Document:

Exhibit 10.2

 Exhibit 10.2 
 EMPLOYMENT AND CHANGE 
 OF CONTROL AGREEMENT 

THIS EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT (this “Agreement”) is made and entered as of the
         day of             , 2011 by and among Macon Bancorp (the “Bancorp”), Macon Bank, Inc. (the “Bank”) (the
Bancorp and the Bank are collectively referred to as the “Employer”), and W. David Sweatt (“Executive”). 

BACKGROUND 
 WHEREAS, the expertise and experience of Executive, and Executive’s relationships and reputation in the financial institutions industry are extremely valuable to the Employer; and 

WHEREAS, it is in the best interests of the Employer to maintain an experienced and sound executive management team to manage the
Employer and to further the Employer’s overall strategies to protect and enhance the value of its shareholders’ investments; and 
 WHEREAS, the Employer and Executive desire to enter into this Agreement to establish the scope, terms and conditions of Executive’s employment by the Employer 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1.
Effective Date. The effective time and date of this Agreement shall be deemed to be 12:00:01 o’clock, a.m., on the date of its making set forth above (the “Effective Date”). 

2. Definitions. The following defined terms are defined in the referenced Sections of this Agreement. 

 

			
	 Term
	  	 Section

	 Accrued Obligations
	  	Section 8(a)(i)(A)
	 Base Salary
	  	Section 6(a)
	 Bancorp Board
	  	Section 7(b)
	 Bank Board
	  	Section 6(a)
	 Bank Group
	  	Section 12(a)
	 Benefit Plans
	  	Section 6(c)
	 Business
	  	Section 12(a)
	 Cause
	  	Section 7(b)
	 Change of Control
	  	Section 9(b)
	 Change of Control Remainder
	  	Section 9(c)
	 Change of Control Termination
	  	Section 9(a)
	 Change of Control Termination Date
	  	Section 9(a)
	 COBRA
	  	Section 8(d)
	 Code
	  	Section 4

			
	 Commissioner
	  	Section 14(d)
	 Date of Termination
	  	Section 7(f)
	 Disability
	  	Section 7(a)
	 Disability Effective Date
	  	Section 7(a)
	 Effective Date
	  	Section 1
	 Employer Benefit Election
	  	Section 8(a)
	 Employment Period
	  	Section 4
	 FDIC
	  	Section 14(d)
	 Good Reason
	  	Section 7(c)
	 Group
	  	Section 9(b)
	 Incumbent Directors
	  	Section 9(b)
	 Insurance Benefit Plans
	  	Section 6(d)
	 ISOs
	  	Section 8(b)
	 Notice of Termination
	  	Section 7(e)
	 NSOs
	  	Section 8(b)
	 Other Benefits
	  	Section 8(b)
	 Person
	  	Section 9(b)
	 Remainder
	  	Section 8(a)
	 Restricted Period
	  	Section 12(a)
	 Section 409A
	  	Section 4
	 Terminate
	  	Section 4
	 Welfare Benefit Plans
	  	Section 6(d)

 3.
Employment. Executive is employed as the Executive Chairman of Bancorp and the Bank. Executive’s responsibilities, duties, prerogatives and authority in such executive offices, and the clerical, administrative and other support staff and
office facilities provided to him, shall be those customary for persons holding such executive offices of institutions that are a part of the financial institutions industry. 
 4. Employment Period. Unless extended by renewal as provided below or earlier Terminated in accordance with Sections 7 or 9 hereof, Executive’s employment shall be for a two (2) year term
beginning as of the Effective Date (the “Employment Period”). Upon the expiration of the Employment Period, this Agreement shall terminate and Executive shall be an “at will” employee of the Employer. For purposes of this
Agreement, “Terminate” (and variations and derivatives thereof) shall mean, when used in connection with a cessation of employment, that the Executive has incurred a separation from service as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and guidance and regulations issued thereunder (“Section 409A”). Notwithstanding any other provision of this Agreement, if a conversion of Bancorp from the mutual to the stock form
of ownership is not consummated on or before December 31, 2011, this Agreement shall be deemed void and of no further force or effect as of January 1, 2012. 
 5. Extent of Service. During the Employment Period, and excluding any periods of vacation, sick or other leave to which Executive is entitled under this Agreement, Executive agrees to devote
reasonable attention and time to the business and affairs of the Bank commensurate with his offices, and, to the extent necessary to discharge the responsibilities 

  
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assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform faithfully and efficiently Executive’s responsibilities and duties under this Agreement.

 6. Compensation and Benefits. 
 (a) Base Salary. During the Employment Period, the Employer will pay to Executive a base salary at the rate of at least
$             per year (“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Bank’s payroll
practices from time to time. In accordance with the policies and procedures of the Board of Directors of the Bank (the “Bank Board”), the Employer shall review Executive’s total compensation at least annually and in its sole
discretion may adjust Executive’s total compensation from year to year, but during the Employment Period the Employer may not decrease Executive’s Base Salary below
$            ; provided further, however, that periodic increases in Base Salary, once granted, shall not be subject to revocation. The annual review of Executive’s total
compensation will consider, among other things, changes in the cost of living, Executive’s own performance and the Bancorp’s consolidated performance. 
 (b) Incentive Plans. During the Employment Period, Executive shall be entitled (i) to participate in all of executive management incentive plans of the Employer, and any successor or
substitute plans; (ii) to participate in long-term incentive plans of the Employer, and any successor or substitute plans; and, (iii) to participate in all stock option, stock grant and similar plans of the Employer, and any successor or
substitute plans, in each of the foregoing cases in at least as favorable a manner as any participant who is a member of the senior executive management of the Employer. 

(c) Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all
savings, pension and retirement plans (including supplemental retirement plans), practices, policies and programs applicable generally to senior executive employees of the Employer (the “Benefit Plans”), and on at least as favorable a
basis as any other participant who is a member of the senior executive management of the Employer. 
 (d)
Welfare Benefit Plans. During the Employment Period, Executive and/or Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under all welfare benefit plans, practices, policies and
programs provided by the Employer (including, without limitation, medical, hospitalization, prescription, dental, disability, employee life, group life, accidental death and dismemberment, and travel accident insurance plans and programs)
(“Welfare Benefit Plans”) to the extent applicable generally to senior executive employees of the Employer. The Welfare Benefit Plans pertaining to medical, hospitalization, prescription and dental insurance coverages are referred to
herein as the “Insurance Benefit Plans”. 
 (e) Expenses. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Employer to the extent applicable generally to other senior executive
employees of the Employer. The expenses eligible for reimbursement under this item (e) in any year shall not affect any expenses eligible for reimbursement or in-kind 

  
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benefits in any other year. Executive’s rights under this item (e) are not subject to liquidation or exchange for any other benefit. 

(f) Fringe and Similar Benefits. During the Employment Period, Executive shall be entitled to fringe benefits in
accordance with the plans, practices, programs and policies of the Employer in effect for its senior executive employees. 
 (g) Vacation, Sick and Other Leave. During the Employment Period, Executive shall be entitled annually to a minimum of
            (__) paid time off days specified in the employment policies of the Employer and shall have such rights with respect to such days as are provided in those policies.

 7. Termination of Employment (Other Than In Connection With A Change Of Control). 

(a) Death or Disability. Executive’s employment with the Employer shall Terminate automatically upon
Executive’s death during the Employment Period. If the Employer determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to
Executive written notice in accordance with Section 7(e) of this Agreement of its intention to Terminate Executive’s employment. In such event, Executive’s employment with the Employer shall Terminate effective on the 60th day after
receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of
this Agreement, “Disability” shall mean the absence of Executive from Executive’s duties with the Employer on a full-time basis for 90 consecutive business days as a result of incapacity due to mental or physical illness or injury
which is determined to be total and permanent by a physician selected by the Employer, or the insurers of the Employer, and acceptable to Executive or Executive’s legal representative, which acceptance shall not be unreasonably withheld,
subject to (i) the Employer’s obligations, and Executive’s rights, under (A) the Americans With Disabilities Act, 42 U.S. C. §§ 1210 et seq., and (B) the Family and Medical Leave Act, 29 U. S.C. §§
2601 et seq. (and the regulations promulgated under the foregoing Acts), and (ii) the exclusion from such 90 business day calculation of any business days constituting vacation days under Section 6(g) and any business days which an
employee is permitted to be absent under the disability, sick or other leave policies of the Employer. 
 (b)
Cause. The Employer may Terminate Executive’s employment with the Employer for Cause. For purposes of this Agreement, “Cause” shall mean: 
  

	 	(i)	the willful and continued failure of Executive to perform substantially Executive’s duties with the Employer, other than any such failure resulting from
Disability, after a written demand for substantial performance is delivered to Executive by the Bank Board which specifically identifies the manner in which the Bank Board believes that Executive has not substantially performed Executive’s
duties; 

  
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	 	(ii)	the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Employer; 

 

	 	(iii)	continued insubordination with respect to directives of the Bank Board after receipt of a written warning from the Bank Board with respect thereto; or

  

	 	(iv)	a willful act by Executive which constitutes a material breach of Executive’s fiduciary duty to the Employer which is intended by Executive to injure the
reputation or business of the Employer. 

 For purposes of this provision, no act or failure to act on the part of
Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Employer. Any act, or
failure to act, based upon authority given pursuant to resolutions duly adopted by the Bank Board or the Board of Directors of Bancorp (“Bancorp Board”), or based upon the advice of counsel for the Employer shall be conclusively presumed
to be done, or omitted to be done, by Executive in good faith and in the best interests of the Employer and to not constitute insubordination. 
 (c) Voluntary Termination; Good Reason. Executive may Terminate Executive’s employment with the Employer voluntarily or for Good Reason. For purposes of this Agreement, “Good Reason”
shall mean: (i) a material diminution in Executive’s authority, duties, or responsibilities; (ii) a material change in the geographic location at which Executive must perform the services to be performed by Executive pursuant to this
Agreement; and (iii) any other action or inaction that constitutes a material breach by the Employer of this Agreement. Executive must provide notice of voluntary Termination at least 30 days prior to the applicable Date of Termination.
Executive must provide notice to the Employer of the condition Executive contends is Good Reason within 30 days of the initial existence of the condition, and the Employer must have a period of at least 30 days to remedy the condition. If the
condition is not remedied, Executive must provide a Notice of Termination as set forth in Section 7(e) within 30 days of the end of the Employer’s remedy period.  

(d) Without Cause. The Employer may Terminate Executive’s employment without Cause (“Without
Cause”). 
 (e) Notice of Termination. Any Termination (other than for death) shall be communicated
by a Notice of Termination given in accordance with Section 16(h) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of Executive’s employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Termination date (which date shall be not more than 30 days after the giving of 

  
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such notice except as otherwise provided in Section 7(a)). The failure to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Disability, Cause,
or Good Reason shall not waive any right of Executive or the Employer hereunder or preclude Executive or the Employer from asserting such fact or circumstance in enforcing Executive’s or the Employer’s rights hereunder. 

(f) Date of Termination. “Date of Termination” means (i) if Executive’s
employment is Terminated by the Employer for Cause or Without Cause, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if Executive’s employment is Terminated by Executive for
Good Reason, the date of receipt of the Notice of Termination, (iii) if Executive’s employment is Terminated by Executive voluntarily, the Date of Termination shall be the 30th day following the date of receipt of the Notice of Termination, and (iv) if Executive’s employment is
Terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the Disability Effective Date, as the case may be. 
 8. Obligations of the Employer Upon Termination (Other Than In Connection With A Change Of Control). The provisions of this Section 8 apply only to Terminations that are not in connection with
a Change of Control. 
 (a) Termination Without Cause or for Good Reason. If, during the Employment
Period, the Employer shall Terminate Executive’s employment Without Cause or the Executive shall Terminate Executive’s employment for Good Reason, then in consideration of Executive’s services rendered prior to such Termination;

  

	 	(i)	the Employer shall pay to Executive: 

  

	 	A.	 a lump sum in cash on the 30th day after the Date of Termination equal to (1) Executive’s Base Salary through the Date of Termination to
the extent not theretofore paid, and (2) any accrued vacation, sick and other leave pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as the
“Accrued Obligations”); and 

  

	 	B.	 a lump sum in cash on the 30th day after the Date of Termination equal to the product of (1) Executive’s aggregate cash bonus for the last
completed fiscal year, whether paid to Executive under Section 6 above or otherwise paid to Executive, and (2) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the
denominator of which is 365; and 

  

	 	C.	Executive’s Base Salary in monthly installments over the remainder of the Employment Period occurring after the Date of Termination (the “Remainder”).

  
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	 	(ii)	for the Remainder, the Employer shall continue to provide benefits to Executive and/or Executive’s family at least equal to those which would have been provided to
them in accordance with the Insurance Benefit Plans if Executive’s employment had not been Terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially the same benefits under
the other employer’s plans as Executive and/or Executive’s family would receive under the Insurance Benefit Plans under this item (ii), the benefits provided under this item (ii) shall be secondary to those provided under such other
employer’s plans during such applicable period of eligibility; and, provided further, that with respect Insurance Benefit Plans, upon the conclusion of any applicable COBRA period, the Employer may elect to discontinue the coverages under such
Insurance Benefit Plans and to pay Executive in cash the amount of the applicable annual premium paid by the Employer for the preceding twelve (12) month period for such discontinued coverages multiplied by the fraction of which the number of
days remaining in the Remainder is the numerator and 365 is the denominator (the election set forth in this proviso being referred to herein as the “Employer Benefit Election”); 

 

	 	(iii)	to the extent not theretofore paid or provided, the Employer shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided
herein or which Executive is eligible to receive under any Welfare Benefit Plan; and 

  

	 	(iv)	provided, however, that if during the Restricted Period Executive violates Section 12, no payments shall be due under item (i)(C) and any such payment previously
made shall be repaid by Executive. 

 (b) Death. If Executive’s employment is
Terminated by reason of Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to Executive’s legal representatives under this Agreement, except that: (i) Accrued Obligations shall
timely be paid as provided below; (ii) Other Benefits shall be timely paid or provided as described below; (iii) all stock options that are “incentive stock options”, as described in Section 422 of the Code
(“ISOs”), previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the longer of twelve (12) months and the exercise period in effect immediately prior to the Date of Termination;
(iv) all nonqualified stock options (“NSOs”) previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the period of exercise in effect immediately prior to the Date of
Termination; (v) all options previously granted to Executive and scheduled to vest in the year of death shall immediately vest and be exercisable for the applicable period set forth in the preceding items (iii) and (iv); and
(vi) Executive’s rights to all benefits under all Benefit Plans that are “non-qualified” plans shall be 100% vested, regardless of Executive’s age or years of service, at the time of Executive’s death. Accrued
Obligations shall be paid to Executive’s estate 

  
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or beneficiary, as applicable, in a lump sum in cash on the 30th day after the Date of Termination. With respect to the provision of Other Benefits, the term “Other Benefits” as
utilized in this Section 8(b) shall mean, and Executive’s estate and/or beneficiaries shall be entitled to receive, all benefits under the Employer’s Welfare Benefit Plans relating to death benefits. Without limiting the foregoing,
for one (1) year after Executive’s death, the Employer shall pay any premium required for any “qualified beneficiary” to continue his or her health care coverage in accordance with Title 1, Part 6 of the Employee Retirement
Security Act of 1974, as amended. 
 (c) Disability. If Executive’s employment is Terminated by
reason of Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to Executive, except that: (i) Accrued Obligations shall be timely paid as provided below; (ii) Other Benefits
shall be timely paid or provided as described below; (iii) all stock options that are ISOs previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the longer of twelve (12) months and
the exercise period in effect immediately prior to the Date of Termination; (iv) all NSOs previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the period of exercise in effect
immediately prior to the Date of Termination; and (v) all options previously granted to Executive and scheduled to vest in the year in which the Disability Effective Date occurs shall immediately vest and be exercisable for the applicable
period set forth in the preceding items (iii) and (iv). Accrued Obligations shall be paid to Executive in a lump sum in cash on the 30th day after the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits
as utilized in this Section 8(c) shall include, without limitation, and Executive shall be entitled after the Date of Termination to, (1) receipt of all disability benefits under all Welfare Benefit Plans relating to disability,
(2) receipt, for the remainder of the then current Employment Period, of all benefits available to Executive under all Insurance Benefit Plans, subject to the Employer Benefit Election, and (3) for the Remainder, continued participation in
group life and employee life insurance programs generally available to senior executive officers. 
 (d)
Voluntary Termination; Cause. If Executive voluntarily Terminates his employment or if Executive’s employment shall be Terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to
Executive, except that (i) the Accrued Obligations shall be paid in a lump sum in cash on the 30th day after the Date of Termination, and (ii) Other Benefits shall be paid or provided in a timely manner, in each case to the extent
theretofore unpaid; provided, however, that Executive’s right to continue to participate in Welfare Benefit Plans shall terminate on the 30th day following the Date of Termination, subject to Executive’s rights under the Consolidated
Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. §§ 1161 et seq. (“COBRA”). 
 9. Termination
In Connection With a Change of Control. 
 (a) Change of Control Termination. In the event that, at
the time of, within 90 days prior to, or within one (1) year after a Change of Control, and during the Employment Period, the Employer Terminates Executive’s employment Without Cause or Executive Terminates Executive’s employment for
Good Reason (each a “Change of Control 

  
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Termination”), Executive shall be entitled to receive the payments and benefits specified in this Section 9. The date on which the Employer or Executive receives notice in accordance
with Section 16(h) of a Change of Control Termination shall be deemed the “Change of Control Termination Date.” 
 (b) Definition of Change of Control. “Change of Control” shall mean (i) a Change of Ownership; (ii) a Change in Effective Control; or (iii) a Change of Asset Ownership; in
each case, as defined herein and as further defined and interpreted in Section 409A. 
 A. “Change in
Effective Control” shall mean the date either (i) any “Person” or “Group” (as those terms are defined in or pursuant to Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but not including
Bancorp or any “employee benefit plan” (as defined in or pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(3) of Bancorp or the Bank) acquires (or has acquired during the proceeding twelve
(12) months) ownership of outstanding stock of Bancorp possessing 30% or more of the total voting power of Bancorp’s outstanding stock or (B) a majority of the Bancorp Board is replaced during any twelve (12) month period by
directors whose election is not endorsed by a majority of the members of the Bancorp Board prior to such election. 
 B. “Change of Asset Ownership” shall mean the date any Person or Group acquires (or has acquired during the preceding twelve (12) months) assets from Bancorp or the Bank that have a total
gross fair market value that is equal to or exceeds 40% of the total gross fair market value of all of Bancorp’s consolidated assets immediately prior to such acquisition. 

C. “Change of Ownership” shall mean the date any Person or Group acquires ownership of outstanding stock of
Bancorp that, together with stock previously held, constitutes more than 50% of the total fair market value or total voting power of the stock of Bancorp provided that such Person or Group did not previously own 50% or more of the value of voting
power of the outstanding stock of Bancorp. 
 Notwithstanding the foregoing provisions of this Section 9(b), the conversion of Bancorp from
the mutual to the stock form of ownership shall not constitute a Change of Control. 
 (c) Change of Control
Payments and Benefits. Upon a Change Of Control Termination: 
  

	 	(i)	The Employer shall pay to Executive in a lump sum in cash on the 30th day after the Change of Control Termination Date the aggregate of the following amounts:

  

	 	(A)	the sum of the Accrued Obligations; 

  
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	 	(B)	an amount equal to the total of Executive’s Base Salary multiplied by a fraction, the numerator of which is the number of days remaining in the Employment Period
after the Change of Control Termination Date (the “Change of Control Remainder”) and the denominator of which is 365; 

  

	 	(C)	the product of (x) Executive’s aggregate cash bonus for the last completed fiscal year, whether paid under Section 6 above and/or otherwise paid to
Executive, and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Change of Control Termination Date and the denominator of which is 365. 

 

	 	(D)	provided, however, that if during the Restricted Period Executive violates Section 12, no payments shall be due under paragraphs (B) and (C) and any such
payment previously made shall be repaid by Executive. 

  

	 	(ii)	During the Change of Control Remainder, the Employer shall continue to provide benefits to Executive and/or Executive’s family at least equal to those which would
have been provided to them in accordance with the Insurance Benefit Plans if Executive’s employment had not been Terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially
the same benefits under the other employer’s plans as Executive would receive under the Insurance Benefit Plans under this item (ii), the benefits provided under this item (ii) shall be secondary to those provided under such other plans
during such applicable period of eligibility; and, provided further, that such obligation of the Employer shall be subject to the Employer Benefit Election. 

 

	 	(iii)	All options previously granted to Executive that are unvested as of the Change of Control Termination Date shall be deemed vested, fully exercisable and non-forfeitable
as of the Change of Control Termination Date (provided, however, that options granted less than six (6) months before the Change of Control Termination Date shall not be exercisable until the first day subsequent to the six (6) months
following their dates of grant) and all previously granted options that are vested, but unexercised, on the Change of Control Termination Date shall remain exercisable, in each case for the period during which they would have been exercisable absent
the Termination of Executive’s employment except as otherwise specifically provided by the Code. 

  
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	 	(iv)	Executive’s benefits under all Benefit Plans that are non-qualified plans shall be 100% vested, regardless of Executive’s age or years of service, as of the
Change of Control Termination Date. 

  

	 	(v)	Notwithstanding the foregoing provisions of this Section 9, the Employer may reduce any amount, distribution, acceleration of vesting or other right described in
this Section 9, in whole or part, such that the aggregate of all payments, distributions and benefits received by Executive shall not constitute an “excess parachute payment” within the meaning of Section 280G of the Code subject
to the excise tax imposed by Section 4999 of the Code; provided, however, that the Employer will endeavor to effect such reduction in a way that results in the most favorable tax consequences for Executive and that such reduced aggregate amount
shall be the maximum amount which would not constitute an “excess parachute payment”. 

 10.
Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy, or practice provided by the Employer and for which Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Employer. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Employer at or subsequent to a Date of Termination or Change of Control Termination Date shall be payable in accordance with such plan, policy, practice or program or such contract or agreement except
as explicitly modified by this Agreement. 
 11. Full Settlement. The Employer’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Employer may have against Executive or others. In no
event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement; provided, however, that Executive’s right to receive
any benefits under Insurance Benefit Plans to the extent that Executive obtains other employment shall be limited as provided in Section 8(a)(ii). The Employer agrees to recognize as an indebtedness to Executive and shall pay as incurred all
legal fees and expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Employer, Executive or others of the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the “applicable federal
rate” provided for in Section 7872(f)(2)(A) of the Code. 

  
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 12. Covenants. 

(a) Covenant Not to Compete. During the Restricted Period, Executive shall not, within the geographic areas
composed of the circles surrounding the Bank’s then existing banking offices, with each circle having the applicable banking office as its center point and a radius of twenty-five (25) miles (the “Territory”), directly or
indirectly, in any capacity, render services, or engage or have a financial interest in, any business that shall be competitive with any of those business activities in which Bancorp or any of the Bancorp’s subsidiaries or affiliates (the
“Bank Group”) is engaged as of the date of this Agreement, which business activities include, but are not limited to, the provision of banking services (collectively, the “Business”); provided, however, that Executive’s
ownership of less than five percent (5%) of the outstanding securities of any entity engaged in the Business that has a class of securities listed on a securities exchange or qualified for quotation on any over-the-counter market shall not be a
violation of the foregoing. For purposes of this Agreement, except as otherwise provided in Section 17, “Restricted Period” shall mean the Remainder or the Change of Control Remainder, as applicable. 

(b) Covenant Not to Solicit Customers. During the Restricted Period, within the Territory Executive shall not,
directly or indirectly, individually or on behalf of any other person or entity (other than a member of the Bank Group), offer to provide banking services to any person, partnership, corporation, limited liability company, association, or other
entity who is or was (i) a customer of any member of the Bank Group during any part of the twelve (12) month period immediately prior to the Date of Termination, or (ii) a potential customer to whom any member of the Bank Group
offered to provide banking services during any part of the twelve (12) month period immediately prior to the Date of Termination. 
 (c) Covenant Not to Solicit Employees. During the Restricted Period, within the Territory Executive shall not, directly or indirectly, individually or on behalf of any other person or entity,
solicit, recruit or entice, directly or indirectly, any employee of any member of the Bank Group to leave the employment of such member to work with Executive or with any person, partnership, corporation, limited liability company or other entity
with whom Executive is or becomes affiliated or associated. 
 (d) Non-Disparagement; Confidentiality.
Executive covenants and agrees that following Termination of Executive’s employment for any reason, Executive shall not disparage, hold up to ridicule or make false statements, whether directly or by inference, regarding Bancorp or the Bank or
any of their respective directors, officers, employees or agents, the financial results or financial condition of either of Bancorp or the Bank, or the prospects of Bancorp or the Bank. 

Executive further covenants and agrees that during the Employment Period and thereafter, Executive shall hold inviolate
and secret, and shall not use for Executive’s personal benefit or the benefit of any Person other than Bancorp or the Bank, all confidential and/or proprietary information of either Bancorp or the Bank, including, but not limited to, all
processes, procedures, programs, know-how, trade secrets, pricing strategies and techniques, investment strategies and techniques, marketing plans and strategies, personnel information, 

  
 12 

 
customer lists, analyses and compilations of customer information, financial projections, and other similar information, regardless of the form in which such information is obtained, retained or
maintained by or on behalf of Bancorp or the Bank. Executive agrees that the foregoing obligations are in addition to, and not in limitation of Executive’s confidentiality obligations or duties under applicable corporate law, federal securities
laws, or federal or state financial institution laws. 
 (e) Reasonableness of Scope and Duration. The
parties hereto agree that the covenants and agreements contained in this Section 12 are reasonable in their time, territory and scope, and they intend that they be enforced, and no party shall raise any issue of the reasonableness of the time,
territory or scope of any such covenants in any proceeding to enforce any such covenants. 
 (f)
Enforceability. Executive agrees that monetary damages would not be a sufficient remedy for any breach or threatened breach of the provisions of this Section 12, and that in addition to all other rights and remedies available to Bancorp
and the Bank, they shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach or threatened breach. Any determination of whether Executive has violated such covenants shall be made by
arbitration in Greensboro, North Carolina under the Rules of Commercial Arbitration (the “Rules”) of the American Arbitration Association, which Rules are deemed to be incorporated by reference herein. 

(g) Separate Covenants and Severability. The covenants and agreements contained in this Section 12 shall be
construed as separate and independent covenants. Should any part or provision of any such covenant or agreement be held invalid, void or unenforceable in any court of competent jurisdiction, no other part or provision of this Agreement shall be
rendered invalid, void or unenforceable by a court of competent jurisdiction, no other part or provision of this Agreement shall be rendered invalid, void or unenforceable as a result. If any portion of the foregoing provisions is found to be
invalid or unenforceable by a court of competent jurisdiction unless modified, it is the intent of the parties that the otherwise invalid or unreasonable term shall be reformed, or a new enforceable term provided, so as to most closely effectuate
the provisions as is validly possible. 
 13. Assignment and Successors. 

(a) Executive. This Agreement is personal to Executive and without the prior written consent of the Employer shall
not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives. 

(b) The Employer. This Agreement shall inure to the benefit of and be binding upon the Employer and its successors
and assigns. Bancorp and the Bank will each require any successor to it (whether direct or indirect, by stock or asset purchase, merger, consolidation or otherwise) to all or substantially all of its business or more than 50% of its assets to assume
expressly and agree to perform this Agreement in the same manner and to the same extent it would be required to perform it if no such succession had taken place. 

  
 13 

 14. Regulatory Intervention. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Employer under this Agreement are subject to the following terms and conditions: 
 (a) If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or (1) of the Federal Deposit
Insurance Act (12 U.S.C. § 1818 (e)(3) and (g)(1)), the Bank’s obligations hereunder, as applicable, shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, all of
the Employer’s obligations which were suspended shall be reinstated. 
 (b) If Executive is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1 818 (e)(4) and (g)(1)), all obligations of the
Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected. 
 (c) If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S. C. § 1813 (X)(1)), all obligations of the Employer under this Agreement shall terminate
as of the date of default, but any vested rights of Executive shall not be affected. 
 (d) All obligations of
the Employer under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, if so ordered by the North Carolina Commissioner of Banks (the
“Commissioner”) at the time the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13 (c) of the Federal
Deposit Insurance Act (12 U.S.C.§ 1823 (c)), or if so ordered b the Commissioner at the time the FDIC approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Commissioner to be in
an unsafe or unsound condition. Any rights of Executive that shall have vested under this Agreement shall not be affected by such action. Provided that any termination of this Agreement, in whole or in part, shall be in compliance with
Section 409A to the extent Section 409A applies to any portion of this Agreement. 
 (e) With regard to
the provisions of this Section 14(a) through (d): 
  

	 	(i)	The Bank agrees to use its best efforts to oppose any such notice of charges as to which there are reasonable defenses; 

 

	 	(ii)	In the event the notice of charges is dismissed or otherwise resolved in manner that will permit the Employer to resume its obligations to pay compensation hereunder,
the Employer will promptly make such payment hereunder; and 

  
 14 

	 	(iii)	During any period of suspension under Section 14(a), the vested rights of Executive shall not be affected except to the extent precluded by such notice.

 (f) The Employer’s obligations to provide compensation or other benefits to Executive under
this Agreement shall be terminated or limited to the extent required by the provisions of any final regulation or order of the FDIC promulgated under Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) limiting or
prohibiting any “golden parachute payment” as defined therein, but only to the extent that the compensation or payments to be provided by the Employer under this Agreement are so prohibited or limited. 

15. Certain Payments Delayed for a Specified Employee. If Executive is a “specified employee” as
defined in Section 409A, then, notwithstanding any other provision herein, any payment(s) required under this Agreement on account of a “separation from service” as defined in Section 409A shall be made and/or shall begin on the
first day of the seventh (7th) month following the
date of Executive’s Termination to the extent such payments are not exempt from Section 409A, and the six (6) month delay in payment is required by Section 409A. 

16. Miscellaneous. 
 (a) No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and, except as provided in Sections
8(a)(ii), no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment. 
 (b) Waiver. Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a
waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making
the waiver. 
 (c) Severability. If any provision or covenant, of any part thereof, of this Agreement
should be held by any court to be invalid, illegal or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality enforceability of the remaining provisions or covenants, or any
part thereof, of this Agreement, all of which shall remain in full force and effect. 
 (d) Other Agents.
Nothing in this Agreement is to be interpreted as limiting the Employer from employing other personnel on such terms and conditions as may be satisfactory to it. 

(e) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Employer
and Executive, with respect to the subject matter hereof and supersedes and invalidates any previous employment and severance agreements or contracts with Executive. No representations, inducements, promises or agreements, oral or otherwise, which
are not embodied herein, shall be of any force or effect. 

  
 15 

 (f) Compliance with Section 409A. It is intended that this
Agreement shall conform with all applicable Section 409A requirements to the extent Section 409A applies to any provisions of the Agreement. Accordingly, in interpreting, construing or applying any provisions of the Agreement, the same
shall be construed in such manner as shall meet and comply with Section 409A, and in the event of any inconsistency with Section 409A, the same shall be reformed so as to meet the requirements of Section 409A. Executive acknowledges
that the Employer has not made any representation or warranty regarding the treatment of this Agreement or the benefits payable under this Agreement under federal, state or local income tax laws, including but not limited to Section 409A.

 (g) Governing Law. Except to the extent preempted by federal law, the laws of the State of North
Carolina shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise. 
 (h) Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or seven
(7) days after mailing if mailed, first class, certified mail, postage prepaid: 
 To the Employer: 

Macon Bancorp 

One Center Court 

Franklin, North Carolina 28734-3445 
 Attention: Chairman of the Board 
 To Executive: 

W. David Sweatt 

______________________ 
 ______________________ 
 Any party may change the address to which notices, requests, demands and
other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein. 
 (i) Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by all parties hereto, which makes specific reference to this Agreement. Provided, further, that
no amendment or modification to this Agreement shall be adopted unless it complies with Section 409A to the extent Section 409A applies to this Agreement and/or to the amendment or modification. 

  
 16 

 17. Regulatory Prohibition. In the event that the Bank shall be deemed a
“troubled bank” by the FDIC with the result that the payment of severance payments to Executive upon Termination of Executive’s employment shall be prohibited by federal statutes or regulations (including, but not limited to, Part 359
of the regulations of the FDIC), then the term “Restricted Period” used in Section 12 shall be deemed to be three (3) months from the Date of Termination or Change of Control Termination Date, as applicable. 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Employment and Change of Control Agreement as of the date
first above written. 
  

			
	MACON BANCORP
		
	By:	 	 
		 	_________________________, Chairman
	
	MACON BANK, INC.
		
	By:	 	 
		 	_________________________, Chairman
	
	EXECUTIVE:
	
	 
	W. David Sweatt

  
 17Exhibit 10.3

 Exhibit 10.3 
 EMPLOYMENT AND CHANGE 
 OF CONTROL AGREEMENT 

THIS EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT (this “Agreement”) is made and entered as of the
         day of             , 2011 by and among Macon Bancorp (the “Bancorp”), Macon Bank, Inc. (the “Bank”) (the
Bancorp and the Bank are collectively referred to as the “Employer”), and Gary L. Brown (“Executive”). 

BACKGROUND 
 WHEREAS, the expertise and experience of Executive, and Executive’s relationships and reputation in the financial institutions industry are extremely valuable to the Employer; and 

WHEREAS, it is in the best interests of the Employer to maintain an experienced and sound executive management team to manage the
Employer and to further the Employer’s overall strategies to protect and enhance the value of its shareholders’ investments; and 
 WHEREAS, the Employer and Executive desire to enter into this Agreement to establish the scope, terms and conditions of Executive’s employment by the Employer 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1.
Effective Date. The effective time and date of this Agreement shall be deemed to be 12:00:01 o’clock, a.m., on the date of its making set forth above (the “Effective Date”). 

2. Definitions. The following defined terms are defined in the referenced Sections of this Agreement. 

 

			
	 Term
	  	 Section

	 Accrued Obligations
	  	Section 8(a)(i)(A)
	 Base Salary
	  	Section 6(a)
	 Bancorp Board
	  	Section 7(b)
	 Bank Board
	  	Section 6(a)
	 Bank Group
	  	Section 12(a)
	 Benefit Plans
	  	Section 6(c)
	 Business
	  	Section 12(a)
	 Cause
	  	Section 7(b)
	 Change of Control
	  	Section 9(b)
	 Change of Control Remainder
	  	Section 9(c)
	 Change of Control Termination
	  	Section 9(a)
	 Change of Control Termination Date
	  	Section 9(a)
	 COBRA
	  	Section 8(d)
	 Code
	  	Section 4

			
	 Commissioner
	  	Section 14(d)
	 Date of Termination
	  	Section 7(f)
	 Disability
	  	Section 7(a)
	 Disability Effective Date
	  	Section 7(a)
	 Effective Date
	  	Section 1
	 Employer Benefit Election
	  	Section 8(a)
	 Employment Period
	  	Section 4
	 FDIC
	  	Section 14(d)
	 Good Reason
	  	Section 7(c)
	 Group
	  	Section 9(b)
	 Incumbent Directors
	  	Section 9(b)
	 Insurance Benefit Plans
	  	Section 6(d)
	 ISOs
	  	Section 8(b)
	 Notice of Termination
	  	Section 7(e)
	 NSOs
	  	Section 8(b)
	 Other Benefits
	  	Section 8(b)
	 Person
	  	Section 9(b)
	 Remainder
	  	Section 8(a)
	 Restricted Period
	  	Section 12(a)
	 Section 409A
	  	Section 4
	 Terminate
	  	Section 4
	 Welfare Benefit Plans
	  	Section 6(d)

 3.
Employment. Executive is employed as the Chief Credit Officer of Bancorp and the Bank. Executive’s responsibilities, duties, prerogatives and authority in such executive offices, and the clerical, administrative and other support staff
and office facilities provided to him, shall be those customary for persons holding such executive offices of institutions that are a part of the financial institutions industry. 

4. Employment Period. Unless extended by renewal as provided below or earlier Terminated in accordance with Sections 7 or 9
hereof, Executive’s employment shall be for a two (2) year term beginning as of the Effective Date (the “Employment Period”). Upon the expiration of the Employment Period, this Agreement shall terminate and Executive shall be an
“at will” employee of the Employer. For purposes of this Agreement, “Terminate” (and variations and derivatives thereof) shall mean, when used in connection with a cessation of employment, that the Executive has incurred a
separation from service as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and guidance and regulations issued thereunder (“Section 409A”). Notwithstanding any other provision of this
Agreement, if a conversion of Bancorp from the mutual to the stock form of ownership is not consummated on or before December 31, 2011, this Agreement shall be deemed void and of no further force or effect as of January 1, 2012.

 5. Extent of Service. During the Employment Period, and excluding any periods of vacation, sick or other leave to
which Executive is entitled under this Agreement, Executive agrees to devote reasonable attention and time to the business and affairs of the Bank commensurate with his offices, and, to the extent necessary to discharge the responsibilities

  
 2 

 
assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform faithfully and efficiently Executive’s responsibilities and duties under this Agreement.

 6. Compensation and Benefits. 
 (a) Base Salary. During the Employment Period, the Employer will pay to Executive a base salary at the rate of at least
$             per year (“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Bank’s payroll
practices from time to time. In accordance with the policies and procedures of the Board of Directors of the Bank (the “Bank Board”), the Employer shall review Executive’s total compensation at least annually and in its sole
discretion may adjust Executive’s total compensation from year to year, but during the Employment Period the Employer may not decrease Executive’s Base Salary below
$            ; provided further, however, that periodic increases in Base Salary, once granted, shall not be subject to revocation. The annual review of Executive’s total
compensation will consider, among other things, changes in the cost of living, Executive’s own performance and the Bancorp’s consolidated performance. 
 (b) Incentive Plans. During the Employment Period, Executive shall be entitled (i) to participate in all of executive management incentive plans of the Employer, and any successor or
substitute plans; (ii) to participate in long-term incentive plans of the Employer, and any successor or substitute plans; and, (iii) to participate in all stock option, stock grant and similar plans of the Employer, and any successor or
substitute plans, in each of the foregoing cases in at least as favorable a manner as any participant who is a member of the senior executive management of the Employer. 

(c) Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all
savings, pension and retirement plans (including supplemental retirement plans), practices, policies and programs applicable generally to senior executive employees of the Employer (the “Benefit Plans”), and on at least as favorable a
basis as any other participant who is a member of the senior executive management of the Employer. 
 (d)
Welfare Benefit Plans. During the Employment Period, Executive and/or Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under all welfare benefit plans, practices, policies and
programs provided by the Employer (including, without limitation, medical, hospitalization, prescription, dental, disability, employee life, group life, accidental death and dismemberment, and travel accident insurance plans and programs)
(“Welfare Benefit Plans”) to the extent applicable generally to senior executive employees of the Employer. The Welfare Benefit Plans pertaining to medical, hospitalization, prescription and dental insurance coverages are referred to
herein as the “Insurance Benefit Plans”. 
 (e) Expenses. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Employer to the extent applicable generally to other senior executive
employees of the Employer. The expenses eligible for reimbursement under this item (e) in any year shall not affect any expenses eligible for reimbursement or in-kind 

  
 3 

 
benefits in any other year. Executive’s rights under this item (e) are not subject to liquidation or exchange for any other benefit. 

(f) Fringe and Similar Benefits. During the Employment Period, Executive shall be entitled to fringe benefits in
accordance with the plans, practices, programs and policies of the Employer in effect for its senior executive employees. 
 (g) Vacation, Sick and Other Leave. During the Employment Period, Executive shall be entitled annually to a minimum of
                     (    ) paid time off days specified in the employment policies of the Employer and shall have
such rights with respect to such days as are provided in those policies. 
 7. Termination of Employment (Other Than In
Connection With A Change Of Control). 
 (a) Death or Disability. Executive’s employment with the
Employer shall Terminate automatically upon Executive’s death during the Employment Period. If the Employer determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to Executive written notice in accordance with Section 7(e) of this Agreement of its intention to Terminate Executive’s employment. In such event, Executive’s employment with the Employer shall
Terminate effective on the 60th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of
Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of Executive from Executive’s duties with the Employer on a full-time basis for 90 consecutive business days as a result of incapacity due to
mental or physical illness or injury which is determined to be total and permanent by a physician selected by the Employer, or the insurers of the Employer, and acceptable to Executive or Executive’s legal representative, which acceptance shall
not be unreasonably withheld, subject to (i) the Employer’s obligations, and Executive’s rights, under (A) the Americans With Disabilities Act, 42 U.S. C. §§ 1210 et seq., and (B) the Family and Medical
Leave Act, 29 U. S.C. §§ 2601 et seq. (and the regulations promulgated under the foregoing Acts), and (ii) the exclusion from such 90 business day calculation of any business days constituting vacation days under
Section 6(g) and any business days which an employee is permitted to be absent under the disability, sick or other leave policies of the Employer. 
 (b) Cause. The Employer may Terminate Executive’s employment with the Employer for Cause. For purposes of this Agreement, “Cause” shall mean: 

 

	 	(i)	the willful and continued failure of Executive to perform substantially Executive’s duties with the Employer, other than any such failure resulting from
Disability, after a written demand for substantial performance is delivered to Executive by the Bank Board which specifically identifies the manner in which the Bank Board believes that Executive has not substantially performed Executive’s
duties; 

  
 4 

	 	(ii)	the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Employer; 

 

	 	(iii)	continued insubordination with respect to directives of the Bank Board after receipt of a written warning from the Bank Board with respect thereto; or

  

	 	(iv)	a willful act by Executive which constitutes a material breach of Executive’s fiduciary duty to the Employer which is intended by Executive to injure the
reputation or business of the Employer. 

 For purposes of this provision, no act or failure to act on the part of
Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Employer. Any act, or
failure to act, based upon authority given pursuant to resolutions duly adopted by the Bank Board or the Board of Directors of Bancorp (“Bancorp Board”), or based upon the advice of counsel for the Employer shall be conclusively presumed
to be done, or omitted to be done, by Executive in good faith and in the best interests of the Employer and to not constitute insubordination. 
 (c) Voluntary Termination; Good Reason. Executive may Terminate Executive’s employment with the Employer voluntarily or for Good Reason. For purposes of this Agreement, “Good Reason”
shall mean: (i) a material diminution in Executive’s authority, duties, or responsibilities; (ii) a material change in the geographic location at which Executive must perform the services to be performed by Executive pursuant to this
Agreement; and (iii) any other action or inaction that constitutes a material breach by the Employer of this Agreement. Executive must provide notice of voluntary Termination at least 30 days prior to the applicable Date of Termination.
Executive must provide notice to the Employer of the condition Executive contends is Good Reason within 30 days of the initial existence of the condition, and the Employer must have a period of at least 30 days to remedy the condition. If the
condition is not remedied, Executive must provide a Notice of Termination as set forth in Section 7(e) within 30 days of the end of the Employer’s remedy period.  

(d) Without Cause. The Employer may Terminate Executive’s employment without Cause (“Without
Cause”). 
 (e) Notice of Termination. Any Termination (other than for death) shall be communicated
by a Notice of Termination given in accordance with Section 16(h) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of Executive’s employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Termination date (which date shall be not more than 30 days after the giving of 

  
 5 

 
such notice except as otherwise provided in Section 7(a)). The failure to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Disability, Cause,
or Good Reason shall not waive any right of Executive or the Employer hereunder or preclude Executive or the Employer from asserting such fact or circumstance in enforcing Executive’s or the Employer’s rights hereunder. 

(f) Date of Termination. “Date of Termination” means (i) if Executive’s
employment is Terminated by the Employer for Cause or Without Cause, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if Executive’s employment is Terminated by Executive for
Good Reason, the date of receipt of the Notice of Termination, (iii) if Executive’s employment is Terminated by Executive voluntarily, the Date of Termination shall be the 30th day following the date of receipt of the Notice of Termination, and (iv) if Executive’s employment is
Terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the Disability Effective Date, as the case may be. 
 8. Obligations of the Employer Upon Termination (Other Than In Connection With A Change Of Control). The provisions of this Section 8 apply only to Terminations that are not in connection with
a Change of Control. 
 (a) Termination Without Cause or for Good Reason. If, during the Employment
Period, the Employer shall Terminate Executive’s employment Without Cause or the Executive shall Terminate Executive’s employment for Good Reason, then in consideration of Executive’s services rendered prior to such Termination;

  

	 	(i)	the Employer shall pay to Executive: 

  

	 	A.	 a lump sum in cash on the 30th day after the Date of Termination equal to (1) Executive’s Base Salary through the Date of Termination to
the extent not theretofore paid, and (2) any accrued vacation, sick and other leave pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as the
“Accrued Obligations”); and 

  

	 	B.	 a lump sum in cash on the 30th day after the Date of Termination equal to the product of (1) Executive’s aggregate cash bonus for the last
completed fiscal year, whether paid to Executive under Section 6 above or otherwise paid to Executive, and (2) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the
denominator of which is 365; and 

  

	 	C.	Executive’s Base Salary in monthly installments over the remainder of the Employment Period occurring after the Date of Termination (the “Remainder”).

  
 6 

	 	(ii)	for the Remainder, the Employer shall continue to provide benefits to Executive and/or Executive’s family at least equal to those which would have been provided to
them in accordance with the Insurance Benefit Plans if Executive’s employment had not been Terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially the same benefits under
the other employer’s plans as Executive and/or Executive’s family would receive under the Insurance Benefit Plans under this item (ii), the benefits provided under this item (ii) shall be secondary to those provided under such other
employer’s plans during such applicable period of eligibility; and, provided further, that with respect Insurance Benefit Plans, upon the conclusion of any applicable COBRA period, the Employer may elect to discontinue the coverages under such
Insurance Benefit Plans and to pay Executive in cash the amount of the applicable annual premium paid by the Employer for the preceding twelve (12) month period for such discontinued coverages multiplied by the fraction of which the number of
days remaining in the Remainder is the numerator and 365 is the denominator (the election set forth in this proviso being referred to herein as the “Employer Benefit Election”); 

 

	 	(iii)	to the extent not theretofore paid or provided, the Employer shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided
herein or which Executive is eligible to receive under any Welfare Benefit Plan; and 

  

	 	(iv)	provided, however, that if during the Restricted Period Executive violates Section 12, no payments shall be due under item (i)(C) and any such payment previously
made shall be repaid by Executive. 

 (b) Death. If Executive’s employment is
Terminated by reason of Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to Executive’s legal representatives under this Agreement, except that: (i) Accrued Obligations shall
timely be paid as provided below; (ii) Other Benefits shall be timely paid or provided as described below; (iii) all stock options that are “incentive stock options”, as described in Section 422 of the Code
(“ISOs”), previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the longer of twelve (12) months and the exercise period in effect immediately prior to the Date of Termination;
(iv) all nonqualified stock options (“NSOs”) previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the period of exercise in effect immediately prior to the Date of
Termination; (v) all options previously granted to Executive and scheduled to vest in the year of death shall immediately vest and be exercisable for the applicable period set forth in the preceding items (iii) and (iv); and
(vi) Executive’s rights to all benefits under all Benefit Plans that are “non-qualified” plans shall be 100% vested, regardless of Executive’s age or years of service, at the time of Executive’s death. Accrued
Obligations shall be paid to Executive’s estate 

  
 7 

 
or beneficiary, as applicable, in a lump sum in cash on the 30th day after the Date of Termination. With respect to the provision of Other Benefits, the term “Other Benefits” as
utilized in this Section 8(b) shall mean, and Executive’s estate and/or beneficiaries shall be entitled to receive, all benefits under the Employer’s Welfare Benefit Plans relating to death benefits. Without limiting the foregoing,
for one (1) year after Executive’s death, the Employer shall pay any premium required for any “qualified beneficiary” to continue his or her health care coverage in accordance with Title 1, Part 6 of the Employee Retirement
Security Act of 1974, as amended. 
 (c) Disability. If Executive’s employment is Terminated by
reason of Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to Executive, except that: (i) Accrued Obligations shall be timely paid as provided below; (ii) Other Benefits
shall be timely paid or provided as described below; (iii) all stock options that are ISOs previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the longer of twelve (12) months and
the exercise period in effect immediately prior to the Date of Termination; (iv) all NSOs previously granted to Executive that vested at or prior to the Date of Termination shall remain exercisable for the period of exercise in effect
immediately prior to the Date of Termination; and (v) all options previously granted to Executive and scheduled to vest in the year in which the Disability Effective Date occurs shall immediately vest and be exercisable for the applicable
period set forth in the preceding items (iii) and (iv). Accrued Obligations shall be paid to Executive in a lump sum in cash on the 30th day after the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits
as utilized in this Section 8(c) shall include, without limitation, and Executive shall be entitled after the Date of Termination to, (1) receipt of all disability benefits under all Welfare Benefit Plans relating to disability,
(2) receipt, for the remainder of the then current Employment Period, of all benefits available to Executive under all Insurance Benefit Plans, subject to the Employer Benefit Election, and (3) for the Remainder, continued participation in
group life and employee life insurance programs generally available to senior executive officers. 
 (d)
Voluntary Termination; Cause. If Executive voluntarily Terminates his employment or if Executive’s employment shall be Terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to
Executive, except that (i) the Accrued Obligations shall be paid in a lump sum in cash on the 30th day after the Date of Termination, and (ii) Other Benefits shall be paid or provided in a timely manner, in each case to the extent
theretofore unpaid; provided, however, that Executive’s right to continue to participate in Welfare Benefit Plans shall terminate on the 30th day following the Date of Termination, subject to Executive’s rights under the Consolidated
Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. §§ 1161 et seq. (“COBRA”). 
 9. Termination
In Connection With a Change of Control. 
 (a) Change of Control Termination. In the event that, at
the time of, within 90 days prior to, or within one (1) year after a Change of Control, and during the Employment Period, the Employer Terminates Executive’s employment Without Cause or Executive Terminates Executive’s employment for
Good Reason (each a “Change of Control 

  
 8 

 
Termination”), Executive shall be entitled to receive the payments and benefits specified in this Section 9. The date on which the Employer or Executive receives notice in accordance
with Section 16(h) of a Change of Control Termination shall be deemed the “Change of Control Termination Date.” 
 (b) Definition of Change of Control. “Change of Control” shall mean (i) a Change of Ownership; (ii) a Change in Effective Control; or (iii) a Change of Asset Ownership; in
each case, as defined herein and as further defined and interpreted in Section 409A. 
 A. “Change in
Effective Control” shall mean the date either (i) any “Person” or “Group” (as those terms are defined in or pursuant to Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but not including
Bancorp or any “employee benefit plan” (as defined in or pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(3) of Bancorp or the Bank) acquires (or has acquired during the proceeding twelve
(12) months) ownership of outstanding stock of Bancorp possessing 30% or more of the total voting power of Bancorp’s outstanding stock or (B) a majority of the Bancorp Board is replaced during any twelve (12) month period by
directors whose election is not endorsed by a majority of the members of the Bancorp Board prior to such election. 
 B. “Change of Asset Ownership” shall mean the date any Person or Group acquires (or has acquired during the preceding twelve (12) months) assets from Bancorp or the Bank that have a total
gross fair market value that is equal to or exceeds 40% of the total gross fair market value of all of Bancorp’s consolidated assets immediately prior to such acquisition. 

C. “Change of Ownership” shall mean the date any Person or Group acquires ownership of outstanding stock of
Bancorp that, together with stock previously held, constitutes more than 50% of the total fair market value or total voting power of the stock of Bancorp provided that such Person or Group did not previously own 50% or more of the value of voting
power of the outstanding stock of Bancorp. 
 Notwithstanding the foregoing provisions of this Section 9(b), the conversion of Bancorp from
the mutual to the stock form of ownership shall not constitute a Change of Control. 
 (c) Change of Control Payments and
Benefits. Upon a Change Of Control Termination: 
  

	 	(i)	The Employer shall pay to Executive in a lump sum in cash on the 30th day after the Change of Control Termination Date the aggregate of the following amounts:

  

	 	(A)	the sum of the Accrued Obligations; 

  
 9 

	 	(B)	an amount equal to the total of Executive’s Base Salary multiplied by a fraction, the numerator of which is the number of days remaining in the Employment Period
after the Change of Control Termination Date (the “Change of Control Remainder”) and the denominator of which is 365; 

  

	 	(C)	the product of (x) Executive’s aggregate cash bonus for the last completed fiscal year, whether paid under Section 6 above and/or otherwise paid to
Executive, and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Change of Control Termination Date and the denominator of which is 365. 

 

	 	(D)	provided, however, that if during the Restricted Period Executive violates Section 12, no payments shall be due under paragraphs (B) and (C) and any such
payment previously made shall be repaid by Executive. 

  

	 	(ii)	During the Change of Control Remainder, the Employer shall continue to provide benefits to Executive and/or Executive’s family at least equal to those which would
have been provided to them in accordance with the Insurance Benefit Plans if Executive’s employment had not been Terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially
the same benefits under the other employer’s plans as Executive would receive under the Insurance Benefit Plans under this item (ii), the benefits provided under this item (ii) shall be secondary to those provided under such other plans
during such applicable period of eligibility; and, provided further, that such obligation of the Employer shall be subject to the Employer Benefit Election. 

 

	 	(iii)	All options previously granted to Executive that are unvested as of the Change of Control Termination Date shall be deemed vested, fully exercisable and non-forfeitable
as of the Change of Control Termination Date (provided, however, that options granted less than six (6) months before the Change of Control Termination Date shall not be exercisable until the first day subsequent to the six (6) months
following their dates of grant) and all previously granted options that are vested, but unexercised, on the Change of Control Termination Date shall remain exercisable, in each case for the period during which they would have been exercisable absent
the Termination of Executive’s employment except as otherwise specifically provided by the Code. 

  
 10 

	 	(iv)	Executive’s benefits under all Benefit Plans that are non-qualified plans shall be 100% vested, regardless of Executive’s age or years of service, as of the
Change of Control Termination Date. 

  

	 	(v)	Notwithstanding the foregoing provisions of this Section 9, the Employer may reduce any amount, distribution, acceleration of vesting or other right described in
this Section 9, in whole or part, such that the aggregate of all payments, distributions and benefits received by Executive shall not constitute an “excess parachute payment” within the meaning of Section 280G of the Code subject
to the excise tax imposed by Section 4999 of the Code; provided, however, that the Employer will endeavor to effect such reduction in a way that results in the most favorable tax consequences for Executive and that such reduced aggregate amount
shall be the maximum amount which would not constitute an “excess parachute payment”. 

 10.
Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy, or practice provided by the Employer and for which Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Employer. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Employer at or subsequent to a Date of Termination or Change of Control Termination Date shall be payable in accordance with such plan, policy, practice or program or such contract or agreement except
as explicitly modified by this Agreement. 
 11. Full Settlement. The Employer’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Employer may have against Executive or others. In no
event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement; provided, however, that Executive’s right to receive
any benefits under Insurance Benefit Plans to the extent that Executive obtains other employment shall be limited as provided in Section 8(a)(ii). The Employer agrees to recognize as an indebtedness to Executive and shall pay as incurred all
legal fees and expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Employer, Executive or others of the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the “applicable federal
rate” provided for in Section 7872(f)(2)(A) of the Code. 

  
 11 

 12. Covenants. 

(a) Covenant Not to Compete. During the Restricted Period, Executive shall not, within the geographic areas
composed of the circles surrounding the Bank’s then existing banking offices, with each circle having the applicable banking office as its center point and a radius of twenty-five (25) miles (the “Territory”), directly or
indirectly, in any capacity, render services, or engage or have a financial interest in, any business that shall be competitive with any of those business activities in which Bancorp or any of the Bancorp’s subsidiaries or affiliates (the
“Bank Group”) is engaged as of the date of this Agreement, which business activities include, but are not limited to, the provision of banking services (collectively, the “Business”); provided, however, that Executive’s
ownership of less than five percent (5%) of the outstanding securities of any entity engaged in the Business that has a class of securities listed on a securities exchange or qualified for quotation on any over-the-counter market shall not be a
violation of the foregoing. For purposes of this Agreement, except as otherwise provided in Section 17, “Restricted Period” shall mean the Remainder or the Change of Control Remainder, as applicable. 

(b) Covenant Not to Solicit Customers. During the Restricted Period, within the Territory Executive shall not,
directly or indirectly, individually or on behalf of any other person or entity (other than a member of the Bank Group), offer to provide banking services to any person, partnership, corporation, limited liability company, association, or other
entity who is or was (i) a customer of any member of the Bank Group during any part of the twelve (12) month period immediately prior to the Date of Termination, or (ii) a potential customer to whom any member of the Bank Group
offered to provide banking services during any part of the twelve (12) month period immediately prior to the Date of Termination. 
 (c) Covenant Not to Solicit Employees. During the Restricted Period, within the Territory Executive shall not, directly or indirectly, individually or on behalf of any other person or entity,
solicit, recruit or entice, directly or indirectly, any employee of any member of the Bank Group to leave the employment of such member to work with Executive or with any person, partnership, corporation, limited liability company or other entity
with whom Executive is or becomes affiliated or associated. 
 (d) Non-Disparagement; Confidentiality.
Executive covenants and agrees that following Termination of Executive’s employment for any reason, Executive shall not disparage, hold up to ridicule or make false statements, whether directly or by inference, regarding Bancorp or the Bank or
any of their respective directors, officers, employees or agents, the financial results or financial condition of either of Bancorp or the Bank, or the prospects of Bancorp or the Bank. 

Executive further covenants and agrees that during the Employment Period and thereafter, Executive shall hold inviolate
and secret, and shall not use for Executive’s personal benefit or the benefit of any Person other than Bancorp or the Bank, all confidential and/or proprietary information of either Bancorp or the Bank, including, but not limited to, all
processes, procedures, programs, know-how, trade secrets, pricing strategies and techniques, investment strategies and techniques, marketing plans and strategies, personnel information, 

  
 12 

 
customer lists, analyses and compilations of customer information, financial projections, and other similar information, regardless of the form in which such information is obtained, retained or
maintained by or on behalf of Bancorp or the Bank. Executive agrees that the foregoing obligations are in addition to, and not in limitation of Executive’s confidentiality obligations or duties under applicable corporate law, federal securities
laws, or federal or state financial institution laws. 
 (e) Reasonableness of Scope and Duration. The
parties hereto agree that the covenants and agreements contained in this Section 12 are reasonable in their time, territory and scope, and they intend that they be enforced, and no party shall raise any issue of the reasonableness of the time,
territory or scope of any such covenants in any proceeding to enforce any such covenants. 
 (f)
Enforceability. Executive agrees that monetary damages would not be a sufficient remedy for any breach or threatened breach of the provisions of this Section 12, and that in addition to all other rights and remedies available to Bancorp
and the Bank, they shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach or threatened breach. Any determination of whether Executive has violated such covenants shall be made by
arbitration in Greensboro, North Carolina under the Rules of Commercial Arbitration (the “Rules”) of the American Arbitration Association, which Rules are deemed to be incorporated by reference herein. 

(g) Separate Covenants and Severability. The covenants and agreements contained in this Section 12 shall be
construed as separate and independent covenants. Should any part or provision of any such covenant or agreement be held invalid, void or unenforceable in any court of competent jurisdiction, no other part or provision of this Agreement shall be
rendered invalid, void or unenforceable by a court of competent jurisdiction, no other part or provision of this Agreement shall be rendered invalid, void or unenforceable as a result. If any portion of the foregoing provisions is found to be
invalid or unenforceable by a court of competent jurisdiction unless modified, it is the intent of the parties that the otherwise invalid or unreasonable term shall be reformed, or a new enforceable term provided, so as to most closely effectuate
the provisions as is validly possible. 
 13. Assignment and Successors. 

(a) Executive. This Agreement is personal to Executive and without the prior written consent of the Employer shall
not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives. 

(b) The Employer. This Agreement shall inure to the benefit of and be binding upon the Employer and its successors
and assigns. Bancorp and the Bank will each require any successor to it (whether direct or indirect, by stock or asset purchase, merger, consolidation or otherwise) to all or substantially all of its business or more than 50% of its assets to assume
expressly and agree to perform this Agreement in the same manner and to the same extent it would be required to perform it if no such succession had taken place. 

  
 13 

 14. Regulatory Intervention. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Employer under this Agreement are subject to the following terms and conditions: 
 (a) If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or (1) of the Federal Deposit
Insurance Act (12 U.S.C. § 1818 (e)(3) and (g)(1)), the Bank’s obligations hereunder, as applicable, shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, all of
the Employer’s obligations which were suspended shall be reinstated. 
 (b) If Executive is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1 818 (e)(4) and (g)(1)), all obligations of the
Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected. 
 (c) If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S. C. § 1813 (X)(1)), all obligations of the Employer under this Agreement shall terminate
as of the date of default, but any vested rights of Executive shall not be affected. 
 (d) All obligations of
the Employer under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, if so ordered by the North Carolina Commissioner of Banks (the
“Commissioner”) at the time the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13 (c) of the Federal
Deposit Insurance Act (12 U.S.C.§ 1823 (c)), or if so ordered b the Commissioner at the time the FDIC approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Commissioner to be in
an unsafe or unsound condition. Any rights of Executive that shall have vested under this Agreement shall not be affected by such action. Provided that any termination of this Agreement, in whole or in part, shall be in compliance with
Section 409A to the extent Section 409A applies to any portion of this Agreement. 
 (e) With regard to
the provisions of this Section 14(a) through (d): 
  

	 	(i)	The Bank agrees to use its best efforts to oppose any such notice of charges as to which there are reasonable defenses; 

 

	 	(ii)	In the event the notice of charges is dismissed or otherwise resolved in manner that will permit the Employer to resume its obligations to pay compensation hereunder,
the Employer will promptly make such payment hereunder; and 

  
 14 

	 	(iii)	During any period of suspension under Section 14(a), the vested rights of Executive shall not be affected except to the extent precluded by such notice.

 (f) The Employer’s obligations to provide compensation or other benefits to Executive under
this Agreement shall be terminated or limited to the extent required by the provisions of any final regulation or order of the FDIC promulgated under Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) limiting or
prohibiting any “golden parachute payment” as defined therein, but only to the extent that the compensation or payments to be provided by the Employer under this Agreement are so prohibited or limited. 

15. Certain Payments Delayed for a Specified Employee. If Executive is a “specified employee” as
defined in Section 409A, then, notwithstanding any other provision herein, any payment(s) required under this Agreement on account of a “separation from service” as defined in Section 409A shall be made and/or shall begin on the
first day of the seventh (7th) month following the
date of Executive’s Termination to the extent such payments are not exempt from Section 409A, and the six (6) month delay in payment is required by Section 409A. 

16. Miscellaneous. 
 (a) No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and, except as provided in Sections
8(a)(ii), no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment. 
 (b) Waiver. Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a
waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making
the waiver. 
 (c) Severability. If any provision or covenant, of any part thereof, of this Agreement
should be held by any court to be invalid, illegal or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality enforceability of the remaining provisions or covenants, or any
part thereof, of this Agreement, all of which shall remain in full force and effect. 
 (d) Other Agents.
Nothing in this Agreement is to be interpreted as limiting the Employer from employing other personnel on such terms and conditions as may be satisfactory to it. 

(e) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Employer
and Executive, with respect to the subject matter hereof and supersedes and invalidates any previous employment and severance agreements or contracts with Executive. No representations, inducements, promises or agreements, oral or otherwise, which
are not embodied herein, shall be of any force or effect. 

  
 15 

 (f) Compliance with Section 409A. It is intended that this
Agreement shall conform with all applicable Section 409A requirements to the extent Section 409A applies to any provisions of the Agreement. Accordingly, in interpreting, construing or applying any provisions of the Agreement, the same
shall be construed in such manner as shall meet and comply with Section 409A, and in the event of any inconsistency with Section 409A, the same shall be reformed so as to meet the requirements of Section 409A. Executive acknowledges
that the Employer has not made any representation or warranty regarding the treatment of this Agreement or the benefits payable under this Agreement under federal, state or local income tax laws, including but not limited to Section 409A.

 (g) Governing Law. Except to the extent preempted by federal law, the laws of the State of North
Carolina shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise. 
 (h) Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or seven
(7) days after mailing if mailed, first class, certified mail, postage prepaid: 
 To the Employer: 

Macon Bancorp 

One Center Court 

Franklin, North Carolina 28734-3445 
 Attention: Chairman of the Board 
 To Executive: 

Gary L. Brown 

____________________ 
 ____________________ 
 Any party may change the address to which notices, requests, demands and
other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein. 
 (i) Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by all parties hereto, which makes specific reference to this Agreement. Provided, further, that
no amendment or modification to this Agreement shall be adopted unless it complies with Section 409A to the extent Section 409A applies to this Agreement and/or to the amendment or modification. 

  
 16 

 17. Regulatory Prohibition. In the event that the Bank shall be deemed a
“troubled bank” by the FDIC with the result that the payment of severance payments to Executive upon Termination of Executive’s employment shall be prohibited by federal statutes or regulations (including, but not limited to, Part 359
of the regulations of the FDIC), then the term “Restricted Period” used in Section 12 shall be deemed to be three (3) months from the Date of Termination or Change of Control Termination Date, as applicable. 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Employment and Change of Control Agreement as of the date
first above written. 
  

			
	MACON BANCORP
		
	By:	 	 
		 	                        , Chairman
	
	MACON BANK, INC.
		
	By:	 	 
		 	                        , Chairman
	
	EXECUTIVE:
	
	 
	Gary L. Brown

  
 17

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