Document:

Carolina Trust Bank 8-K12G3

 

Exhibit 4.01

 

WARRANT

 

to purchase up to 86,957

 

Shares of Common Stock

 

of Carolina Trust Bank

 

1.              Definitions. Unless the context
otherwise requires, when used herein the following terms shall have the meanings indicated.

 

“Affiliate” means, with respect
to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”) when used with respect to any Person, means the possession, directly
or indirectly, of the power to cause the direction of management and/or policies of such Person, whether through the ownership
of voting securities by contract or otherwise.

 

“Board of Directors” means
the board of directors of the Company, including any duly authorized committee thereof.

 

“Business Combination” means
a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Company’s stockholders.

 

“business day” means any
day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required
by law or other governmental actions to close.

 

“Capital Stock” means (A)
with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.

 

“Charter” means, with respect
to any Person, its certificate or articles of incorporation, articles of association, or similar organizational document.

 

“Common Stock” means the
common stock, par value $2.50 per share, of the Company.

 

“Company” means the Person
whose name, corporate or other organizational form and jurisdiction of organization is set forth in Item 1 of Schedule A hereto.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder. 

 

     

     

    

 

“Exercise Price” means the
amount set forth in Item 2 of Schedule A hereto.

 

“Expiration Date” means the
date set forth in Item 3 of Schedule A hereto.

 

“Expiration Time” means 5:00
p.m., New York City time on the Expiration Date.

 

“Fair Market Value” means,
with respect to any security or other property, the fair market value of such security or other property as determined by the Board
of Directors, acting in good faith.

 

“Governmental Entities” means,
collectively, all United States and other governmental, regulatory or judicial authorities.

 

“Market Price” means, with
respect to a particular security, on any given day, the last reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the last closing bid and ask prices regular way, in either case on the principal national
securities exchange on which the applicable securities are listed or admitted to trading, or if not listed or admitted to trading
on any national securities exchange, the average of the closing bid and ask prices as furnished by two members of the Financial
Industry Regulatory Authority, Inc. selected from time to time by the Company for that purpose. “Market Price” shall
be determined without reference to after hours or extended hours trading. If such security is not listed and traded in a manner
that the quotations referred to above are available for the period required hereunder, the Market Price per share of Common Stock
shall be deemed to be the fair market value per share of such security as determined in good faith by the Board of Directors in
reliance on an opinion of a nationally recognized independent investment banking corporation retained by the Company for this purpose
and certified in a resolution to the Warrantholder. For the purposes of determining the Market Price of the Common Stock on the
“trading day” preceding, on or following the occurrence of an event, (i) that trading day shall be deemed to commence
immediately after the regular scheduled closing time of trading on the principal stock exchange on which the Common Stock is then
listed or traded (or, if not so listed or traded, the New York Stock Exchange) or, if trading is closed at an earlier time, such
earlier time and (ii) that trading day shall end at the next regular scheduled closing time, or if trading is closed at an earlier
time, such earlier time (for the avoidance of doubt, and as an example, if the Market Price is to be determined as of the last
trading day preceding a specified event and the closing time of trading on a particular day is 4:00 p.m. and the specified event
occurs at 5:00 p.m. on that day, the Market Price would be determined by reference to such 4:00 p.m. closing price).

 

“Ordinary Cash Dividends”
means a regular quarterly cash dividend on shares of Common Stock out of surplus or net profits legally available therefor (determined
in accordance with U.S. GAAP in effect from time to time), provided that Ordinary Cash Dividends shall not include any cash
dividends to the extent the aggregate per share dividends paid on the outstanding Common Stock in any quarter exceed the Quarterly
Dividend Threshold, as adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

 

“Person” has the meaning
given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

 

“Per Share Fair Market Value”
has the meaning set forth in Section 13(C).

 

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“Pro Rata Repurchases” means
any purchase of shares of Common Stock by the Company or any Affiliate thereof pursuant to (A) any tender offer or exchange offer
subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available
to substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash, shares of Capital Stock of the
Company, other securities of the Company, evidences of indebtedness of the Company or any other Person or any other property (including,
without limitation, shares of Capital Stock, other securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase shall mean
the date of acceptance of shares for purchase or exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender or exchange offer.

 

“Quarterly Dividend Threshold”
means the amount set forth in Item 4 of Schedule A hereto.

 

“Regulatory Approvals” with
respect to the Warrantholder, means, to the extent applicable and required to permit the Warrantholder to exercise this Warrant
for shares of Common Stock and to own such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.

 

“SEC” means the U.S. Securities
and Exchange Commission.

 

“Securities Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Shares” has the meaning
set forth in Section 2.

 

“trading day” means (A) if
the shares of Common Stock are not traded on any national or regional securities exchange or association or over-the-counter market,
a business day or (B) if the shares of Common Stock are traded on any national or regional securities exchange or association or
over-the-counter market, a business day on which such relevant exchange or quotation system is scheduled to be open for business
and on which the shares of Common Stock (i) are not suspended from trading on any national or regional securities exchange or association
or over-the-counter market for any period or periods aggregating one half hour or longer; and (ii) have traded at least once on
the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading
of the shares of Common Stock. The term “trading day” with respect to any security other than the Common Stock shall
have a correlative meaning based on the primary exchange or quotation system on which such security is listed or traded.

 

“U.S. GAAP” means United
States generally accepted accounting principles.

 

“Warrantholder” has the meaning
set forth in Section 2.

 

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“Warrant” means this Warrant.

 

“Warrant Shares” means the
number of Shares set forth in Item 6 of Schedule A hereto, as may be adjusted pursuant to the terms hereof from time to time.

 

2.              Number of Shares; Exercise Price.
This certifies that, for value received, the person in whose name this Warrant is registered as set forth in Item 9 of Schedule
A or such person’s permitted assigns (the “Warrantholder”) is entitled, upon the terms and subject to
the conditions hereinafter set forth, to acquire from the Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth in Item 6
of Schedule A hereto, at a purchase price per share of Common Stock equal to the Exercise Price. The number of shares of Common
Stock (the “Shares”) and the Exercise Price are subject to adjustment as provided herein, and all references
to “Common Stock,” “Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.

 

3.              Exercise of Warrant; Term. Subject
to Section 2, to the extent permitted by applicable laws and regulations, the right to purchase the Shares represented by this
Warrant is exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the execution and delivery
of this Warrant by the Company on the date hereof, but in no event later than the Expiration Time, by (A) the surrender of this
Warrant and Notice of Exercise annexed hereto, duly completed and executed on behalf of the Warrantholder, at the principal executive
office of the Company located at the address set forth in Item 7 of Schedule A hereto (or such other office or agency of the Company
in the United States as it may designate by notice in writing to the Warrantholder at the address of the Warrantholder appearing
on the books of the Company), and (B) payment of the Exercise Price for the Shares thereby purchased by having the Company withhold,
from the shares of Common Stock that would otherwise be delivered to the Warrantholder upon such exercise, shares of Common Stock
issuable upon exercise of the Warrant equal in value to the aggregate Exercise Price as to which this Warrant is so exercised based
on the Market Price of the Common Stock on the trading day on which this Warrant is exercised and the Notice of Exercise is delivered
to the Company pursuant to this Section 3.

 

If the Warrantholder does not exercise this
Warrant in its entirety, the Warrantholder will be entitled to receive from the Company within a reasonable time, and in any event
not exceeding three business days, a new warrant in substantially identical form for the purchase of that number of Shares equal
to the difference between the number of Shares subject to this Warrant and the number of Shares as to which this Warrant is so
exercised. Notwithstanding anything in this Warrant to the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the Warrantholder will have first received any applicable
Regulatory Approvals.

 

4.              Issuance of Shares; Authorization;
Listing. Certificates for Shares issued upon exercise of this Warrant will be issued in such name or names as the Warrantholder
may designate (or, if requested by the Warrantholder and agreed by the Company, Shares will be issued via book-entry transfer crediting
the specified account of such named Person or Persons) and will be delivered to such named Person or Persons within a reasonable
time, not to exceed three business days after the date on which this Warrant has been duly exercised in accordance

 

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with the terms
of this Warrant. The Company hereby represents and warrants that any Shares issued upon the exercise of this Warrant in accordance
with the provisions of Section 3 will be duly and validly authorized and issued, fully paid and nonassessable and free from all
taxes, liens and charges (other than liens or charges created by the Warrantholder, income and franchise taxes incurred in connection
with the exercise of the Warrant or taxes in respect of any transfer occurring contemporaneously therewith). The Company agrees
that the Shares so issued will be deemed to have been issued to the Warrantholder as of the close of business on the date on which
this Warrant and payment of the Exercise Price are delivered to the Company in accordance with the terms of this Warrant, notwithstanding
that the stock transfer books of the Company may then be closed or certificates representing such Shares may not be actually delivered
on such date. The Company will at all times until the Expiration Time (or, if such date shall not be a business day, then on the
next succeeding business day) reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose
of providing for the exercise of this Warrant, the aggregate number of shares of Common Stock then issuable upon exercise of this
Warrant at any time. The Company will (A) procure, at its sole expense, the listing of the Shares issuable upon exercise of this
Warrant at any time, subject to issuance or notice of issuance, on all principal stock exchanges on which the Common Stock is then
listed or traded and (B) maintain such listings of such Shares at all times after issuance. The Company will use reasonable best
efforts to ensure that the Shares may be issued without violation of any applicable law or regulation or of any requirement of
any securities exchange on which the Shares are listed or traded.

 

5.              No Fractional Shares or Scrip.
No fractional Shares or scrip representing fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any
fractional Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled to receive a cash
payment equal to the Market Price of the Common Stock on the last trading day preceding the date of exercise less the pro-rated
Exercise Price for such fractional share.

 

6.              No Rights as Stockholders; Transfer
Books. This Warrant does not entitle the Warrantholder to any voting rights or other rights as a stockholder of the Company
prior to the date of exercise hereof. The Company will at no time close its transfer books against transfer of this Warrant in
any manner which interferes with the timely exercise of this Warrant.

 

7.              Charges, Taxes and Expenses. Issuance
of Shares to the Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Shares (other than liens or charges created by the
Warrantholder, income and franchise taxes incurred in connection with the exercise of the Warrant or taxes in respect of any transfer
occurring contemporaneously therewith), all of which taxes and expenses shall be paid by the Company.

 

8.              Transfer/Assignment.

 

(A)           Subject to compliance with clause (B)
of this Section 8, this Warrant and all rights hereunder are transferable, in whole or in part, upon the books of the Company by
the registered holder hereof in person or by duly authorized attorney, and a new warrant shall be made and delivered by the Company,
of the same tenor and date as this Warrant but registered in the name

 

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of one or more transferees, upon surrender of this Warrant,
duly endorsed, to the office or agency of the Company described in Section 3. All expenses (other than stock transfer taxes) and
other charges payable in connection with the preparation, execution and delivery of the new warrants pursuant to this Section 8
shall be paid by the Company.

 

(B)            Subject to compliance with applicable
securities laws, the Warrantholder may transfer, sell, assign or otherwise dispose (“Transfer”) all or a portion
of the Warrant or the Shares issuable upon exercise of the Warrant at any time, and the Company shall take all steps as may be
reasonably requested by the Warrantholder to facilitate such Transfer.

 

9.               Exchange and Registry of Warrant.
This Warrant is exchangeable, upon the surrender hereof by the Warrantholder to the Company, for a new warrant or warrants of like
tenor and representing the right to purchase the same aggregate number of Shares. The Company shall maintain a registry showing
the name and address of the Warrantholder as the registered holder of this Warrant. This Warrant may be surrendered for exchange
or exercise in accordance with its terms, at the office of the Company, and the Company shall be entitled to rely in all respects,
prior to written notice to the contrary, upon such registry.

 

10.            Loss, Theft, Destruction or Mutilation
of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company
shall make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing
the right to purchase the same aggregate number of Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.

 

11.            Saturdays, Sundays, Holidays, etc.
If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be
a business day, then such action may be taken or such right may be exercised on the next succeeding day that is a business day.

 

12.            [Reserved]

 

13.            Adjustments and Other Rights.
The Exercise Price and the number of Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to
time as follows; provided, that if more than one subsection of this Section 13 is applicable to a single event, the subsection
shall be applied that produces the largest adjustment and no single event shall cause an adjustment under more than one subsection
of this Section 13 so as to result in duplication:

 

(A)           Stock Splits, Subdivisions, Reclassifications
or Combinations. If the Company shall (i) declare and pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (iii) combine
or reclassify the outstanding shares of Common Stock into a smaller number of shares, the number of Shares issuable upon exercise
of this Warrant at the time of the record date for such dividend or distribution or the effective date of such

 

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subdivision, combination
or reclassification shall be proportionately adjusted so that the Warrantholder after such date shall be entitled to purchase the
number of shares of Common Stock which such holder would have owned or been entitled to receive in respect of the shares of Common
Stock subject to this Warrant after such date had this Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted to the number obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the
record or effective date, as the case may be, for the dividend, distribution, subdivision, combination or reclassification giving
rise to this adjustment by (y) the new number of Shares issuable upon exercise of the Warrant determined pursuant to the immediately
preceding sentence.

 

(B)            [Reserved]

 

(C)            Other Distributions. In case
the Company shall fix a record date for the making of a distribution to all holders of shares of its Common Stock of securities,
evidences of indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its Common Stock and
other dividends or distributions referred to in Section 13(A)), in each such case, the Exercise Price in effect prior to such record
date shall be reduced immediately thereafter to the price determined by multiplying the Exercise Price in effect immediately prior
to the reduction by the quotient of (x) the Market Price of the Common Stock on the last trading day preceding the first date on
which the Common Stock trades regular way on the principal national securities exchange on which the Common Stock is listed or
admitted to trading without the right to receive such distribution, minus the amount of cash and/or the Fair Market Value of the
securities, evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share of Common Stock
(such amount and/or Fair Market Value, the “Per Share Fair Market Value”) divided by (y) such Market Price on
such date specified in clause (x); such adjustment shall be made successively whenever such a record date is fixed. In such event,
the number of Shares issuable upon the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product
of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and (2) the Exercise Price in effect
immediately prior to the distribution giving rise to this adjustment by (y) the new Exercise Price determined in accordance with
the immediately preceding sentence. In the case of adjustment for a cash dividend that is, or is coincident with, a regular quarterly
cash dividend, the Per Share Fair Market Value would be reduced by the per share amount of the portion of the cash dividend that
would constitute an Ordinary Cash Dividend. In the event that such distribution is not so made, the Exercise Price and the number
of Shares issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date when the Board of
Directors determines not to distribute such shares, evidences of indebtedness, assets, rights, cash or warrants, as the case may
be, to the Exercise Price that would then be in effect and the number of Shares that would then be issuable upon exercise of this
Warrant if such record date had not been fixed.

 

(D)            Certain Repurchases of Common Stock.
In case the Company effects a Pro Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined
by multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata Repurchase by a fraction of
which the numerator shall be (i) the product of (x) the number

 

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of shares of Common Stock outstanding immediately before such Pro
Rata Repurchase and (y) the Market Price of a share of Common Stock on the trading day immediately preceding the first public announcement
by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price
of the Pro Rata Repurchase, and of which the denominator shall be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so repurchased and (ii) the Market Price
per share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the exercise
of this Warrant shall be increased to the number obtained by dividing (x) the product of (1) the number of Shares issuable upon
the exercise of this Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase
giving rise to this adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding sentence.
For the avoidance of doubt, no increase to the Exercise Price or decrease in the number of Shares issuable upon exercise of this
Warrant shall be made pursuant to this Section 13(D).

 

(E)            Business Combinations. In case
of any Business Combination or reclassification of Common Stock (other than a reclassification of Common Stock referred to in Section
13(A)), the Warrantholder’s right to receive Shares upon exercise of this Warrant shall be converted into the right to exercise
this Warrant to acquire the number of shares of stock or other securities or property (including cash) which the Common Stock issuable
(at the time of such Business Combination or reclassification) upon exercise of this Warrant immediately prior to such Business
Combination or reclassification would have been entitled to receive upon consummation of such Business Combination or reclassification;
and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the
Warrantholder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Warrantholder’s
right to exercise this Warrant in exchange for any shares of stock or other securities or property pursuant to this paragraph.
In determining the kind and amount of stock, securities or the property receivable upon exercise of this Warrant following the
consummation of such Business Combination, if the holders of Common Stock have the right to elect the kind or amount of consideration
receivable upon consummation of such Business Combination, then the consideration that the Warrantholder shall be entitled to receive
upon exercise shall be deemed to be the types and amounts of consideration received by the majority of all holders of the shares
of common stock that affirmatively make an election (or of all such holders if none make an election).

 

(F)            Rounding of Calculations; Minimum
Adjustments. All calculations under this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the contrary notwithstanding, no adjustment
in the Exercise Price or the number of Shares into which this Warrant is exercisable shall be made if the amount of such adjustment
would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such
amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.

 

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(G)            Timing of Issuance of Additional
Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 13 shall require that an adjustment
shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event (i)
issuing to the Warrantholder of this Warrant exercised after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares
of Common Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such Warrantholder any amount
of cash in lieu of a fractional share of Common Stock; provided, however, that the Company upon request shall deliver
to such Warrantholder a due bill or other appropriate instrument evidencing such Warrantholder’s right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such adjustment.

 

(H)           [Reserved]

 

(I)             Other Events. The Exercise Price
or the number of Shares into which this Warrant is exercisable shall not be adjusted in the event of a change in the par value
of the Common Stock or a change in the jurisdiction of incorporation of the Company.

 

(J)             Statement Regarding Adjustments.
Whenever the Exercise Price or the number of Shares into which this Warrant is exercisable shall be adjusted as provided in Section
13, the Company shall forthwith file at the principal office of the Company a statement showing in reasonable detail the facts
requiring such adjustment and the Exercise Price that shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment, and the Company shall also cause a copy of such statement to be sent by mail, first class
postage prepaid, to each Warrantholder at the address appearing in the Company’s records.

 

(K)            Notice of Adjustment Event. In
the event that the Company shall propose to take any action of the type described in this Section 13 (but only if the action of
the type described in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable or a change in the type of securities or property to be delivered upon exercise of this Warrant), the Company
shall give notice to the Warrantholder, in the manner set forth in Section 13(J), which notice shall specify the record date, if
any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set
forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on the Exercise Price and the number,
kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of
any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed,
and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure
to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

 

(L)            Proceedings Prior to Any Action Requiring
Adjustment. As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section
13, the Company shall take any action which may be necessary, including obtaining regulatory, New York Stock Exchange, NASDAQ Stock
Market or other applicable national securities exchange or stockholder approvals or exemptions, in order that the Company may thereafter
validly and

 

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legally issue as fully paid and nonassessable all shares of Common Stock that the Warrantholder is entitled to receive
upon exercise of this Warrant pursuant to this Section 13.

 

(M)           Adjustment Rules. Any adjustments
pursuant to this Section 13 shall be made successively whenever an event referred to herein shall occur. If an adjustment in Exercise
Price made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock, then such adjustment in
Exercise Price made hereunder shall reduce the Exercise Price to the par value of the Common Stock.

 

14.            [Reserved]

 

15.            No Impairment. The Company will
not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions
of this Warrant and in taking of all such action as may be necessary or appropriate in order to protect the rights of the Warrantholder.

 

16.            Governing Law. This Warrant
will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. To the extent permitted by applicable law, each of the Company and the Warrantholder hereby unconditionally
waives trial by jury in any civil legal action or proceeding relating to the Warrant or the transactions contemplated hereby or
thereby.

 

17.            Binding Effect. This Warrant
shall be binding upon any successors or assigns of the Company.

 

18.            Amendments. This Warrant may
be amended and the observance of any term of this Warrant may be waived only with the written consent of the Company and the Warrantholder.

 

19 .           Prohibited Actions. The Company
agrees that it will not take any action which would entitle the Warrantholder to an adjustment of the Exercise Price if the total
number of shares of Common Stock issuable after such action upon exercise of this Warrant, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon the exercise of all outstanding options, warrants, conversion
and other rights, would exceed the total number of shares of Common Stock then authorized by its Charter.

 

20.            Notices. Any notice, request,
instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been
duly given (a) on the date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on the second
business day following the date of dispatch if delivered by a recognized next day courier service. All notices hereunder shall
be delivered as set forth in Item 8 of Schedule A hereto, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice.

 

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21.            Entire Agreement. This Warrant,
the forms attached hereto and Schedule A hereto (the terms of which are incorporated by reference herein) contain the entire agreement
between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings
with respect thereto.

 

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[Form of Notice of Exercise]

 

Date: _________

 

TO: Carolina Trust Bank

 

RE: Election to Purchase Common Stock

 

The undersigned, pursuant to the provisions
set forth in the attached Warrant, hereby agrees to subscribe for and purchase the number of shares of the Common Stock set forth
below covered by such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate
Exercise Price for such shares of Common Stock via the cashless exercise provision of Section 3 of the Warrant. A new warrant evidencing
the remaining shares of Common Stock covered by such Warrant, but not yet subscribed for and purchased, if any, should be issued
in the name set forth below.

 

Number of Shares of Common Stock __________________

 

Aggregate Exercise Price: __________________

  

	 	Holder: 	
	 	By:	 
	 	Name: 	 
	 	Title:	 

 

    	12 

     

    

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by a duly authorized officer.

 

Dated: _______________

 

 

	 	CAROLINA TRUST BANK
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Attest:
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	Title:	 

 

[Signature Page to Warrant]

 

    	13 

     

    

 

Schedule A

 

Item 1

Name: CAROLINA TRUST BANK 

Corporate or other organizational form: Banking
Corporation 

Jurisdiction of organization: North Carolina

 

Item 2 

Exercise Price: $6.90

 

Item 3 

Expiration Date: February 6, 2019

 

Item 4 

Quarterly Dividend Threshold: zero

 

Item 5 

[reserved]

 

Item 6 

Number of shares of Common Stock underlying the
Warrant (the “Warrant Shares”): 86,957

 

Item 7 

Company’s address: 901 East Main Street,
Lincolnton, North Carolina 28092

 

Item 8 

Notice information: J. Michael Cline, President and Chief Executive
Officer, 901 East Main Street, Lincolnton, North Carolina 28092; Telepone: 704-735-1104; Fax: 704-735-1258; Email: mcline@carolinatrust.com

 

Item 9 

Name of Registered Warrantholder: _________________________

  

14Carolina Trust Bank 8-K12G3

 

Exhibit
10.1

 

EXECUTIVE
EMPLOYMENT AGREEMENT

 

This
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), effective as of January 2, 2014 (the “Effective
Date”),
by and between Carolina Trust Bank, a North Carolina banking association (the “Bank”) with its principal
location in Lincolnton, North Carolina, and Jerry L. Ocheltree (the “Executive”), collectively (the
“Parties”).

 

WHEREAS,
the Bank is engaged in the business of banking and financial services serving individuals and businesses in North Carolina
and other areas; and

 

WHEREAS,
the Bank desires to employ the Executive, and the Executive wishes to accept such employment, upon the terms and conditions
set forth in this Agreement;

 

NOW,
THEREFORE, in consideration of the premises and of the mutual promise, covenants and agreements contained herein, the Parties
hereto agree as follows:

 

SECTION
1. Employment. The Bank hereby employs the Executive as its Chief Executive Officer, and the Executive hereby accepts
such employment with the Bank, for the period set forth in Section 2 hereof, all upon the terms and conditions hereinafter set
forth.

 

SECTION
2. Term of Employment. Unless earlier terminated as provided in this Agreement, the initial term of this Agreement
shall begin on January 1, 2014 (the “Start Date”) and shall terminate two (2) years after the Effective Date
(the “Initial Term”) and, after the Initial Term, on or before each annual anniversary date from the Effective
Date, the term of this Agreement shall be extended for up to an additional one year period beyond the then effective expiration
date upon a determination and resolution of the Board of Directors that the performance of the Executive has met the requirements
and standards of the Board of Directors, and that the term shall be extended. The Initial Term and any successive terms, subject
to earlier termination as set forth in this Agreement, is hereinafter referred to as the “Employment Term”.

 

SECTION
3. Duties. The Executive shall be employed as the Bank’s Chief Executive Officer (“CEO”).
In this position, the Executive shall have such duties, responsibilities and authority normally associated with the position of
CEO of financial institutions of similar size and in the same industry as the Bank, shall be responsible for overseeing and managing
the Bank’s operations and promoting the Bank’s business, and shall have such other duties as are assigned by the Bank’s
Board of Directors from time to time. The Executive agrees to faithfully and diligently perform his duties and devote all of his
business time to the business of the Bank. The Executive shall not during the Employment Term engage in any other business activity.
The Executive shall perform the Executive’s duties principally at the Bank’s principal place of business in Lincolnton,
North Carolina but will be expected to travel to the Bank’s other locations on a periodic basis and to engage in such other
travel as necessary to fulfill his duties hereunder. Executive represents and warrants that he is neither bound by nor subject
to any valid and enforceable restrictive covenant, confidentiality agreement, or similar agreement with any individual, partnership,
corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, other
business entity, or governmental entity (or any

 

    	 

     

    

 

department, agency, or political subdivision thereof) which shall adversely affect,
or be violated by, Executive’s employment with the Bank and the performance of his duties hereunder.

 

SECTION
4. Compensation.

 

(a)          Base
Salary. As compensation for the performance by the Executive of the services to be performed by the Executive during the Employment
Term, the Bank shall pay Executive an annual base salary of Two Hundred Forty Thousand and no/100 Dollars ($240,000.00), payable
in equal installments on the Bank’s regular paydays (the “Base Salary”).

 

(b)          Bonus,
In addition, the Executive shall be eligible to participate in the Bank’s management incentive program subject to the terms
and conditions of the program, and subject to the Bank and Executive achieving targets and expectations as set by the Bank’s
Board of Directors after consideration of Executive’s recommendations. Executive’s target bonus under the management
incentive program for 2014 shall be $60,000. Any such bonus shall be paid less deductions and withholdings required by law and
such deductions authorized by Executive on the next regular pay day after the bonus is calculated by the Board, but in any event
prior to March 15 of the following year. Such bonus shall be deemed earned when paid, and the Executive must be employed with
the Bank on the date of payment to be entitled to payment.

 

SECTION
5. Benefits. During the Employment Term, Executive will be eligible for the following benefits, subject to the terms
and conditions of the applicable plans and policies.

 

(a)          General
Benefit Plans.  The Executive shall be permitted to participate in all employee benefit plans, including group health plans
and disability insurance plans, in the scope and form as currently provided, to other employees of the Bank generally, and as
may be amended from time to time at the discretion of the Bank in accordance with the Bank’s standard procedures.

 

(b)          Vacation.
During the term of the Executive’s employment, he shall be entitled to four (4) weeks’ vacation for each calendar
year or ratable part thereof subject to the terms and conditions of the Bank’s vacation policy as amended from time to time.

 

(c)          Expense
Reimbursement. The Bank shall reimburse the Executive for all reasonable travel, entertainment, and other out-of-pocket expenses
that are incurred by him in the good faith performance of his duties under this Agreement and that the Bank, in its’ reasonable
discretion, determines are both reasonable in amount and ordinary and necessary to the Bank’s business, upon the Executive’s
submission to the Bank of appropriate evidence and itemization of those expenses in accordance with Bank’s policies and
procedures.

 

(d)          Company
Phone and Laptop. Bank will provide Executive access to a cellular telephone and laptop computer for business use. Executive
may use this equipment only as reasonably necessary in the performance of Executive’s duties for Bank and in the furtherance
of Bank’s business. Use of these items for personal reasons is prohibited, except for limited personal use that does not
interference with Bank’s business or damage the

 

    	 2

     

    

 

equipment, and Executive will be held responsible for the costs and expenses
associated with any personal use of these items. Executive understands and agrees that Bank may inspect these devices, including
any personal documents, messages or other personal use, to confirm compliance with this Agreement and Bank’s policies. Further,
Executive will be required to exercise utmost due care in the use of these items and will be responsible for any loss or damage
caused by Executive or caused while these items are in Executive’s possession. The Executive accepts full responsibility
for the care and safekeeping of all Bank owned equipment, which is provided for use. Executive agrees that the cost of any damage
or loss to Bank owned equipment while under Executive’s care, other than routine maintenance or repairs necessitated by
normal use, can be deducted from any compensation owed to Executive by Bank. Executive further agrees to sign the Authorization
for Deduction from Wages attached to this Agreement as Attachment A and to execute any other documents necessary to authorize
the deduction. Use of personal devices for Bank business is prohibited.

 

(e)          Stock
Options. Executive will be awarded options to purchase 35,000 shares in the Bank at a strike price equal to the Bank’s
stock price at the date of issuance of the options, subject to the terms and conditions of the 2005 Employee Stock Option Plan
assumed from Carolina Commerce Bank (“Carolina Commerce Plan”)
as modified from time to time, and the applicable award agreement. These options will vest two (2) years after the date
of issuance, provided Executive remains employed through the vesting date. In the event the Bank is sold in a stock deal or an
asset deal in which the shareholders of the Bank do not own a majority of the voting stock of the surviving entity or substantially
all of the assets of the Bank are sold. Executive’s options will vest immediately prior to such transaction.

 

(f)           Restricted
Stock Award. Executive also will be awarded 10,000 shares of restricted common stock in the Bank which will vest one-third
on January 1, 2015, one- third on January 1, 2016 and one-third on January 1, 2017, subject to Executive’s continuous employment
through each of such vesting dates and the terms and conditions of the plan to be adopted by the Bank, as modified from time to
time, and the applicable award agreement.

 

(g)          Car
Allowance. Bank will provide Executive with a monthly car allowance of $750.00 for the lease or purchase and maintenance of
a suitable vehicle to use for Bank business.

 

(h)          Country
Club Membership. The Bank shall pay the initiation fee (no greater than the initiation fee for Gaston Country Club) and family
membership dues for Executive in one country club in the Lincolnton, North Carolina area (or such other area as approved by the
Board) with the expectation that Executive also will use the membership for business development purposes.

 

(i)           Life
Insurance. The Executive shall be insured by the Bank under a term insurance policy providing a death benefit of up to two
times Base Salary with such members of the Executive’s family named as beneficiaries as the Executive may determine.

 

(j)           Relocation.
The Bank shall reimburse Executive for the relocation of Executive and his family from Pinehurst, North Carolina to a residence
in the Bank’s market area and within 60 miles of Lincolnton, North Carolina area, up to the amount of Seven

 

    	 3

     

    

 

Thousand Five
Hundred and No/100 Dollars ($7,500.00), to be paid to Executive within fifteen (15) days after Executive’s submission of
receipts reflecting the relocation expenses incurred by him.

 

(k)          Supplemental
Employee Retirement Plan. The Bank will adopt, and Executive will participate in, a defined contribution supplemental employee
retirement plan funded annually at a level no less than twenty percent (20%) of the Executive’s base salary and consistent
with applicable law. The Executive’s benefits under the plan will vest after five (5) years provided that Executive is still
employed with the Bank at that time.

 

SECTION
6. Termination and Severance.

 

(a)          The
Executive’s employment will terminate upon the earlier to occur of the following;

 

(i)           The
expiration of the Term as provided in Section 2 above;

 

(ii)          The
Executive’s death;

 

(iii)         The
Executive’s inability to perform his duties on account of disability or incapacity for a period of ninety (90) or more days,
whether or not consecutive within any period of twelve (12) consecutive months. The determination of incapacity or disability
under the preceding sentence shall be made in good faith by the Bank and may be based upon information supplied by a physician
selected by the Bank or its insurers and reasonably acceptable to the Executive or his legal representative; provided that the
Executive shall cooperate fully with such physician to permit such physician to make an accurate determination as to incapacity
or disability. Nothing in this subsection 6(a)(‘iii’) is intended to modify the Bank’s obligations under
any applicable laws related to disabilities in employment;

 

(iv)         Termination
of the Executive’s employment by the Bank for any of the following reasons:

 

(A)         Cause.
Delivery of written notice (as set forth below) that the Executive’s employment is terminated for “Cause”, such
termination to take effect immediately; “Cause” shall mean the good faith determination by the Board of Directors
that any one or more of the following has occurred:

 

(1)         Employee’s
substantial failure to perform or material neglect of the material duties of his employment under this Agreement;

 

(2)         the
conviction of Employee of, or the guilty or nolo contendere plea of Employee with respect to, any crime or offense involving property
of the Bank (other than a de minimis offense) or involving moral turpitude;

 

    	 4

     

    

 

(3)         the
conviction of Employee of, or the guilty or nolo contendere plea of Employee with respect to, or any crime or offense (A) constituting
a felony, or (B) which has a material adverse impact on the Bank’s reputation or financial condition;

 

(4)         the
breach of any material provision of this Agreement (including, without limitation, the provisions of Section 3, Section
7, Section 8 or Section 10 hereof);

 

(5)         Employee’s
dishonesty in connection with the Bank or appropriating assets or opportunities of the Bank for his own benefit; or

 

(6)         violation
of a generally recognized lawful material policy of the Bank, of which Executive is provided a copy or is otherwise made aware,
(after written notice thereof and a reasonable opportunity to cure if the event the violation is an issue which reasonably is
curable).

 

(B)         Without
Cause. Delivery of a written notice by the Bank at any time that the Executive’s employment is terminated other than
for “Cause,” disability, death or expiration of the Employment Term; or

 

(v)          Termination
of employment by the Executive upon delivery of written notice that the Executive is terminating his employment for any reason
(including without limitation, resignation or retirement). The Executive agrees that in the event of a voluntary termination,
he shall provide ninety (90) days’ notice of such termination. Executive agrees to use his best efforts to reasonably cooperate
with any remaining obligations thereafter under Section 10(f) hereof.

 

(b)          In
the event that the Executive’s employment is terminated pursuant to subsections 6(a)(i), (ii), (iii),
(iv)(A), or (v) above, the Bank shall not be obligated to make any payments to the Executive or on his behalf of
whatever kind or nature by reason of the Executive’s cessation of employment, other than the Base Salary and expense
reimbursements, if any, earned by the Executive that remain unpaid as of the effective date of Executive’s
termination.

 

(c)          If
the Bank, without Executive’s consent, substantially reduces the Executive’s duties and responsibilities to a level
inconsistent with that of a CEO or requires the Executive’s relocation from Lincoln County, North Carolina, such actions
shall effect a termination without cause as set forth in Section 6(a)(iv)(B).

 

(d)          In
the event that the Executive’s employment is terminated by the Bank without cause pursuant to Section 6(a)(iv)(B)
above, the Bank shall pay to the Executive the Base Salary and expense reimbursements, if any, earned by the Executive that remain
unpaid as of the effective date of the Executive’s termination. In addition, contingent upon Executive’s post-employment
obligations to the Bank and the execution by the Executive and delivery to the Bank of an unconditional release, in the form provided
by the Bank, of all

  

    	 5

     

    

 

claims against the Bank and affiliates arising from or in connection with this Agreement, the Executive’s
employment with the Bank, and the termination of that employment, the Bank shall pay the Executive as follows:

 

(i)           The
Bank shall pay to Executive severance pay in the amount of Twenty Thousand Dollars ($20,000.00) for each full month remaining
in the then current Employment Term (the “Severance Period”), payable on the Bank’s regular paydays
over the course of the remainder of the Initial Term following such termination without cause, pursuant to and as part of the
normal payroll practices of the Bank; and

 

(ii)          a
pro rata portion of his Bonus (if any) per the terms of Section 4(b) of this Agreement for the calendar year in which the
termination without cause occurs based on the number of days that the Executive was employed with the Bank during that calendar
year, payable at the time that the Bonus would have been paid to the Executive under this Agreement had his employment not been
terminated (such payments under subsections (i) and (ii) the “Severance Payment”); and

 

(iii)         reimbursement
to Executive for the premiums paid by Executive for group health plan continuation coverage to which the Employee and his dependents
are entitled pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, 26 U.S.C. § 4980B et seq.,
(“COBRA”), for each month during the Severance Period.

 

(e)          Payments
provided for in this Section 6 are in lieu of, and not in addition to, payments that might otherwise be due to Executive
under any other agreement or arrangement between or among Executive and Bank. Upon the Bank’s satisfaction of its obligations
to Executive in full hereunder, neither the Bank nor any of its affiliates shall have any obligation to Executive.

 

SECTION
7. Agreement Not to Disclose or Use Trade Secrets or Confidential Information. The Executive acknowledges that as an
executive of the Bank, the Executive will from time to time come into contact with and have access to Trade Secrets and Confidential
Information (as defined below) of Bank. In consideration of the Executive’s employment with the Bank, receipt of compensation
and additional benefits, access to the Bank’s Confidential Information and Trade Secrets, and other good and valuable consideration,
each of which constitutes separate sufficient and independent consideration for this covenant, the Executive expressly covenants
and agrees that the Executive will not, during his employment with the Bank or following termination of the Executive’s
employment with the Bank, whether by the Executive or the Bank for any reason (with or without cause); (i) use any Trade Secrets
or Confidential Information of the Bank, except during his employment with the Bank in the performance of services for the Bank;
(ii) reveal or disclose or allow to be revealed or disclosed any Trade Secrets or Confidential Information to any person, firm,
partnership, trust, corporation or other entity outside the Bank (whether governmental or private) except during his employment
with the Bank in the Executive’s performance of services for the Bank as expressly authorized by the Bank; or (iii) remove
or aid in the removal from the premises of the Bank, or from any other location where Trade

 

    	 6

     

    

 

Secrets or Confidential Information
are maintained or stored by the Bank, any such Trade Secrets or Confidential Information, in whatever form or manner they are
maintained, or any materials or electronic data which relate thereto. The foregoing obligations shall survive termination of the
Executive’s employment with the Bank until the information is no longer Confidential or Trade Secrets, as defined herein.
The Executive agrees that all Confidential information which the Executive creates or to which the Executive has access as a result
of his employment is and shall remain the sole and exclusive property of the Bank.

 

Without
limiting the foregoing. Executive is prohibited from using or disclosing Bank’s Trade Secrets or Confidential Information
on or in connection with blogs, chat rooms and similar social media. Executive also is prohibited from using names, contact information
and other sensitive information regarding Bank’s customers and prospective customers on or in connection with social networking
sites, including without limitation LinkedIn, Twitter, MySpace, Skype, Messenger, or Facebook. The foregoing obligations shall
survive termination of Executive’s employment with Bank

 

(a)          Definition
of Trade Secrets. As used in this Agreement, the term “Trade Secrets” shall mean all formulas, techniques,
and procedures used by the Bank in its technical processes which are not generally known or used in the industry; specific Bank-developed
customer information (including customer data, preferences, financial information and requirements); computer programs developed
by the Bank agents or for use solely by Bank; and any other information or data which meets the definition of Trade Secrets under
North Carolina law.

 

(b)          Definition
of Confidential Information. As used in this Agreement, “Confidential Information” means data or information,
whether constituting Trade Secrets or not, which is of value to, and not generally known outside of, the Bank developed or compiled
by or on behalf of the Bank (including without limitation. Intellectual Property as defined in Section 8 below), including
but not limited to the following: (i) current and historical sales information about customers, customer business procedures or
processes, and any other information which the Executive learns about current and potential customers of the Bank through the
Executive’s employment with the Bank; (ii) information about the financial aspects of the business of the Bank, such as
costs, financial statements, selling prices, pricing policies, quoting procedures, sales, financial projections, business strategies
and other financial information; (iii) business opportunities for new or developing businesses for, and business and marketing
plans, techniques, and strategies of, the Bank (including plans for new products or services); (iv) private personnel information
(such as social security numbers and medical information); (v) information regarding the design, development, and technical aspects
of Company’s products or services; (vi) any information received by the Bank from third parties in confidence (or subject
to non-disclosure or similar covenants) and the terms and conditions of negotiations or confidential contracts between the Bank
and third parties; and (vii) any documents, files, electronic records or other information marked “Confidential”.

 

(c)          Limitations
on Use of Bank Information through Personal Devices. Executive may from time to time in the course of performing his duties
for Bank need to access Bank’s confidential, proprietary or trade secret information when he is not at Bank’s offices.

 

    	 7

     

    

 

Executive understands that information that Executive accesses or obtains regarding Bank’s business, customers, prospective
customers, vendors, products and services by virtue of Executive’s employment with Bank, including but not limited to Confidential
Information or Trade Secrets, is the property of Bank. Executive is prohibited from downloading, storing, copying, cutting and
pasting, or otherwise transmitting this information to any personal data device not owned by Bank, including but not limited to
Executive’s personal computers (including but not limited to computers in Executive’s vehicles), cellular telephones,
smart phones, texting devices, jumpdrives, compact discs, DVD’s hard drives, owned or third party storage or back-up services,
or any other device or medium on which data can be stored. Executive is expressly prohibited from emailing or otherwise transmitting
any Bank information to his personal email accounts. Further, to the extent that Executive does access the Bank’s information
through a device outside of the Bank’s offices, Executive agrees follow all Bank security procedures and to protect the
confidentiality of the information from exposure to third persons, including family members, roommates, and others who are not
expressly authorized by Bank to view the information.

 

SECTION
8. Intellectual Property.

 

(a)          During
the term of Executive’s employment by Bank, Executive covenants that in the event that Executive should conceive, author
or make any invention, trade secret, idea, discovery or improvement relating in any way, directly or indirectly, to the business
of Bank or to any prospective business which Bank is pursuing or investigating (the “Prospective Business”)
whether patentable or unpatentable (collectively, “Intellectual Property”), Executive shall promptly
communicate and disclose all such Intellectual Property to Executive’s supervisor together with all related data and information.

 

(b)          Any
and all Intellectual Property which Executive may conceive, author or make, in any place and at any time, during the term of Executive’s
employment, relating in any matter, directly or indirectly, to the business of Bank or the Prospective Business shall be the sole
and exclusive property of Bank, and Executive hereby assigns to Bank any and all right and interest which Executive may have at
any time to such Intellectual Property including without limitation all patents, trademarks, trade secrets and copyrights that
may result therefrom. Any Intellectual Property that Executive reduces to practice or begins to reduce to practice, or with respect
to which Executive files a patent or other document pertaining to ownership of Intellectual Property, within one year of the termination
of Executive’s employment with Bank for any reason (with or without cause), shall be presumed to have been conceived during
Executive’s employment unless Executive shall prove otherwise.

 

(c)          Whenever
requested to do so by Bank, Executive shall execute all papers and documents and do such other legal acts (at Bank’s expense)
as may be required to enable Bank to obtain, maintain and enforce its rights hereunder and to obtain, maintain and enforce patent
protection, copyright protection or other legal protection of any Intellectual Property in the United States or in any foreign
country, or to complete or to transfer title or otherwise protect Bank’s interest in the Intellectual Property. These obligations
shall be binding upon Executive’s assigns, executors, administrators and other legal representatives.

 

    	 8

     

    

 

(d)          Notwithstanding
anything herein to the contrary, the assignments made herein shall not apply to any invention that Executive developed entirely
on his own time without using the Bank’s equipment, supplies, facilities or confidential or trade secret information, except
for those inventions that (i) relate at the time of conception or reduction to practice to the Bank’s business or actual
or demonstrably anticipated research or development of Bank; or (ii) result from any work performed by Executive for Bank.

 

(e)          Executive
acknowledges that as of the date hereof, Executive has not invented, authored or conceived of any such Intellectual Property,
except as listed on Attachment B to this Agreement.

 

SECTION
9. Executive to Return Property. The Executive agrees that upon the earlier of (a) the termination of the Executive’s
employment with the Bank, whether by the Executive or the Bank for any reason (with or without cause), or (b) the written request
of the Bank, the Executive (or in the event of the death or disability of Executive, Executive’s heirs, successors, assigns
and legal representatives) shall return to the Bank the Bank cellphone and computer and any and all other equipment, documents
and information, including but not limited to Confidential Information and all Trade Secret information contained in, notes, notebooks,
letters, papers, data, tapes, lists, reference items, files, records, documents, keys, pass or access cards, identification badges
or cards, passwords, laptops, PDAs, memoranda, sketches, computer files and other electronic data (wherever and however recorded,
including but not limited to information and files on the Executive’s personal computer, phones and other electronic devices
if any), drawings, memos, communications, materials, software, discs, product samples, forms, manuals, and equipment, which are
not generally available in the industry, without retaining any copies or summaries of such property.

 

SECTION
10. Restrictive Covenants/Non-Disparagement/Kev Man.

 

(a)          Legitimate
Business Interests. The Executive acknowledges that: the provisions of this Section 10 are reasonable and necessary
to protect the Bank’s business. The Executive further acknowledges that as an employee of the Bank, the Executive will not
only from time to time come into contact with and have access to Trade Secrets and Confidential Information, but also will have
contact with and access to the customers of the Bank. In consideration of the Executive’s initial employment with the Bank,
his access and exposure to the Bank’s customers, Trade Secrets and Confidential Information, and other good and valuable
consideration, each of which constitutes separate sufficient and independent consideration for each covenant below, the Executive
hereby agrees to the following restrictive covenants, for the periods of time specified.

 

(b)          Non-compete.
Executive agrees that during his employment with the Bank and for a period of one year after termination of his employment for
any reason, with or without notice or cause, Employee will not, in competition with the Bank:

 

(i)           engage
in the financial services industry in the Restricted Territory (as defined below);

 

    	 9

     

    

 

(ii)          perform
for another financial institution in the Restricted Territory the same or substantially similar services that Executive performed
for the Bank.

 

For
purposes of this subsection 10(b), the term “Restricted Territory” shall mean:

 

(A)         North
Carolina;

 

(B)         the
counties of Avery, Buncombe, Burke, Cabarrus, Catawba, Cherokee, Clay, Cleveland, Gaston, Graham, Haywood, Henderson, Jackson,
Lincoln, Macon, Madison, McDowell, Mitchell, Mecklenburg, Polk, Rowan, Rutherford, Swain, Transylvania, Union, Watauga and Yancey,
North Carolina;

 

(C)         any
and all counties in North Carolina or any other state in the United States in which the Bank conducted business or solicited customers
while Executive was employed by the Bank and in which the Bank still does business at the time of Executive’s termination;

 

(D)         Each
and every city in which the Bank’s customers are located.

 

(c)          Non-solicitation
of Clients. During the Executive’s employment by the Bank and for two (2) years following Executive’s termination
of employment, whether by Executive or Bank for any reason (with or without notice or cause). Executive will not, directly or
indirectly, on his own behalf or on behalf of another person or entity:

 

(i)           Request,
induce, or attempt to influence any customer or client of the Bank to limit, curtail, cancel, or terminate any business it transacts
with, or products or services it receives from, Bank;

 

(ii)          Request,
induce or attempt to influence any Prospective Customer (as defined below) of Bank to terminate any business negotiations it is
having with Bank or to otherwise not do business with Bank;

 

(iii)         Request,
induce, or solicit any customer of the Bank to purchase products or services from an entity other than Bank which are the same
or closely similar to those offered to the customer by Bank; or

 

(iv)         Request,
induce, or solicit, on behalf of a person other than the Bank, any Prospective Customer to purchase products or services from
an entity other than Bank which are the same or closely similar to those offered to the Prospective Customer by Bank.

 

For
purposes of this Section 10(c), the term “Prospective Customer” shall mean any person or entity who
has not yet purchased Bank’s products or services, but who has been targeted or identified by Bank as a potential user of
Bank’s products or services, and

 

(A)         Whom
Executive or his direct subordinates was engaged in soliciting on behalf of Bank during the twelve months preceding his

 

    	 10

     

    

 

termination
(or if Executive is still employed with the Bank at the time of the conduct described in subsection 10(c)(i) or (ii),
then during the 12-month period preceding the prohibited contact); or

 

(B)         Whom
Executive would have an advantage in soliciting as a result of confidential information gained by Executive as a result of his
employment with Bank.

 

(d)          Non-solicitation
of Employees. The Executive agrees that during the Executive’s employment and for two (2) years following the Executive’s
termination of employment, the Executive will not directly or indirectly solicit for employment, or advise or recommend to any
competitor of the Bank that they employ or solicit for employment, any person who is employed (currently or at any time during
the time of Executive’s employment) by the Bank, or solicit or encourage any other employee of the Bank or any of its affiliates
to do any act that is disloyal to the Bank.

 

(e)          Non-Disparagement.
The Executive agrees that during and after his employment he shall not disparage or malign the Bank or its agents, officers or
directors with respect to the Bank to anyone outside of the Bank. This provision shall not be deemed to require Executive to make
or fail to make any representation or statement that would subject such party to liability or potential liability by virtue of
making any such representation or statement or failing to make a representation or statement, including but not limited to truthful
representations consistent with requirements of applicable securities laws and regulations.

 

(f)           Cooperation
Regarding Key Man. The Executive agrees to reasonably cooperate and assist the Bank in the transitioning of certain operations
to any new “Key Man” as identified and designated by the Bank during the period of his employment with the Bank and/or
at the time of termination of his employment and for a transition period of up to ninety days thereafter. Following the ninety
day transition period. Executive agrees to use his best efforts to be reasonably available to cooperate with regard to continuing
transition issues, at the request of the Bank.

 

(g)          Reasonableness
of Restrictions. The Executive agrees that the limitations set forth in this Section 10 (including, without limitation,
any time or territorial limitations) and in Sections 7, 8 and 9 of this Agreement are reasonable and properly
required for the adequate protection of the businesses of the Bank. It is understood and agreed that the covenants made by the
Executive in this Section 10 (and in Sections 7, 8 and 9 hereof) shall survive the expiration or termination
of this Agreement, and that the Executive’s compliance with the terms of these Sections and subsections (b), (c), (d),
(e) and (f) of this Section 10 shall be a condition of the receipt of any payment under this Agreement.

 

SECTION
11. Preliminary Injunctive Relief and Additional Remedy. The Executive
and the Bank agree that a breach by either of the provisions of this Agreement may cause irreparable damage incapable of measurement
and for which money damages alone would be an insufficient remedy. Therefore, in the event of such breach or threatened breach,
the Parties, in addition to any other remedies available at law or in equity, shall be entitled to a temporary restraining order
and preliminary and permanent injunctions from a court of

 

    	 11

     

    

 

competent jurisdiction sitting in Lincoln County, North Carolina, restraining
the breach or continuing any breach of any of the provisions of this Agreement. The parties further covenant and agree that in
the event of a violation of any of the covenants and agreements contained in Sections 7, 8, 9 or 10 of this Agreement
or any subsections thereof, the aggrieved party shall be entitled to an accounting of the profits the non-aggrieved party directly
or indirectly has realized and/or may realize as a result of, growing out of or in connection with any such violation.

 

SECTION
12. Additional Regulatory Requirements. Notwithstanding anything contained in this Agreement to the contrary, it is
understood and agreed that the Bank (or any of its successors in interest) shall not be required to make any payment or take any
action under this Agreement if:

 

(a)          the
Bank is declared by any governmental agency having jurisdiction over the Bank (hereinafter referred to as “Regulatory
Authority”) to be insolvent, in default or operating in an unsafe or unsound manner; or,

 

(b)          in
the reasonable opinion of counsel to the Bank, such payment or action (i) would be prohibited by or would violate any provision
of state or federal law applicable to the Bank, including, without limitation, the Federal Deposit Insurance Act as now in effect
or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of
policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by
any Regulatory Authority.

 

Section
13. Change in Control.

 

(a)          In
the event of a termination of the Executive’s employment in connection with, or within twenty-four (24) months after, a
“Change in Control” (as defined in subsection (d) below) of the Bank other than for Cause (as defined
in Section 6 of this Agreement), the Executive shall be entitled to receive liquidated damages as set forth in subsection
(c) below. Said sum shall be payable as provided in subsection (e) below.

 

(b)          The
Executive shall have the right to terminate this Agreement upon the occurrence of any of the following events (the “Termination
Events”) within twenty-four months following a Change in Control of the Bank:

 

(i)           Executive
is assigned any duties and/or responsibilities that are inconsistent with or constitute a demotion or reduction in the Executive’s
position, duties, responsibilities or status as such existed at the time of the Change in Control or with his reporting responsibilities
or titles with the Bank in effect at such time, regardless of Executive’s resulting position; or

 

(ii)          Executive’s
annual base salary rate is reduced below the annual amount in effect as of the effective date of a Change in Control or as the
same shall have been increased from time to time following such effective date; or

 

    	 12

     

    

 

(iii)         Executive’s
life insurance, medical or hospitalization insurance, disability insurance, stock options plans, stock purchase plans, deferred
compensation plans, management retention plans, retirement plans or similar plans or benefits being provided by the Bank to the
Executive as of the effective date of the Change in Control are reduced in their level, scope or coverage, or any such insurance,
plans or benefits are eliminated; unless such reduction or elimination applies proportionately to all salaried employees of the
Bank who participated in such benefits prior to such Change in Control; or

 

(iv)         Executive
is transferred to a location which is an unreasonable distance from his current principal work location without the Executive’s
express written consent.

 

A
Termination Event shall be deemed to have occurred on the date such action or event is implemented or takes effect.

 

(c)          In
the event that the Executive terminates this Agreement pursuant to this Section 13 in the first year of this Agreement,
the Bank will be obligated to pay or cause to be paid to Executive liquidated damages in an amount equal to 1.99 times the Executive’s
“base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”),
and in the event that the Executive terminates this Agreement pursuant to this Section 13 in the any subsequent year
of this Agreement, the Bank will be obligated to pay or cause to be paid to Executive liquidated damages in an amount equal to
1.0 times the Executive’s “base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986,
as amended (the “Code”). In addition, in the event that the Executive terminates this Agreement pursuant
to this Section 13 in any year of this Agreement, and unless otherwise prohibited by applicable law, and subject to the
terms and conditions of the applicable plans. Executive’s restricted stock awarded under this Agreement and Executive’s
supplemental retirement plan benefits (as set forth under Section 5(k) of this Agreement) will fully vest immediately prior
to the effective date of the Executive’s termination.

 

(d)          For
the purposes of this Agreement, the term Change in Control shall mean any of the following events:

 

(i)           After
the effective date of this Agreement, any “person” (as such term is defined in Section 7(j)(8)(A) of the Change in
Bank Control Act of 1978), directly or indirectly, acquires beneficial ownership of voting stock, or acquires beneficial ownership
of voting stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable proxies, representing thirty-five
percent (35%) or more of any class of voting securities of the Bank, or acquires control of, in any manner, the election of a
majority of the Directors; or

 

(ii)          The
Bank consolidates or merges with or into another corporation, association or entity, or is otherwise reorganized, where the Bank
is not the surviving corporation in such transaction; or

 

    	 13

     

    

 

(iii)         All
or substantially all of the assets of the Bank are sold or otherwise transferred to or are acquired by any other corporation,
association or other person, entity or group.

 

Notwithstanding
the other provisions of this Section 13, a transaction or event shall not be considered a Change in Control if, prior to
the consummation or occurrence of such transaction or event, Executive and Bank agree in writing that the same shall not be treated
as a Change in Control for purposes of this Agreement.

 

(e)          Such
amounts payable pursuant to this Section 13 shall be paid, at the option of the Executive, in one lump sum payment following
termination of this Agreement.

 

(f)           Following
a Termination Event which gives rise to Executive’s rights hereunder, the Executive shall have twelve (12) months from the
date of occurrence of the Termination Event to terminate this Agreement pursuant to this Section 13. Any such termination
shall be deemed to have occurred only upon delivery to the Bank (or to any successor corporation) of written notice of termination
which describes the Change in Control and the Termination Event. If Executive does not so terminate this Agreement within such
twelve-month period, he shall thereafter have no further rights hereunder with respect to that Termination Event, but shall retain
rights, if any, hereunder with respect to any other Termination Event as to which such period has not expired.

 

(g)          It
is the intent of the parties hereto that all payments made pursuant to this Agreement be deductible by the Bank for federal income
tax purposes and. not result in the imposition of an excise tax on the Executive. Notwithstanding anything contained in this Agreement
to the contrary, any payments to be made to or for the benefit of the Executive which are deemed to be “parachute payments”
as that term is defined in Section 280G of the Code, shall be modified or reduced to the extent deemed to be necessary by the
Directors to avoid the imposition of excise taxes on the Executive under Section 4999 of the Code or the disallowance of a deduction
to the Bank under Section 280(a) of the Code.

 

(h)          In
the event any dispute shall arise between the Executive and the Bank as to the terms or interpretation of this Agreement, including
this Section 13, whether instituted by formal legal proceedings or otherwise, including any action taken by the Executive
to enforce the terms of this Section 13 or in defending against any action taken by the Bank, the Bank shall reimburse
the Executive for all costs and expenses, proceedings or actions, in the event the Executive prevails in any such action.

 

SECTION
14. Code Section 409A. Notwithstanding any other provision in the Agreement to the contrary, if and to the extent that
Code Section 409A is deemed to apply to any benefit under the Agreement, it is the general intention of the Bank that such benefits
shall, to the extent practicable, comply with, or be exempt from. Code Section 409A, and the Agreement shall, to the extent practicable,
be construed in accordance therewith. Deferrals of benefits distributable pursuant to the Agreement that are otherwise exempt
from Code Section 409A in a manner that would cause Code Section 409A to apply shall not be permitted unless such deferrals are
in compliance with Code Section 409A. hi the event that the Bank (or a successor thereto) has any stock which is publicly traded
on an established

 

    	 14

     

    

 

securities market or otherwise and the Executive is determined to be a “specified employee” (as
defined under Code Section 409A), any payment to be made to the Executive upon a separation from service may not be made before
the date that is six months after the Executive’s separation from service (or death, if earlier). To the extent that the
Executive becomes subject to the six-month delay rule, all payments that would have been made to the Executive during the six
months following his separation from services that are not otherwise exempt from Code Section 409A, if any, will be accumulated
and paid to the Executive during the seventh month following his separation from service, and any remaining payments due will
be made in their ordinary course as described in the Agreement. For the purposes herein, the phrase “termination of employment”
or similar phrases will be interpreted in accordance with the term “separation from service” as defined under Code
Section 409A if and to the extent required under Code Section 409A. Further, (i) in the event that Code Section 409A requires
that any special terms, provisions or conditions be included in the Agreement, then such terms, provisions and conditions shall,
to the extent practicable, be deemed to be made a part of the Agreement, and (ii) terms used in the Agreement shall be construed
in accordance with Code Section 409A if and to the extent required. Further, in the event that the Agreement or any benefit thereunder
shall be deemed not to comply with Code Section 409A, then neither the Bank, the Board, the Compensation Committee nor its or
their designees or agents shall be liable to any participant or other person for actions, decisions or determinations made in
good faith.

 

SECTION
15. Binding Effect. This Agreement may not be assigned by Executive. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, successors, and legal representatives and as to Bank, its assigns.

 

SECTION
16. Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and
either delivered in person or sent by first class or by certified or registered mail, postage prepaid, if to the Bank, at the
Bank’s principal place of business, and if to the Executive, at the Executive’s home address most recently filed with
the Bank, or to such other address or addresses as either party shall have designated in writing to the other party hereto.

 

SECTION
17. Law Governing. This Agreement shall be governed by and construed in accordance with the laws of the State of North
Carolina, exclusive of the conflicts of laws provisions thereof.

 

SECTION
18. Severability. If any portion of this Agreement, including but not limited to any provision of Sections 4, 5,
7, 8, 9, and 10
of this Agreement, are deemed unreasonable or unenforceable by any court of competent jurisdiction, then such portion shall be
severable from that portion of this Agreement which is reasonable and which is enforceable, it being the intention of the parties
that any illegal or unenforceable provision shall not affect the remainder of this Agreement that is valid and enforceable and
that all other covenants and provisions in this Agreement shall in every other respect continue in full force and effect.

 

SECTION
19. Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not
be deemed a waiver of such term, covenant or

 

    	 15

     

    

 

condition, nor shall any waiver or relinquishment of any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.

 

SECTION
20. Entire Agreement; Modifications. This Agreement constitutes the entire agreement between the Parties with respect
to the subject matter hereof and supersedes all prior agreements, oral and written, with respect thereto. This Agreement may be
modified or amended only by an instrument in writing signed by both parties hereto.

 

SECTION
21. Counterparts. For the convenience of the Parties, this Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

IN
WITNESS WHEREOF, the Bank and the Executive have duly executed and delivered this Agreement as of the day and year first above
written.

 

	 	BANK:
	 	 	 
	 	Carolina
Trust Bank
	 	 	 
	 	By:	/s/
Johnathan L. Rhyne, Jr.
	 	Name:	Johnathan L. Rhyne, Jr.
	 	Title:	Chairman
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	 	/s/
Jerry L. Ocheltree
	 	 	Jerry
L. Ocheltree

 

16

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