Document:

Indemnification Agreement

 Exhibit 10.2 
 INDEMNIFICATION AGREEMENT 
 This Indemnification Agreement made this 29th day of January, 2009, between 1st Financial Services Corporation, a
North Carolina corporation (the “Corporation”) and Roger A. Mobley, a director, officer, employee, agent, or representative (as hereinafter defined) of the Corporation (the “Indemnitee”). 
 WHEREAS, the Corporation and the Indemnitee are each aware of the exposure to litigation of officers, directors,
employees, agents, and representatives of the Corporation as such persons exercise their duties to the Corporation, 
 WHEREAS, the Corporation and the Indemnitee are also aware of conditions in the insurance industry that have affected and may continue to affect the Corporation’s ability to obtain appropriate
liability insurance on an economically acceptable basis, 
 WHEREAS, the Corporation desires to continue
to benefit from the services of highly qualified, experienced, and otherwise competent persons such as the Indemnitee, and 
 WHEREAS, the Indemnitee desires to serve or to continue to serve the Corporation as a director, officer, employee, or agent or as a director, officer, employee, agent, or trustee of another corporation,
joint venture, trust, or other enterprise in which the Corporation has a direct or indirect ownership interest, for so long as the Corporation continues to provide, on an acceptable basis, adequate and reliable indemnification against certain
liabilities and expenses that may be incurred by the Indemnitee. 
 NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. 
 1. Indemnification. Subject to the exclusions contained in section 9 of this Agreement, the Corporation shall indemnify the Indemnitee with
respect to his or her activities as a director, officer, employee, or agent of the Corporation and/or as a person who is serving or has served at the request of the Corporation (“representative”) as a director, officer, employee, agent, or
trustee of another corporation, joint venture, trust, or other enterprise, domestic or foreign, in which the Corporation has a direct or indirect ownership interest (an “affiliated entity”) against expenses (including, without limitation,
attorneys’ and experts’ fees, judgments, fines, and amounts paid or payable in settlement) actually and reasonably incurred (“Expenses”) in connection with any claim against Indemnitee that is the subject of any threatened,
pending, or completed action, suit, or other type of proceeding, whether civil, criminal, administrative, investigative, or otherwise and whether formal or informal (a “Proceeding”), to which Indemnitee was, is, or is threatened to be made
a party by reason of facts which include Indemnitee’s being or having been such a director, officer, employee, agent, or representative, to the extent of the highest and most advantageous to the Indemnitee, as determined by the Indemnitee, of
one or any combination of the following – 
  

	 	(a)	The benefits provided by the Corporation’s Articles of Incorporation (“Articles”) or Bylaws, or the Articles of Incorporation or Bylaws of an affiliated entity of
which the Indemnitee serves as a representative, in each case as in effect on the date hereof, 

  

	 	(b)	The benefits provided by the Corporation’s Articles or Bylaws, or the Articles of Incorporation or Bylaws of an affiliated entity of which the Indemnitee serves as a
representative, in each case as in effect at the time Expenses are incurred by the Indemnitee, 

  

	 	(c)	The benefits allowable under North Carolina law in effect at the date hereof or as amended to increase the scope of indemnification, 

  

	 	(d)	The benefits allowable under the law of the jurisdiction under which the Corporation exists at the time Expenses are incurred by the Indemnitee, 

  

	 	(e)	The benefits available under any liability insurance obtained by the Corporation in effect when a claim is made against Indemnitee, 

	 	(f)	The benefits available under any liability insurance obtained by the Corporation in effect at the time Expenses are incurred by the Indemnitee, and 

  

	 	(g)	Such other benefits as are or may be otherwise available to Indemnitee. 

 Combination of two or more of the benefits provided by (a) through (g) shall be available to the extent that the Applicable Document (as hereafter defined) does not require that the benefits provided therein
be exclusive of other benefits. The document or law providing for the benefits listed in items (a) through (g) above is called the “Applicable Document” in this Agreement. The Corporation hereby undertakes to use its best efforts
to assist Indemnitee, in all proper and legal ways, to obtain the benefits selected by Indemnitee under item (a) through (g) above. 
 For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans for employees of the Corporation or of any affiliated entity, without regard to ownership of such plans; references to
“fines” shall include any excise taxes assessed on the Indemnitee with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee, or
agent of the Corporation which imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit plan, its participants, or beneficiaries; references to the masculine shall include the feminine; references to the
singular shall include the plural and vice versa; and if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, he or she
shall be deemed to have acted in a manner consistent with the standards required for indemnification by the Corporation under the Applicable Documents. 
 2. Insurance. The Corporation shall maintain liability insurance for so long as Indemnitee’s services are covered hereunder, provided and to the extent that such insurance is available on a basis
acceptable to the Corporation. However, the Corporation agrees that the provisions hereof shall remain in effect regardless of whether liability or other insurance coverage is at any time obtained or retained by the Corporation. But payments made to
Indemnitee under an insurance policy obtained or retained by the Corporation shall reduce the obligation of the Corporation to make payments hereunder by the amount of the payments made under any such insurance policy. 
 3. Payment of Expenses. At Indemnitee’s request, after receipt of written notice under section 5 hereof and an undertaking in the form
of Exhibit A attached hereto by or on behalf of Indemnitee to repay such amounts so paid on Indemnitee’s behalf if it shall ultimately be determined under the Applicable Document that Indemnitee is not entitled to be indemnified by the
Corporation for such Expenses, the Corporation shall pay the Expenses as and when incurred by Indemnitee. That portion of Expenses representing attorneys’ fees and other costs incurred in defending any proceeding shall be paid by the
Corporation within 30 days after the Corporation receives the request and reasonable documentation evidencing the amount and nature of the Expenses, subject to its also having received such a notice and undertaking. 
 4. Additional Rights. The indemnification provided in this Agreement shall not be exclusive of any other indemnification or right to which
Indemnitee may be entitled and shall continue after Indemnitee has ceased to occupy a position as an officer, director, employee, agent, or representative as described in section 1 above with respect to Proceedings relating to or arising out of
Indemnitee’s acts or omissions during his or her service in such position. The benefits provided to Indemnitee under this Agreement for the Indemnitee’s service as a representative of an affiliated entity shall be payable if and only if
and only to the extent that reimbursement to Indemnitee by the affiliated entity with which Indemnitee has served as a representative, whether pursuant to agreement, applicable law, articles of incorporation or association, bylaws or regulations of
the entity, or insurance maintained by such affiliated entity, is insufficient to compensate Indemnitee for Expenses actually incurred and otherwise payable by the Corporation under this Agreement. Any payments in fact made to or on behalf of the
Indemnitee directly or indirectly by the affiliated entity with which Indemnitee served as a representative shall reduce the obligation of the Corporation hereunder. 
  

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 5. Notice to Corporation. Indemnitee shall provide to the Corporation prompt written notice
of any Proceeding brought, threatened, asserted, or commenced against Indemnitee with respect to which Indemnitee may assert a right to indemnification hereunder; provided, however, that failure to provide such notice shall not in any way
limit Indemnitee’s rights under this Agreement. 
 6. Cooperation in Defense and Settlement. Indemnitee shall not make any
admission or effect any settlement without the Corporation’s written consent unless Indemnitee shall have determined to undertake his or her own defense in such matter and has waived the benefits of this Agreement. The Corporation shall not
settle any Proceeding to which Indemnitee is a party in a manner that would impose any Expense on Indemnitee without his or her written consent. Neither Indemnitee nor the Corporation will unreasonably withhold consent to the proposed settlement.
Indemnitee and the Corporation shall cooperate to the extent reasonably possible with each other and with the Corporation’s insurers in attempts to defend and/or settle such Proceeding. 
 7. Assumption of Defense. Except as otherwise provided below, the Corporation jointly with any other indemnifying party similarly notified
may assume Indemnitee’s defense in any Proceeding, with counsel mutually satisfactory to Indemnitee and the Corporation. After notice from the Corporation to Indemnitee of the Corporation’s election to assume such defense, the Corporation
will not be liable to Indemnitee under this Agreement for Expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the
right to employ counsel in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at Indemnitee’s expense unless: 
  

	 	(a)	The employment of counsel by Indemnitee has been authorized by the Corporation, 

  

	 	(b)	Counsel employed by the Corporation initially is unacceptable or later becomes unacceptable to Indemnitee and such unacceptability is reasonable under then existing circumstances,

  

	 	(c)	Indemnitee shall have reasonably concluded that there may be a conflict of interest between Indemnitee and the Corporation (or another party being represented jointly with the
Corporation) in the conduct of the defense of such Proceeding, or 

  

	 	(d)	The Corporation shall not have employed counsel promptly to assume the defense of such Proceeding, 

 in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation and subject to payment pursuant to this Agreement. The Corporation shall not be entitled to assume the defense of
Indemnitee in any Proceeding brought by or on behalf of the Corporation or as to which Indemnitee shall have made either of the conclusions provided for in clauses (b) or (c) above. 
 8. Enforcement. If a dispute or controversy arises under this Agreement between Indemnitee and the Corporation with respect to whether the
Indemnitee is entitled to indemnification for any Proceeding or for Expenses incurred, then for each such dispute or controversy the Indemnitee may seek to enforce the Agreement through legal action or, at Indemnitee’s sole option and written
request, through arbitration. If the Indemnitee requests arbitration, the dispute or controversy shall be submitted by the parties to binding arbitration in the County of Henderson, State of North Carolina, before a single arbitrator agreeable to
both parties; provided, however, that indemnification for any claim, issue, or matter in a Proceeding brought against Indemnitee by or in the right of the Corporation and as to which Indemnitee is adjudged liable for negligence or misconduct
in the performance of his or her duty to the Corporation shall be submitted to arbitration only to the extent permitted under the Applicable Document and applicable law then in effect. If the parties cannot agree on a designated arbitrator within 15
days after arbitration is requested in writing by the Indemnitee, the arbitration shall proceed in the County of Henderson, State of North Carolina, before an arbitrator appointed by the American Arbitration Association. In either case, the
arbitration proceeding shall commence promptly under the rules then in effect of that Association. And the arbitrator agreed to by the parties or appointed by that Association shall be an attorney other than an attorney who has been or is associated
with a firm having associated with it an attorney who has been retained by or performed services for the Corporation or Indemnitee at any time during the five years preceding commencement of arbitration. 
  

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The award shall be rendered in such form that judgment may be entered thereon in any court having jurisdiction thereof. The prevailing party shall be
entitled to prompt reimbursement of any costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred in connection with such legal action or arbitration; provided, however, that the Indemnitee shall not be
required to reimburse the Corporation unless the arbitrator or court resolving the dispute determines that Indemnitee acted in bad faith in bringing the action or arbitration. 
 9. Exclusions. Notwithstanding the scope of indemnification available to Indemnitees from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of the Corporation hereunder with respect to: 
  

	 	(a)	Any claim or any part thereof as to which Indemnitee shall have been determined by a court of competent jurisdiction, from which no appeal is or can be taken, by clear and
convincing evidence, to have acted with deliberate intent to cause injury to the Corporation or with reckless disregard for the best interests of the Corporation, 

  

	 	(b)	Any claim or any part thereof arising out of acts or omissions for which applicable law prohibits elimination of liability, 

  

	 	(c)	Any claim or any part thereof arising under Section 16(b) of the Securities Exchange Act of 1934 pursuant to which Indemnitee shall be obligated to pay any penalty, fine,
settlement or judgment, 

  

	 	(d)	Any obligation of Indemnitee based upon or attributable to the Indemnitee gaining in fact any improper personal benefit, gain, profit or advantage to which he or she was not
entitled, or 

  

	 	(e)	Any proceeding initiated by Indemnitee without the consent or authorization of the Board of Directors of the Corporation, provided that this exclusion shall not apply with respect
to any claims brought by Indemnitee (1) to enforce his or her rights under this Agreement or (2) in any Proceeding initiated by another person or entity whether or not such claims were brought by Indemnitee against a person or entity who
was otherwise a party to such proceeding. 

 Nothing in this section 9 shall eliminate or diminish the Corporation’s
obligations to advance that portion of Indemnitee’s Expenses representing attorneys’ fees and other costs incurred in defending any proceeding pursuant to section 3 of this Agreement. 
 Furthermore, anything herein to the contrary notwithstanding, nothing in this Agreement requires indemnification, reimbursement or payment by the
Corporation, and the Indemnitee shall not be entitled to demand indemnification, reimbursement or payment under this Agreement, if and to the extent indemnification, reimbursement or payment constitutes a “prohibited indemnification
payment” within the meaning of Federal Deposit Insurance Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)]. 
 10.
Extraordinary Transactions. The Corporation covenants and agrees that in the event of any merger, consolidation, or reorganization in which the Corporation is not the surviving entity, any sale of all or substantially all of the assets of the
Corporation, or any liquidation of the Corporation (each such event is hereinafter referred to as an “extraordinary transaction”), the Corporation shall – 
  

	 	(a)	Have the obligations of the Corporation under this Agreement expressly assumed by the survivor, purchaser or successor, as the case may be, in such extraordinary transaction, or

  

	 	(b)	Otherwise adequately provide for the satisfaction of the Corporation’s obligations under this Agreement, in a manner acceptable to Indemnitee. 

 11. No Personal Liability. Indemnitee agrees that neither the directors nor any officer, employee, representative, or agent of the
Corporation shall be personally liable for the satisfaction of the Corporation’s obligations under this Agreement, and Indemnitee shall look solely to the assets of the Corporation for satisfaction of any claims hereunder. 
  

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 12. Severability. If any provision, phrase, or other portion of this Agreement is
determined by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, and such determination becomes final, such provision, phrase, or other portion shall be deemed to be severed or limited, but only to the
extent required to render the remaining provisions and portions of the Agreement enforceable, and the Agreement as thus amended shall be enforced to give effect to the intention of the parties insofar as that is possible. 
 13. Subrogation. If any payments are made under this Agreement, the Corporation shall be subrogated to the extent thereof to all rights to
indemnification or reimbursement against any insurer or other entity or person vested in the Indemnitee, who shall execute all instruments and take all other actions as shall be reasonably necessary for the Corporation to enforce such rights.

 14. Governing Law. The parties hereto agree that this Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of North Carolina. 
 15. Notices. All
notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the
following addresses or to such other address as either party may designate by like notice. Unless otherwise changed by notice, notice shall be properly addressed to the Indemnitee if addressed to the address of the Indemnitee on the books and
records of the Corporation at the time of the delivery of such notice, and properly addressed to the Corporation if addressed to 1st Financial
Services Corporation, P.O. Box 6428, Hendersonville, North Carolina 28793. 
 16. Termination. This Agreement may be terminated
by either party upon not less than 60 days’ prior written notice delivered to the other party, but such termination shall not diminish the obligations of Corporation hereunder with respect to Indemnitee’s activities before the effective
date of termination. 
 17. Amendments and Binding Effect. This Agreement and the rights and duties of Indemnitee and the
Corporation hereunder may not be amended, modified or terminated except by written instrument signed and delivered by the parties hereto. This Agreement is binding upon and shall inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, and assigns. 
 IN WITNESS WHEREOF,
the undersigned have executed this Agreement as of the date first above written. 
  

							
	INDEMNITEE	 		 	1ST FINANCIAL SERVICES CORPORATION

				
	 /s/ Roger A. Mobley
	 		 	By:	 	 /s/ Gregory L. Gibson

		 		 	Its:	 	Chief Executive Officer

  

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 FORM OF UNDERTAKING 
 THIS UNDERTAKING has been entered into by
Roger A. Mobley (“Indemnitee”) pursuant to an Indemnification Agreement dated January 29, 2009, (the “Indemnification Agreement”), between 1st Financial Services Corporation (the “Corporation”), a North Carolina corporation, and Indemnitee. 
 RECITALS: 
 A. Under the Indemnification Agreement, the Corporation has agreed to pay Expenses (within
the meaning of the Indemnification Agreement) as and when incurred by Indemnitee in connection with any claim against Indemnitee that is the subject of any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, or
investigative, to which Indemnitee was, is, or is threatened to be made a party by reason of facts that include Indemnitee’s being or having been a director, officer, or representative (within the meaning of the Indemnification Agreement) of
the Corporation, 
 B. Such a claim has arisen against Indemnitee and Indemnitee has notified the Corporation thereof in accordance
with the terms of Section 5 of the Indemnification Agreement (hereinafter the “Proceeding”), and 
 C. Indemnitee
believes that Indemnitee should prevail in the Proceeding, and it is in the interest of both Indemnitee and the Corporation to defend against the claims against Indemnitee thereunder. 
 NOW, THEREFORE, Indemnitee hereby agrees that in consideration of the Corporation’s advance
payment of Indemnitee’s Expenses incurred before final disposition of the Proceeding, Indemnitee hereby undertakes to reimburse the Corporation for any and all expenses paid by the Corporation on behalf of Indemnitee before final disposition of
the Proceeding if the Indemnitee is determined under the Applicable Document (within the meaning of the Indemnification Agreement) to be required to repay such amounts to the Corporation under the Indemnification Agreement and applicable law,
provided that if Indemnitee is entitled under the Applicable Document to indemnification for some or a portion of such Expenses, Indemnitee’s obligation to reimburse the Corporation shall only be for those Expenses for which Indemnitee is
determined to be required to repay such amounts to the Corporation. Such reimbursement or arrangements for reimbursement by Indemnitee shall be consummated within 90 days after a determination that Indemnitee is required to repay such amounts to the
Corporation under the Indemnification Agreement and applicable law. 
 Further, the Indemnitee agrees to reasonably cooperate with the
Corporation concerning such proceeding. 
 IN WITNESS WHEREOF, the
undersigned has set his or her hand this 29th day of January, 2009. 
  

	
	 /s/ Roger A. Mobley

	INDEMNITEEAmended Endorsement Split Dollar Agreement with Gregory L. Gibson

 Exhibit 10.3 
 MOUNTAIN 1ST BANK & TRUST COMPANY 
 AMENDED ENDORSEMENT SPLIT DOLLAR AGREEMENT 
 This AMENDED ENDORSEMENT SPLIT DOLLAR AGREEMENT (this “Agreement”) is entered into as of this 30th day of
January, 2009 by and between Mountain 1st Bank & Trust Company, a North Carolina-chartered bank (the “Bank”), and Gregory L. Gibson, an executive of the Bank (the “Executive”). This Agreement shall append the Split
Dollar Policy Endorsement entered into on even date herewith or as subsequently amended, by and between the aforementioned parties. 
 WHEREAS, to encourage the Executive to remain a Bank employee, the Bank desires to enter this Agreement providing for division of the death proceeds of a life insurance policy on the Executive’s
life, to be effective until the Executive’s employment terminates, and 
 WHEREAS, the Bank and the
Executive intend that this Agreement shall supersede and replace in its entirety the December 24, 2007 Endorsement Split Dollar Agreement between the Executive and the Bank. 
 NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. 
 ARTICLE 1

 GENERAL DEFINITIONS 
 Capitalized terms not otherwise defined in this Agreement are used herein as defined in the Salary Continuation Agreement. The following terms shall have the meanings specified. 
 1.1 “Administrator” means the administrator described in Article 7. 
 1.2 “Code” means the Internal Revenue Code of 1986, as amended, and rules, regulations, and guidance of general application
issued thereunder by the Department of the Treasury. 
 1.3 “Executive’s Interest” means the benefit set forth
in section 2.2. 
 1.4 “Insured” means the Executive. 
 1.5 “Insurer” means each life insurance carrier for which there is a Split Dollar Policy Endorsement attached to this Agreement.

 1.6 “Net Death Proceeds” means the total death proceeds of the Policy minus the cash surrender value. 

1.7 “Normal Retirement Age” means the Executive’s full retirement age as defined at 20 C.F.R. 404.409 under the Social
Security Act. 
 1.8 “Policy” means the specific life insurance policy or policies issued by the Insurer. 

 1.9 “Salary Continuation Agreement” means the March 26, 2008 Salary
Continuation Agreement between the Executive and the Bank, as the same may be amended from time to time. 
 1.10 “Separation
from Service” means a separation from service as defined in Code section 409A, including termination of the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in
Code section 414, for any reason other than because of a leave of absence approved by the Bank or the Executive’s death. 
 1.11
“Split Dollar Policy Endorsement” means the form required by the Administrator or the Insurer to indicate the Executive’s interest, if any, in a Policy on the Executive’s life. 
 ARTICLE 2 
 POLICY OWNERSHIP/INTERESTS 
 2.1 Bank Ownership. The Bank is the sole
owner of the Policy and shall have the right to exercise all incidents of ownership, except that the Bank shall not sell, surrender, or transfer ownership of a Policy without the Insured’s consent so long as the Insured has an interest in the
Policy as described in section 2.2. The Bank shall be the beneficiary of the remaining death proceeds of the Policy after the Executive’s interest is paid according to section 2.2 below. 
 2.2 Death Benefit. Provided the Executive’s death occurs both before the Executive’s Separation from Service and before the Executive
attains Normal Retirement Age, at the Executive’s death the Executive’s beneficiary designated in accordance with the Split Dollar Policy Endorsement shall be entitled to Policy proceeds in an amount equal to the lesser of
(x) 100% of the Net Death Proceeds or (y) $1,250,000 (the “Executive’s Interest”). The Executive shall have the right to designate the beneficiary of the Executive’s Interest. On the earlier of the date of
the Executive’s Separation from Service or the date on which the Executive attains Normal Retirement Age, the Executive’s Interest shall be extinguished, this Agreement shall terminate, and the Executive’s beneficiary shall be
entitled to no benefits under this Agreement for the Executive’s death occurring thereafter. 
 2.3 Option to Purchase. The Bank
shall not sell, surrender, or transfer ownership of the Policy before the earlier of the date of the Executive’s Separation from Service or the date on which the Executive attains Normal Retirement Age without first giving the Executive or the
Executive’s transferee the option for a period of 60 days to purchase the Policy. The purchase price shall be an amount equal to the Policy cash surrender value. The option to purchase the Policy shall lapse if not exercised within 60 days
after the date the Bank gives written notice of the Bank’s intention to sell, surrender, or transfer ownership of the Policy. This provision shall not impair the Bank’s rights to terminate this Agreement. 
 2.4 Comparable Coverage. The Bank shall maintain the Policy in full force and effect. The Bank may not amend, terminate, or otherwise abrogate the
Executive’s interest in the Policy before the earlier of the date of the Executive’s Separation from Service or the date on which the Executive attains Normal Retirement Age unless the Bank replaces the Policy with a comparable insurance
policy to cover the benefit provided under this Agreement and executes a new split dollar agreement and endorsement for the comparable insurance policy. The Policy or any comparable policy shall be subject to claims of the Bank’s creditors.

 2.5 Internal Revenue Code Section 1035 Exchanges. The Executive recognizes and agrees that the Bank may after this Agreement
is adopted wish to exchange the Policy of life insurance on the Executive’s life for another contract of life insurance insuring the Executive’s life. Provided that the Policy 

  

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is replaced (or intended to be replaced) with a comparable policy of life insurance, the Executive agrees to provide medical information and cooperate with
medical insurance-related testing required by a prospective insurer for implementing the Policy or, if necessary, for modifying or updating to a comparable insurer. 
 ARTICLE 3 
 PREMIUMS 
 3.1 Premium Payment. The Bank shall pay any premiums due on the Policy. 
 3.2 Economic Benefit. The Administrator shall annually determine the economic benefit attributable to the Executive based on the life insurance
premium factor for the Executive’s age multiplied by the aggregate death benefit payable to the Executive’s beneficiary. The “life insurance premium factor” is the minimum factor applicable under guidance published pursuant to
Treasury Reg. section 1.61-22(d)(3)(ii) or any subsequent authority. 
 3.3 Imputed Income. The Bank shall impute the economic benefit
to the Executive on an annual basis, by adding the economic benefit to the Executive’s W-2 or Form 1099, as appropriate. 
 ARTICLE 4 
 ASSIGNMENT 
 The Executive may irrevocably assign without consideration all of the Executive’s Interest in the Policy and in this Agreement to any person,
entity, or trust established by the Executive or the Executive’s spouse. If the Executive transfers all of the Executive’s Interest in the Policy, all of the Executive’s Interest in the Policy and in the Agreement shall be vested in
the Executive’s transferee, who shall be substituted as a party hereunder and the Executive shall have no further interest in this Agreement. 
 ARTICLE 5 
 INSURER 
 The Insurer shall be bound by the terms of the Policy only. Any payments the Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits, and demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice of the provisions of this Agreement. 
 ARTICLE 6 
 CLAIMS AND
REVIEW PROCEDURES 
 6.1 Claims Procedure. Any person or entity who has not received benefits under
this Agreement that he or she believes should be paid (the “claimant”) shall make a claim for benefits as follows – 
 6.1.1 Initiation – written claim. The claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be
made within 60 days after the notice was received by the claimant. All other claims must be made within 180 days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the
claimant. 
  

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

 6.1.3 Notice of decision. If the Administrator denies part or all of the claim, the Administrator shall notify the
claimant in writing of the denial. The Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth – 
 (a) The specific reasons for the denial, 
 (b) A reference to the specific provisions of this Agreement on which the denial is based, 
 (c) A description of any additional
information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, 
 (d) An explanation of the
Agreement’s review procedures and the time limits applicable to such procedures, and 
 (e) A statement of the claimant’s right to
bring a civil action under ERISA section 502(a) after an adverse benefit determination on review. 
 6.2 Review Procedure. If the
Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Administrator of the denial, as follows – 
 6.2.1 Initiation – written request. To initiate the review, the claimant must file with the Administrator a written request
for review within 60 days after receiving the Administrator’s notice of denial. 
 6.2.2 Additional submissions –
information access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim. Upon request and free of charge, the Administrator shall also provide the claimant
reasonable access to and copies of all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits. 
 6.2.3 Considerations on review. In considering the review, the Administrator shall take into account all materials and information
the claimant submits relating to the claim, without regard to whether the information was submitted or considered in the initial benefit determination. 
 6.2.4 Timing of Administrator response. The Administrator shall respond in writing to the claimant within 60 days after receiving the request for review. If the Administrator determines that special
circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional 60 days by notifying the claimant in writing before the end of the initial 60-day period that an additional period is
required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision. 
  

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 6.2.5 Notice of decision. The Administrator shall notify the claimant in writing
of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth – 
 (a) The specific reasons for the denial, 
 (b) A reference to the specific provisions of the Agreement on which the denial is based, 
 (c) A statement that the claimant is
entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and 

(d) A statement of the claimant’s right to bring a civil action under ERISA section 502(a). 
 ARTICLE 7 
 ADMINISTRATION OF AGREEMENT 
 7.1 Administrator Duties. This Agreement
shall be administered by an Administrator, which shall consist of the Board or such committee as the Board shall appoint. The Executive may not be a member of the Administrator. The Administrator shall have the discretion and authority to
(x) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (y) decide or resolve any and all questions that arise, including interpretations of this Agreement.

 7.2 Agents. In the administration of this Agreement, the Administrator may employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank. 
 7.3 Binding Effect of Decisions. The decision or action of the Administrator concerning any question arising out of the administration, interpretation, and application of this Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. 
 7.4
Indemnity of Administrator. The Bank shall indemnify and hold harmless the members of the Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this
Agreement, except in the case of willful misconduct by the Administrator or any of its members. 
 7.5 Information. To enable the
Administrator to perform its functions, the Bank shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the retirement, death, or Separation from Service of the Executive, and such
other pertinent information as the Administrator may reasonably require. 
 ARTICLE 8 
 MISCELLANEOUS 
 8.1
Amendment and Termination of Agreement. This Agreement may be amended solely by a written agreement signed by the Bank and the Executive. This Agreement shall terminate upon the first to occur of (w) distribution of the death benefit
proceeds in accordance with section 2.2 above, (x)

  

 5 

 
termination of the Salary Continuation Agreement under Article 5 of the Salary Continuation Agreement, (y) the Executive’s Separation from
Service, or (z) the Executive’s attainment of Normal Retirement Age. 
 8.2 Binding Effect. This Agreement shall bind
the Executive and the Bank and their beneficiaries, survivors, executors, administrators, and transferees, and any Policy beneficiary. 
 8.3 No Guarantee of Employment. This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Bank nor does it interfere with the Bank’s right to discharge the
Executive. It also does not require the Executive to remain an employee or interfere with the Executive’s right to terminate employment at any time. 
 8.4 Successors; Binding Agreement. By an assumption agreement in form and substance satisfactory to the Executive, the Bank shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business or assets of the Bank to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform this
Agreement had no succession occurred. 
 8.5 Applicable Law. This Agreement and all rights hereunder shall be governed by and
construed according to the laws of the State of North Carolina, except to the extent preempted by the laws of the United States of America. 
 8.6 Entire Agreement. This Agreement and the Salary Continuation Agreement constitute the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement
other than those specifically set forth. This Agreement amends and restates in its entirety the December 24, 2007 Endorsement Split Dollar Agreement between the Executive and the Bank. 
 8.7 Severability. If any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not
held invalid, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Agreement is held invalid in part, such invalidity shall not affect the remainder of the provision
not held invalid, and the remainder of the provision together with all other provisions of this Agreement shall continue in full force and effect to the full extent consistent with law. 
 8.8 Headings. Headings and subheadings herein are included solely for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement. 
 8.9 Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by
like notice. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the Executive’s address on the books and records of the Bank at the time of the delivery of such notice, and properly addressed
to the Bank if addressed to the board of directors, Mountain 1st Bank & Trust Company, 101 Jack Street, Hendersonville, North Carolina 28792. 
  

 6 

 IN WITNESS WHEREOF, the Executive and
a duly authorized representative of the Bank have executed this Amended Endorsement Split Dollar Agreement as of the date first written above. 
  

							
	EXECUTIVE:	 		 	BANK:
		 		 	Mountain 1st Bank & Trust Company
			
	 /s/ Gregory L. Gibson
	 		 	/s/ John Sheiry
	Gregory L. Gibson	 		 	By:	 	John Sheiry
		 		 	Its:	 	Compensation Committee Chairman

 AGREEMENT TO COOPERATE WITH
INSURANCE UNDERWRITING INCIDENT TO INTERNAL REVENUE CODE SECTION 1035 EXCHANGE 
 I acknowledge that I have read the Amended Endorsement Split Dollar Agreement and agree to be bound by its terms, particularly the covenant on my part set
forth in section 2.5 of the Amended Endorsement Split Dollar Agreement to provide medical information and cooperate with medical insurance-related testing required by an insurer to issue a comparable insurance policy to cover the benefit provided
under this Amended Endorsement Split Dollar Agreement. 
  

					
	 /s/ Jansen Matthews
	 		 	 /s/ Gregory L. Gibson

	Witness	 		 	Gregory L. Gibson

  

 7 

 SPLIT DOLLAR POLICY ENDORSEMENT

 Insured: Gregory L. Gibson 
 Insurer: Midland National
Life Insurance Company 
 Policy No.: 691271 
 According to the terms of the Mountain 1st Bank & Trust Company Amended Endorsement Split Dollar Agreement dated as of January 30, 2009, the undersigned Owner requests that the above-referenced policy issued by the Insurer
provide for the following beneficiary designation and limited contract ownership rights to the Insured: 
 1. Upon the death of the Insured,
proceeds shall be paid in one sum to the Owner, its successors or assigns, to the extent of the Owner’s interest in the policy. It is hereby provided that the Insurer may rely solely upon a statement from the Owner as to the amount of proceeds
it is entitled to receive under this paragraph. 
 2. Any proceeds at the death of the Insured in excess of the amount paid under the
provisions of the preceding paragraph shall be paid in one sum to: 
 Cathy Gibson 
  
 PRIMARY BENEFICIARY,
RELATIONSHIP/SOCIAL SECURITY NUMBER 
 Allen Gibson 
  
 CONTINGENT
BENEFICIARY, RELATIONSHIP/SOCIAL SECURITY NUMBER 
 The exclusive rights to change
the beneficiary for the proceeds payable under this paragraph and to assign all rights and interests granted under this paragraph are hereby granted to the Insured. The sole signature of the Insured shall be sufficient to exercise the rights. The
Owner retains all contract rights not granted to the Insured under this paragraph. 
 3. It is agreed by the undersigned that this
designation and limited assignment of rights shall be subject in all respects to the contractual terms of the policy. 
 4. Any payment
directed by the Owner under this endorsement shall be a full discharge of the Insurer, and such discharge shall be binding on all parties claiming any interest under the policy. 
 5. This Split Dollar Policy Endorsement supersedes and replaces all prior endorsements of the Insured relating to the above-referenced policy issued by
the Insurer. 
 6. The exercise by the Owner of the right to surrender the policy shall terminate the rights of the Insured. 
 7. The Owner of the policy is Mountain 1st Bank & Trust Company. The Owner alone may exercise all policy rights, except that the Owner will not
have the rights specified in paragraph 2 of this Split Dollar Policy Endorsement. 
 The undersigned for the Owner is signing in a
representative capacity and warrants that he or she has the authority to bind the entity on whose behalf this document is executed. 
 Signed at 101 Jack St, Hendersonville, North Carolina this 30th day of January, 2009. 
  

							
	INSURED:	 		 	OWNER:
		 		 	Mountain 1st Bank & Trust Company
				
	 /s/ Gregory L. Gibson
	 		 	By:	 	/s/ John Sheiry
	Gregory L. Gibson	 		 	Its:	 	Compensation Committee Chair

  

 8

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