifty percent (50%) of the securities having ordinary voting power for the
election of directors or other governing body of a person or more than fifty percent (50%) of the partnership or other ownership interest therein (other than as a limited partner of such person). 
 “Territory” shall have the meaning ascribed to it in Section 3.1. 
 “Third Party” with respect to any Shareholder shall mean any Person that is not a Party to this Agreement nor an
Affiliate of such Shareholder. 
 “Transaction Documents” shall have the meaning ascribed thereto in the
Share Purchase Agreement. 
 “Transfer” shall mean, with respect to any Shares, (i) when used as a verb,
to sell, hypothecate, give, bequeath, transfer, exchange, assign, pledge or in any other 

  

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way whatsoever encumber or dispose of such Shares or any participation or interest therein, whether directly or indirectly (including by way of the Transfer
of such Shares to any Subsidiary of any Person that is subsequently Transferred in whole or in part to any other Person), or to enter into any contract, option, or other arrangement, commitment or understanding to do any of the foregoing actions,
and (ii) when used as a noun, any indirect or direct sale, hypothecation, gift, bequest, transfer, exchange, assignment, pledge or any other encumbrance or disposal whatsoever of such Shares or any participation or interest therein or any
contract, option, or other arrangement, commitment or understanding to effect any of the foregoing. 
 “Transferee” shall have the meaning ascribed to it in Section 5.1(a). 
 “US
GAAP” shall mean generally accepted accounting principles in the United States. 
 “Vodka Interests”
shall have the meaning ascribed to it in Section 6.4(b). 
 “WH Import” shall mean WH Import
Company, a company incorporated under the laws of Russia, whose registered office is located at 2/38, bld. 3, ulitsa Pyatnitskaya, Moscow 113035, Russia, registered on October 10, 2001 with the Moscow Registration Chamber under number
001.408.707. 
 “Whitehall” shall mean WHL Holdings Limited, a company incorporated under the laws of the
Republic of Cyprus, whose registered office is located at Chrysanthou Mylona, 3 Street, P.C. 3030 Limassol, Cyprus and which is a wholly-owned Subsidiary of the Company. 
 ARTICLE II 
 CONSTRUCTION 
 Section 2.1 Construction. For the purposes of this Agreement: (i) any reference to “writing” or
“written” means any method of reproducing words in a legible and non-transitory form (excluding, for the avoidance of doubt, e-mail); (ii) references to a “company” include any company, corporation or other
body corporate wherever and however incorporated or established; (iii) references to a “Person” include any natural person, company, partnership, joint venture, firm, association, trust, proprietorship, other business
organization, union, and any Governmental Authority, whether incorporated or unincorporated and shall include a reference to that Person’s legal representative or successors; (iv) words (including capitalized terms defined herein) in the
singular shall be held to include the plural and vice versa and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires; (v) the terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Exhibits and Schedules which are incorporated into and
form part of this Agreement) and not to any particular provision of this Agreement, and Article, Section, paragraph, Exhibit and Schedule references are to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise
specified; (vi) the word “including” and words of similar import when used in this Agreement means “including without limitation” unless the context otherwise requires or unless otherwise specified;
(vii) the word “or” shall not be exclusive; (viii) “commercially reasonable efforts” shall not require waiver by any Party of any material rights or any action or omission that would be a breach of this
Agreement; (ix) all 

  

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references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified; (x) references to any statute
or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any subordinate regulation or rule made under
the relevant statute or statutory provision, except to the extent that any amendment, consolidation or replacement would increase or extend the liability of Seller under this Agreement; and (xi) references to any New York legal term for any
statute, action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than New York, be deemed to include what most nearly approximates in
that jurisdiction to the New York legal term. 
 Section 2.2 Absence of Presumption. The Parties acknowledge that each Party and
its counsel have reviewed and revised this Agreement and that no rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall be employed in the interpretation of this Agreement (including all of the
Exhibits and Schedules) or any amendments hereto. 
 Section 2.3 Headings; Definitions. The Article and Section headings
contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement. 
 ARTICLE III 
 GOVERNANCE AND MANAGEMENT OF THE COMPANY 
 Section 3.1 General Principles and Purpose. The Parties covenant and agree that from and after the Closing, the Company and the Group
shall be run with the objective of maximizing the profitability and value of the Company and the Group to the Shareholders. The purpose of the Company is to hold, indirectly, through its Subsidiaries, the assets of the Group and to hold, indirectly,
its interest in the Joint Venture, and, indirectly, through its Subsidiaries and the Joint Venture, to conduct the business of the production, importation, distribution, marketing, promotion, and sale of alcoholic beverages in the Russian Federation
(the “Territory”) and matters incidental to or in support of such activities (collectively, the “Business”); provided that with respect to the Joint Venture, the Parties acknowledge and agree that the conduct of the
Business is subject at all times to the terms and conditions of the Joint Venture Agreement. 
 Section 3.2 Effective Management Control.

 (a) The Company and the Group shall be under the sole effective management control of Mark Kaoufman or one of his wholly-owned Affiliates,
acting in the capacity of CEO pursuant to Section 4.2 hereof; provided that if Mark Kaoufman proposes to vest management of the Company in any Affiliate other than New Management Co, the designation of such Affiliate shall
constitute a Key Decision. 
 (b) Mark Kaoufman (or such designated Affiliate) shall be responsible for the management and operation of the
Group’s Business, including the holding of the Company’s interest in the Joint Venture, consistent with the objectives stated in Section 3.1, the terms of this Agreement, and, in the case of the Joint Venture, the Joint Venture
Agreement, and the implementation of the Business Plan, all subject to the overall direction and supervision of the Company by a Board of Directors (the “Board”). 
  

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 Section 3.3 The Board of Directors. The Shareholders shall take, or cause to be taken,
all necessary action as may be required under and permitted by applicable Requirements of Law (including, voting all Shares or executing proxies or written consents, causing the Company to call a meeting of Shareholders, and, to the extent permitted
by applicable Requirements of Law, directing the Directors designated by them to act) to cause the Board to have, and shall refrain from taking, or causing to be taken, any action that would cause the Board not to have, from and after the Closing,
the size, composition and procedures set forth in this Section 3.3. 
 (a) Size and Composition. The Board shall be
composed of six (6) directors, each of whom shall hold office for a renewable one year term and one of whom shall be elected the Chairman, provided: 
 (i) three (3) directors (two of whom shall be a resident of Cyprus) shall be appointed as designated by the Purchaser Shareholder
(such directors, the “CEDC Directors”), provided that William V. Carey, or his successor as Chief Executive Officer of CEDC shall be among the CEDC Directors; and 
 (ii) three (3) directors (two of whom shall be a resident of Cyprus) shall be appointed as designated by the Seller Shareholder (such
directors, the “MK Directors” and collectively with the CEDC Directors, the “Directors”) provided that Mark Kaoufman shall be among the MK Directors. 
 (b) Removal. Each Shareholder agrees that, if at any time it is entitled to vote for the removal of any Director, including any Director then
serving as the Chairman, it shall not vote any of its Class A Shares in favor of the removal of any Director designated pursuant to Section 3.3(a), unless (i) such removal shall be for Cause or (ii) the Shareholder
entitled to designate such Director shall have consented to such removal in writing; provided, however, that the Seller Shareholder shall have the right to cause any MK Director to be removed from the Board at any time and the
Purchaser Shareholder shall have the right to cause any CEDC Director to be removed from the Board at any time, in each case with or without Cause and in the applicable Shareholder’s sole discretion. 
 (c) Vacancies. If a vacancy on the Board occurs at any time as a result of the death, disability, resignation, retirement, or removal of any
Director, the Shareholder that designated the Director whose death, disability, resignation, retirement or removal caused the vacancy shall have the right to designate a replacement Director for appointment or election and the vacancy shall be
filled within twenty (20) Business Days of its occurrence. At any time there is a vacancy, the Board shall not conduct any further business until a replacement Director has been appointed or elected to the Board in accordance with this Section;
provided, however, that the foregoing restriction shall not apply, and the Board may continue to conduct business, in the event that a vacancy has continued for longer than twenty (20) Business Days after the event giving rise to
such vacancy. 
 (d) Board Meetings. Subject to applicable Requirements of Law, the Board shall meet as often as required by the
operations and affairs of the Company and no less than once per calendar quarter. Board meetings shall be convened by the Chairman, either acting in its sole initiative or upon the request of any Shareholder, by notice to each Director (either by
mail, facsimile or other electronic transmission) to be received not later than forty-eight (48) hours before the meeting, stating the date, time and place of such meeting and the agenda of business to be conducted thereat. A Board meeting may
be held without 

  

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the foregoing notice thereof, if all Directors are present and unanimously agree to hold a meeting and to waive the notice requirement. Subject to applicable
Requirements of Law, all Board meetings shall take place at a location mutually convenient to the Board as the Board may from time to time agree. All Board meetings shall be conducted in English. 
 (e) Quorum. At all meetings of the Board, the presence of at least four (4) Directors shall constitute a quorum for the transaction of
business, provided that at least one MK Director and at least one CEDC Director shall be present. To the extent permitted by applicable Requirements of Law, a Director may participate in any meeting of the Board by means of an audio or video
conference or other communications equipment that allows all Directors participating in such meeting to hear each other; participation in any such meeting by such means shall constitute presence in person for all purposes (including the satisfaction
of any quorum requirement) of this Agreement. Notwithstanding the foregoing, if such quorum is not present at any duly-convened meeting of the Board, the Directors present thereat may adjourn such meeting until another time not earlier than five
(5) Business Days nor later than ten (10) Business Days thereafter. At any such adjourned meeting no quorum requirement shall apply, provided that (i) no business shall be conducted thereat that was not included in the agenda
for the meeting that was adjourned and (ii) in no event shall any action be taken at such adjourned meeting with respect to any matter set forth in Section 3.5 unless at least one MK Director and one CEDC Director are present
thereat, except if (without reasonable cause) no such MK Director or CEDC Director, as the case may be, has been present at three consecutive, duly convened meetings of the Board (including adjournments thereof). 
 (f) Action by the Board. Except as provided in Section 3.5, all actions of the Board shall require the affirmative vote of at least a
majority of the Directors present at a duly-convened meeting of the Board held in accordance with Section 3.3(d) and Section 3.3(e), provided that in the event of a deadlocked vote, other than with respect to matters
required to be approved pursuant to Section 3.5, the Chairman shall have the casting vote. 
 (g) Action by Written
Consent. A written resolution signed by each of the Directors comprising the entire Board (which may be signed in facsimile and in multiple counterparts) shall be as valid and effective as if it had been adopted at a duly convened meeting of the
Board. 
 Section 3.4 Chairman. The Chairman of the Board (the “Chairman”) shall be elected from among the
Directors on an annual basis, provided that the Chairman shall alternate each year between a CEDC Director and an MK Director. The first Chairman shall be a CEDC Director. In the event of a deadlocked vote, other than with respect to matters
required to be approved pursuant to Section 3.5, the Chairman shall have a casting vote. 
 Section 3.5 Key
Decisions. From and after the Closing Date, (A) the Company shall take no action (including any action by the Board or by any officer of the Company) and (B) the Shareholders shall take no action in their capacity as Shareholders
(including voting any of their Shares) with respect to any of the following matters (and, to the full extent within the power of the Company, the Company shall cause the Subsidiaries of the Company not to take any action with respect to any of the
following matters), (x) without such first action being submitted to a duly-convened meeting of the Board held in accordance with Section 3.3 and (y) if at any such meeting any of the Directors votes against such action (each
of the following matters a “Key Decision”): 
 (a) the adoption of any business plan other than the Business Plan, or any
material departures from or amendment or revision to, the Business Plan; 
  

 10 

 (b) subject to the provisions of Section 8.2, the approval and adoption of any Annual Budget
for a given financial year, if the proposed Annual Budget does not provide for a targeted EBIT at least equal to the EBIT set forth in the Business Plan for the applicable financial year; 
 (c) any merger, statutory share exchange, consolidation, spin-off or similar corporate transaction, or sale of all or substantially all of its assets,
other than any transaction involving only the Company and/or its wholly-owned Subsidiaries and no other Person; 
 (d) the issuance of any
debt or equity securities; 
 (e) other than transactions involving only the Company and/or its wholly-owned Subsidiaries: (i) the
incurrence of any indebtedness for borrowed money if, as a result, the consolidated indebtedness of the Group would exceed (x) €10 million in any of the first three quarters of any calendar year or (y) €15 million in
the fourth quarter of any calendar year; provided that the foregoing levels of indebtedness shall be increased proportionately with the growth in the revenue of the Business relative to FY 2007, (ii) the grant of any loan or credit to
any other person (other than trade credit on customary terms in the ordinary course of business), and (iii) the grant of any guarantee or other surety with respect to the debt obligations or other liabilities of any person; except for any
guarantee or other surety granted in connection with the obtaining of banderols by WH Import or any other import company; 
 (f) the sale or
other disposition, or purchase, directly or indirectly, of any assets in excess of €500,000 in the aggregate in any financial year, other than the purchase and sale of inventory held for sale in the ordinary course of business; 
 (g) the grant of any lien or other security interest of any kind on any material assets used in the conduct of the Business, other than liens arising in
the ordinary course of business or under applicable Requirements of Law or in connection with the obtaining of banderols by WH Import or any other import company; 
 (h) the acquisition of the stock of or other investment in the equity interests of any other Person, or the organization of any new, or the dissolution and winding up of any existing, Subsidiary or the entry into any
form of joint venture or partnership with any Person; 
 (i) the entry into, termination (other than in accordance with its terms) of, any
material amendment or revision to, or the granting of any material waiver under, any of the following contracts, provided that neither the renewal, extension or replacement of any such existing contract on substantially similar terms nor the
granting of any waiver under any such existing contract in the ordinary course of business consistent with past practice shall constitute a Key Decision: 
 (i) any distribution agreement; 
  

 11 

 (ii) any contract (including any real estate or financial lease commitment) requiring
payments in excess of €250,000 in any financial year; 
 (iii) any Related Party Transaction (including for the avoidance
of doubt the Management Agreement); or 
 (iv) any agreement providing for any form of employee compensation, which,
individually or in the aggregate, would result in employee compensation in excess of the amount agreed in the most recent approved Annual Budget, except for any such increase in compensation that is required under applicable Requirements of Law or
pursuant to the terms of any contract as in effect on the date hereof; 
 (j) the removal of the existing, and the appointment of new,
auditors of the Company or any Company Subsidiary; 
 (k) any material change in any method of accounting or accounting practice or policy,
other than such changes that are required by RAS or IFRS, as the case may be, or by applicable Requirements of Law; 
 (l) the making or the
revocation of any material tax election; 
 (m) the initiation (other than routine debt collection) of any suit, claim, action or proceeding
or the settlement of any of the same for an amount in excess of €250,000, or which contains injunctive, equitable or other provisions that would be reasonably likely to adversely affect the ongoing conduct of the Business in any material
respect; 
 (n) any amendment to the Joint Venture Agreement as well as any decision extending or otherwise terminating the Joint Venture;
provided, however, that any decision to extend the term of the Joint Venture Agreement shall be subject to the unanimous approval of the Shareholders (voting in their sole discretion); 
 (o) any material amendment to the memorandum of association or the articles of association of the Company (or any Subsidiary thereof or the Joint Venture
(or the analogous foundational or organizational documents)), including any increase or decrease in the share capital of the Company or the authorization of any new class or series of share capital; 
 (p) subject to Section 11.4, any appropriations of retained profits and any distributions made by the Company; or 
 (q) any voluntary winding up, dissolution or liquidation or reduction in the share capital of the Company or any arrangement having the same economic
effect as the foregoing. 
 Section 3.6 Foundational Documents. To the fullest extent not prohibited by applicable
Requirements of Law, the Shareholders and the Company shall take, or cause to be taken, all necessary action as may be required (including, voting all Shares or executing proxies or written consents, causing the Company to call a meeting of
Shareholders, and, to the extent permitted by applicable Requirements of Law, directing the Directors designated by them to act) to cause the memorandum of association and articles of association of the Company to be amended, as necessary, so that
they do not at any time conflict with any provision of this Agreement and they permit each Shareholder to receive the benefits to 

  

 12 

 
which each such Shareholder is entitled under this Agreement. As between Shareholders and their Affiliates, in the event of any conflict between this
Agreement and memorandum of association and articles of association of the Company, this Agreement shall control. Notwithstanding any other provision in this Agreement, nothing in the Agreement shall constitute an unlawful restriction or fetter of
the Company’s statutory powers, and if any provision of this Agreement is found to constitute such restriction or fetter or is otherwise unlawful and/or unenforceable against the Company, such term shall, as against the Company only, be severed
from the rest of the Agreement and treated as void. 
 Section 3.7 No Conflicting Agreements. No Shareholder shall grant any
proxy or enter into or agree to be bound by any stockholder agreement or like arrangements of any kind (including any arrangement or agreement with respect to the acquisition, disposition or voting of any Shares) with any Person (including another
Shareholder) that is inconsistent with any of the provisions of this Agreement; provided that nothing herein is intended to supersede or derogate from the terms and conditions of the Joint Venture Agreement. 
 Section 3.8 Deadlock. In the event that the MK Directors and the CEDC Directors cannot agree on any matter set forth in
Section 3.5 and the dispute is material to the Business or the assets, results of operations or financial condition or prospects of the Group on a consolidated basis (a “Governance Deadlock”), the Seller Shareholder
agrees that it shall refer the matter to Mark Kaoufman, and the Purchaser Shareholder agrees that it shall refer the matter to William V. Carey, or his successor as the chief executive officer of CEDC, each of whom shall negotiate in good faith to
resolve the Governance Deadlock. 
 ARTICLE IV 
 CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICERS 
 Section 4.1 New Management Company.

 (a) As promptly as practicable after the Closing, Mark Kaoufman shall cause a new management company to be organized in Russia for the
purposes of providing management services to the Company and the Group (“New Management Co”). At all times, New Management Co shall be under the sole effective management control of Mark Kaoufman. 
 (b) New Management Co shall be compensated for its services by an annual fee (“Management Fee”) in the amount set forth in the Business
Plan for each applicable year, provided that in any year the aggregate overhead expenses for the Group on a consolidated basis shall not exceed the targets for such expenses set forth for the applicable year in the Business Plan (except that
in the event that the overall revenue of the Business exceeds the amount set forth in the Business Plan for any applicable year, Mark Kaoufman and CEDC shall negotiate in good faith to determine whether the aggregate target overhead expenses for the
Group should be increased). 
 (c) No later than June 1, 2008, OOO Whitehall-Center and New Management Co shall enter into a management
agreement, which shall comply in all respects with the requirements of the Russian tax authorities, shall incorporate the key terms and conditions set forth in the term sheet attached hereto as Exhibit A, and shall otherwise be based on the
form of agreement previously provided by Whitehall to CEDC (the “Management Agreement”). In all matters related to any Management Agreement, the Company shall be represented by one or more of the CEDC Directors, and the terms
and conditions of such agreement shall constitute a Key Decision pursuant to Section 3.5(i)(iii). 
  

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 Section 4.2 Chief Executive Officer. 
 (a) The Chief Executive Officer of the Group (the “CEO”) shall be New Management Co or Mark Kaoufman. 
 (b) If Mark Kaoufman, for any reason whatsoever, ceases or becomes unable to hold (directly or through New Management Co) the position of CEO, the Chief
Executive Officer of CEDC, or a senior executive of CEDC designated by the Chief Executive Officer of CEDC, or an Affiliate of CEDC designated by the Chief Executive Officer of CEDC shall be appointed the CEO. 
 (c) Subject to the applicable Requirements of Law, and the powers reserved to the Board in the articles of association of the Company (and the like
foundational documents of its Subsidiaries), and the terms of this Agreement, the CEO shall be responsible for the day-to-day management of the Group in accordance with the decisions of the Board. In general, the CEO shall at all times act in
accordance with the highest standard of professional care and, in particular, shall use its best endeavors to deliver the Business Plan and the Annual Budgets. 
 (d) Except in the event of the death or disability of Mark Kaoufman, the CEO shall not be removed except following a non-appealable decision entered by a Russian court of competent jurisdiction, it being understood
that any Director shall have the right, at any time, to ask for such removal for any reason whatsoever, including but not limited to any reasons referred to in the definition of “Cause” hereabove. 
 Section 4.3 Financial Controller. 
 (a) Purchaser Shareholder shall be entitled to propose to the Board the candidate for appointment as the Financial Controller of the Group (the “Financial Controller”) (including, for the avoidance of doubt, any candidate
to fill any subsequent vacancy in such office, however arising); provided that the appointment of the Financial Controller shall be subject to the final approval of the CEO, not to be unreasonably withheld, delayed or conditioned. 

(b) The duties and responsibilities of the Financial Controller shall be those customarily performed by such an officer, it being understood that the
CEO shall have direct responsibility for communications with the Russian authorities with respect to accounting and taxation matters and relationships with Russian banks, the Financial Controller being nevertheless kept fully informed by the CEO on
all these matters. 
 (c) The CEO shall ensure that the Financial Controller has full and unrestricted access to all financial, tax and
accounting records of the Company and the Group, and to the extent permitted by the Joint Venture Agreement, all such records of the Joint Venture, all on a permanent basis. 
 (d) The Financial Controller shall report to the CEO; provided that, to the extent permitted by applicable Requirements of Law, for purposes of
ensuring CEDC’s compliance with its reporting obligations under applicable Requirements of Law, including, without 

  

 14 

 
limitation, the requirements of the Securities Exchange Act, CEDC may communicate directly with, and request information directly from, the Financial
Controller; provided, further, that the CEO is copied on all such written communication (or furnished with a full, fair and accurate summary of any oral communications) and any responses thereto. The Parties agree that the Financial
Controller, and not the CEO or the New Management Co, shall be responsible for ensuring that information is timely reported according to CEDC’s reporting standards, but this shall not relieve the CEO or New Management Co from preparing and
maintaining accounting records for the Company and the Group, or from providing the Financial Controller full access to such records. 
 (e)
Except as otherwise agreed by the CEO and the Purchaser Shareholder, and subject to Requirements of Law, the employment of the Financial Controller may only be terminated for Cause. 
 ARTICLE V 
 RESTRICTIONS ON TRANSFER 
 Section 5.1 General Restrictions on Transfer. 
 (a) Each Shareholder agrees that such Shareholder shall not Transfer any Shares now or at any time hereafter owned by such Shareholder (or any interest therein) to any Person (each, a “Transferee”),
except as expressly permitted by and in accordance with the terms and conditions of this Agreement. 
 (b) Except as expressly agreed between
the Shareholders in writing, no Transfer of any Shares by any Shareholder shall be permitted unless the Transferee shall have executed and delivered to each Party other than the transferring Shareholder, as a condition precedent to such Transfer, an
agreement in writing to be bound by the terms of this Agreement. 
 (c) Notwithstanding any other provision of this Agreement, no Transfer of
any Shares to any Transferee shall be permitted unless such Transfer complies with all applicable Requirements of Law, including the securities laws of any applicable jurisdiction. 
 (d) Except as expressly permitted under Section 5.2, in no event shall any Shareholder at any time Transfer to any non-affiliated Third Party
less than all the Shares beneficially owned by it and its Affiliates. 
 (e) Any attempt to Transfer any Shares not in compliance with this
Agreement shall be null and void ab initio and of no effect and the Company shall not, and shall cause its transfer agent, if any, not to, record any such purported Transfer upon the stock register of the Company. 
 Section 5.2 Affiliate Transfers. Subject to Section 5.1, any Shareholder shall have the right at any time to Transfer any or all of the
Shares that it holds to any of its Affiliated Transferees; provided that the other Shareholder shall have consented to such Transfer (which consent shall not be withheld or delayed except if such other Shareholder reasonably concludes that
such Transfer would be materially detrimental to its interests); provided, further, such Transfer shall be subject to the condition that in the event that, at any time after such Transfer, either the Shareholder effecting such Transfer
or its Affiliated Transferee wishes to take or to permit any action that could result in such Affiliated Transferee ceasing 

  

 15 

 
to be an Affiliated Transferee of such transferring Shareholder, then, prior to taking or permitting such action, the transferring Shareholder or the
Affiliated Transferee, shall cause the Transfer of any Shares that the Affiliated Transferee continues to hold at such time to the transferring Shareholder or to another Affiliated Transferee of such transferring Shareholder; provided,
further, that no Affiliated Transferee that takes Shares pursuant to this Section 5.2 shall have the right to Transfer those Shares in any manner whatsoever other than in a further Transfer pursuant to this Section 5.2
or pursuant to a Transfer initiated by the Seller Shareholder or the Purchaser Shareholder pursuant to an Exit Option. 
 Section 5.3 No Other
Transfers. Other than pursuant to Section 5.2, except with the prior written consent of the other Shareholder, which may be withheld in its absolute discretion, neither Shareholder shall be permitted to Transfer any Shares to
any Third Party. 
 Section 5.4 Permitted Pledges. Notwithstanding anything to the contrary in this Agreement, nothing herein shall prohibit
(a) the Seller Shareholder, Mark Kaoufman or any of his Affiliates from entering into an MK Permitted Pledge or (b) the Purchaser Shareholder, CEDC or any of its Affiliates form entering into a CEDC Permitted Pledge. 
 ARTICLE VI 
 EXIT OPTIONS

 Section 6.1 Put Option. 
 (a)
The Purchaser Shareholder hereby irrevocably grants to the Seller Shareholder (and any Permitted Transferee thereof that acquires Shares pursuant to and in compliance with Article V) the right, but not the obligation (the “Put
Option”), subject to the terms and conditions set forth in this Section 6.1, to sell to Purchaser Shareholder (or its successor or Permitted Transferee) and to require Purchaser Shareholder (or its successor or Permitted
Transferee) to purchase, all (but not less than all) of the Shares beneficially owned by Seller Shareholder and/or its Affiliates and Permitted Transferees (the “Put Shares”). 
 (b) The Put Option may be exercised at any time; provided that if at such time the Joint Venture Agreement remains in full force and effect, the
Put Option shall not be exercised by Seller Shareholder unless Moët Hennessy International shall have given its prior written consent to such exercise and shall have irrevocably waived any call option or termination rights arising under the
Joint Venture Agreement or any right of first refusal over the Put Shares. 
 (c) The price at which the Put Option shall be exercised and
the Purchaser Shareholder shall be obligated to purchase the Put Shares (the “Exercise Price”) shall be calculated in the manner set forth on Schedule 1. 
 (d) The Put Option shall be exercised, if at all, by the delivery by Seller Shareholder of a written notice (the “Put Notice”) to
Purchaser Shareholder, provided that if the Put Option is being exercised at any time the Joint Venture Agreement remains in full force and effect, the Seller Shareholder shall attach evidence in a form reasonably satisfactory to Purchaser
Shareholder that Moët Hennessy International has waived its call option, termination rights and rights of first refusal under the Joint Venture Agreement. 
 (e) The closing of the sale and purchase of the Put Shares (the “Put Closing”) shall be subject to the receipt by Purchaser Shareholder of any material regulatory approvals from any Governmental
Authority of competent jurisdiction, including, without limitation, the Russian Federal Antimonopoly Service. 
  

 16 

 (f) The Put Closing shall take place as soon as practicable after the delivery of the Put Notice, but in
any event no earlier than December 31 of the year in which the Put Option is exercised and the Put Notice delivered. 
 (g) At the Put
Closing: 
 (i) the Purchaser Shareholder shall pay, or cause to be paid, to Seller Shareholder by wire transfer of
immediately available funds an amount in U.S. dollars equal to the Exercise Price; and 
 (ii) Seller Shareholder shall
transfer to Purchaser Shareholder, or its designee, the Put Shares, free and clear of all liens, and shall deliver to Purchaser Shareholder, or its designee, all documentation that Purchaser Shareholder may reasonably request in order to perfect the
transfer of such title. 
 Section 6.2 Call Option. 
 (a) The Seller Shareholder hereby irrevocably grants to the Purchaser Shareholder (and any Permitted Transferee thereof that acquires Shares pursuant to and in compliance with Article V) the right, but not the
obligation (the “Call Option”), subject to the terms and conditions set forth in this Section 6.2, to purchase from Seller Shareholder (or its successor or Permitted Transferee) and to require Seller Shareholder (or its
successor or Permitted Transferee) to sell, all (but not less than all) of the Shares beneficially owned by Seller Shareholder and/or its Affiliates and Permitted Transferees (the “Call Shares”). 
 (b) The Call Option may be exercised at any time; provided that, if at such time the Joint Venture Agreement remains in full force and effect, the
Call Option shall not be exercised by Purchaser Shareholder unless (i) Moët Hennessy International shall have given its prior written consent to such exercise and shall have irrevocably waived any call option or termination rights arising
under the Joint Venture Agreement or any right of first refusal over the Call Shares and (ii) Mark Kaoufman shall have given his prior written consent to such exercise. 
 (c) The Exercise Price at which the Call Option shall be exercised and the Seller Shareholder shall be obligated to sell the Call Shares shall be
calculated in the manner set forth on Schedule 1. 
 (d) The Call Option shall be exercised, if at all, by the delivery by Purchaser
Shareholder of a written notice (the “Call Notice”) to Seller Shareholder, with a copy to Mark Kaoufman, provided that if the Call Option is being exercised at any time the Joint Venture Agreement remains in full force and
effect, the Purchaser Shareholder shall attach evidence in a form reasonably satisfactory to Seller Shareholder that Moët Hennessy International has waived its call option, termination rights and rights of first refusal under the Joint Venture
Agreement and that Mark Kaoufman has consented to the exercise of the Call Option. 
 (e) The closing of the sale and purchase of the Call
Shares (the “Call Closing”) shall be subject to the receipt by Purchaser Shareholder of any material regulatory approvals from any Governmental Authority of competent jurisdiction, including, without limitation, the Russian Federal
Antimonopoly Service. 
  

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 (f) The Call Closing shall take place as soon as practicable after the delivery of the Call Notice, but
in any event no earlier than December 31 of the year in which the Call Option is exercised and the Call Notice delivered. 
 (g) At the
Call Closing: 
 (i) the Purchaser Shareholder shall pay, or cause to be paid, to Seller Shareholder by wire transfer of
immediately available funds an amount in U.S. dollars equal to the Exercise Price; and 
 (ii) Seller Shareholder shall
transfer to Purchaser Shareholder, or its designee, the Call Shares, free and clear of all liens, and shall deliver to Purchaser Shareholder, or its designee, all documentation that Purchaser Shareholder may reasonably request in order to perfect
the transfer of such title. 
 Section 6.3 Option to Acquire New Management Co. 
 (a) In the event that Purchaser Shareholder acquires the Put Shares or the Call Shares pursuant to the exercise of an Exit Option, Purchaser Shareholder
(or its designated Affiliate) shall have the further option to acquire from Mark Kaoufman the entire share capital of the New Management Co (which transaction must be completed at the same time as the closing of the Exit Option transadtion) for a
purchase price equal to its net asset value (determined on the basis of the most recent statutory financial statements), which shall include at no additional cost the right to continue to employ the staff of such management company that are
primarily involved in the management of the Group; provided that Mark Kaoufman (or any of his Affiliates that are not members of the Group) will not be prevented from soliciting or employing any member of staff of New Management Co not
primarily involved in the management of the Group subject to, and insofar as, Purchaser Shareholder shall not have objected in writing that the relevant staff member is primarily involved in the management of the Group. 
 (b) In the event that Purchaser Shareholder does not elect to acquire the New Management Co pursuant to this Section 6.3, for a period of 2
years following the exercise of the Exit Option, Purchaser Shareholder shall not, and shall cause its Affiliates (including the members of the Group) not to, solicit or employ any person who is employed by New Management Co at the time of the
exercise of the Exit Option (or the six months prior thereto) other than any such person whose employment was terminated by New Management Co (other than for cause).
 Section 6.4 Right to Acquire “Kauffman” Brand or “Kauffman” Vodka. 
 (a) For
the avoidance of doubt, at no time, including after the exercise of the Exit Option, shall Purchaser Shareholder or any of its Affiliates (including the members of the Group) have any right to acquire any intellectual property interest in the
“Kauffman” brand or related trademarks except with the consent of Mark Kaoufman, in his absolute discretion, or as provided in Section 6.4(b). 
  

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 (b) Notwithstanding the foregoing, in the event that Seller Shareholder or any of its Affiliates
(including Mark Kaoufman or VL Enterprises LLC), desires to dispose of any of its interests in “Kauffman” Vodka (the “Vodka Interests”) to a Third Party, the Seller Shareholder shall, or shall cause its applicable
Affiliate (including Mark Kaoufman), first to send to Purchaser Shareholder (or its designated Affiliate) a written notice setting forth its intention to sell the Vodka Interests (the “First Notice”). 
 (c) Upon receipt of the First Notice, Purchaser Shareholder (or its designated Affiliate) may elect to make an offer to acquire the Vodka Interests by
way of a written notice (the “Offer Notice”), setting out the price and conditions at which it would be prepared to acquire the Vodka Interests (the “Offer”), addressed to Seller Shareholder (or its applicable
Affiliate) within 30 days following receipt of the First Notice. 
 (d) If, within 30 days following the Offer Notice, Seller Shareholder (or
its applicable Affiliate) notifies Purchaser Shareholder (or its designated Affiliate) that it accepts such Offer, the parties shall negotiate in good faith to conclude definitive terms and conditions for the sale of the Vodka Interests and to close
such sale, subject to customary closing conditions (including receipt of any necessary approvals from any Governmental Authority), as soon as practicable after the date of the First Notice. 
 (e) If Seller Shareholder (or its applicable Affiliate) declines the Offer in writing or fails to respond within 30 days from the date of the Offer
Notice, Seller Shareholder (or its applicable Affiliate) shall have the right to dispose of the Vodka Interests to a Third Party, provided that such sale is consummated on terms (including the price) which are, in aggregate, more favorable to
Seller Shareholder, or its relevant Affiliate, than those set forth in the Offer Notice; provided, further, that such sale shall be consummated no later than the first anniversary of the date of the Offer Notice. If the sale of the
Vodka Interests is not consummated on or before the first anniversary of the Offer Notice, the Seller Shareholder shall be obligated to repeat the procedures set forth in this Section 6.4 and no sale of the Vodka Interests shall be
consummated without the sending of a First Notice to the Purchaser Shareholder. 
 (f) For the avoidance of doubt, nothing in this
Section 6.4 shall prevent Seller Shareholder (or any of its Affiliates) from Transferring the Vodka Interests to any of its Affiliates and the right of first offer set forth herein shall not apply to such Transfer, provided only that it
shall be a condition of such Transfer that any Transferee of the Vodka Interests shall be obligated to comply with the procedures set forth in this Section 6.4 in the event of any eventual disposition of the Vodka Interests to any Third
Party. 
  

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 ARTICLE VII 
 NON-COMPETE; 
 COMPETING INVESTMENT OPPORTUNITIES 
 Section 7.1 Non-Compete. 
 (a)
During the term of this Agreement, for so long as the Joint Venture Agreement remains in effect, without the prior written consent of Mark Kaoufman, except for agreements in effect as of February 23, 2008, neither Purchaser Shareholder nor any
of its Affiliates in which CEDC has a controlling stake shall import, market, promote or distribute in the Territory: (i) any cognacs (or similar brandy), including, without limitation, Martell, Remy Martin, Courvoisier or Otard;
(ii) Chivas Regal or Johnnie Walker whiskies; (iii) champagnes (or any other premium sparkling wine) having an import price greater than 60% of the Moët & Chandon champagne FOB price paid by the Joint Venture). 
 (b) During the term of this Agreement, for so long as the Joint Venture Agreement remains in effect, without the prior written consent of Mark Kaoufman,
neither Purchaser Shareholder nor any of its Affiliates will enter into or amend (other than to reduce the scope of the arrangement) any agreement with or provide any services whatsoever (importation, distribution, marketing, promotion, etc) in the
Territory to Maxxium and/or Remy Cointreau or any of their related companies. 
 Section 7.2 Future Opportunities. Mark Kaoufman
and CEDC undertake to discuss in good faith any opportunity brought to them, or otherwise available to them, individually or jointly, with a view to contributing to the Group any new brand or distribution contract in the Territory. 
 Section 7.3 Post-Termination Non-Compete. 
 (a) From and after the closing of the acquisition of the Call Shares or the Put Shares, as the case may be, pursuant to the valid exercise of an Exit Option, until the second anniversary of the closing of such sale,
neither Seller Shareholder nor any of its Affiliates (including, for the avoidance of doubt, Mark Kaoufman and his Affiliates) shall own or conduct any business that produces, imports, markets, promotes or distributes (except at the retail level) in
the Territory any wine or spirit that competes with the category of products imported, marketed, promoted or distributed by the Group (including the Joint Venture) at the date of the exercise of the Exit Option; provided that, for the avoidance of
doubt, nothing in the foregoing shall prohibit Mark Kaoufman or any of his Affiliates from producing, importing, marketing, promoting, distributing and/or selling any product under the “Kauffman” brand, including, without limitation,
Kauffman Vodka and the Kauffman Collection. 
 (b) Notwithstanding the foregoing, nothing herein shall prevent or limit Mark Kaoufman at any
time after the exercise of the Exit Option from providing consulting services (with respect to any part of the value chain) to any Third Party involved in the production, importation, distribution, marketing, promotion or sales of any wines or
spirits in the Territory or elsewhere, subject to Mark Kaoufman adhering to the confidentiality restrictions set forth herein. 
  

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 ARTICLE VIII 
 ANNUAL BUDGET; INFORMATION AND ACCESS RIGHTS 
 Section 8.1 Financial and Management
Reporting. 
 (a) The CEO shall cause the Company and the Group on a regular and timely basis to prepare and submit to the Board by
November 1 of each calendar year, a proposed annual operating budget for the Group for the next succeeding fiscal year (the “Annual Budget”). The Annual Budget shall include product prices and discounts, analysis of days sales
outstanding, cash flow and working capital, detailed overheads, distribution channels and shall be prepared in a form to be agreed between the Parties. 
 (b) The CEO shall cause monthly management reports to be prepared that shall include statements on the sales, cost items and the cash position of the Group, setting forth in each case in comparative form the
corresponding figures for the corresponding period (A) of the preceding fiscal year and (B) in the Annual Budget for such period, all in reasonable detail and accompanied by a succinct narrative discussion of the results of operations
compared against the Annual Budget of the Group. 
 (c) In addition, as promptly as practicable after the Company has Knowledge thereof, the
Company shall inform (including by facsimile or other electronic transmission) the Shareholders of the following: 
 (i) the
occurrence of any circumstance or event likely to result in a material adverse change in the results of operations or financial condition or prospects of the Group; and 
 (ii) the commencement of all actions, suits and proceedings before any Governmental Authority affecting the Group. 
 (d) In addition, the CEO shall cause to be prepared and delivered to the Shareholders (x) monthly financial information on the Company and its
Subsidiaries in form and content agreed between the CEO and the Financial Controller sufficient to allow CEDC to prepare US GAAP consolidated financial statements, (y) quarterly financial statements within 10 days following the term of
each calendar quarter and (z) such financial and other management reports as either Shareholder may reasonably request. 
 Section 8.2 Approval of Annual Budget. 
 (a) The proposed Annual Budget presented to the Board pursuant to
Section 8.1, shall be discussed by the Board, which shall have the opportunity to propose changes. In such a case, the CEO shall submit a revised Annual Budget taking into account the proposals and discussions of the Board. 

(b) The Board, shall take a final vote on the proposed Annual Budget (as it may have been revised by the CEO) no later than December 1st of each
year (the “Budget Vote”). 
 (c) In the event that the proposed Annual Budget (in the form presented at the time of the
Budget Vote) provides for EBIT at least equal to the target EBIT set forth in the Business Plan for the relevant financial year, no MK Director and no CEDC Director shall have the right to vote against the approval of such proposed Annual Budget in
the Budget 

  

 21 

 
Vote (except to the extent that such director determines in good faith, after consulting with outside counsel, that not voting against the approval would
conflict with such director’s fiduciary obligations imposed by applicable Requirements of Law) and, for the avoidance of doubt, the approval of such an Annual Budget shall not constitute a Key Decision. 
 (d) In the event that the proposed Annual Budget for a given financial year (in the form presented at the time of the Budget Vote) does not provide for
EBIT at least equal to the target EBIT set forth in the Business Plan for the relevant financial year, the approval of such Annual Budget shall constitute a Key Decision requiring unanimous approval of all Directors pursuant to
Section 3.5(c); for the avoidance of doubt, in such case, each Director shall have the right to vote against such proposed Annual Budget in the Budget Vote. 
 (e) In the event that the Board has not accepted and approved the Annual Budget for any financial year on or before December 1st of the preceding financial year, (i) such failure to approve and accept the
Annual Budget shall constitute a Governance Deadlock subject to the provisions of Section 3.8, and (ii) pending resolution of such Governance Deadlock, the Annual Budget to be applied for such financial year shall be the Annual
Budget for the previous financial year, adjusted for inflation in accordance with the CPI. 
 Section 8.3 Access. The Company shall permit
each Shareholder and their respective authorized Representatives reasonable access, during regular business hours and upon reasonable advance notice, to the premises, employees and books and records of the Company for purposes consistent with this
Agreement, including the purposes of auditing and verification. 
 ARTICLE IX 
 CONFIDENTIALITY 
 Section 9.1 Confidential Information.
 (a) Except as otherwise provided by this Agreement, each Party agrees that all information relating to any other Party or its Affiliates obtained by such
Party (whether before or after the date hereof) in connection with this Agreement, or in the course of negotiations or investigations leading up to the execution of this Agreement (all such information “Other Party Confidential
Information”), shall be kept confidential by such Party. 
 (b) Except as otherwise provided by this Agreement, each Party agrees
that all information relating to the Group or its Business obtained by such Party (whether before or after the date hereof) (all such information “Group Confidential Information”, and together with Other Party Confidential
Information, “Confidential Information”), shall be kept confidential by such Party. 
 (c) In addition, each Party agrees
(i) to use such Confidential Information solely for the purposes contemplated by this Agreement, or as necessary to carry out the transactions contemplated hereby, and not to use it for any other purpose; (ii) not to disclose to any Person
such Confidential Information, except that any Party may disclose such Confidential Information to its Representatives who need to know such Confidential Information for purposes contemplated by this Agreement or as necessary to carry out the
obligations of such Party hereunder, (iii) not to disclose to any Person that such Confidential Information has been made available to it and (iv) not to disclose to any Person the 

  

 22 

 
existence of this Agreement or any of the terms, conditions, or other facts with respect to this Agreement, without the prior written consent of the other
Parties. Each Party will inform its Representatives of the confidential nature of the Confidential Information and each Party agrees to be responsible for any breach of this Section 9.1 by its respective Representatives (and for such
purposes, Mark Kaoufman and New Management Co shall be considered Representatives of Seller Shareholder). 
 (d) Notwithstanding anything to
the contrary herein or in the Confidentiality Agreement, (x) the term “Other Party Confidential Information” shall not include any information that (i) at the time of disclosure or thereafter is generally available to and
known by the public (other than as a result of a disclosure directly or indirectly by the Party relying on this exception or any of its Representative); (ii) was available to any Party on a non-confidential basis from a source other than any
other Party or its Affiliates or any Representative of the foregoing (acting in its capacity as Representative), provided that such source was not known by the Party relying on this exception to be in breach of any obligation of
confidentiality to any other Party; or (iii) has been independently acquired or developed by any Party without the use of, and is not derived from, any Other Party Confidential Information and (y) the term “Group Confidential
Information” shall not include any information that at the time of disclosure or thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by the Party relying on this
exception or any of its Representatives). 
 Section 9.2 Required Disclosure. 
 (a) Notwithstanding Section 9.1, if any Party or any of its Affiliates or any of their respective Representatives becomes legally compelled
(by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, to the extent allowed by Requirements of Law such Party or Affiliate shall provide the relevant
other Party with prompt prior written notice of such requirement (but in any event within 24 hours) to enable the relevant other Party to seek a protective order or other appropriate remedy or waive compliance with the terms of this
Section 9.2. In the event that such protective order or other remedy is not obtained, or that the relevant other Party waives compliance with the provisions hereof, the Party subject to the legal compulsion agrees to, and to cause their
Affiliates and Representatives to, furnish only that portion of the Other Party Confidential Information which such compelled Party is advised by counsel is legally required and to exercise its best efforts to obtain assurance that confidential
treatment will be accorded such Other Party Confidential Information. 
 (b) Notwithstanding clause (iv) of Section 9.1(c), any
Party may disclose the existence and the terms and conditions of this Agreement, to the extent that such disclosure, on the advice of counsel, is required under applicable Requirements of Law; provided that such Party provide all other
Parties with prior written notice of, and (if reasonably practicable) Purchaser and Mark Kaoufman will consult with each other on the form and content of such disclosure; it being agreed and understood that CEDC shall report the entry into this
Agreement in a Current Report filed on Form 8-K with the SEC and this Agreement shall be filed as an exhibit thereto. 
  

 23 

 ARTICLE X 
 TERM 
 Section 10.1 Effectiveness; Termination. Subject to the Closing, this Agreement shall become
effective on the Closing Date, and unless terminated at an earlier date by the mutual agreement of all Parties (including Persons that become Shareholders hereafter), this Agreement shall continue in full force and effect until the consummation of a
purchase and sale of the Put Shares pursuant to the exercise of the Put Option in accordance with Section 6.1 or of the Call Shares pursuant to the exercise of the Call Option pursuant to Section 6.2. 
 Section 10.2 Partial Termination. Except as expressly set forth herein, no Shareholder (including Persons that become Shareholders hereafter)
shall have any further rights or obligations under this Agreement from the time that such Shareholder and its Affiliates ceases to beneficially own any Shares. 
 Section 10.3 Effect of Termination; Survival. The obligations set forth in (i) this Article X, Article IX (Confidentiality) and Article XI (Miscellaneous) and (ii) Section
6.3, Section 6.4 and Section 7.3 shall survive termination according to their terms. 
 ARTICLE XI

 FINANCING AND DIVIDEND POLICY; 
 COOPERATION; RELATED PARTY TRANSACTIONS 
 Section 11.1 General Assistance. The
Shareholders covenant and agree that each shall make available to the Group its respective general assistance and know-how with respect to the geographical and product markets in which the Group operates the Business so as to further the best
interests of the Group. 
 Section 11.2 Arm’s Length Agreements. The Shareholders covenant and agree that any future
relations between the any member of the Group and any Shareholder or any Affiliate thereof shall be on an arm’s length basis. 
 Section 11.3 License Agreement. After the Closing, the Group shall retain the right to use the Kauffman trademark pursuant to terms and conditions of the Trademark License Agreement to be entered into at the Closing. 

Section 11.4 Dividends. Subject to applicable Requirements of Law, the Shareholders and the Company shall take, or cause to be taken,
all necessary action (including, voting all Shares or executing proxies or written consents, causing the Company to call a meeting of Shareholders, and, to the extent permitted by applicable Requirements of Law, directing the Directors designated by
them to act) to cause: (i) each Subsidiary within the Group to distribute annually to its shareholder(s) at least 90% of its legally distributable profits, (ii) Whitehall to distribute annually to the Company all its legally distributable
profits, and (iii) the Company to distribute annually to the Shareholders all its legally distributable profits. 
 Section 11.5 Future
Funding. 
 (a) Prior to arranging for any equity funding or Third Party debt financing, the Company shall seek debt financing from CEDC
and Purchaser Shareholder under reasonable market terms and at commercially reasonable rates. 
  

 24 

 (b) If the Board and the Shareholders determine that funding for the implementation of decisions of the
Board taken in accordance with Section 3.5 shall be provided by the Shareholders in the form of additional capital contributions, unless the Shareholders agree otherwise, such contributions shall be made by the Shareholders in proportion
to their beneficial ownership of Class B Shares (i.e., 25.00 per cent. by Seller Shareholder and 75.00% per cent. by Purchaser Shareholder, such percentage its “Proportionate Share”). If a Shareholder fails to provide the
Company with its Proportionate Share of such required equity funding, then the other Shareholders shall have the right to provide 100 per cent of the necessary equity funding and the non-participating Shareholder will be diluted accordingly,
based on the initial valuation of the Group set forth in the Share Purchase Agreement. 
 (c) To the extent required under the applicable
terms, the Shareholders agree that any Third Party debt funding shall be guaranteed, severally and not jointly, by the Shareholders pro rata to their Proportionate Share. 
 Section 11.6 Shareholder Loans. 
 (a) Notwithstanding the foregoing, if the Board decides that
the Shareholders shall provide additional capital to the Group in the form of shareholder loans, unless the Shareholders agree otherwise, no Shareholder shall be required to loan the Company more than an amount equal to its Proportionate Share of
the total amount of additional financing required. 
 (b) Unless the Shareholders agree otherwise, any loans to the Company granted from time
to time by either Shareholder shall bear interest at an equal rate for each Shareholder if such loans are otherwise provided on the same terms and conditions; provided, however, that any such loan shall be made at an interest rate that
allows the Company to deduct the interest expense for tax purposes. 
 Section 11.7 Revised Business Plan. The Shareholders undertake that they shall negotiate in good faith to develop a mutually acceptable revised Business Plan no later than the third (3rd) anniversary of the date of this Agreement; provided that, for the avoidance of doubt, in no event shall the adoption of a revised Business Plan adversely affect the
calculation of the Exercise Price to be paid to Seller Shareholder on consummation of the sale and purchase of its Shares in connection with the exercise of the Put Option or Call Option. 
  

 25 

 ARTICLE XII 
 MISCELLANEOUS 
 Section 12.1 Notices. 
 (a) Any notice or other communications required or permitted to be given to any Party under or in connection with this Agreement (each a
“Notice”) shall be in writing in the English language and signed on or on behalf of the Party giving the Notice and marked for the attention of the relevant Party. A Notice may be delivered personally or sent by fax (with telephone
confirmation), pre-paid recorded delivery or pre-paid registered airmail to the address or fax number set out below (or at such other address or facsimile number as the Party shall furnish the other parties by Notice in accordance with this
Section 12.1): 
 If to Seller Shareholder: 
 Barclays Wealth Trustees (Jersey) Limited as Trustee 
 of The First National Trust  
 39-41 Broad Street 
 St Helier 
 Jersey JE4 5PS 
 The Channel Islands 
 Attn: Robert Kerley 
 Facsimile: + 44 1534 873 526 
 Telephone confirmation: + 44 1534 711 146 
 With a copy to: 
 Darrois Villey Maillot Brochier 
 69 avenue Victor Hugo 
 75116 Paris 
 FRANCE 
 Attn:
Alain Maillot / Ben Burman 
 Facsimile: + 33 (0)1 45 02 49 59 
 Telephone confirmation: + 33 (0)1 45 02 19 19 
 If to Purchaser Shareholder: 
 Polmos Bialystok S.A. 
 ul. Elewatorska No. 20 
 15-950 Bialystok 
 Poland 
 Attn: President of the Management Board 
 Facsimile: +48 85 662 7307 
 Telephone confirmation: + 48 85 651 0496 
 With a copy to: 
 Central European Distribution Corporation 
 ul. Bobrowiecka 6 
 00-728 Warszawa 
 Poland 
 Attn: William V. Carey 
 Facsimile: +48 22 455 1810 
 Telephone confirmation: +48 22 488 3400 
  

 26 

 With a copy to: 
 Dewey & LeBoeuf 
 No.1 Minster Court 
 Mincing Lane 
 London EC3R 7YL 
 England 
 Attn: Stephen J. Horvath 
 Facsimile: +44 20 7459 5099 
 Telephone confirmation: +44 20 7459 5000 
 If to the Company: 
 Peulla Enterprises Limited 
 9th Floor 
 Capital Center 
 2-4 Makarios Avenue 
 Nicosia 1065 
 Cyprus 
 Attn: Corporate Secretary 
 With a copy to: 
 Darrois Villey Maillot Brochier 
 69 avenue Victor Hugo 
 75116 Paris 
 FRANCE 
 Attn:
Alain Maillot / Ben Burman 
 Facsimile: + 33 (0)1 45 02 49 59 
 Telephone confirmation: + 33 (0)1 45 02 19 19 
 With a further copy to: 
 Central European Distribution Corporation 
 ul. Bobrowiecka 6 
 00-728 Warszawa 
 Poland 
 Attn: William V. Carey 
 Facsimile: +48 22 455 1810 
 Telephone confirmation: +48 22 488 3400 
  

	 	(b)	A Notice shall be deemed to have been received: 

  

	 	(i)	at the time of delivery if delivered personally; 

  

 27 

	 	(ii)	at the time of transmission (if such transmission is confirmed) if sent by fax; 

  

	 	(iii)	two (2) Business Days after the time and date of mailing if sent by pre-paid inland registered mail; or 

  

	 	(iv)	five (5) Business Days after the time and date of mailing if sent by pre-paid registered airmail; 

 provided that if deemed receipt of any Notice occurs after 6:00 p.m. or is not on a Business Day, deemed receipt of the Notice shall be 9:00 a.m.
on the next Business Day. References to time in this Section 12.1 are to local time in the country of the addressee. 
 Section 12.2
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws
principles of such State. 
 Section 12.3 Dispute Resolution; Consent to Arbitration. 
 (a) If any dispute, controversy or claim arises out of or in connection with this Agreement, including any question regarding its existence, validity,
termination or interpretation or any dispute regarding the validity, amount or liability for a Claim (a “Dispute”) the Parties shall use all commercially reasonable efforts to resolve the matter amicably. If one Party gives the
other notice that a Dispute has arisen and the Parties are unable to resolve the Dispute within thirty (30) days of service of such notice then the Dispute shall be referred to Mark Kaoufman and William V. Carey, or his successor as chief
executive officer of CEDC, who shall attempt to resolve the Dispute. No Party shall resort to arbitration against another under this Agreement until thirty (30) days after such referral. 
 (b) All Disputes, which are unresolved pursuant to Section 12.3(a) and which a Party wishes to have resolved, shall be referred upon the
application of any Party to and finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “Rules”) in force at the date of this Agreement, which Rules are deemed to be incorporated by reference in
this Section 12.3. The number of arbitrators shall be three (3), appointed in accordance with the Rules. The seat of the arbitration shall be Paris, France. The language of this arbitration shall be English. 
 (c) The arbitrators shall have the power to grant any legal or equitable remedy or relief available under law, including but not limited to injunctive
relief, whether interim and/or final, and specific performance, and any measures ordered by the arbitrators may be specifically enforced by any court of competent jurisdiction. Each Party retains the right to seek interim or provisional measures,
including but not limited to injunctive relief and including but not limited to pre-arbitral attachments or injunctions, from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate
or a waiver of the right to arbitrate. 
 (d) The Parties agree that any arbitral proceedings under this Agreement and any arbitral
proceedings under any of the other Transaction Documents (including as amended from time to time) may (to the extent the arbitral tribunal considers appropriate given the 

  

 28 

 
subject matter of the particular dispute) be consolidated or be heard together concurrently before the same arbitral tribunal. The Parties further agree that
any arbitral tribunal constituted under this Agreement shall have the power to order consolidation of proceedings or concurrent hearings. 
 (e) Notwithstanding the agreement to arbitrate set forth in this Section 12.3, the Parties hereby expressly acknowledge and agree that the adjudication of “cause” with respect to the removal of Mark Kaoufman or New
Management Co from the office of CEO shall be determined by a Russian court of competent jurisdiction. 
 (f) Each Party irrevocably consents
to service of process in the manner provided for the giving of notices pursuant to Section 12.1 of this Agreement. Nothing in this Section 12.3 shall affect the right of any Party to serve process in any other manner
permitted by law. 
 Section 12.4 Counterparts. This Agreement may be executed by the Parties in counterparts which may be
delivered by facsimile transmission. Each counterpart when so executed and delivered shall be deemed an original, and all such counterparts taken together shall constitute one and the same instrument. 
 Section 12.5 Entire Agreement. This Agreement, together with the other Transaction Documents, and all annexes, exhibits and schedules hereto
and thereto, constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede in their entirety all prior agreements (written or oral) with respect thereto including the Heads of Terms, dated February 23,
2008. The Parties intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Agreement. 
 Section 12.6 Amendment, Modification and Waiver. No amendment to or modification of this Agreement shall be effective unless it shall be in
writing and signed by each Party. Any failure of a Party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the Party entitled to the benefits thereof only by a written instrument duly
executed and delivered by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance. 
 Section 12.7 Severability. If any term, provision, agreement, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, agreements, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination,
the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby may be consummated as
originally contemplated to the fullest extent possible. 
 Section 12.8 Successors and Assigns; No Third-Party Beneficiaries.
This Agreement and all its provisions shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. Nothing in this Agreement, whether 

  

 29 

 
expressed or implied, will confer on any person, other than the Parties hereto or their respective permitted successors and assigns, any rights, remedies or
obligations. No Party may assign its rights or obligations under this Agreement without the prior written consent of the other Parties hereto (which consent may not be unreasonably withheld) and any purported assignment without such consent shall be
void. 
 Section 12.9 Publicity. Except for any notice which is required by applicable law or regulation or by a Governmental
Authority, Seller Shareholder and Purchaser Shareholder each agree that neither it nor any of its Affiliates will issue a press release or make any other public statement with respect to this Agreement or the other Transaction Documents or the
transactions contemplated hereby or thereby without the prior written consent of the other, which consent will not be unreasonably withheld or delayed. Seller Shareholder and Purchaser Shareholder agree, to the extent possible and legally
permissible, to notify and consult with the other at least twenty-four (24) hours in advance of issuing a press release or making any other public statement. 
 Section 12.10 Expenses. Except as otherwise expressly stated in this Agreement or the other Transaction Documents, any costs, expenses, or charges incurred by any of the Parties in connection with the
negotiation, preparation and performance of this Agreement and the other Transaction Documents shall be borne by the Party incurring such cost, expense or charge whether or not the series of transactions contemplated hereby or thereby shall be
consummated. 
 Section 12.11 Specific Performance. The Parties hereby expressly recognize and acknowledge that immediate,
extensive and irreparable damage would result, no adequate remedy at law would exist and damages would be difficult to determine in the event that any provision of this Agreement is not performed in accordance with its specific terms or otherwise
breached. Therefore, in addition to, and not in limitation of, any other remedy available to the Parties, an aggrieved Party under this Agreement would be entitled to specific performance of the terms hereof and immediate injunctive relief, without
the necessity of proving the inadequacy of money damages as a remedy. Such remedies and any and all other remedies provided for in this Agreement shall, however, be cumulative in nature and not exclusive and shall be in addition to any other
remedies whatsoever which any Party may otherwise have. 
 [The remainder of this page left intentionally blank; signature page follows] 

 

 30 

 IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be duly executed on its behalf as of
the day and year first above written. 
  

			
	 BARCLAYS WEALTH TRUSTEES
 (JERSEY)
LIMITED as Trustee of the
 FIRST NATIONAL TRUST

		
	By:	 	 /s/ Paul Sinel

	Name:	 	Paul Sinel
	Title:	 	Director
	
	POLMOS BIALYSTOK S.A.
		
	By:	 	 /s/ Christopher Biederman

	Name:	 	Christopher Biederman
	Title:	 	Member of the Management Board
		
	By:	 	 /s/ Evangelos Evangelou

	Name:	 	Evangelos Evangelou
	Title:	 	Member of the Management Board
	
	PEULLA ENTERPRISES LIMITED
		
	By:	 	 /s/ Arta Antoniou

	Name:	 	Arta Antoniou
	Title:	 	Director

 Schedule 1 
 Calculation of Exercise Price 
  

	A.	Assumptions 

 The Exercise Price will be calculated based on
the relevant measure of the Company’s financial performance during two separate periods: (A) the period from January 1, 2008 through the end of the year in which the date of exercise of the relevant Exit Option occurs (e.g., if
the Call Option is exercised on June 30, 2013, December 31, 2013) (the “First Period”) and (B) the two full financial years immediately preceding the end of the year in which the date of exercise of the relevant
Exit Option occurs (e.g., if the Call Option is exercised on June 30, 2013, the financial years ending December 31, 2012 and December 31, 2013) (the “Second Period”). 
 The Exercise Price will be calculated on the basis of the Company’s financial performance during these two periods in the following manner: 
  

	 	1.	The First Period 

  

	 	 •
	 	 Xactual represents the average actual annual Reference Operating Profit of the Company and the Group, based on the audited consolidated financial statements of the Company during the First Period;

  

	 	 •
	 	 Xtarget represents the average target annual Reference Operating Profit of the Group set forth in the Exit Price Target Plan for the First Period; 

  

	 	•	 	 The “Reference Operating Profit” during this First Period shall be calculated as the consolidated EBIT for the Group (which, for the avoidance of
doubt, will include the EBIT of the Whitehall Subsidiaries but exclude the EBIT of the Joint Venture) plus 50% of the EBIT of the Joint Venture; 

  

	 	•	 	 The “Exit Price Target Plan” means the target plan agreed between the Parties as of the date hereof. 

  

	 	2.	The Second Period 

  

	 	 •
	 	 Yactual represents the actual aggregate total of Reference Operating Profit of the Company and the Group, based on the audited consolidated financial statements of the Company during the Second Period;

  

	 	 •
	 	 Ytarget represents the target aggregate total of Reference Operating Profit of the Group for the Second Period set forth in the Exit Price Target Plan; 

  

	 	•	 	 The “Reference Operating Profit” during this Second Period shall be calculated as the consolidated EBIT for the Group (which, for the avoidance of
doubt, will include the EBIT of the Whitehall Subsidiaries but exclude the EBIT of the Joint Venture) minus the EBIT attributable to Kauffman Vodka. 

	B.	Formula For Calculating Exercise Price 

 The
“Exercise Price” will be an amount in U.S. dollars calculated according to the following formula: 
 Exercise Price = (K1*0.40 + K2*0.60)*($75 million –NetDebt*0.25) * (1.12)Q – FOREX*(1.12)Q 
 Where: 
 Q represents the number of years (including any fractional year) in the period from the Closing Date through the end of the year in which the date of the exercise of the Exit Option Occurs; 
 NetDebt represents the Consolidated Net Debt of the Group as of the Closing; and 
 FOREX is $11,088,000. 
 It being understood that: 
 If (0.75 * Xtarget) < Xactual < (1.25 * Xtarget) then K1 = (1.6* Xactual / Xtarget) – 0.6 
 If Xactual
 < (0.75 * Xtarget) then K1 = 0.6 
 If Xactual > (1.25 * Xtarget
) then K1 = 1.4 
 If (0.75 * Ytarget) < Yactual < (1.25 * Ytarget) then K2 = (1.6* Yactual / Ytarget) – 0.6 
 If Yactual
 < (0.75 * Ytarget) then K2 = 0.6 
 If Yactual > (1.25 * Ytarget
) then K2 = 1.4 
 provided, however, that, in the event of either of the following there shall be no effective floor to the value of the Exit Price and the lower limit of 0.6 to the
values of K1 and K2 shall not apply: 
  

	 	(1)	As a result of the Investment, Moët Hennessy International exercises a call right over Whitehall’s shares in the Joint Venture under the Joint Venture Agreement within 60
days of the Closing (and prevails in any Legal Dispute (as such term is defined in the Joint Venture Agreement) arising out of the exercise of the call right) with the result that the Joint Venture Agreement is terminated. 

 

	 	(2)	In the event of Mark Kaoufman’s death or permanent disability (as determined by a competent Russian court) Moët Hennessy International exercises a call right over
Whitehall’s shares in the Joint Venture under the Joint Venture Agreement on the grounds that MK Management is no longer under the effective control of Mark Kaoufman with the result that the Joint Venture Agreement is terminated.

 EXHIBIT A 
 Term Sheet for Management Agreement 
  

			
	Parties:	  	 •   New Management Co (“NMC”)
  
 •   OOO Whitehall-Center
(“Whitehall”)

		
	Scope: Powers and Obligations	  	 •   NMC will be delegated the powers granted to the CEO of Whitehall, pursuant to its
articles, applicable Russian Law and the Shareholders Agreement. NMC will exercise those powers on behalf of and to the benefit of the Group as a whole.
  
 •   NMC to exercise all powers of CEO and to cause those management and support services to be provided to
Group, which when taken with other resources available to the Group Companies, are sufficient for Group to satisfy its corporate purposes and achieve its corporate objectives, including the Business Plan.
  
 •   NMC shall act at all times in the
interests of Whitehall and the Group in good faith and shall take all reasonable steps necessary or desirable to achieve the corporate purposes and maximize profits of Group

		
	Fees:	  	 •   As set out and agreed in the Business Plan, the Management Fees to be paid to NMC shall be as
follows:

  

			
	 Period
	  	Amount (RUR million)
	 2008 (June 1 – Dec. 31)
	  	110
	 2009
	  	201
	 2010
	  	215
	 2011
	  	230
	 2012
	  	246
	 2013
	  	264

  

			
		  	  
 •   These
amounts have been taken into account in determining the target EBIT set forth in the Business Plan
  
 •   Management fees shall be paid monthly in arrears, no later than 10 days following each month end on
receipt of invoice
  
 •   Management fees shall be paid in Roubles by wire transfer to NMC account
  
 •   Fees set forth above are ex-VAT. In addition, Whitehall will be invoiced and will pay VAT in accordance
with applicable Russian regulations.

			
	Term:	  	June 1, 2008 to December 31, 2013
		
	Governing Law	  	Russian law
		
	Dispute Resolution	  	Moscow court of arbitration
		
	Other	  	 •   Customary mutual indemnitiesEmployment Agreement between the Bank and Gregory L. Gibson, as amended

 EXHIBIT 10.01 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this 20th day of December, 2007, by and between Gregory L. Gibson (the
“Executive”) and Mountain 1st Bank & Trust Company, a North Carolina-chartered bank (the
“Employer”). 
 WHEREAS, the Executive is the Chief Executive Officer of the
Employer, possessing unique skills, knowledge, and experience relating to the Employer’s business, and the Executive has made and is expected to continue to make major contributions to the profitability, growth, and financial strength of the
Employer and affiliates, 
 WHEREAS, the Employer and the Executive intend that this Agreement supersede
and replace in its entirety the September 24, 2007 Employment Agreement between the Employer and the Executive, and 
 WHEREAS, none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal Deposit Insurance
Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Employer, is contemplated insofar as the Employer or any affiliates are concerned.

 NOW THEREFORE, in consideration of these premises, the mutual covenants contained
herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. 
 ARTICLE 1 
 EMPLOYMENT 
 1.1 Employment. The Employer hereby employs the Executive to serve as Chief Executive Officer according to the terms and conditions of this
Agreement and for the period stated in section 1.4. The Executive hereby accepts employment according to the terms and conditions of this Agreement and for the period stated in section 1.4. 
 1.2 Service on the Board of Directors. If the Executive is serving as a director of the Employer on the date of this Agreement, the Employer shall
nominate the Executive for election as a director at such times as necessary so that the Executive will, if elected by stockholders, remain a director of the Employer throughout the term of this Agreement. The Executive hereby consents to serve as a
director of the Employer and the Executive hereby consents to being named as a director of the Employer in documents filed by the Employer under the Securities Exchange Act of 1934. The Executive shall be deemed to have resigned as a director of the
Employer effective immediately after termination of the Executive’s employment under Article 3 of this Agreement, regardless of whether the Executive submits a formal, written resignation as director. 
 1.3 Duties. As Chief Executive Officer of the Employer, the Executive shall serve under the direction of the Employer’s board of directors
and in accordance with the Employer’s Articles of Incorporation and Bylaws, as each may be amended or restated from time to time. The Executive shall report directly to the board of directors. The Executive shall serve the Employer faithfully,
diligently, competently, and to the best of the Executive’s ability. The Executive shall exclusively devote full time, energy, and attention to the business of the Employer and to the promotion of the Employer’s interests throughout the
term of this Agreement. Without written consent of the Employer’s board of directors, during the term of this Agreement the Executive shall not render services to or for any person, firm, 

 
corporation, or other entity or organization in exchange for compensation, regardless of the form in which such compensation is paid and regardless of
whether it is paid directly or indirectly to the Executive. Nothing in this section 1.3 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the
Executive’s duties and responsibilities under this Agreement. 
 1.4 Term. The initial term of this Agreement shall be for a
period of three years, commencing December 20, 2007. On the first anniversary of the December 20, 2007 effective date of this Agreement and on each anniversary thereafter, this Agreement shall be extended automatically for one
additional year unless the Employer’s board of directors determines that the term shall not be extended. If the board of directors determines not to extend the term, it shall promptly notify the Executive in writing. If the board decides not to
extend the term of this Agreement, this Agreement shall nevertheless remain in force until its term expires. The board’s decision not to extend the term of this Agreement shall not – by itself – give the Executive any rights under
this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4 or 5 of this Agreement. References herein to the term of this Agreement mean the initial
term, as the same may be extended. Unless sooner terminated, the Executive’s employment shall terminate when the Executive attains age 65. 
 ARTICLE 2 
 COMPENSATION 
 2.1 Base Salary. In consideration of the Executive’s performance of the obligations under this Agreement, the Employer shall pay or cause to
be paid to the Executive a salary at the annual rate of not less than $165,000, payable in installments twice monthly. The Executive’s salary shall be reviewed annually by the Corporate Governance Committee of the Employer’s board of
directors or by such other board committee as has jurisdiction over executive compensation. The Executive’s salary shall be increased no more frequently than annually to account for cost of living increases. The Executive’s salary also may
be increased beyond the amount necessary to account for cost of living increases at the discretion of the committee having jurisdiction over executive compensation. However, the Executive’s salary shall not be reduced. The Executive’s
salary, as the same may be increased from time to time, is referred to in this Agreement as the “Base Salary.” 
 2.2 Benefit Plans and Perquisites. The Executive shall be entitled throughout the term of this Agreement to participate in any and all officer or employee compensation, bonus, incentive, and benefit plans in effect from time to time,
including without limitation plans providing pension, medical, dental, disability, and group life benefits, including the Employer’s 401(k) Plan, and to receive any and all other fringe benefits provided from time to time, provided that the
Executive satisfies the eligibility requirements for any such plans or benefits. Without limiting the generality of the foregoing – 
 (a) Participation in stock plans. The Executive shall be eligible to participate in stock option plans and other stock-based compensation, incentive, bonus, or purchase plans existing on the date of this Agreement or adopted during
the term of this Agreement. 
 (b) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all
reasonable business expenses incurred performing the obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Employer
and reasonable expenses for attendance at annual and other periodic meetings of trade associations. 
  

 2 

 (c) Long-term care and disability coverage. If the Executive chooses to obtain long-term care and
disability insurance coverage, the Employer shall reimburse the Executive for the cost of obtaining and thereafter maintaining the long-term care and disability coverage, provided that disability coverage shall be reimbursed solely insofar as
necessary to support disability insurance providing an annual benefit not exceeding 60% of the Executive’s current projected base and bonus salary for the year at the time of termination of employment because of disability, with a minimum
90-day elimination period. 
 2.3 Vacation. The Executive shall be entitled to paid annual vacation and sick leave in accordance with
the policies established from time to time by the Employer. The Executive shall not be entitled to any additional compensation for failure to use allotted vacation or sick leave, nor shall the Executive be entitled to accumulate unused sick leave
from one year to the next unless authorized by the Employer’s board of directors to do so. Vacation days not used in a given year may not be carried over from one calendar year to the next. 
 ARTICLE 3 
 EMPLOYMENT TERMINATION 
 3.1 Termination Because of Death or Disability.
(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies in active service to the Employer, the Executive’s estate shall receive any sums due to the Executive as
Base Salary and reimbursement of expenses through the end of the month in which death occurred, any bonus earned or accrued through the date of death, including any unvested amounts awarded for previous years, and for twelve months after the
Executive’s death the Employer shall provide without cost to the Executive’s family continuing health care coverage under COBRA substantially identical to that provided for the Executive before death. 
 (b) Disability. By delivery of written notice 30 days in advance to the Executive, the Employer may terminate the Executive’s employment if
the Executive is disabled. For purposes of this Agreement the Executive shall be considered “disabled” if an independent physician selected by the Employer and reasonably acceptable to the Executive or the Executive’s
legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of 90 consecutive days. The Executive shall
not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Employer gives notice of termination due to disability. If the Executive’s employment terminates because of disability, the
Executive shall receive the salary earned through the date on which termination became effective, any unpaid bonus or incentive compensation due to the Executive for the calendar year preceding the calendar year in which the termination became
effective, any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, and such other benefits to which the Executive may be entitled under the Employer’s benefit plans,
policies, and agreements, or the provisions of this Agreement. 
 3.2 Involuntary Termination with Cause. The Employer may terminate
the Executive’s employment with Cause. If the Executive’s employment terminates with Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses to which the
Executive is entitled when termination becomes effective. The Executive shall not be deemed to have been terminated with Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of
the board of directors called and held for the purpose, which resolution shall (x) contain findings that, in the good faith opinion of the board, the Executive has committed an act constituting Cause, and (y) specify the
particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if and only if it is adopted by the affirmative vote of at least 75% of the Employer’s directors, excluding the Executive, at a meeting duly

  

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called and held for that purpose. Notice of the meeting and the proposed termination with Cause shall be given to the Executive a reasonable time before the
board’s meeting. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board at the meeting. Nothing in this Agreement limits the
Executive’s or beneficiaries’ right to contest the validity or propriety of the board’s determination of Cause. For purposes of this Agreement “Cause” means any of the following – 
 (a) an intentional act of fraud, embezzlement, or theft by the Executive in the course of employment. For purposes of this Agreement no act or failure to
act on the Executive’s part shall be deemed to have been intentional if it was due primarily to an error in judgment or negligence. An act or failure to act on the Executive’s part shall be considered intentional if it is not in good faith
and if it is without a reasonable belief that the action or failure to act is in the Employer’s best interests, or 
 (b) intentional
material violation of any law or significant policy of the Employer, which in the Employer’s reasonable judgment has an adverse effect on the Employer, or 
 (c) the Executive’s gross negligence or gross neglect of duties in the performance of duties to the Employer, or 
 (d) intentional wrongful damage by the Executive to the Employer’s business or property, including without limitation the Employer’s reputation, which in the Employer’s sole judgment causes material
harm to the Employer, or 
 (e) failure by the Executive to comply with fiduciary duties to the Employer and its stockholders or misconduct
involving dishonesty, in either case whether in the Executive’s capacity as an officer or as a director, or 
 (f) failure of the
Executive to comply with this Agreement, which in the sole judgment of the Employer is a material failure to comply and is not corrected by the Executive within ten days after receiving written notice from the Employer, or 
 (g) removal of the Executive from office or permanent prohibition of the Executive from participating in the Employer’s affairs by an order issued
under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 
 (h) occurrence of any event that
results in the Executive being excluded from coverage, or having coverage limited for the Executive as compared to other executives of the Employer, under the Employer’s blanket bond or other fidelity or insurance policy covering its directors,
officers, or employees, or 
 (i) conviction of the Executive for or plea of no contest to a felony or conviction of or plea of no contest to
a misdemeanor involving moral turpitude, or the actual incarceration of the Executive for 45 consecutive days or more. 
 3.3 Involuntary
Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive 90 days in advance, the Employer may terminate the Executive’s employment without Cause. Termination shall take effect at the end of
the 90-day period. With advance written notice to the Employer as provided in clause (y), the Executive may terminate employment with Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but
with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the
conditions stated in both clauses (x) and (y) are satisfied – 
  

 4 

 (x) a voluntary termination by the Executive shall be considered a voluntary termination with Good
Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent – 
 1) a material diminution of the Executive’s Base Salary, 
 2) a material diminution of the Executive’s authority, duties, or responsibilities, 
 3) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report,

 4) a material diminution in the budget over which the Executive retains authority, 
 5) a material change in the geographic location at which the Executive must perform services for the Employer, or 
 6) any other action or inaction that constitutes a material breach by the Employer of this Agreement. 
 (y) the Executive must give notice to the Employer of the existence of one or more of the conditions described in clause (x) within 90
days after the initial existence of the condition, and the Employer shall have 30 days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in
clause (x) must occur within 24 months after the initial existence of the condition. 
 3.4 Voluntary Termination by the
Executive Without Good Reason. If the Executive terminates employment without Good Reason, the Executive shall receive the Base Salary and expense reimbursement to which the Executive is entitled through the date on which termination becomes
effective. 
 ARTICLE 4 
 SEVERANCE COMPENSATION 
 4.1 Cash Severance after
Termination Without Cause or Termination with Good Reason. (a) Subject to the possibility that cash severance after employment termination might be delayed under section 4.1(b), if the Executive’s employment terminates involuntarily
but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Executive shall for the unexpired term of this Agreement and in accordance with the Employer’s regular pay practices continue to receive the Base
Salary in effect at employment termination. However, the Executive shall not be entitled to continued participation in the Employer’s or a subsidiary’s retirement plan(s) or any stock-based plans. The Employer and the Executive acknowledge
and agree that the compensation and benefits under this section 4.1 shall not be payable if compensation and benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement. 
 (b) If when employment termination occurs the Executive is a specified employee within the meaning of section 409A of the Internal Revenue Code of 1986,
if the cash severance payment under section 4.1(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) is not available, the Executive’s
continued Base Salary under section 4.1(a) for the first six months after employment termination shall be 

  

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paid to the Executive in a single lump sum without interest on the first day of the seventh month after the month in which the Executive’s employment
terminates. References in this Agreement to Internal Revenue Code section 409A include rules, regulations, and guidance of general application issued by the Department of the Treasury under section 409A. 
 4.2 Post-Termination Insurance Coverage. (a) Subject to section 4.2(b), if the Executive’s employment terminates involuntarily but
without Cause, voluntarily but with Good Reason, or because of disability, the Employer shall continue or cause to be continued at the Employer’s expense life and medical insurance benefits in effect during and in accordance with the same
schedule prevailing in the two years preceding the date of the Executive’s termination, and the Employer shall continue to reimburse the Executive under section 2.2(c) for the cost to continue long-term care and disability insurance coverage,
if any, previously obtained by the Executive and for which the Executive shall have been receiving reimbursement under section 2.2(c). The benefits provided by this section 4.2 shall continue until the first to occur of (w) the
Executive’s return to employment with the Employer or another employer, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z) the end of the term remaining under this Agreement
when the Executive’s employment terminates. 
 (b) If (x) under the terms of the applicable policy or policies for the
insurance benefits specified in section 4.2(a) it is not possible to continue the Executive’s coverage, or (y) when employment termination occurs the Executive is a specified employee within the meaning of section 409A of the
Internal Revenue Code of 1986, if any of the benefits specified in section 4.2(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) is not
available for that particular benefit, instead of continued insurance coverage under section 4.2(a) the Employer shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Employer’s projected cost to
maintain that particular benefit had the Executive’s employment not terminated, assuming continued coverage for the lesser of 36 months or the number of months until the Executive attains age 65. The lump-sum payment shall be made 30 days after
employment termination or, if section 4.1(b) applies and a six-month delay is required under Internal Revenue Code section 409A, on the first day of the seventh month after the month in which the Executive’s employment terminates. 

4.3 Additional Severance Benefits. If the Employer terminates the Executive’s employment involuntarily but without Cause or if the
Executive terminates employment voluntarily but with Good Reason before full vesting of stock options then held by the Executive, the Executive shall be entitled to receive from the Employer an amount in cash equal to the intrinsic value of the
unvested stock options as of the effective date of termination. For this purpose intrinsic value means the per share fair market value of Employer common stock minus the option exercise price per share. If the common stock is traded on an exchange
or over the counter, fair market value shall mean the closing price on the trading day immediately before the date of termination. If the common stock is not traded on an exchange or over the counter, the per share fair market value of Employer
common stock shall be determined by the Employer’s board of directors in good faith. Amounts payable under this section 4.3 shall be paid in a single lump sum 30 days after termination of the Executive’s employment or, if section 4.1(b)
applies and a six-month delay is required under Internal Revenue Code section 409A, on the first day of the seventh month after the month in which the Executive’s employment terminates. 
 ARTICLE 5 
 CHANGE IN
CONTROL 
 5.1 Change in Control Benefits. (a) If a Change in Control occurs during the term of
this Agreement, the Employer shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to three times the Executive’s annual compensation. For this purpose annual 

  

 6 

 
compensation means (x) the Executive’s Base Salary when the Change in Control occurs plus (y) any cash bonus or cash incentive
compensation earned for the calendar year ended immediately before the year in which the Change in Control occurs, regardless of when the cash bonus or cash incentive compensation earned for the preceding calendar year is paid and regardless of
whether all or part of the bonus or incentive compensation is subject to elective deferral or vesting. Annual compensation shall be calculated without regard to any deferrals under qualified or nonqualified plans, but annual compensation shall not
include interest or other earnings credited to the Executive under qualified or nonqualified plans or any compensation paid to the Executive in the Executive’s capacity as a director. The amount payable to the Executive hereunder shall not be
reduced to account for the time value of money or discounted to present value. The payment required under this paragraph (a) is payable no later than five business days after the Change in Control occurs. If the Executive receives payment under
section 5.1 the Executive shall not be entitled to any additional severance benefits under section 4.1 of this Agreement. The Executive shall be entitled to benefits under this section 5.1 on no more than one occasion. 
 (b) In addition to the benefits specified in sections 4.2 and 4.3, if the Executive is involuntarily terminated without Cause or if the Executive
voluntary terminates with Good Reason within 24 months after a Change in Control, the Employer shall cause the Executive to become fully vested in any non-qualified plans, programs, or arrangements in which the Executive participated if the plan,
program, or arrangement does not address the effect of a change in control. 
 5.2 Change in Control Defined. For purposes of this
Agreement “Change in Control” means a change in control as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury,
including – 
 (a) Change in ownership: a change in ownership of the Employer occurs on the date any one person or group
accumulates ownership of Employer stock constituting more than 50% of the total fair market value or total voting power of Employer stock, 
 (b) Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Employer stock possessing 30% or more of the total voting power of Employer
stock, or (y) a majority of the Employer’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Employer’s board of directors, or

 (c) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Employer’s
assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Employer assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the
Employer’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of the Employer’s assets, or the value of the assets being disposed of, determined without regard to any
liabilities associated with the assets. 
 A transaction in which a company becomes
the holding company for the Employer shall not be considered a Change in Control for purposes of this Agreement, provided the offer, sale, and issuance of shares of the holding company to Employer stockholders as part of the holding company
reorganization are exempt from registration under the Securities Act of 1933 by section 3(a)(12) of that Act. If a holding company reorganization occurs, references in this section 5.2 to the Employer shall mean the holding company instead, and
after a holding company reorganization a sale of all or substantially all the holding company’s assets includes sale of Mountain 1st
Bank & Trust Company alone. 
 5.3 Gross-Up for Taxes. (a) Additional payment to account for Excise Taxes. If a
Change in Control occurs in 2009 or thereafter, if the Executive receives the lump-sum payment under section 5.1 of 

  

 7 

 
this Agreement and acceleration of benefits under any other benefit, compensation, or incentive plan or arrangement with the Employer (collectively, the
“Total Benefits”), and if any part of the Total Benefits is subject to the Excise Tax under Internal Revenue Code sections 280G and 4999 (the “Excise Tax”), the Employer shall pay to the Executive the
following additional amount, consisting of a percentage of the sum of (x) a payment equal to the Excise Tax payable by the Executive under section 4999 on the Total Benefits (the “Excise Tax Payment”) plus
(y) a payment equal to the amount necessary to provide the Excise Tax Payment net of all income, payroll, and excise taxes. The applicable percentage of the sum of clauses (x) and (y) is referred to in this
Employment Agreement as the “Gross-Up Payment Amount.” The applicable percentage Gross-Up Payment Amount to which the Executive is entitled is 33% for a Change in Control occurring in 2009, 66% for a Change in Control
occurring in 2010, and 100% for a Change in Control occurring in 2011 or thereafter. The Executive shall be entitled to no Gross-Up Payment Amount whatsoever for a Change in Control occurring before 2009. Payment of the Gross-Up Payment Amount shall
be made in addition to the amount set forth in section 5.1. 
 Calculating the Excise Tax. For purposes of determining whether any of
the Total Benefits will be subject to the Excise Tax and for purposes of determining the amount of the Excise Tax, 
  

	 	1)	Determination of “parachute payments” subject to the Excise Tax: any other payments or benefits received or to be received by the Executive in connection with a
Change in Control or the Executive’s employment termination (whether under the terms of this Agreement or any other agreement or any other benefit plan or arrangement with the Employer, any person whose actions result in a Change in Control, or
any person affiliated with the Employer or such person) shall be treated as “parachute payments” within the meaning of Internal Revenue Code section 280G(b)(2), and all “excess parachute payments”
within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of the certified public accounting firm that is retained by the Employer as of the date immediately before the Change in Control (the
“Accounting Firm”) such other payments or benefits do not constitute (in whole or in part) parachute payments, or such excess parachute payments represent (in whole or in part) reasonable compensation for services actually
rendered within the meaning of Internal Revenue Code section 280G(b)(4) in excess of the “base amount” (as defined in Internal Revenue Code section 280G(b)(3)), or are otherwise not subject to the Excise Tax, 

  

	 	2)	Calculation of benefits subject to the Excise Tax: the amount of the Total Benefits that shall be treated as subject to the Excise Tax shall be equal to the lesser of
(x) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of the Accounting Firm are not parachute payments, or (y) the amount of excess parachute payments within the meaning
of section 280G(b)(1) (after applying clause (1), above), and 

  

	 	3)	Value of noncash benefits and deferred payments: the value of any noncash benefits or any deferred payment or benefit shall be determined by the Accounting Firm in accordance
with the principles of Internal Revenue Code sections 280G(d)(3) and (4). 

 Assumed Marginal Income Tax Rate. For
purposes of determining the Gross-Up Payment Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar years in which the Gross-Up Payment Amount is to be made and state
and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the date of termination of employment, net of the reduction in federal income taxes that can be obtained from deduction of
state and local taxes (calculated by assuming that any reduction under Internal Revenue Code section 68 in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of state and local income taxes that would
otherwise be deductible by the Executive, and applicable federal FICA and Medicare withholding taxes). 
  

 8 

 Return of Reduced Excise Tax Payment or Payment of Additional Excise Tax. If the Excise Tax is
later determined to be less than the amount taken into account hereunder when the Executive’s employment terminated, the Executive shall repay to the Employer – when the amount of the reduction in Excise Tax is finally determined –
the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the
Gross-Up Payment Amount being repaid by the Executive to the extent that the repayment results in a reduction in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local income tax deduction). 
 If the Excise Tax is later determined to be more than the amount taken into account hereunder when the Executive’s employment terminated (due, for
example, to a payment whose existence or amount cannot be determined at the time of the Gross-Up Payment Amount), the Employer shall make an additional payment to the Executive for the excess (plus any interest, penalties or additions payable by the
Executive for the excess) when the amount of the excess is finally determined. 
 (b) Responsibilities of the Accounting Firm and the
Employer. Determinations Shall Be Made by the Accounting Firm. Subject to the provisions of section 5.3(a), all determinations required to be made under this section 5.3(b) – including whether and when a Gross-Up Payment Amount is
required, the amount of the Gross-Up Payment Amount and the assumptions to be used to arrive at the determination (collectively, the “Determination”) – shall be made by the Accounting Firm, which shall provide detailed
supporting calculations both to the Employer and the Executive within 15 business days after receipt of notice from the Employer or the Executive that there has been a Gross-Up Payment Amount, or such earlier time as is requested by the Employer.

 Fees and Expenses of the Accounting Firm and Agreement with the Accounting Firm. All fees and expenses of the Accounting Firm shall
be borne solely by the Employer. The Employer shall enter into any agreement requested by the Accounting Firm in connection with the performance of its services hereunder. 
 Accounting Firm’s Opinion. If the Accounting Firm determines that no Excise Tax is payable by the Executive, the Accounting Firm shall
furnish the Executive with a written opinion to that effect and to the effect that failure to report Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar
penalty. 
 Accounting Firm’s Determination Is Binding; Underpayment and Overpayment. The Determination by the Accounting Firm
shall be binding on the Employer and the Executive. Because of the uncertainty when the Determination is made about whether any of the Total Benefits will be subject to the Excise Tax, it is possible that a Gross-Up Payment Amount that should have
been made will not have been made by the Employer (“Underpayment”), or that a Gross-Up Payment Amount will be made that should not have been made by the Employer (“Overpayment”). If after a
Determination by the Accounting Firm the Executive is required to make a payment of additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment. The Underpayment (together with interest at the rate provided in section
1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the Employer to or for the benefit of the Executive. If the Gross-Up Payment Amount exceeds the amount necessary to reimburse the Executive for the Excise Tax according to section
5.3(a), the Accounting Firm shall determine the amount of the Overpayment. The Overpayment (together with interest at the rate provided in section 1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the Executive to or for the
benefit of the Employer. Provided that the Executive’s expenses are reimbursed by the Employer, the Executive shall cooperate with reasonable requests by the Employer in any contests or disputes with the Internal Revenue Service relating to the
Excise Tax. 
  

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 Accounting Firm Conflict of Interest. If the Accounting Firm is serving as accountant or auditor
for the individual, entity, or group effecting the Change in Control, the Executive may appoint another qualified public accounting firm to make the Determinations required hereunder (in which case the term “Accounting Firm” as used in
this Agreement shall be deemed to refer to the accounting firm appointed by the Executive). 
 ARTICLE 6 
 CONFIDENTIALITY AND COVENANT NOT TO COMPETE

 6.1 Confidentiality. (a) Nondisclosure. The Executive covenants not to reveal to any person, firm, or corporation any
confidential information of any nature concerning the Employer or its business or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the Employer’s and its
affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to – 
 1) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or
other financial information, 
 2) the whole or any portion or phase of any research and development information, design
procedures, algorithms or processes, or other technical information, 
 3) the whole or any portion or phase of any marketing
or sales information, sales records, customer lists, prices, sales projections, or other sales information, and 
 4) trade
secrets, as defined from time to time by the laws of the State of North Carolina. 
 However, confidential information excludes information
that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Employer, or
(y) otherwise than by or at the direction of the Executive. This section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of the Executive’s authority. 
 For purposes of this Agreement the
term “affiliate” of the Employer includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Employer. 
 (b) Return of materials. The Executive agrees to deliver or return to the Employer upon termination, upon expiration of this Agreement, or as soon
thereafter as possible, all written information and any other similar items furnished by the Employer or prepared by the Executive in connection with the Executive’s services hereunder. The Executive shall retain no copies thereof after
termination of this Agreement or termination of the Executive’s employment with the Employer. 
 (c) Creative work. The Executive
agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless
of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by 

  

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the Employer. The Executive hereby assigns to the Employer all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or
otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws. 
 6.2 Competition. (a) Covenant not to compete. The Executive shall not – 
 1) own any
interest in, manage, operate, control, be a director of or employed by, render consulting or advisory services to, or participate in or be connected with the management or control of any business that is engaged in the operation of a bank, savings
bank, credit union, mortgage company, savings and loan association or similar financial institution conducting any of its operations within the counties in North Carolina in which the Employer or any affiliate conducts operations or in any county
contiguous to any of the counties in which the Employer had a branch when the Executive’s employment terminated. Ownership by the Executive of a passive investment not exceeding 5.0% of the outstanding capital stock of any such business whose
stock is publicly traded or quoted on the New York Stock Exchange, the American Stock Exchange, Nasdaq, the OTC Bulletin Board, or the “pink sheets” of the National Quotation Bureau shall not be considered to be a violation of the covenant
against competition stated in this section 6.2, or 
 2) influence or attempt to influence any customer of the Employer to
discontinue use of the Employer’s services or divert or attempt to divert the customer’s business to any other person, firm or corporation, or 
 3) interfere with, disrupt, or attempt to disrupt the relationship, contractual or otherwise, between the Employer and any of its customers, suppliers, principals, distributors, lessors, or licensors, or 

4) solicit any officer or employee of the Employer whose base annual salary at the time of the Executive’s employment termination
was $50,000 or more to work for any other person, firm, or corporation. 
 (b) Duration and forfeiture. The covenant against
competition stated in this section 6.2 shall survive until the later of (x) the remaining term of this Agreement and (y) the date when the Executive is no longer receiving severance benefits under Article 4 of this Agreement.
A violation by the Executive of the covenant against competition while receiving severance benefits shall result in forfeiture by the Executive of all remaining severance benefits under Articles 4 and 5 of this Agreement. 
 (c) Tolling period. If the Executive fails to comply with section 6.2 and the Employer seeks to enforce compliance by judicial proceedings, the
time period during which the Executive is prohibited from competing with the Employer shall be extended by the time during which the Executive has actually competed with the Employer or has been in violation of section 6.2 and any period of
litigation required to enforce the Executive’s obligations. 
 (d) Reformation. The Executive and the Employer intend that the
provisions of this section 6.2 be enforced as written. However, if one or more of the provisions is held to be unenforceable because of its duration or scope, the Executive and the Employer agree that the court making that determination shall have
the power to reform the duration or scope of the affected provision, and as reformed the provision shall then be enforceable and shall be binding on the parties. 
 (e) Exceptions. It is expressly agreed that the provisions and covenants in this section 6.2 shall not apply and shall be of no force or effect if the Employer fails to honor its obligations under this
Agreement after termination of the Executive’s employment. The covenant against competition stated in section 6.2 also shall be void after a Change in Control. 
  

 11 

 6.3 Acknowledgments. The Executive hereby acknowledges that the enforcement of Article 6 of this
Agreement is necessary to ensure the preservation, protection, and continuity of the business, trade secrets, and goodwill of the Employer, and that the restrictions set forth in Article 6 are reasonable in terms of time, scope, territory, and in
all other respects. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Employer if the Executive fails to observe the obligations imposed by Article 6. Accordingly, if the Employer institutes an
action to enforce the provisions of Article 6, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Employer and the Executive agrees not to urge in any such action the claim or defense that an adequate
remedy at law exists. 
 6.4 Survival of Obligations. The Executive’s obligations under Article 6 of this Agreement shall survive
employment termination regardless of the manner in which termination occurs and shall be binding upon the Executive’s heirs, executors, and administrators. The existence of any claim or cause of action by the Executive against the Employer
shall not constitute and shall not be asserted as a defense by the Executive to enforcement of Article 6. 
 ARTICLE 7 

 MISCELLANEOUS 
 7.1 Successors and Assigns. (a) This Agreement is binding on successors. This Agreement shall be binding upon the Employer and any successor to the Employer, including any persons acquiring directly
or indirectly all or substantially all of the business or assets of the Employer by purchase, merger, consolidation, reorganization, or otherwise. But this Agreement and the Employer’s obligations under this Agreement are not otherwise
assignable, transferable, or delegable by the Employer. By agreement in form and substance satisfactory to the Executive, the Employer shall require any successor to all or substantially all of the business or assets of the Employer expressly to
assume and agree to perform this Agreement in the same manner and to the same extent the Employer would be required to perform had no succession occurred. 
 (b) This Agreement is enforceable by the Executive’s heirs. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, and legatees. 
 (c) This Agreement is personal in nature and is not assignable. This
Agreement is personal in nature. Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided herein. Without limiting the
generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will
or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this section 7.1, the Employer shall have no liability to pay any amount to the assignee or transferee. 
 7.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the State of North
Carolina, without giving effect to any conflict of laws provision or rule (whether of the State of North Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. By
entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of North Carolina. Any actions or proceedings instituted under this Agreement 

  

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shall be brought and tried solely in courts located in Henderson County, North Carolina or in the federal court having jurisdiction in Hendersonville, North
Carolina. The Executive expressly waives the right to have any such actions or proceedings brought or tried elsewhere. 
 7.3 Entire
Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or
contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void. This Agreement supersedes and replaces in its entirety the September 24, 2007 Employment Agreement between the Employer and the
Executive, and from and after the date of this Agreement the September 24, 2007 Employment Agreement shall be of no further force or effect. 
 7.4 Notices. Any notice under this Agreement shall be deemed to have been effectively made
or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile. Unless otherwise
changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if
addressed to Mountain 1st Bank & Trust Company, 101 Jack Street, Hendersonville, North Carolina 28792, Attention: Corporate Secretary.

 7.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial
precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provision of this Agreement is held by a court of
competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would
result in an injustice. 
 7.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do
not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 7.7 No Duty to Mitigate. The Employer hereby acknowledges that it will be difficult and could be impossible (x) for the
Executive to find reasonably comparable employment after employment termination, and (y) to measure the amount of damages the Executive may suffer as a result of termination. Additionally, the Employer acknowledges that its general
severance pay plans do not provide for mitigation, offset, or reduction of any severance payment received thereunder. The Employer further acknowledges that the payment of severance benefits under this Agreement is reasonable and shall be liquidated
damages. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, the amount of any payment provided for in this Agreement shall not be reduced by any
compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination. 
 7.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified except by an instrument in writing signed by each of the parties hereto. The failure of any
party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each
and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. 
  

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 7.9 Payment of Legal Fees. The Employer is aware that after a Change in Control management could
cause or attempt to cause the Employer to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Employer to institute litigation seeking to have this Agreement declared unenforceable, or
could take or attempt to take other action to deny Executive the benefits intended under this Agreement. In these circumstances the purpose of this Agreement would be frustrated. The Employer desires that the Executive not be required to incur the
expenses associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive
hereunder. The Employer desires that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that
(x) the Employer has failed to comply with any of its obligations under this Agreement, or (y) the Employer or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any
litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, the Employer irrevocably authorizes the Executive from time to time to retain counsel of
the Executive’s choice, at the Employer’s expense as provided in this section 7.9, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director,
officer, stockholder, or other person affiliated with the Employer, in any jurisdiction. Despite any existing or previous attorney-client relationship between the Employer and any counsel chosen by the Executive under this section 7.9, the Employer
irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and
expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by the Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements
prepared by counsel in accordance with counsel’s customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. The Employer’s
obligation to pay the Executive’s legal fees provided by this section 7.9 operates separately from and in addition to any legal fee reimbursement obligation the Employer may have with the Executive under any separate severance or other
agreement. Despite anything in this Agreement to the contrary, however, the Employer shall not be required to pay or reimburse Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C.
1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3]. 
 7.10 Consultation with Counsel and Interpretation
of this Agreement. The Executive has had the assistance of counsel of the Executive’s choosing in the negotiation of this Agreement or the Executive has chosen not to have the assistance of counsel. Both parties hereto having participated
in the negotiation and drafting of this Agreement, they hereby agree that there shall not be strict interpretation against either party in any review of this Agreement in which interpretation of the Agreement is an issue. 
 7.11 Compliance with Internal Revenue Code Section 409A. The Employer and the Executive intend that their exercise of authority or discretion
under this Agreement shall comply with section 409A of the Internal Revenue Code of 1986. If when the Executive’s employment terminates the Executive is a specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and
if any payments under this Agreement, including Articles 4 or 5, will result in additional tax or interest to the Executive because of section 409A, then despite any provision of this Agreement to the contrary the Executive shall not be entitled to
the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the date of the Executive’s death,
or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A. As promptly as possible after the end of the period during which payments 

  

 14 

 
are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum. If any provision of this
Agreement does not satisfy the requirements of section 409A, the provision shall be applied in a manner consistent with those requirements despite any contrary provision of this Agreement. If any provision of this Agreement would subject the
Executive to additional tax or interest under section 409A, the Employer shall reform the provision. However, the Employer shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the
Executive to additional tax or interest, and the Employer shall not be required to incur any additional compensation expense as a result of the reformed provision. References in this Agreement to section 409A of the Internal Revenue Code of 1986
include rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal Revenue Code section 409A. 
 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above. 
  

							
	EXECUTIVE	 		 	MOUNTAIN 1st BANK & TRUST
COMPANY
				
	 /s/ Gregory L. Gibson
	 		 	By:	 	 /s/ John S. Sheiry, Jr.

	Gregory L. Gibson	 		 	Its:	 	Chairman, Governance Committee

  

					
	Henderson County	  	        )	  	
		  	        ) ss:	  	
	State of North Carolina	  	        )	  	

 Before me this 20th day of December, 2007, personally appeared the above named Gregory L. Gibson
and John S. Sheiry, Jr., who acknowledged that they did sign the foregoing instrument and that the same was their free act and deed. 
  

					
		 		 	 /s/ Sherrie B. Rogers

	(Notary Seal)	 		 	Notary Public
		 		 	My Commission Expires: 12/20/09

  

 15

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