Document:

Exhibit
10.3

CHANGE OF CONTROL AGREEMENT

THIS AGREEMENT (“Agreement”)
dated June 1, 2007, by and between AMERICAN PATRIOT BANK, a Tennessee banking
corporation (the “Bank”), and J.  Robert
Grubbs (“Executive”).

W I T N E S S E T H:

WHEREAS, Executive
has been effective in his service to Bank, and Bank recognizes the valuable
services that Executive has rendered and desires to be assured that Executive
will continue his active participation in the business of Bank; and

WHEREAS, Executive
is willing to continue to serve Bank but desires assurance that in the event of
any Change of Control (as such term is hereinafter defined) of the Bank’s
holding company, American Patriot Financial Group, Inc., a Tennessee
corporation (the “Holding Company”) he will continue to have the responsibility
and status he has earned.

NOW, THEREFORE, in
consideration of the promises and the mutual agreements herein contained, Bank
and Executive hereby agree as follows:

1.                                       In
order to protect Executive against the possible consequences of a Change of
Control (as such term is hereinafter defined) of Holding Company and thereby to
induce Executive to continue to serve as an executive officer of Bank, Bank
agrees that if control of Holding Company is changed, Executive shall be
entitled to receive within ten (10) business days of the Change of Control, a
lump-sum payment in cash in the amount of $1.00 less than three (3) times
the disqualified individual’s base amount of compensation (Internal Revenue
Code Sec. 280G(b)(2)(A)(ii)). The term “base amount,” referred to in this
provision, is the Employee’s annualized includible compensation for a base
period, consisting of the most recent five tax years ending before the date on
which the ownership or control of the Bank or Holding Company changed, or the
portion of this period during which the Employee performed personal services
for or was an employee of the Bank (Code Sec. 280G(b)(3) and (d)). “Annualized
includible compensation” for the base period is the average annual compensation
that was payable by the Bank and includible by the Employee in gross income for
the tax years of the base period (Code Sec. 280G(d)(1)).

2.                                       Even
in the event of termination of Executive’s service to the Bank, Executive’s
benefits hereunder shall be considered severance pay in consideration of his
past service, and pay in consideration of his continued service from the date
hereof, and his entitlement thereto shall not be governed by any duty to
mitigate his damages by seeking further employment nor offset by any compensation
which he may receive from future employment.

3.                                       As
used herein, the term “Change of Control” shall mean:

(i)                                     A
shareholder-approved merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the Holding
Company’s outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction;

(ii)                                  A
sale, transfer, or other disposition of all or substantially all of the Holding
Company’s assets and complete liquidation or dissolution of the Holding
Company;

(iii)                               The
acquisition, directly or indirectly, by any person or related group of persons
(other than the Holding Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Holding
Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, or comparable successor rule) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Holding Company’s outstanding securities pursuant to a
tender or exchange offer made directly to the Holding Company’s shareholders;
or

(iv)                              Any
change in the composition of the Board of Directors of the Holding Company
resulting in a majority of the present directors of the Holding Company not
constituting a majority two years hence, provided, that in making such
determination, directors who are elected by, or on the recommendation of, such
present majority, shall be excluded.

4.                                       The
specific arrangements referred to above are not intended to exclude Executive’s
participation in other benefits available to executive personnel generally or
to preclude other compensation or benefits as may be authorized by the Board of
Directors from time to time.

5.                                       The
Bank agrees to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Bank, by agreement in form and substance satisfactory to
Executive, 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 it if
no such succession had taken place. 
Failure of the Bank to obtain such agreement prior to the effectiveness
of any such succession shall be a breach of this agreement and shall entitle
Executive to compensation from the Bank in the same amount and on the same
terms as Executive would be entitled under Section 1 hereof.  As used in this Agreement, “Bank” shall mean
the Bank as hereinbefore defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for in
this paragraph 5 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.

6.                                       This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. 
If Executive should die while any amount would still be payable to
Executive hereunder if Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement of Executive’s devisee, legatee or other designee, or, if there
be no such designee, to Executive’s estate.

7.                                       Any
payment or delivery required under this Agreement shall be subject to all
requirements of the law with regard to withholding, filing, making of reports,
and the like, and Bank shall use its best efforts to satisfy promptly all such
requirements.

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8.                                       Prior
to a Change of Control as herein defined, this Agreement shall terminate if
Executive shall resign voluntarily, retire, become permanently and totally
disabled, voluntarily take another position requiring a substantial portion of
his time, or die.  This Agreement shall
also terminate if Executive’s employment as an officer of Bank shall have been
terminated for any reason by the Board of Directors of Bank as constituted
prior to any Change of Control of Holding Company as herein defined.

Not withstanding
any other provision, this Agreement will not terminate if the Bank terminates
the Executive for the primary purpose of avoiding payment of benefits under
this Agreement due to a prospective or actual “Change of Control” situation
that arises and the Executive has not exhibited conduct that could be
considered “Termination for Cause.” “Termination for Cause” means separation
from service for:

(a)                                  Gross
negligence for gross neglect of duties to the Bank; or

(b)                                 Conviction
of a felony or of a gross misdemeanor involving moral turpitude in connection
with the Executive’s employment with the Bank; or

(c)                                  Fraud,
dishonesty or willful violation of any law or significant Bank policy committed
in connection with the Executive’s employment and resulting in a material
adverse effect on the Bank.

9.                                       This
Agreement shall be construed and enforced under the laws of the State of
Tennessee.

IN WITNESS WHEREOF,
this Agreement has been executed on June 1, 2007.

	
   

  	
   

  
	
   

  	
  AMERICAN PATRIOT BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don Waddell

  	
   

  
	
   

  	
  Title:

  	
  CFO

  
					

 

 3Exhibit 10.4

June
1,2007 

Mr. Jerry A. Simmerly 

1823 Clingman View Drive 

Alcoa,
TN 37701 

RE:
Employment Terms Agreement 

Dear
Jerry: 

I am
pleased to offer you the following terms and conditions of employment with
American Patriot Bank: 

Primary Position: President and Chief Operating Officer for American Patriot Bank 

Secondary Position: Board of Directors for American Patriot Bank  

Office Location: Maryville/Knoxville Metro Area 

Responsibilities:

Develop
and implement a banking services delivery strategy for each individual market
while maintaining continuity of products and services across the multi bank
system. 

Manage,
the input of the local bank lenders, the positioning of assets for growth
throughout the banking system. 

Work
with the CEO on continued growth strategies within the desired market
territories whether by De Novo growth or by merger and acquisition. 

Develop
and implement a systems, product, and continuing education program to insure
that each employee is provided all the knowledge to be successful in each of
their markets. 

Manage
all of the Bank’s East Tennessee operations including Retail and Commercial
Banking with discretion on staffing and payroll. 

Develop
and implement a banking services delivery strategy for all of the Bank’s
markets including but not limited to the Knoxville, Nashville, Chattanooga, and
the Tri-Cities market areas. 

Manage
the Bank’s Balance Sheet, Income Statement, and Asset Liability functions to
insure maximum shareholder return.

The President will be responsible for the overall
growth, profitability, budgeting, compliance, safety and soundness, and capital
of the Bank. Personal loan portfolio growth as well as developing new markets,
products, services, personnel to enhance franchise value of the Bank in addition
to shareholder value, ROE, and ROA.

The President will report directly to the Chairman
& CEO. 

Signing Incentive: A $25,000 signing incentive will be paid upon the first day of
employment. 

Base Salary:
$150,000 per year paid twice a month with annual reviews. Increases in salary
will be determined by the Board of Directors Compensation Committee. The above
salary amount is conditioned on satisfactory performance of the above described
responsibilities including meeting goals and objectives established by the
Board. 

Incentive Bonus Structure: The Board of Directors will implement a bonus program whereby
Executive may receive up to 40% of annual base salary based on goals to be
predetermined by the Board. Goals may include but not necessarily limited to
ROA, ROE, earnings, asset growth, safety and soundness, and compliance. 

Director Fees:
Executive should receive director fees as approved by the Board of Directors
for all inside directors. This currently consists of a $6,000 retainer fee and
$500 per board meeting. 

Director Employment: Executive agrees that if his employment as an Executive Officer of the
Bank is terminated that his role as director may also be terminated
simultaneously by the Board.  All
directors must be approved by majority of shareholders to remain in office. 

Automobile:
Terms agreeable for type and amount to be approved by the Board. 

Stock Appreciation Rights Agreement, Deferred Director
Compensation Agreement, and
Change of Control: Executive
will be able to participate in the above cited Agreements. 

Reimbursement:
The Bank will reimburse for all appropriate expenses including travel, meals,
cell phone, etc. used for the growth of American Patriot Bank. 

Insurance:
Family insurance to be paid for by the Bank, currently Blue Cross Blue Shield. 

Vacation and Sick Days: Four weeks per year of Vacation and Five additional days of paid sick
leave. 

Other: 401(k)
and profit sharing plan per Bank policy. 

Termination:
The effect of termination for the Stock Appreciation Rights Agreement, Director
Compensation Rights Agreement, Director Deferral Compensation Agreement, and
the Change of Control Agreement will be determined and controlled solely by the
language of those particular agreements. 

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Termination for Cause: Not withstanding any
provision of this Employment Terms Agreement to the contrary, the Bank shall
not distribute any benefit under this agreement or any other agreement if the
executive employed with the Bank is terminated by the Bank or any applicable
bank regulator due to a “Termination for Cause.”

“Termination
for Cause” means separation from service for: 

(a)           Gross
negligence for gross neglect of duties to the Bank; or 

(b)          Conviction
of a felony or of a gross misdemcanor involving moral turpitude in connection
with the Executive’s employment with the Bank; or 

(c)           Fraud,
dishonesty or willful violation of any law or significant Bank policy committed
in connection with the Executive’s employment and resulting in a material
adverse effect on the Bank. 

Termination Other Than for Cause: Either
party may terminate this Employment Terms Agreement other than for cause upon
written notice to the other party. In the event that the Bank or Executive
terminates this Agreement other than for cause, the Executive should receive all
accrued and vested incentives that are not controlled by the language of the
Stock Appreciation Rights Agreement, Director Deferred Compensation Agreement,
or Change of Control Agreement. 

In the
event that the Executive terminates this Employment Terms Agreement, he agrees
not to solicit the Bank’s customers or employees to leave the service of the
Bank or to compete directly or indirectly with the Bank within fifty miles of
any Bank office for a period of one year from the separation of service. The
Executive may not serve on the Board of Directors of, be employed by, or be a
consultant for any financial institution other than the Bank or Bank Holding
Company or be employed by any other financial institution or act as a
consultant or otherwise influence employees or customers to join said other
financial institution for a period of one year after Separation of Service. 

	
  Sincerely,

  	
   

  
	
  /s/ J.Robert
  Grubbs

  	
   

  	
   

  
	
  J.Robert Grubbs

  	
   

  
	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted this 1st of June 2007.

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jerry
  Simmerly 

  
	
   

  	
  Jerry Simmerly 

  
				

 

 3

Addendum to Employment Terms
Agreement

This
Addendum to Employment Terms Agreement dated June 1, 2007 (Addendum) is entered
into between Jerry A. Simmerly (JAS), American Patriot Bank (APB) and American
Patriot Financial Group, Inc. (APFGI). 

Whereas,
JAS and APB signed on Employment Terms Agreement dated June 1, 2007; and, 

Whereas,
JAS and APB desire to add to the terms of the Employment Terms Agreement and
that APFGI also become a party. 

Now
therefore, based on good and valuable consideration the sufficiency thereof
being hereto agreed and attested to by the parties, JAS, APB, and APBGI agree
to the following: 

1.                  JAS
shall also serve as a director, President and COO of APFGI. In the event that
JAS’s role as an executive officer of APB is terminated his role as APFGI
director, President, and COO may also be terminated simultaneously by the Board
of Directors of APFGI. 

2.                  APFGI
shall become an additional party to the Employment Terms Agreement and all
terms and conditions of this addendum are hereby incorporated by reference into
the Employment Terms Agreement and all terms of the said Employment Terms
Agreement are hereby incorporated into this Addendum. 

3.                  All
other terms and conditions of the Employment Terms Agreement will remain in
full force and effect. 

Witness
our signature entered on this July 2, 2007. 

	
  American Patriot Bank

  	
   

  	
  American Patriot Financial Group, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ J. Robert
  Grubbs

  	
   

  	
   

  	
  /s/ J. Robert Grubbs

  	
   

  
	
  By: J. Robert
  Grubbs

  	
   

  	
  By: J. Robert
  Grubbs

  
	
  Chariman & CEO

  	
   

  	
  Chariman &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/  Jerry A. Simmerly

  	
   

  	
   

  	
   

  
	
  Jerry A.
  Simmerly

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