Document:

Exhibit 10.1

  

  

  

  

  

  
    EMPLOYMENT AGREEMENT

    This Employment Agreement (the “Agreement”) is entered into as of the 30th day of July, 2020, and made effective as of July 20, 2020 (the “Effective
      Date”), by and between Bancorp 34, Inc. (the “Company”) and James T. Crotty (“Executive”).  Any reference to the “Bank” shall mean Bank 34, the wholly-owned subsidiary of the Company.

    WHEREAS, the Company wishes to assure itself of the continued services of Executive for the period provided in this
      Agreement; and

    WHEREAS, in order to induce Executive to accept employment with the Company and to provide further incentive for
      Executive to achieve the financial and performance objectives of the Company, the parties desire to enter into this Agreement; and

    WHEREAS, the Company desires to set forth the rights and responsibilities of Executive and the compensation payable to
      Executive, as modified from time to time.

    NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions
      hereinafter provided, the parties hereby agree as follows:

    1. POSITION AND RESPONSIBILITIES.

    During the term of this Agreement, Executive agrees to serve initially as the Co-President and Chief Executive Officer of the Company, and agrees to serve
      subsequently as the President and Chief Executive Officer of the Company (the “Executive Position”) and will perform the duties and will have all powers associated with such position as set forth in any job description provided to Executive by the
      Company, and as may be set forth in the bylaws of the Company.  During the period provided in this Agreement, Executive also agrees to serve, if elected, as an officer of any subsidiary or affiliate of the Company and in such capacity carry out such
      duties and responsibilities reasonably appropriate to that office.

    2. TERM AND DUTIES.

    (a) The term of
        this Agreement and the period of Executive’s employment hereunder shall begin as of the Effective Date and shall, initially, continue through the second anniversary of the Effective Date.  Commencing on January 1, 2021 (the “Renewal Date”) and
        continuing on each January 1st thereafter (each a “Renewal Date”), this Agreement shall renew for an additional year such that the remaining term shall be twenty-four (24) months, provided, however, that in order for this Agreement to renew, the
        disinterested members of the Board of Directors of the Company (the “Board”) must take the following actions within the time frames set forth below prior to each Renewal Date:  (i) at least sixty (60) days prior to the Renewal Date, conduct a
        comprehensive performance evaluation and review of Executive for purposes of determining whether to extend this Agreement; and (ii) affirmatively approve the renewal or non-renewal of this Agreement, which such decision shall be included in the
        minutes of the Board’s meeting.  If the decision of such disinterested members of the Board is not to renew this Agreement, then the Board shall provide Executive with a written notice of non-renewal (“Non-Renewal Notice”) at least thirty (30) days
        and not more than sixty (60) days prior to any Renewal Date, such that this Agreement shall terminate at the end of twenty-four (24) months following such Renewal Date.  The failure of the disinterested members of the Board to take the actions set
        forth herein before any Renewal Date will result in the automatic non-renewal of this Agreement, even if the Board fails to affirmatively issue the Non-Renewal Notice to Executive.  If the Board fails to inform Executive of its determination
        regarding the renewal or non-renewal of this Agreement, the Executive may request, in writing, the results of the Board’s action (or non-action) and the Board shall, within thirty (30) days of the receipt of such request, provide a written response
        to Executive.  Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.

    

    

    

    

    

    

    

    

    
      
        

    

    
    (b) Notwithstanding

        the foregoing, in the event that the Company or the Bank has entered into an agreement to effect a transaction which would be considered a Change in Control as defined under Section 5 hereof while the Executive is employed pursuant to this
        Agreement, then the term of this Agreement shall automatically be extended for twenty-four (24) months following the date on which the Change in Control occurs.

    

    

    (c) During the
        period of his employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, Executive will devote all of his business time, attention, skill and efforts to the faithful
        performance of his duties under this Agreement, including activities and duties related to the Executive Position.  Notwithstanding the preceding sentence, subject to the approval of the Board, Executive may
        serve as a member of the board of directors of business, community and charitable organizations, provided that in each case such service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the
        reputation of the Company or any other affiliates of the Company, or present any conflict of interest.

    

    

    (d) Nothing in
        this Agreement shall mandate or prohibit a continuation of Executive’s employment following the expiration of the term of this Agreement.

     

      

    
      
        	
                3.

              	
                COMPENSATION, BENEFITS AND REIMBURSEMENT.

              

      

       

    

    

    (a) Base Salary.  In consideration of Executive’s performance of the responsibilities and duties set forth in this Agreement, the Company will provide Executive the compensation specified in this Agreement. 
        The Company will pay Executive a salary of $260,000.00 per year (“Base Salary”).  Such Base Salary will be payable in accordance with the customary payroll practices
        of the Company.  During the term of this Agreement, the Board may consider increasing, but not decreasing (other than a decrease which is applicable to all senior officers of the Company and in a percentage
        not in excess of the percentage decrease for other senior officers), Executive’s Base Salary as the Board deems appropriate.  Any change in Base Salary will become the “Base Salary” for purposes of this Agreement.

    

    

    (b) Retention Bonus.  Executive shall be entitled to a retention bonus of $200,000.00 payable ratably over a five-year period, on each annual anniversary of the Executive’s employment date.  The net after-tax
        value of these funds is expected to be used to purchase Company common stock, unless the value of Executive’s then investment in Company common stock, excluding Company provided equity benefits, exceeds the cumulative retention bonus paid through
        such anniversary date.

    

    

    

    

    

    

    

    

    
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    (c) Regular Bonuses.  Based upon achievement of the goals and objectives agreed to in the performance development planning process with the Board, Executive may be eligible for a performance or other bonuses,
        in accordance with any plan established for senior officer of the Company or solely for Executive.  Any bonus plan in which Executive shall be entitled to participate, and the formula for determining such bonus, shall be approved by the Board from
        year to year.

    

    

    (d) Company Stock Options.  Upon the successful completion of 90 days of employment, Executive shall receive a grant of 25,000 Company stock options, which will vest in equal annual installments over a
        five-year period on each annual anniversary of the grant date, provided Executive remains in employment of the Bank on such date and subject to such other terms and conditions as may be set forth in a stock option award agreement among the Company
        and Executive.

     

    

    (e) Benefit Plans.  Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of the Company.  Without limiting the generality of
        the foregoing provisions of this Section 3(e), Executive also will be entitled to participate in any employee benefit plans including but not limited to retirement plans, pension plans, profit-sharing plans, health-and-accident plans, or any other
        employee benefit plan or arrangement made available by the Company in the future to management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.  In addition,
        Executive will be entitled to participate in a non-qualified deferred compensation plan which will allow the Executive to defer up to 100% of his Base Salary per year, subject to applicable tax withholding.  Executive will also receive a $600.00
        automobile allowance per month of employment and a $100.00 monthly cell phone allowance.

     

    

    (f) Vacation and Paid Time Off.  Executive will be entitled to paid vacation time each year during the term of this Agreement measured on a calendar year basis, in accordance with the Company’s customary
        practices, as well as sick leave, holidays and other paid absences in accordance with the Company’s policies and procedures for officers.  Executive will be entitled to 25 days of paid time off annually.

    

    

    (g) Expense Reimbursements.  The Company will reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing his obligations
        under this Agreement, including, without limitation, fees for memberships in such organizations as Executive and the Board mutually agree are necessary and appropriate in connection with the performance of his duties under this Agreement, upon
        substantiation of such expenses in accordance with applicable policies and procedures of the Company.  All reimbursements pursuant to this Section 3(g) shall be paid promptly by the Company and in any event no later than thirty (30) days following the date on which the expense
          reimbursement was requested, provided however, that any such expense is reimbursed no later than the last day of the calendar year immediately following the year in which the expense is incurred.

    

    

    

    

    

    

    

    

    
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    (h) To the extent not specifically set forth in this Section 3, any compensation payable or provided under this Section 3 shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is
        no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-1(d).

    
      	
              4.

            	
              TERMINATION AND TERMINATION PAY.  

            

    

    Subject to Section 5 of this Agreement which governs the occurrence of a Change in Control, Executive’s employment under this Agreement may be terminated in the
      following circumstances:

    (a) Death.  Executive’s employment under this Agreement will terminate upon his death during the term of this Agreement, in which event Executive’s estate or beneficiary shall be paid Executive’s
        Base Salary at the rate in effect at the time of Executive’s death for a period of one (1) year following Executive’s death (payable in accordance with the regular payroll practices of the Company).

    (b) Disability.  Termination of Executive’s employment based on “Disability” shall mean termination because of any permanent and totally physical or mental impairment that restricts Executive from
        performing all the essential functions of normal employment.  In the event of Executive’s termination due to Disability, Executive will be entitled to disability benefits, if any, provided under a long term disability plan sponsored by the Company,
        if applicable.

    (c) Termination for Cause.  The Board may immediately terminate his employment at any time for “Cause.”  Executive shall have no right to receive compensation or other benefits for any period after termination
        for Cause, except for already vested benefits.  Termination for “Cause” shall mean termination because of, in the good faith determination of the Board, Executive’s:

    

    
      	

            	  (i) 

            	
              personal dishonesty;

            

      

      

      	

            	  (ii) 

            	
              incompetence;

            

      

      

      	

            	  (iii) 

            	
              willful misconduct;

            

      

      

      	

            	  (iv) 

            	
              breach of fiduciary duty involving personal profit;

            

      

      

      	

            	  (v) 

            	
              intentional failure to perform stated duties;

            

      

      

      	

            	  (vi) 

            	
              willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or

            

      

      

      	

            	  (vii) 

            	
              material breach by Executive of any provision of this Agreement.

            

    

    

    

    

    

    
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    (d) Voluntary Termination by Executive.  In addition to his other rights to terminate his employment under this Agreement, Executive may voluntarily terminate employment during the term of this
        Agreement (other than “With Good Reason” as defined below) upon at least thirty (30) days prior written notice to the Board.  Upon Executive’s voluntary termination, Executive will receive only his earned but unpaid compensation and vested rights
        and benefits as of the date of his termination.

    (e) Termination Without Cause or With Good Reason.

    
      	
              (i)

            	
              The Board may immediately terminate Executive’s employment at any time for a reason other than Cause (a termination “Without Cause”), and Executive may, by written notice
                to the Board, terminate this Agreement at any time within ninety (90) days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”); provided, however, that the Company shall have thirty (30) days
                to cure the “Good Reason” condition, but the Company may waive its right to cure.  Any termination of Executive’s employment, other than Termination for Cause shall have no effect on or prejudice the vested rights of Executive under the
                Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans
                or other employee benefit plans or programs, or compensation plans or programs in which Executive was a participant.

            

    

    
      	
              (ii)

            	
              In the event of termination as described under Section 4(e)(i) and subject to the requirements of Section 4(e)(v), the Company shall pay Executive, or in the event of
                Executive’s subsequent death, Executive’s beneficiary or estate, as the case may be, as severance pay, a cash lump sum payment equal to the Base Salary (at the rate in effect as of his date of termination) that Executive would have earned
                had he remained employed with the Company from his date of termination until, and including, the last day of the remaining term of this Agreement. Such payment shall be made to Executive within ten (10) days following Executive’s date of
                termination, or if later, following the seventh (7th) day after Executive’s execution of the Release required under Section 4(e)(iv) hereof.

            

    

    
      	
              (iii)

            	
               “Good Reason” exists if, without Executive’s express written consent, any of the following occurs:

            

    

    
      	
              (A)

            	
              the failure of the Company to appoint or re-elect Executive to the Executive Position;

            

    

    
      	
              (B)

            	
              a material reduction in Executive’s Base Salary or benefits provided in this Agreement (other than a reduction or elimination of Executive’s benefits under one or more
                benefit plans maintained by the Company as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against Executive (except as such
                discrimination may be necessary to comply with applicable law));

            

       

      

       

      

       

      

       

      

      
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              (C)

            	
              a change in Executive’s Executive Position to be one of lesser authority or a material reduction in Executive’s authority, duties or responsibilities from the position
                and attributes associated with the Executive Position;

            

    

    
      	
              (D)

            	
              a relocation of Executive’s principal place of employment by more than twenty-five (25) miles from Executive’s principal place of employment as of the initial Effective
                Date of this Agreement; or

            

    

    
      	
              (E)

            	
              a material breach of this Agreement by the Company.

            

    

    
      	
              (iv)

            	
              Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4(e) unless and until Executive executes a release of his
                claims (“Release”), satisfactory in form to the Company, against the Company, the Bank and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of
                action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act (“ADEA”), but not including claims for benefits under tax-qualified plans or other benefit
                plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement.  In order to comply with the requirements
                of Code Section 409A and the ADEA, the Release shall be provided to Executive no later than the date of his Separation from Service and Executive shall have no fewer than twenty-one (21) days to consider the Release, and following
                Executive’s execution of the Release, Executive shall have seven (7) days to revoke said Release.

            

    

    

    

      
        	
                5.

                

              	
                CHANGE IN CONTROL.

                 

                

              

      

    

    (a) Change in Control Defined.  For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:

    
      	
              (i)

            	
              Merger:  The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Company or the Bank, and as a
                result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or
                consolidation;

            

    

    
      	
              (ii)

            	
              Acquisition of Significant Share Ownership:  There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule
                13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class
                of the Company’s or the Bank’s voting securities; provided, however, this clause (ii) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company
                directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

            

       

      

       

      

       

      

       

      

      
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              (iii)

            	
              Change in Board Composition:  During any period of two consecutive years, individuals who constitute the Company’s or Bank’s Board of Directors at the beginning of
                the two-year period cease for any reason to constitute at least a majority of the Company’s or Bank’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the board (or first
                nominated by the board for election by the stockholders or corporators) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period or who is appointed to the Board as the result of a
                directive, supervisory agreement or order issued by the primary federal regulator of the Bank or the Company or by the Federal Deposit Insurance Corporation (“FDIC”) shall be deemed to have also been a director at the beginning of such
                period; or

            

    

    
      	
              (iv)

            	
              Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

            

    

    (b) Change in Control Benefits.  Upon the occurrence of Executive’s termination Without Cause or With Good Reason on or after the effective time of a Change in Control, the Company (or any
        successor) shall pay Executive, or in the event of Executive’s subsequent death, Executive’s beneficiary or estate, as severance pay, an amount equal to three (3) times the sum of (i) his highest rate of Base Salary, and (ii) the highest annual
        bonus paid to, or earned by, Executive during the current calendar year of Executive’s date of termination or either of the two (2) calendar years immediately preceding Executive’s date of termination.  Such payment shall be made in a lump sum
        within ten (10) days following Executive’s date of termination.  Notwithstanding the foregoing, the payment provided in this Section 5(b) shall be payable to Executive in lieu of any payment that is payable under Section 4(e).

    (c) Termination within Six Months Prior to Change in Control.  In the event of Executive’s termination of employment under Section 4(e) within six (6) months prior to a Change in Control, Executive
        shall be entitled to the difference, if any, between the benefit received under Section 4(e) and the benefit available to Executive under this Section 5 upon the effective date of the Change in Control.  Such benefit shall be payable in a cash lump
        sum payment to the former Executive within ten (10) days following the effective date of the Change in Control.

    
       

      

       

      

       

      

       

      

      
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              6.

            	
              COVENANTS OF EXECUTIVE.

            

    

    (a) Non-Solicitation/Non-Compete.  Executive hereby covenants and agrees that, for a period of one (1) year following his termination of employment with the Company
        (other than a termination of employment following a Change in Control), Executive shall not, without the written consent of the Company, either directly or indirectly:

    
      	
              (i)

            	
              solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any
                officer or employee of the Company, or any of its respective subsidiaries or affiliates, to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any
                business whatsoever that competes with the business of the Company, or any of their direct or indirect subsidiaries or affiliates, that has headquarters or offices within twenty-five (25) miles of any location(s) in which the Company has
                business operations or has filed an application for regulatory approval to establish an office (the “Restricted Territory”);

            

    

    
      	
              (ii)

            	
              become an officer, employee, consultant, director, independent contractor, agent, joint venturer, partner or trustee of any savings bank, savings and loan association,
                savings and loan holding company, commercial bank, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other entity that competes with the business of the Company or any of their
                direct or indirect subsidiaries or affiliates, that: (i) has a headquarters within the Restricted Territory or (ii) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if
                Executive would be employed, conduct business or have other responsibilities or duties within the Restricted Territory; or

            

    

    
      	
              (iii)

            	
              solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to
                have the effect of causing any customer of the Company to terminate an existing business or commercial relationship with the Company.

            

    

    (b) Non-disparagement.  Executive agrees that, during the term and thereafter, he will not, directly or indirectly, alone or in conjunction with any other party, make statements to customers or suppliers of
        the Company and/or the Bank or to other members of the public that are in any way disparaging or negative towards the Company or the Bank, or the products or services of either, or the Company’s or the Bank’s representatives, directors, or
        employees.  The Company agrees that, during the term and thereafter, the Company will not, directly or indirectly, alone or in conjunction with any other party, make statements to customers or suppliers of the Company and/or the Bank or to other
        members of the public that are in any way disparaging or negative towards the Executive.

     

      

     

      

    
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    (c) Confidentiality.  Executive recognizes and acknowledges that the knowledge of the business activities, plans for business activities, and all other proprietary information of the Company, as it may exist
        from time to time, are valuable, special and unique assets of the Company.  Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities or any other similar
        proprietary information of the Company to any person, firm, corporation, or other entity for any reason or purpose whatsoever unless expressly authorized by the Board or required by law.  Notwithstanding the foregoing, Executive may disclose any
        knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Company.  Further, Executive may disclose information regarding the business
        activities of the Company to any Company regulator having regulatory jurisdiction over the activities of the Company pursuant to a formal regulatory request.  In the event of a breach or threatened breach by Executive of the provisions of this
        Section, the Company will be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Company or any other similar proprietary
        information, or from rendering any services to any person, firm, corporation, or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing herein will be construed as prohibiting the
        Company from pursuing any other remedies available to the Company for such breach or threatened breach, including the recovery of damages from Executive.

    (d) Information/Cooperation.  Executive shall, upon reasonable notice, furnish such information and assistance to the Company as may be reasonably required by the Company, in connection with any litigation in
        which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between Executive and the Company or any other
        subsidiaries or affiliates.

     (e) Reliance.  Except as otherwise provided, all payments and benefits to Executive under this Agreement shall be subject to
        Executive’s compliance with this Section 6, to the extent applicable.  The parties hereto, recognizing that irreparable injury will result to the Company, its business and property in the event of Executive’s breach of this Section 6, agree that,
        in the event of any such breach by Executive, the Company will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive and all persons acting for or with Executive.
        Executive represents and admits that Executive’s experience and capabilities are such that Executive can obtain employment in a business engaged in other lines of business than the Company, and that the enforcement of a remedy by way of injunction
        will not prevent Executive from earning a livelihood.  Nothing herein will be construed as prohibiting the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from
        Executive

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                7.

                

              	
                SOURCE OF PAYMENTS.

              

      

    

     

      

    All payments provided in this Agreement shall be timely paid by check or direct deposit from the general funds of the Company (or any successor of the Company). 
      Notwithstanding any provision in this Agreement to the contrary, there will be no duplication of benefits between this Agreement and any employment agreement to which the Executive may be subject with the Bank.  To the extent payments and benefits,
      as provided for under this Agreement, are paid or received by Executive under an employment agreement in effect between Executive and the Bank, the payments and benefits paid by the Bank will be subtracted from any amount or benefit due
      simultaneously to Executive under similar provisions of this Agreement.

    
       

      

       

      

       

      

       

      

      
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              8.

            	
                   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

            

    

    This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Company or any predecessor
      of the Company and Executive, except that this Agreement shall not affect or operate to reduce the re-location assistance offered under the Offer Letter dated June 3, 2020 between the Bank and the Executive or any benefit or compensation inuring to
      Executive under another plan, program or agreement (other than an employment agreement) between the Company and the Executive.

    
      	
              9.

            	
                 NO ATTACHMENT; BINDING ON SUCCESSORS.

            

    

    (a) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or
        similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

    (b) The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and
        agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place.

    
      10.  MODIFICATION AND WAIVER.

      

      

         

    (a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

    (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or
        estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or
        condition for the future as to any act other than that specifically waived.

    11. 

       REQUIRED PROVISIONS.

    Notwithstanding anything herein contained to the contrary, the following provisions shall apply:

    (a) The Board may terminate Executive’s employment at any time, but any termination by the Company’s Board other than termination for Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive
        shall have no right to receive compensation or other benefits for any period after Executive’s termination for Cause.

     

      

     

      

    
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    (b) Notwithstanding anything else in this Agreement to the contrary (with the exception of Section 4(c)(i)), Executive’s employment shall not be deemed to have been terminated unless and until Executive has a Separation from Service within the
        meaning of Code Section 409A.  For purposes of this Agreement, a “Separation from Service” shall have occurred if the Company and Executive reasonably anticipate that either no further services will be performed by Executive after the date of
        termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the
        termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).   Notwithstanding the foregoing, this Section 11(b) is not applicable in the event
        of the Executive’s termination for Cause.

    (c) Notwithstanding the foregoing, if Executive is a “specified employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the final regulations issued thereunder) and any payment under this
        Agreement is triggered due to Executive’s Separation from Service (other than due to Disability or death), then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6)
        months following Executive’s Separation from Service.  Rather, any payment which would otherwise be paid to Executive during such period shall be accumulated and paid to Executive in a lump sum on the first day of the seventh month following such
        Separation from Service.  All subsequent payments shall be paid in the manner specified in this Agreement.

    12.   SEVERABILITY. 

    If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this
      Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

     13. 

         GOVERNING LAW. 

    This Agreement shall be governed by the laws of State of Arizona, but only to the extent not superseded by federal law.

    14. 

         ARBITRATION. 

    Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil
      litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator mutually acceptable to the Company and Executive, sitting in a location selected by the Company within fifty
      (50) miles from the Bank’s office located in Scottsdale, Arizona, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes then in effect.  Judgment may be entered on the
      arbitrator’s award in any court having jurisdiction.

     

    

     

    

    
      11

      
        

    

    
    
      15. 

           PAYMENT OF LEGAL FEES.

        

    

    To the extent that such payment(s) may be made without triggering penalty under Code Section 409A, all reasonable legal fees paid or incurred by Executive
      pursuant to any dispute relating to this Agreement shall be paid or reimbursed by the Company, provided that the dispute is resolved in Executive’s favor, and such reimbursement shall occur no later than sixty (60) days after the end of the year in
      which the dispute is settled or resolved in Executive’s favor.

    
      16. 

           INDEMNIFICATION. 

        

    

    The Company shall provide Executive (including his heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability
      insurance policy at its expense, and shall indemnify Executive (and his heirs, executors and administrators) for the term of the Agreement and for a period of six (6) years thereafter to the fullest extent permitted under applicable law against all
      expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Company or the Bank or any subsidiary or
      affiliate of the Company or the Bank (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and
      attorneys’ fees and the cost of reasonable settlements (such settlements must be approved by the Board or the board of directors of the Bank, as appropriate); provided, however, neither the Company nor Bank shall be required to indemnify or reimburse
      Executive for legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by Executive.

     17. 

         NOTICE. 

    For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered
      or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

    

    

    	
            To the Company:

          	
            Bancorp 34, Inc.

            500 East 10th Street

            Alamogordo, New Mexico  88310

            Attn: Randal L. Rabon, Director

             

          
	
            To Executive:

          	
            Most recent address on file with the Company

             

          
	 	 

    

    

    

    

    [Signature Page Follows]

     

    

     

    

    
      12

      
        

    

    

    

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

    

    

    

    

    	 	
            BANCORP 34, INC.

          
	 	 
	 	 
	 	
            By:      /s/ Randal L. Rabon

          
	 	
            Name:  Randal L. Rabon

          
	 	
            Title:    Board Chairman

          
	 	 
	 	 
	 	 
	 	 
	 	
            EXECUTIVE

          
	 	 
	 	 
	 	/s/ James T. Crotty 

          
	 	
            James T. Crotty

          

    

    

    

    

  

  13Exhibit 10.2

  

  

  

  
    EMPLOYMENT AGREEMENT 

    This Employment Agreement (the “Agreement”) is entered into as of the 30th day of July, 2020, and made effective as of July 20, 2020 (the “Effective
      Date”), by and between Bank 34 (the “Bank”) and James T. Crotty (“Executive”).  Any reference to the “Company” shall mean Bancorp 34, Inc., the stock holding company of the Bank.

    WHEREAS, the Bank wishes to assure itself of the continued services of Executive for the period provided in this
      Agreement; and

    WHEREAS, in order to induce Executive to accept employment with the Bank and to provide further incentive for Executive
      to achieve the financial and performance objectives of the Bank, the parties desire to enter into this Agreement; and

    WHEREAS, the Bank desires to set forth the rights and responsibilities of Executive and the compensation payable to
      Executive, as modified from time to time.

    NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions
      hereinafter provided, the parties hereby agree as follows:

    1. POSITION AND
        RESPONSIBILITIES.

    

    

    During the term of this Agreement, Executive agrees to serve initially as the Co-President and Chief Executive Officer of the Bank, and agrees to serve
      subsequently as the President and Chief Executive Officer of the Bank (the “Executive Position”) and will perform the duties and will have all powers associated with such position as set forth in any job description provided to Executive by the Bank,
      and as may be set forth in the bylaws of the Bank.  During the period provided in this Agreement, Executive also agrees to serve, if elected, as an officer of any subsidiary or affiliate of the Bank and in such capacity carry out such duties and
      responsibilities reasonably appropriate to that office.

    2. TERM AND DUTIES.

    

    

    (a) The term of
        this Agreement and the period of Executive’s employment hereunder shall begin as of the Effective Date and shall, initially, continue through the second anniversary of the Effective Date.  Commencing on January 1, 2021 (the “Renewal Date”) and
        continuing on each January 1st thereafter (each a “Renewal Date”), this Agreement shall renew for an additional year such that the remaining term shall be twenty-four (24) months, provided, however, that in order for this Agreement to renew, the
        disinterested members of the Board of Directors of the Bank (the “Board”) must take the following actions within the time frames set forth below prior to each Renewal Date:  (i) at least sixty (60) days prior to the Renewal Date, conduct a
        comprehensive performance evaluation and review of Executive for purposes of determining whether to extend this Agreement; and (ii) affirmatively approve the renewal or non-renewal of this Agreement, which such decision shall be included in the
        minutes of the Board’s meeting.  If the decision of such disinterested members of the Board is not to renew this Agreement, then the Board shall provide Executive with a written notice of non-renewal (“Non-Renewal Notice”) at least thirty (30) days
        and not more than sixty (60) days prior to any Renewal Date, such that this Agreement shall terminate at the end of twenty-four (24) months following such Renewal Date.  The failure of the disinterested members of the Board to take the actions set
        forth herein before any Renewal Date will result in the automatic non-renewal of this Agreement, even if the Board fails to affirmatively issue the Non-Renewal Notice to Executive.  If the Board fails to inform Executive of its determination
        regarding the renewal or non-renewal of this Agreement, the Executive may request, in writing, the results of the Board’s action (or non-action) and the Board shall, within thirty (30) days of the receipt of such request, provide a written response
        to Executive.  Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.

     

      

     

      

     

      

    

    

    
      
        

    

    
    (b) Notwithstanding

        the foregoing, in the event that the Bank or the Company has entered into an agreement to effect a transaction which would be considered a Change in Control as defined under Section 5 hereof while the Executive is employed pursuant to this
        Agreement, then the term of this Agreement shall automatically be extended for twenty-four (24) months following the date on which the Change in Control occurs.

    

    

    (c) During the
        period of his employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, Executive will devote all of his business time, attention, skill and efforts to the faithful
        performance of his duties under this Agreement, including activities and duties related to the Executive Position.  Notwithstanding the preceding sentence, subject to the approval of the Board, Executive may
        serve as a member of the board of directors of business, community and charitable organizations, provided that in each case such service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the
        reputation of the Bank or any other affiliates of the Bank, or present any conflict of interest.

    

    

    (d) Nothing in
        this Agreement shall mandate or prohibit a continuation of Executive’s employment following the expiration of the term of this Agreement.

    

    

    3. COMPENSATION, BENEFITS AND
        REIMBURSEMENT.

    

    

    (a) Base Salary.  In consideration of Executive’s performance of the responsibilities and duties set forth in this Agreement, the Bank will provide Executive the compensation specified in this Agreement.  The
        Bank will pay Executive a salary of $260,000.00 per year (“Base Salary”).  Such Base Salary will be payable in accordance with the customary payroll practices of the
        Bank.  During the term of this Agreement, the Board may consider increasing, but not decreasing (other than a decrease which is applicable to all senior officers of the Bank and in a percentage not in excess
        of the percentage decrease for other senior officers), Executive’s Base Salary as the Board deems appropriate.  Any change in Base Salary will become the “Base Salary” for purposes of this Agreement.

    

    

    (b) Retention Bonus.  Executive shall be entitled to a retention bonus of $200,000.00, payable ratably over a five-year period, on each annual anniversary of Executive’s employment date.  The net after-tax
        value of these funds is expected to be used to purchase Company common stock, unless the value of Executive’s then investment in Company common stock, excluding Company provided equity benefits, exceeds the cumulative retention bonus paid through
        such anniversary date.

    

    

    

    

    

    

    

    

    
      2

      
        

    

    (c) Regular Bonuses.  Based upon achievement of the goals and objectives agreed to in the performance development planning process with the Board, Executive may be eligible for a performance or other bonuses,
        in accordance with any plan established for senior officer of the Bank or solely for Executive.  Any bonus plan in which Executive shall be entitled to participate, and the formula for determining such bonus, shall be approved by the Board from
        year to year.

     

    

    (d) Company Stock Options.  Upon the successful completion of 90 days of employment, Executive shall receive a grant of 25,000 Company stock options, which will vest in equal annual installments over a
        five-year period on each annual anniversary of the grant date, provided Executive remains in employment of the Bank on such date and subject to such other terms and conditions as may be set forth in a stock option award agreement among the Company
        and Executive.

    

    

    (e) Benefit Plans.  Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of the Bank.  Without limiting the generality of the
        foregoing provisions of this Section 3(e), Executive also will be entitled to participate in any employee benefit plans including but not limited to retirement plans, pension plans, profit-sharing plans, health-and-accident plans, or any other
        employee benefit plan or arrangement made available by the Bank in the future to management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.  In addition,
        Executive will be entitled to participate in a non-qualified deferred compensation plan which will allow the Executive to defer up to 100% of his Base Salary per year, subject to applicable tax withholding.  Executive will also receive a $600.00
        automobile allowance per month of employment and a $100.00 monthly cell phone allowance.

     

    

    (f) Vacation and Paid Time Off.  Executive will be entitled to paid vacation time each year during the term of this Agreement measured on a calendar year basis, in accordance with the Bank’s customary
        practices, as well as sick leave, holidays and other paid absences in accordance with the Bank’s policies and procedures for officers.  Executive will be entitled to accrue 25 days of paid time off annually.

    

    

    (g) Expense Reimbursements.  The Bank will reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing his obligations under
        this Agreement, including, without limitation, fees for memberships in such organizations as Executive and the Board mutually agree are necessary and appropriate in connection with the performance of his duties under this Agreement, upon
        substantiation of such expenses in accordance with applicable policies and procedures of the Bank.  All reimbursements pursuant to this Section 3(g) shall be paid promptly by the Bank and in any event no later than thirty (30) days following the
        date on which the expense was requested, provided however, that any such expense is reimbursed no later than the last day of the calendar year immediately following the year in which the expense is incurred.

    

    

    

    

    

    

    

    

    
      3

      
        

    

    (h) To the extent not specifically set forth in this Section 3, any compensation payable or provided under this Section 3 shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is
        no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-1(d).

    4. TERMINATION
          AND TERMINATION PAY.  

    

    

    Subject to Section 5 of this Agreement which governs the occurrence of a Change in Control, Executive’s employment under this Agreement may be terminated in the
      following circumstances:

    (a) Death.  Executive’s employment under this Agreement will terminate upon his death during the term of this Agreement, in which event Executive’s estate or beneficiary shall be paid Executive’s
        Base Salary at the rate in effect at the time of Executive’s death for a period of one (1) year following Executive’s death (payable in accordance with the regular payroll practices of the Bank).  

    (b) Disability.  Termination of Executive’s employment based on “Disability” shall mean termination because of any permanent and total physical or mental impairment that restricts Executive from
        performing all the essential functions of normal employment.  In the event of Executive’s termination due to Disability, Executive will be entitled to disability benefits, if any, provided under a long term disability plan sponsored by the Bank, if
        applicable.

    (c) Termination for Cause.  The Board may immediately terminate his employment at any time for “Cause.”  Executive shall have no right to receive compensation or other benefits for any period after termination
        for Cause, except for already vested benefits.  Termination for “Cause” shall mean termination because of, in the good faith determination of the Board, Executive’s:

    

    

    	

          	  (i) 

          	
            personal dishonesty;

          

    

    

    	

          	  (ii) 

          	
            incompetence;

          

    

    

    	

          	  (iii) 

          	
            willful misconduct;

          

    

    

    	

          	  (iv) 

          	
            breach of fiduciary duty involving personal profit;

          

    

    

    	

          	  (v) 

          	
            intentional failure to perform stated duties;

          

    

    

    	

          	  (vi) 

          	
            willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order: or

          

    

    

    	

          	  (vii)  

          	
            material breach by Executive of any provision of this Agreement.

          

    

    

    (d) Voluntary Termination by Executive.  In addition to his other rights to terminate his employment under this Agreement, Executive may voluntarily terminate employment during the term of this
        Agreement (other than “With Good Reason” as defined below) upon at least thirty (30) days prior written notice to the Board.  Upon Executive’s voluntary termination, Executive will receive only his earned but unpaid compensation and vested rights
        and benefits as of the date of his termination.

     

      

     

      

     

      

    
      4

      
        

    

    (e) Termination Without Cause or With Good Reason.

    
      	
              (i)

            	
              The Board may immediately terminate Executive’s employment at any time for a reason other than Cause (a termination “Without Cause”), and Executive may, by written notice
                to the Board, terminate this Agreement at any time within ninety (90) days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”); provided, however, that the Bank shall have thirty (30) days to
                cure the “Good Reason” condition, but the Bank may waive its right to cure.  Any termination of Executive’s employment, other than Termination for Cause shall have no effect on or prejudice the vested rights of Executive under the Bank’s
                qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or other
                employee benefit plans or programs, or compensation plans or programs in which Executive was a participant.

            

    

    
      	
              (ii)

            	
              In the event of termination as described under Section 4(e)(i) and subject to the requirements of Section 4(e)(iv), the Bank shall pay Executive, or in the event of
                Executive’s subsequent death, Executive’s beneficiary or estate, as the case may be, as severance pay, a cash lump sum payment equal to the Base Salary (at the rate in effect as of his date of termination) that Executive would have earned
                had he  remained employed with the Bank from his date of termination until, and including, the last day of the remaining term of this Agreement. Such payment shall be made to Executive within ten (10) days following Executive’s date of
                termination, or if later, following the seventh (7th) day after Executive’s execution of the Release required under Section 4(e)(iv) hereof.

            

    

    
      	
              (iii)

            	
               “Good Reason” exists if, without Executive’s express written consent, any of the following occurs:

            

    

    
      	
              (A)

            	
              the failure of the Bank to appoint or re-elect Executive to the Executive Position;

            

    

    
      	
              (B)

            	
              a material reduction in Executive’s Base Salary or benefits provided in this Agreement (other than a reduction or elimination of Executive’s benefits under one or more
                benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against Executive (except as such discrimination
                may be necessary to comply with applicable law));

            

       

      

       

      

       

      

      
        5

        
          

      

    

    
      	
              (C)

            	
              a change in Executive’s Executive Position to be one of lesser authority or a material reduction in Executive’s authority, duties or responsibilities from the position
                and attributes associated with the Executive Position;

            

    

    
      	
              (D)

            	
               a relocation of Executive’s principal place of employment by more than twenty-five (25) miles from Executive’s principal place of employment as of the initial Effective
                Date of this Agreement; or

            

    

    
      	
              (E)

            	
              a material breach of this Agreement by the Bank.

            

    

    
      	
              (iv)

            	
              Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4(e) unless and until Executive executes a release of his
                claims (“Release”), satisfactory in form to the Bank and the Company,  against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands,
                causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act (“ADEA”), but not including claims for benefits under tax-qualified plans or other
                benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement.  In order to comply with the
                requirements of Code Section 409A and the ADEA, the Release shall be provided to Executive no later than the date of his Separation from Service and Executive shall have no fewer than twenty-one (21) days to consider the Release, and
                following Executive’s execution of the Release, Executive shall have seven (7) days to revoke said Release.

            

    

    5. CHANGE IN CONTROL.

    

    

    (a) Change in Control Defined.  For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:

    
      	
              (i)

            	
              Merger:  The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Bank or the Company, and as a
                result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or
                consolidation;

            

    

    
      	
              (ii)

            	
              Acquisition of Significant Share Ownership:  There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule
                13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class
                of the Company’s or the Bank’s voting securities; provided, however, this clause (ii) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company
                directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

            

       

      

       

      

       

      

       

      

       

      

      
        6

        
          

      

    

    
      	
              (iii)

            	
              Change in Board Composition:  During any period of two consecutive years, individuals who constitute the Company’s or the Bank’s Board of Directors at the
                beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s or the Bank’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the
                board (or first nominated by the board for election by the stockholders or corporators) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period or who is appointed to the Board as
                the result of a directive, supervisory agreement or order issued by the primary federal regulator of the Company or the Bank or by the Federal Deposit Insurance Corporation (“FDIC”) shall be deemed to have also been a director at the
                beginning of such period; or

            

    

    
      	
              (iv)

            	
              Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

            

    

    (b) Change in Control Benefits.  Upon the occurrence of Executive’s termination Without Cause or With Good Reason on or after the effective time of a Change in Control, the Bank (or any successor)
        shall pay Executive, or in the event of Executive’s subsequent death, Executive’s beneficiary or estate, as severance pay, an amount equal to three (3) times the sum of (i) his highest rate of Base Salary, and (ii) the highest annual bonus paid to,
        or earned by, Executive during the current calendar year of Executive’s date of termination or either of the two (2) calendar years immediately preceding Executive’s date of termination.  Such payment shall be made in a lump sum within ten (10)
        days following Executive’s date of termination.  Notwithstanding the foregoing, the payment provided in this Section 5(b) shall be payable to Executive in lieu of any payment that is payable under Section 4(e).

    (c) Termination within Six Months Prior to Change in Control.  In the event of Executive’s termination of employment under Section 4(e) within six (6) months prior to a Change in Control, Executive
        shall be entitled to the difference, if any, between the benefit received under Section 4(e) and the benefit available to Executive under this Section 5 upon the effective date of the Change in Control.  Such benefit shall be payable in a cash lump
        sum payment to the former Executive within ten (10) days following the effective date of the Change in Control.

    (d) 280G Cutback.  Notwithstanding anything in this Agreement to the contrary, in no event shall the aggregate payments or benefits to be made or afforded to
        Executive under this Agreement, either as a stand-alone benefit or when aggregated with other payments to, or for the benefit of, Executive (collectively referred to as the “Change in Control Benefits”) that are contingent on a change in control
        (as defined under Code Section 280G), constitute an “excess parachute payment” under Code Section 280G or any successor thereto, and in order to avoid such a result, Executive’s benefits payable under this Agreement shall be reduced by the minimum
        amount necessary so that the Change in Control Benefits that are payable to Executive are not subject to penalties under Code Sections 280G and 4999.

     

      

     

      

    
      7

      
        

    

    6. COVENANTS OF EXECUTIVE.

    

    

    (a) Non-Solicitation/Non-Compete.  Executive hereby covenants and agrees that, for a period of one (1) year following his termination of employment with the Bank (other
        than a termination of employment following a Change in Control), Executive shall not, without the written consent of the Bank, either directly or indirectly:

    
      	
              (i)

            	
              solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any
                officer or employee of the Bank, or any of its respective subsidiaries or affiliates, to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any
                business whatsoever that competes with the business of the Bank, or any of their direct or indirect subsidiaries or affiliates, that has headquarters or offices within twenty-five (25) miles of any location(s) in which the Bank has business
                operations or has filed an application for regulatory approval to establish an office (the “Restricted Territory”);

            

    

    
      	
              (ii)

            	
              become an officer, employee, consultant, director, independent contractor, agent, joint venturer, partner or trustee of any savings bank, savings and loan association,
                savings and loan holding company, commercial bank, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other entity that competes with the business of the Bank or any of their direct
                or indirect subsidiaries or affiliates, that: (i) has a headquarters within the Restricted Territory or (ii) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if Executive would
                be employed, conduct business or have other responsibilities or duties within the Restricted Territory; or

            

    

    
      	
              (iii)

            	
              solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to
                have the effect of causing any customer of the Bank to terminate an existing business or commercial relationship with the Bank.

            

    

    (b) Non-disparagement.  Executive agrees that, during the term and thereafter, he  will not, directly or indirectly, alone or in conjunction with any other party, make statements to customers or suppliers of
        the Company and/or the Bank or to other members of the public that are in any way disparaging or negative towards the Company or the Bank, or the products or services of either, or the Company’s or the Bank’s representatives, directors, or
        employees.  The Bank agrees that, during the term and thereafter, the Bank will not, directly or indirectly, alone or in conjunction with any other party, make statements to customers or suppliers of the Company and/or the Bank or to other members
        of the public that are in any way disparaging or negative towards the Executive.

     

      

     

      

     

      

    
      8

      
        

    

    (c) Confidentiality.  Executive recognizes and acknowledges that the knowledge of the business activities, plans for business activities, and all other proprietary information of the Bank, as it may exist from
        time to time, are valuable, special and unique assets of the Bank.  Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities or any other similar
        proprietary information of the Bank to any person, firm, corporation, or other entity for any reason or purpose whatsoever unless expressly authorized by the Board or required by law.  Notwithstanding the foregoing, Executive may disclose any
        knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Bank.  Further, Executive may disclose information regarding the business
        activities of the Bank to any bank regulator having regulatory jurisdiction over the activities of the Bank pursuant to a formal regulatory request.  In the event of a breach or threatened breach by Executive of the provisions of this Section, the
        Bank will be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Bank or any other similar proprietary information, or from
        rendering any services to any person, firm, corporation, or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing herein will be construed as prohibiting the Bank from pursuing any
        other remedies available to the Bank for such breach or threatened breach, including the recovery of damages from Executive.

    (d) Information/Cooperation.  Executive shall, upon reasonable notice, furnish such information and assistance to the Bank as may be reasonably required by the Bank, in connection with any litigation in which
        it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between Executive and the Bank or any other
        subsidiaries or affiliates.

    (e) Reliance.  Except as otherwise provided, all payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 6, to the extent applicable.  The parties
        hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of Executive’s breach of this Section 6, agree that, in the event of any such breach by Executive, the Bank will be entitled, in addition to
        any other remedies and damages available, to an injunction to restrain the violation hereof by Executive and all persons acting for or with Executive. Executive represents and admits that Executive’s experience and capabilities are such that
        Executive can obtain employment in a business engaged in other lines of business than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.  Nothing herein will be construed as
        prohibiting the Bank from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from Executive.

     

      

     

      

    
      9

      
        

    

    7. SOURCE OF PAYMENTS.

    

    

    All payments provided in this Agreement shall be timely paid by check or direct deposit from the general funds of the Bank (or any successor of the Bank).

    8. EFFECT ON PRIOR AGREEMENTS
        AND EXISTING BENEFITS PLANS.

    

    

    This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Bank or any predecessor of
      the Bank and Executive, except that this Agreement shall not affect or operate to reduce the re-location assistance offered under the Offer Letter dated June 3, 2020 between the Bank and the Executive or any benefit or compensation inuring to
      Executive under another plan, program or agreement (other than an employment agreement) between the Bank and the Executive.

    9. NO ATTACHMENT; BINDING ON
        SUCCESSORS.

    

    

    (a) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or
        similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

    (b) The Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree
        to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.

    10. MODIFICATION AND WAIVER.

    

    

    (a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

    (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or
        estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or
        condition for the future as to any act other than that specifically waived.

    11. REQUIRED PROVISIONS.

    

    

    Notwithstanding anything herein contained to the contrary, the following provisions shall apply:

    (a) The Board may terminate Executive’s employment at any time, but any termination by the Bank’s Board other than termination for Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive
        shall have no right to receive compensation or other benefits for any period after Executive’s termination for Cause.

     

      

     

      

    
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    (b) If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) [12 U.S.C. §1818(e)(3)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the Federal
        Deposit Insurance Act (the “FDI Act”), the Bank’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion:
        (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

    (c) If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 U.S.C. §1818(e)(4)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the FDI Act, all obligations
        of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

    (d) If the Bank is in default as defined in Section 3(x)(1) [12 U.S.C. §1813(x)(1)] of the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights
        of the contracting parties.

    (e) All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank, (i) by the Comptroller of the Office of the Comptroller of
        the Currency or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) [12 U.S.C. §1823(c)] of the FDI Act; or (ii) by the Comptroller or
        his or her designee at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Comptroller to be in an unsafe or unsound condition.  Any
        rights of the parties that have already vested, however, shall not be affected by such action.

    (f) Notwithstanding anything else in this Agreement to the contrary (with the exception of Section 4(c)(i)), Executive’s employment shall not be deemed to have been terminated unless and until Executive has a Separation from Service within the
        meaning of Code Section 409A.  For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by Executive after the date of
        termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the
        termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).

    (g) Notwithstanding the foregoing, if Executive is a “specified employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the final regulations issued thereunder) and any payment under this
        Agreement is triggered due to Executive’s Separation from Service (other than due to Disability or death), then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6)
        months following Executive’s Separation from Service.  Rather, any payment which would otherwise be paid to Executive during such period shall be accumulated and paid to Executive in a lump sum on the first day of the seventh month following such
        Separation from Service.  All subsequent payments shall be paid in the manner specified in this Agreement.

     

      

     

      

     

      

    
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    12. SEVERABILITY.

    

    

    If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this
      Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

    13. GOVERNING LAW.

    

    

    This Agreement shall be governed by the laws of State of Arizona, but only to the extent not superseded by federal law.

    14. ARBITRATION.

    

    

    Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil
      litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator mutually acceptable to the Bank and Executive, sitting in a location selected by the Bank within fifty (50)
      miles from the Bank’s office located in Scottsdale, Arizona, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes then in effect.  Judgment may be entered on the arbitrator’s
      award in any court having jurisdiction.

    15. PAYMENT OF LEGAL FEES.

    

    

    To the extent that such payment(s) may be made without triggering penalty under Code Section 409A, all reasonable legal fees paid or incurred by Executive
      pursuant to any dispute relating to this Agreement shall be paid or reimbursed by the Bank, provided that the dispute is resolved in Executive’s favor, and such reimbursement shall occur no later than sixty (60) days after the end of the year in
      which the dispute is settled or resolved in Executive’s favor.

    16. INDEMNIFICATION.

    

    

    The Bank shall provide Executive (including his heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance
      policy at its expense, and shall indemnify Executive (and his heirs, executors and administrators) for the term of the Agreement and for a period of six (6) years thereafter to the fullest extent permitted under applicable law against all expenses
      and liabilities reasonably incurred by him  in connection with or arising out of any action, suit or proceeding in which he  may be involved by reason of his having been a director or officer of the Bank or the Company or any subsidiary or affiliate
      of the Bank or the Company (whether or not he  continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys’ fees
      and the cost of reasonable settlements (such settlements must be approved by the Board or the board of directors of the Company, as appropriate); provided, however, neither the Bank nor Company shall be required to indemnify or reimburse Executive
      for legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by Executive.

     

    

     

    

    
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    17. NOTICE.  

    

    

    For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered
      or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

    

    

    
      	
              To the Bank:

            	
              Bank 34.

              500 East 10th Street

              

              Alamogordo, New Mexico  88310

              Attn: Randal L. Rabon, Director

               

               

            
	
              To Executive:

            	
              Most recent address on file with the Bank

            
	 	 

    

    

    

    

    

    [Signature Page Follows]

    

    

    

    

    

    

    

      

    

    
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    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

    

    

    	 	
            BANK 34

          
	 	 
	 	 
	 	
            By:     /s/ Randal L. Rabon 

          
	 	
            Name:           Randal L. Rabon

          
	 	
            Title:               Board Chairman

          
	 	 
	 	 
	 	 
	 	 
	 	
            EXECUTIVE

          
	 	 
	 	 
	 	
            /s/ James T. Crotty

          
	 	
             James T. Crotty

          

    

    

    

    

  

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