Document:

Unassociated Document

This Note is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository named below or a nominee of the Depository.  This Note is not exchangeable for Notes registered in the name of a Person other than the Depository or its nominee except in the limited circumstances described herein and in the Indenture, and no transfer of this Note (other than a transfer of this Note as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in the limited circumstances described herein.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (the "Depository"), to the Company or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of the Depository (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

CITIGROUP INC.

Floating Rate Notes due March 29, 2016

 

	REGISTERED	REGISTERED

CUSIP: 172967 FN 6

ISIN: US172967FN63

Common Code: 061133089

 

	No. R-	$

 

CITIGROUP INC., a Delaware corporation (the "Company", which term includes any successor Person under the Indenture), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $______________ on March 29, 2016 and to pay interest thereon from and including March 29, 2011 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly, on the twenty-ninth day of each March, June, September and December, commencing June 29, 2011, at the rate per annum for each Interest Period of three-month LIBOR, determined as provided herein, plus 1.45% until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Record Date for such interest, which shall be the Business Day immediately preceding such Interest Payment Date.

Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the holder on such Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a subsequent Record Date, such subsequent Record Date to be not less than five days prior to the date of payment of such defaulted interest, notice whereof shall be given to holders of Notes of this series not less than 15 days prior to such subsequent Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

  

  

  

Interest hereon will be calculated on the basis of the actual number of days elapsed in an Interest Period and a 360-day year.  Dollar amounts resulting from such calculation will be rounded to the nearest cent, with one-half cent being rounded upward.  An "Interest Period" shall be the period from and including an Interest Payment Date (or from March 29, 2011 in the case of the first Interest Payment Date) to and including the day immediately preceding the next Interest Payment Date.

If an Interest Payment Date falls on a day that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day.  If the Maturity of the Notes falls on a day that is not a Business Day, the payment due on Maturity will be postponed to the next succeeding Business Day, and no further interest will accrue in respect of such postponement.  If a date for payment of interest or principal on the Notes falls on a day that is not a business day in the place of payment, such payment will be made on the next succeeding business day in such place of payment as if made on the date the payment was due.  No interest will accrue on any amounts payable for the period from and after the due date for payment of such principal or interest.

For these purposes, “Business Day” means any day which is a day on which commercial banks settle payments and are open for general business in The City of New York.

Payment of the principal of and interest on this Note will be made at the office or agency of the Trustee maintained for that purpose in The City of New York.

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee or by an authenticating agent on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

  

2

  

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:  March 29, 2011

CITIGROUP INC.

By:_________________________________

Title:  Treasurer

ATTEST:

By:___________________________

Title:  Assistant Secretary

  

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This is one of the Notes of the series issued under the within-mentioned Indenture.

Dated:  March 29, 2011

THE BANK OF NEW YORK MELLON,

as Trustee

By:_________________________________

      Name:

      Title:

-or-

CITIBANK, N.A.,

as Authenticating Agent

By:_________________________________

      Name:

      Title:

  

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This Note is one of a duly authorized issue of Securities of the Company (the "Notes"), issued and to be issued in one or more series under the Indenture, dated as of March 15, 1987 (as amended and supplemented to date, the "Indenture"), between the Company and The Bank of New York Mellon, formerly known as The Bank of New York, as Trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof, initially limited in aggregate principal to $500,000,000.

This Note will bear interest for each Interest Period at a rate determined by Citibank, N.A., acting as Calculation Agent.  The interest rate on this Note for a particular Interest Period will be a per annum rate equal to three-month LIBOR as determined on the related Interest Determination Date, plus 1.45%.  The Interest Determination Date for an Interest Period will be the second London business day preceding such Interest Period.  The Interest Determination Date for the first Interest Period was March 25, 2011.  Promptly upon determination, the Calculation Agent will inform the Trustee and the Company of the interest rate for the next Interest Period.  Absent manifest error, the determination of the interest rate by the Calculation Agent shall be binding and conclusive on the holders of Notes, the Trustee and the Company.

A London business day is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

On any Interest Determination Date, LIBOR will be equal to the offered rate for deposits in U.S. dollars having an index maturity of six months for the next Interest Period, in amounts of at least $1,000,000, as such rate appears on Reuters Screen LIBOR01 at approximately 11:00 a.m., London time, on such Interest Determination Date.  If the Reuters Screen LIBOR01 is replaced by another service or ceases to exist, the Calculation Agent will use the replacing service or such other service that may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits.

If no offered rate appears on Reuters Screen LIBOR01 on an Interest Determination Date at approximately 11:00 a.m., London time, then the Calculation Agent (after consultation with the Company) will select four major banks in the London interbank market and shall request each of their principal London offices to provide a quotation of the rate at which six-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time, that is representative of single transactions at that time.  If at least two quotations are provided, LIBOR will be the arithmetic average of the quotations provided.  Otherwise, the Calculation Agent will select three major banks in New York City and shall request each of them to provide a quotation of the rate offered by them at approximately 11:00 a.m., New York City time, on the Interest Determination Date for loans in U.S. dollars to leading European banks having an index maturity of six months for the applicable Interest Period in an amount of at least $1,000,000 that is representative of single transactions at that time.  If three quotations are provided, LIBOR will be the arithmetic average of the quotations provided.  Otherwise, the rate of LIBOR for the next Interest Period will be set equal to the rate of LIBOR for the current Interest Period.

  

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The Luxembourg Stock Exchange shall be notified of the interest rate, the amount of the interest payment and the Interest Payment Date for a particular Interest Period not later than the first day of such Interest Period.  Upon request from any Noteholder, the Calculation Agent will provide the interest rate in effect on this Note for the current Interest Period and, if it has been determined, the interest rate to be in effect for the next Interest Period.

If an event of default (as defined in the Indenture) with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance by the Company with certain conditions set forth in Sections 11.03 and 11.04 thereof, which provisions apply to this Note.

The Indenture contains provisions permitting the Company and the Trustee, without the consent of the holders of the Securities, to establish, among other things, the form and terms of any series of Securities issuable thereunder by one or more supplemental indentures, and, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of Securities at the time outstanding which are affected thereby, to modify the Indenture or any supplemental indenture or the rights of the holders of Securities of such series to be affected, provided that no such modification will (i) extend the fixed maturity of any Securities, reduce the rate or extend the time of payment of interest thereon, reduce the principal amount thereof or the premium, if any, thereon, reduce the amount of the principal of Original Issue Discount Securities payable on any date, change the currency in which Securities are payable, or impair the right to institute suit for the enforcement of any such payment on or after the maturity thereof, without the consent of the holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities of any series the consent of the holders of which is required for any such modification without the consent of the holders of all Securities of such series then outstanding, or (iii) modify, without the written consent of the Trustee, the rights, duties or immunities of the Trustee.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

This Note is a Global Security registered in the name of a nominee of the Depository.  This Note is exchangeable for Notes registered in the name of a person other than the Depository or its nominee only in the limited circumstances hereinafter described.  Unless and until it is exchanged in whole or in part for definitive Notes in certificated form, this Note may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository.

  

6

  

 

The Notes represented by this Global Security are exchangeable for definitive Notes in certificated form of like tenor as such Notes in denominations of $1,000 and whole multiples of $1,000 in excess thereof only if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for the Notes or (ii) the Depository ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, or (iii) the Company in its sole discretion decides to allow the Notes to be exchanged for definitive Notes in registered form.  Any Notes that are exchangeable pursuant to the preceding sentence are exchangeable for certificated Notes issuable in authorized denominations and registered in such names as the Depository shall direct.  As provided in the Indenture and subject to certain limitations therein set forth, the transfer of definitive Notes in certificated form is registrable in the register maintained by the Company in The City of New York for such purpose, upon surrender of the definitive Note for registration of transfer at the office or agency of the registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the registrar duly executed by, the holder thereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  Subject to the foregoing, this Note is not exchangeable, except for a Global Security or Global Securities of this issue of the same principal amount to be registered in the name of the Depository or its nominee.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Company will pay additional amounts ("Additional Amounts") to the beneficial owner of any Note that is a non-United States person in order to ensure that every net payment on such Note will not be less, due to payment of U.S. withholding tax, than the amount then due and payable.  For this purpose, a "net payment" on a Note means a payment by the Company or a paying agent, including payment of principal and interest, after deduction for any present or future tax, assessment or other governmental charge of the United States. These Additional Amounts will constitute additional interest on the Note.

The Company will not be required to pay Additional Amounts, however, in any of the circumstances described in items (1) through (13) below.

	
  

	
(1)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the beneficial owner:

 

  

7

  

 

	
  

	
(a)

	
having a relationship with the United States as a citizen, resident or otherwise;

	
  

	
(b)

	
having had such a relationship in the past or

	
  

	
(c)

	
being considered as having had such a relationship.

	
  

	
(2)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the beneficial owner:

	
  

	
(a)

	
being treated as present in or engaged in a trade or business in the United States;

	
  

	
(b)

	
being treated as having been present in or engaged in a trade or business in the United States in the past or

	
  

	
(c)

	
having or having had a permanent establishment in the United States.

	
  

	
(3)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld in whole or in part by reason of the beneficial owner being or having been any of the following (as such terms are defined in the Internal Revenue Code of 1986, as amended):

	
  

	
(a)

	
personal holding company;

	
  

	
(b)

	
foreign personal holding company;

	
  

	
(c)

	
foreign private foundation or other foreign tax-exempt organization;

	
  

	
(d)

	
passive foreign investment company;

	
  

	
(e)

	
controlled foreign corporation or

	
  

	
(f)

	
corporation which has accumulated earnings to avoid United States federal income tax.

	
  

	
(4)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the beneficial owner owning or having owned, actually or constructively, 10 percent or more of the total combined voting power of all classes of stock of the Company entitled to vote or by reason of the beneficial owner being a bank that has invested in a Note as an extension of credit in the ordinary course of its trade or business.

For purposes of items (1) through (4) above, "beneficial owner" means a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership, limited liability company, corporation or other entity, or a person holding a power over an estate or trust administered by a fiduciary holder.

	
  

	
(5)

	
Additional Amounts will not be payable to any beneficial owner of a Note that is a:

	
  

	
(a)

	
fiduciary;

 

  

8

  

 

 

	
  

	
(b)

	
partnership;

	
  

	
(c)

	
limited liability company or

	
  

	
(d)

	
other fiscally transparent entity

	
  

	
or that is not the sole beneficial owner of the Note, or any portion of the Note. However, this exception to the obligation to pay Additional Amounts will only apply to the extent that a beneficiary or settlor in relation to the fiduciary, or a beneficial owner or member of the partnership, limited liability company or other fiscally transparent entity, would not have been entitled to the payment of an Additional Amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment.

	
  

	
(6)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the failure of the beneficial owner or any other person to comply with applicable certification, identification, documentation or other information reporting requirements. This exception to the obligation to pay Additional Amounts will only apply if compliance with such reporting requirements is required by statute or regulation of the United States or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax, assessment or other governmental charge.

	
  

	
(7)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is collected or imposed by any method other than by withholding from a payment on a Note by the Company or a paying agent.

	
  

	
(8)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld by reason of a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later.

	
  

	
(9)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld by reason of the presentation by the beneficial owner of a Note for payment more than 30 days after the date on which such payment becomes due or is duly provided for, whichever occurs later.

	
  

	
(10)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any:

	
  

	
(a)

	
estate tax;

	
  

	
(b)

	
inheritance tax;

	
  

	
(c)

	
gift tax;

 

  

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(d)

	
sales tax;

	
  

	
(e)

	
excise tax;

	
  

	
(f)

	
transfer tax;

	
  

	
(g)

	
wealth tax;

	
  

	
(h)

	
personal property tax or

	
  

	
(i)

	
any similar tax, assessment, withholding, deduction or other governmental charge.

	
  

	
(11)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment, or other governmental charge required to be withheld by any paying agent from a payment of principal or interest on a Note if such payment can be made without such withholding by any other paying agent.

	
  

	
(12)

	
Additional amounts will not be payable if a payment on a Note is reduced as a result of any tax, assessment or other governmental charge that is required to be made pursuant to any European Union directive on the taxation of savings income or any law implementing or complying with, or introduced to conform to, any such directive.

	
  

	
(13)

	
Additional Amounts will not be payable if a payment on a Note is reduced as a result of any combination of items (1) through (12) above.

Except as specifically provided herein, the Company will not be required to make any payment of any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of such government.

As used in this Note, "United States person" means:

	
  

	
(a)

	
any individual who is a citizen or resident of the United States;

	
  

	
(b)

	
any corporation, partnership or other entity created or organized in or under the laws of the United States;

	
  

	
(c)

	
any estate if the income of such estate falls within the federal income tax jurisdiction of the United States regardless of the source of such income and

	
  

	
(d)

	
any trust if a United States court is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of the substantial decisions of the trust.

Additionally, "non-United States person" means a person who is not a United States person, and "United States" means the states of the United States of America and the District of Columbia, but excluding its territories and its possessions.

Except as provided below, the Notes may not be redeemed prior to maturity.

(1)           The Company may, at its option, redeem the Notes if:

 

  

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(a)

	
the Company becomes or will become obligated to pay Additional Amounts as described above;

	
  

	
(b)

	
the obligation to pay Additional Amounts arises as a result of any change in the laws, regulations or rulings of the United States, or an official position regarding the application or interpretation of such laws, regulations or rulings, which change is announced or becomes effective on or after March 22, 2011 and

	
  

	
(c)

	
the Company determines, in its business judgment, that the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to it, other than substituting the obligor under the Notes or taking any action that would entail a material cost to the Company.

	
  

	
(2)

	
The Company may also redeem the Notes, at its option, if:

	
  

	
(a)

	
any act is taken by a taxing authority of the United States on or after March 22, 2011, whether or not such act is taken in relation to the Company or any affiliate, that results in a substantial probability that the Company will or may be required to pay Additional Amounts as described above;

	
  

	
(b)

	
the Company determines, in its business judgment, that the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to it, other than substituting the obligor under the Notes or taking any action that would entail a material cost to the Company and

	
  

	
(c)

	
the Company receives an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that the Company will or may be required to pay the Additional Amounts described above, and delivers to the Trustee a certificate, signed by a duly authorized officer, stating that based on such opinion the Company is entitled to redeem the Notes pursuant to their terms.

Any redemption of the Notes as set forth in clauses (1) or (2) above shall be in whole, and not in part, and will be made at a redemption price equal to 100% of the principal amount of the Notes Outstanding plus accrued interest thereon to the date of redemption.  Holders shall be given not less than 30 days’ nor more than 60 days’ prior notice by the Trustee of the date fixed for such redemption.

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.  The Notes are governed by the laws of the State of New York.

 

 

 

  

11EXHIBIT 10(xxvi)

Amendment to Employment Agreement

This Amendment to Employment Agreement (this “Amendment”) is entered into effective as of this 31st day of December, 2010 by and among Michael G. Carlton (the “Executive”), Crescent Financial Corporation, a North Carolina corporation (the “Corporation”), and Crescent State Bank, a North Carolina-chartered bank and wholly owned subsidiary of Crescent Financial Corporation (the “Bank”) and amends that certain Employment Agreement effective as of September 10, 2008 among the aforesaid parties (the “Agreement”).  The Corporation and the Bank are hereinafter sometimes referred to together or individually as the “Employer.”

Whereas, the Executive and the Employer desire to clarify and conform certain provisions of the Agreement in order to comply with Section 409A of the Internal Revenue Code of 1986 (“IRC”).

Now Therefore, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1.  Section 4.3(b) of the Agreement is amended to read as follows in order to limit the outplacement reimbursement period to two years:

(b)           Outplacement and support.  If the Employer terminates the Executive’s employment without Cause or if the Executive terminates employment with Good Reason, the Employer shall pay or cause to be paid to the Executive reasonable outplacement expenses incurred during the two year period after termination in an amount up to $25,000 and for one year after termination the Employer shall provide the Executive with the use of office space and reasonable office support facilities, including secretarial assistance.

2.  The following section 5.3(c) is added to the Agreement in order to clarify the time of payment of Gross-Up Payment Amounts:

(c)  Payment of Gross-Up Payment.  All payments to be made under this section 5.3 (other than the Underpayment described in section 5.3(b)) must be made (i) where the Employer is required to withhold the related excise or other applicable taxes, when the Employer is required to withhold such taxes, but in no event later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the Employer is required to remit the applicable taxes or (ii) where such taxes are not required to be remitted by the Employer, as soon as practical after the determination of the amount due, but in no event later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the related taxes are remitted to the taxing authorities by the Executive.  In the event any Underpayment described in section 5.3(b) or other reimbursement is payable under this section 5.3 as a result of a tax audit or litigation addressing the existence or amount of a tax liability, such amount must be paid by the end of the Executive’s taxable year following the Executive’s taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authorities or, where no such taxes are remitted, the end of the Executive’s taxable year following the year in which the audit is completed or there is a final and non-appealable settlement or the resolution of the litigation.  If any Underpayment becomes payable to the Executive other than as a result of a tax audit or litigation, such amount shall be paid no later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the applicable taxes.

3.  Section 7.9 of the Agreement is amended to read as follows in order (a) to limit the reimbursement period to six years, (b) to prorate the previously stated reimbursement cap over six taxable years beginning with the taxable year in which a Change in Control occurs ($41,667 per year) and (c) to increase the reimbursement cap to $250,000 per year:

  

1

  

7.9           Payment of Legal Fees.  The Employer is aware that after a Change in Control management of the Employer could cause or attempt to cause the Employer to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Employer to institute litigation seeking to have this Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Agreement.  In these circumstances the purpose of this Agreement would be frustrated.  The Employer desires that the Executive not be required to incur the expenses associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive hereunder.  The Employer desires that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses.  Accordingly, if after a Change in Control occurs it appears to the Executive that (x) the Employer has failed to comply with any of its obligations under this Agreement, or (y) the Employer or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, the Employer irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at the Employer’s expense as provided in this section 7.9, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director, officer, stockholder, or other person affiliated with the Employer, in any jurisdiction.  Despite any existing or previous attorney-client relationship between the Employer and any counsel chosen by the Executive under this section 7.9, the Employer irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel.  The fees and expenses of counsel selected from time to time by the Executive as provided in this section and incurred during the six year period after a Change in Control occurs shall be paid or reimbursed to the Executive by the Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $250,000 for each taxable year of the Executive, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings.  The Employer’s obligation to pay the Executive’s legal fees provided by this section 7.9 operates separately from and in addition to any legal fee reimbursement obligation the Employer may have with the Executive under any separate employment, severance, or other agreement between the Executive and the Employer.  Despite anything in this section 7.9 to the contrary however, the Employer shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3].

4.  The following is added at the end of section 7.11 of the Agreement in order to incorporate IRC Section 409A reimbursement rules:

With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits that are subject to Section 409A of the Internal Revenue Code of 1986, except as permitted by said Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year of the Executive shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Executive, provided that (ii) above shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Internal Revenue Code of 1986 solely because such expenses are subject to a limit related to the period the arrangement is in effect. All reimbursements shall be reimbursed in accordance with the Employer’s reimbursement policies but in no event later than the end of the Executive’s taxable year following the Executive’s taxable year in which the related expense is incurred.

In Witness Whereof, the parties have executed this Amendment to Employment Agreement as of the date first written above.

	
Witnesses

	  	
Crescent Financial Corporation

	  	  	  	  	  
	
    

	  	  	
By:

	
    

	  	  	  	  	  
	
    

	  	  	
Its:

	
    

  

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Witnesses

	  	
Crescent State Bank

	  	  	  	  	  
	
    

	  	  	
By:

	
    

	  	  	  	  	  
	
  

	  	  	
Its:

	
  

	
Witnesses

	 	Executive
	  	 	 	  
	
    

	 	  
	  	 	 	
Michael G. Carlton

	
  

	 	 	  

	
County of Wake

	
)

	  	
  ) ss:

	
State of North Carolina)

	  

Before me this ___ day of December, 2010, personally appeared the above named ____________________ and Michael G. Carlton, who acknowledged that they did sign the foregoing instrument and that the same was their free act and deed.

	  	
    

	
 (Notary Seal)

	
Notary Public

	  	  
	  	
My Commission Expires:

  

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]