Document:

Ex 10.7 CEOC Amendment to Amended and Restated Credit Agreement

Exhibit 10.7 

AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT, dated as of June 3, 2014 (this “Amendment”), to the Amended and Restated Credit Agreement, dated as of November 14, 2012 (as amended, modified or supplemented through the date hereof, the “Credit Agreement”), among Caesars Entertainment Operating Company, Inc., a Delaware corporation (the “Borrower”), and Caesars Entertainment Corporation, a Delaware corporation (the “Lender”).  Capitalized terms used but not defined herein have the meaning provided in the Credit Agreement (as amended hereby).
WHEREAS, the Borrower intends to repay $260,400,000 of the Loans outstanding under the Credit Agreement as of the date of this Amendment (the “Repayment Amount”);
WHEREAS, pursuant to Section 6.08(b) of the Credit Agreement, the Borrower and the Lender may agree to amend the Credit Agreement as set forth herein; and
WHEREAS, the parties hereto desire to amend the Credit Agreement on the terms set forth herein; 
NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1.Amendment.  Notwithstanding the terms of Section 2.01 of the Credit Agreement, which provides that the Lender may agree, in its sole discretion, to make Loans to the Borrower from time to time during the Availability Period, the Lender hereby agrees that if the Borrower repays the Repayment Amount on or after the date of this Amendment, the Lender will permit the Borrower to reborrow Loans after the date of such repayment in an aggregate amount up to such Repayment Amount at any time on or prior to the second anniversary of the date on which the Lender receives such repayment; provided, that such borrowing is otherwise in compliance with the other terms and conditions of the Credit Agreement (including, without limitation, Section 4.01 of the Credit Agreement).  
Section 2.Effectiveness; Counterparts; Amendments.  This Amendment shall become effective when copies hereof that, when taken together, bear the signatures of the Borrower and the Lender shall have been received by the Lender.  This Amendment may not be amended nor may any provision hereof be waived except pursuant to a writing signed by the Lender and the Borrower.  This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Amendment by telecopy or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.
Section 3.No Other Amendments.  This Amendment shall not constitute an amendment or waiver of or consent to any provision of the Credit Agreement except as expressly stated herein and shall not be construed as an amendment, waiver or consent to any action on the part of the Borrower that would require an amendment, waiver or consent of the Lender except as expressly stated herein.  Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect in accordance with their terms.  
Section 4.Applicable Law; Waiver of Jury Trial.  (A)  THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATING TO THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(B)  EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTION 6.11 AND SECTION 6.15 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN.
* * *

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first above written.

CAESARS ENTERTAINMENT CORPORATION.
as Lender

	
		
	 
	 

	By:
	/S/ DONALD A. COLVIN

	 
	Name:   Donald A. Colvin

	 
	Title:     Executive Vice President and Chief Financial Officer

CAESARS ENTERTAINMENT OPERATING COMPANY, INC.,
as Borrower

	
		
	 
	 

	By:
	/S/ DONALD A. COLVIN

	 
	Name:   Donald A. Colvin

	 
	Title:     Executive Vice President and Chief Financial OfficerExhibit 10.1

Carolina Bank

Salary Continuation
Agreement

 

This Salary
Continuation Agreement (this “Agreement”) is entered into as of this 1st day of October, 2014, by and between
Carolina Bank, a North Carolina-chartered bank (the “Bank”), and John Richard Spiker, II, its Executive Vice President
(the “Executive”).

 

Whereas,
recognizing the Executive’s substantial contribution to the Bank’s success and intending to encourage the Executive
to remain an employee, the Bank and the Executive enter into this Agreement,

 

Whereas,
none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth
in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance
Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar
as the Bank is concerned, and

 

Whereas,
the parties hereto intend that this Agreement shall be considered an unfunded arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). The Executive is fully advised of the Bank’s financial status.

 

Now
Therefore, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Executive and the Bank hereby agree as follows.

 

Article 1

Definitions

 

1.1“Accrual Balance” means
the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) for the Bank’s
obligation to the Executive under this Agreement, applying Accounting Principles Board Opinion No. 12, as amended by Financial
Accounting Standard No. 106, and the calculation method and discount rate specified hereinafter. The Accrual Balance is determined
such that when it is credited with interest each month the Accrual Balance at Normal Retirement Age equals the present value of
the normal retirement benefits. The discount rate means the rate used by the Plan Administrator for determining the Accrual Balance.
In its sole discretion the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according
to GAAP.

 

1.2“Beneficiary” means each
designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined
according to Article 4.

 

 

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1.3“Beneficiary Designation Form”
means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the
Plan Administrator to designate one or more Beneficiaries.

 

1.4“Change in Control” shall
mean a change in control as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application
thereunder issued by the Department of the Treasury, including –

 

(a)Change in ownership: a change in ownership
of Carolina Bank Holdings, Inc., a North Carolina corporation of which the Bank is a wholly owned subsidiary, occurs on the date
any one person or group accumulates ownership of Carolina Bank Holdings, Inc. stock constituting more than 50% of the total fair
market value or total voting power of Carolina Bank Holdings, Inc. stock, or

 

(b)Change in effective control: (x) any
one person or more than one person acting as a group acquires within a 12-month period ownership of Carolina Bank Holdings, Inc.
stock possessing 30% or more of the total voting power of Carolina Bank Holdings, Inc. stock, or (y) a majority of Carolina
Bank Holdings, Inc.’s board of directors is replaced during any 12-month period by directors whose appointment or election
is not endorsed in advance by a majority of Carolina Bank Holdings, Inc.’s board of directors, or

 

(c)Change in ownership of a substantial portion of
assets: a change in ownership of a substantial portion of Carolina Bank Holdings, Inc.’s assets occurs if in a 12-month
period any one person or more than one person acting as a group acquires from Carolina Bank Holdings, Inc. assets having a total
gross fair market value equal to or exceeding 40% of the total gross fair market value of all of Carolina Bank Holdings, Inc.’s
assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of Carolina
Bank Holdings, Inc.’s assets, or the value of the assets being disposed of, determined without regard to any liabilities
associated with the assets.

 

1.5“Code” means the Internal
Revenue Code of 1986, as amended, and rules, regulations, and guidance of general application issued thereunder by the Department
of the Treasury.

 

1.6“Disability” means, because
of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last
for a continuous period of at least 12 months, (x) the Executive is unable to engage in any substantial gainful activity,
or (y) the Executive is receiving income replacement benefits for a period of at least three months under an accident and
health plan of the employer. Medical determination of disability may be made either by the Social Security Administration or by
the provider of an accident or health plan covering employees of the Bank. Upon request of the Plan Administrator, the Executive
must submit proof to the Plan Administrator of the Social Security Administration’s or provider’s determination.

 

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1.7“Early Termination” means
Separation from Service before Normal Retirement Age for reasons other than death, Disability, or Termination with Cause. Early
Termination excludes a Separation from Service governed by section 2.4.

 

1.8“Effective Date” means
October 1, 2014.

 

1.9“Normal Retirement Age”
means the Executive’s 65th birthday.

 

1.10“Plan Administrator” or
“Administrator” means the plan administrator described in Article 8.

 

1.11“Plan Year” means a twelve-month
period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the effective date
of this Agreement.

 

1.12“Separation from Service”
means the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group,
as defined in Code section 414, terminates for any reason, other than because of a leave of absence approved by the Bank or the
Executive’s death. For purposes of this Agreement, if there is a dispute about the employment status of the Executive or
the date of the Executive’s Separation from Service, the Bank shall have the sole and absolute right to decide the dispute
unless a Change in Control shall have occurred.

 

1.13“Termination with Cause”
and “Cause” shall have the same meaning specified in any effective severance or employment agreement existing
on the date hereof or hereafter entered into between the Executive and the Bank. If the Executive is not a party to a severance
or employment agreement containing a definition of termination with cause, Termination with Cause means the Bank terminates the
Executive’s employment for any of the following reasons –

 

(a)the Executive’s gross negligence or gross neglect
of duties or intentional and material failure to perform stated duties after written notice thereof, or

 

(b)disloyalty or dishonesty by the Executive in the
performance of the Executive’s duties, or a breach of the Executive’s fiduciary duties for personal profit, in any
case whether in the Executive’s capacity as a director or officer, or

 

(c)intentional wrongful damage by the Executive to the
business or property of the Bank or its affiliates, including without limitation the reputation of the Bank, which in the judgement
of the Bank causes material harm to the Bank or affiliates, or

 

(d)a willful violation by the Executive of any applicable
law or significant policy of the Bank or an affiliate that, in the Bank’s judgement, results in an adverse effect on the
Bank or the affiliate, regardless of whether the violation leads to criminal prosecution or conviction. For purposes of this Agreement
applicable laws include any statute, rule, regulatory order, statement of policy, or final cease-and-desist order of any governmental
agency or body having regulatory authority over the Bank, or

 

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(e)an intentional act of fraud, embezzlement, or theft
by the Executive in the course of employment. For purposes of this Agreement no act or failure to act on the part of the Executive
shall be deemed to have been intentional if it was due primarily to an error in judgment or negligence. An act or failure to act
on the Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief
that the action or failure to act is in the Bank’s best interests, or

 

(f)the occurrence of any event that results in the Executive
being excluded from coverage, or having coverage limited for the Executive as compared to other executives of the Bank, under the
Bank’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees, or

 

(g)the Executive is removed from office or permanently
prohibited from participating in the Bank’s affairs by an order issued under section 8(e)(4) or section 8(g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or

 

(h)conviction of the Executive for or plea of no contest
to a felony or conviction of or plea of no contest to a misdemeanor involving moral turpitude, or the actual incarceration of the
Executive for 45 consecutive days or more.

 

1.14“Voluntary Termination with Good
Reason” means a voluntary Separation from Service by the Executive within 24 months after a Change in Control if the
following conditions (x) and (y) are satisfied: (x) a voluntary Separation from Service by the Executive will
be considered a Voluntary Termination with Good Reason if any of the following occur without the Executive’s advance written
consent –

 

1)a material diminution of the Executive’s
base salary,

 

2)a material diminution of the Executive’s
authority, duties, or responsibilities,

 

3)a material diminution in the authority,
duties, or responsibilities of the supervisor to whom the Executive is required to report,

 

4)a material diminution in the budget over
which the Executive retains authority,

 

5)a material change in the geographic location
at which the Executive must perform services for the Bank, or

 

6)any other action or inaction that constitutes
a material breach by the Bank of the agreement under which the Executive provides services to the Bank.

 

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(y)the Executive must give notice to the Bank
of the existence of one or more of the conditions described in clause (x) within 90 days after the initial existence of
the condition, and the Bank shall have 30 days thereafter to remedy the condition. In addition, the Executive’s voluntary
termination because of the existence of one or more of the conditions described in clause (x) must occur within 24 months
after the earlier of the initial existence of the condition or the date of the Change in Control.

 

Article 2

Lifetime Benefits

 

2.1Normal Retirement. Unless Separation
from Service occurs before Normal Retirement Age, when the Executive attains Normal Retirement Age the Bank shall pay to the Executive
the benefit described in this section 2.1 instead of any other benefit under this Agreement. If the Executive’s Separation
from Service thereafter is a Termination with Cause or if this Agreement terminates under Article 5, no further benefits shall
be paid.

 

2.1.1Amount of benefit. The annual benefit
under this section 2.1 is $125,000.

 

2.1.2Payment of benefit. Beginning with
the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit
to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive
for 15 years.

 

2.2Early Termination. For Early Termination
the Bank shall pay to the Executive the benefit described in this section 2.2 instead of any other benefit under this Agreement.
Neither the Bank nor the Executive shall be entitled to elect in the 24-month period after a Change in Control between the benefit
under this section 2.2 versus the benefit under section 2.4. If the Executive’s Separation from Service within 24 months
after a Change in Control is an involuntary termination without Cause or a Voluntary Termination with Good Reason, no benefit shall
be payable under this section 2.2 and the Executive shall instead be entitled to the benefit under section 2.4 or, if the Executive
first attained Normal Retirement Age, section 2.1. No benefits shall be payable under this Agreement if the Executive’s Separation
from Service is a Termination with Cause or if this Agreement terminates under Article 5.

 

2.2.1Amount of benefit. The annual benefit
under this section 2.2 is calculated as the amount that fully amortizes the vested Accrual Balance existing at the end of the month
immediately before the month in which Separation from Service occurs, amortizing that vested Accrual Balance over the period beginning
with the Executive’s Normal Retirement Age and taking into account interest at the discount rate or rates established by
the Plan Administrator. The percentage of the Accrual Balance that is vested at any time is (x) if a Change in Control has
not occurred before Separation from Service, the percentage corresponding to a fraction, the numerator of which is the total number
of months in which the Executive has been employed by the Bank, including employment before the Effective Date of this Agreement,
and the denominator of which is the total potential months of employment of the Executive by the Bank from commencement of the
Executive’s employment with the Bank to Normal Retirement Age, or (y) 100% if a Change in Control has occurred before
Separation from Service.

 

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2.2.2Payment of benefit. Beginning with
the later of (x) the seventh month after the month in which the Executive’s Separation from Service occurs, or (y)
the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit
to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive
for 15 years.

 

2.3Disability. Unless the Executive shall
have received the benefit under section 2.4 after a Change in Control, for Separation from Service because of Disability before
Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.3 instead of any other benefit
under this Agreement.

 

2.3.1Amount of benefit. The annual benefit
under this section 2.3 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately
before the month in which Separation from Service occurs, amortizing that Accrual Balance over the period beginning with the Executive’s
Normal Retirement Age and taking into account interest at the discount rate or rates established by the Plan Administrator.

 

2.3.2Payment of benefit. Beginning with
the later of (x) the seventh month after the month in which the Executive’s Separation from Service occurs, or (y)
the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit
to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive
for 15 years.

 

2.4Change in Control. If the Executive’s
Separation from Service is an involuntary termination without Cause or a Voluntary Termination with Good Reason, in either case
within 24 months after a Change in Control, the Bank shall pay to the Executive the benefit described in this section 2.4 instead
of any other benefit under this Agreement. Neither the Bank nor the Executive shall be entitled to elect in the 24-month period
after a Change in Control between the benefit under this section 2.4 versus the Early Termination benefit under section 2.2. If
the Executive’s Separation from Service within 24 months after a Change in Control is an involuntary termination without
Cause or a Voluntary Termination with Good Reason, no benefit shall be payable under section 2.2 and the Executive shall instead
be entitled to the benefit under this section 2.4. But if the Executive shall have attained Normal Retirement Age when Separation
from Service within 24 months after a Change in Control occurs, whether Separation from Service is voluntary or involuntary for
any reason other than Termination with Cause, the Executive shall be entitled solely to the benefit provided by section 2.1, not
this section 2.4 or section 2.2. No benefits shall be payable under this Agreement if the Executive’s Separation from Service
is a Termination with Cause or if this Agreement terminates under Article 5.

 

2.4.1Amount of benefit. The benefit under
this section 2.4 is the Accrual Balance maintained by the Bank as of the end of the month immediately before the month in which
Separation from Service occurs, plus interest to the date of payment at a rate or rates determined by the Plan Administrator.

 

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2.4.2Payment of benefit. The Bank shall
pay the benefit under this section 2.4 to the Executive in a single lump sum on the first day of the seventh month after the month
in which the Executive’s Separation from Service occurs.

 

2.5Lump-sum Payment of Normal Retirement Benefit,
Early Termination Benefit, or Disability Benefit Being Paid to the Executive when a Change in Control Occurs. If when a Change
in Control occurs the Executive is receiving the Normal Retirement Age benefit under section 2.1, the Bank shall pay the remaining
salary continuation benefits to the Executive in a single lump sum within three days after the Change in Control. If when a Change
in Control occurs after Separation from Service the Executive is receiving or is entitled at Normal Retirement Age to receive the
benefit under section 2.2, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum
within three days after the later of (x) the date of the Change in Control or (y) the first day of the seventh month
after the month in which the Executive’s Separation from Service occurs. The lump-sum payment due to the Executive as a result
of a Change in Control shall be an amount equal to the vested Accrual Balance amount corresponding to the benefit under section
2.2 when the Change in Control occurs. If when a Change in Control occurs after Separation from Service the Executive is receiving
or is entitled at Normal Retirement Age to receive the benefit under section 2.3, the Bank shall pay the remaining salary continuation
benefits to the Executive in a single lump sum within three days after the later of (x) the date of the Change in Control
or (y) the first day of the seventh month after the month in which the Executive’s Separation from Service occurs.
The lump-sum payment due to the Executive as a result of a Change in Control shall be an amount equal to the Accrual Balance amount
corresponding to the benefit under section 2.3 when the Change in Control occurs.

 

2.6Annual Benefit Statement. Within 60
days after the end of each Plan Year the Plan Administrator shall provide or cause to be provided to the Executive and the Bank
an annual benefit statement showing benefits payable or potentially payable to the Executive under this Agreement. Each annual
benefit statement shall supersede the previous year’s annual benefit statement. If there is a contradiction between this
Agreement and the annual benefit statement concerning the amount of a particular benefit payable or potentially payable to the
Executive under sections 2.2, 2.3, or 2.4 hereof, the amount of the benefit determined under the Agreement shall control.

 

2.7Savings Clause Relating to Compliance with
Code Section 409A. Despite any contrary provision of this Agreement, if when the Executive’s employment terminates the
Executive is a specified employee, as defined in Code section 409A, and if any payments under Article 2 of this Agreement will
result in additional tax or interest to the Executive because of section 409A, the Executive shall not be entitled to the payments
under Article 2 until the earliest of (x) the date that is at least six months after termination of the Executive’s
employment for reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z)
any earlier date that does not result in additional tax or interest to the Executive under section 409A. If any provision of this
Agreement would subject the Executive to additional tax or interest under section 409A, the Bank shall reform the provision. However,
the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the
Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result
of the reformed provision.

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2.8One Benefit Only. Despite anything
to the contrary in this Agreement, the Executive and Beneficiary are entitled to one benefit only under this Agreement, which shall
be determined by the first event to occur that is dealt with by this Agreement. Except as provided in section 2.5 or Article 3,
subsequent occurrence of events dealt with by this Agreement shall not entitle the Executive or Beneficiary to other or additional
benefits under this Agreement.

 

Article 3

Death Benefits

 

3.1Death Before Separation from Service.
Except as provided in section 5.2, if the Executive dies before Separation from Service, at the Executive’s death the Beneficiary
shall be entitled to an amount in cash equal to the Accrual Balance existing at the Executive’s death, unless the Change-in-Control
benefit shall have been paid to the Executive under section 2.4 or unless a Change-in-Control payout shall have occurred under
section 2.5. No benefit shall be paid if the Change-in-Control benefit shall have been paid to the Executive under section 2.4
or if a Change-in-Control payout shall have occurred under section 2.5. If a benefit is payable to the Beneficiary, the benefit
shall be paid in a single lump sum 90 days after the Executive’s death. However, no benefits under this Agreement shall be
paid or payable to the Executive or the Beneficiary if this Agreement is terminated under Article 5.

 

3.2Death after Separation from Service.
If the Executive dies after Separation from Service and if Separation from Service was not a Termination with Cause, at the Executive’s
death the Beneficiary shall be entitled to an amount in cash equal to the vested Accrual Balance remaining at the Executive’s
death if at Separation from Service the Executive was entitled to the Early Termination benefit under section 2.2, or the Accrual
Balance remaining at the Executive’s death if at Separation from Service the Executive was entitled to the Disability benefit
under section 2.3, unless the Change-in-Control benefit shall have been paid to the Executive under section 2.4 or unless a Change-in-Control
payout shall have occurred under section 2.5. No benefit shall be paid if the Change-in-Control benefit shall have been paid to
the Executive under section 2.4 or if a Change-in-Control payout shall have occurred under section 2.5. If a benefit is payable
to the Beneficiary under this section 3.2, the benefit shall be paid in a single lump sum 90 days after the Executive’s death.
However, no benefits under this Agreement shall be paid or payable to the Executive or the Beneficiary if this Agreement is terminated
under Article 5.

 

 

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Article 4

Beneficiaries

 

4.1 Beneficiary Designations. The Executive
shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Agreement at the Executive’s
death. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any
other benefit plan of the Bank in which the Executive participates.

 

4.2Beneficiary Designation: Change.
The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the
Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked
if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time.
Upon acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed
shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive
and accepted by the Plan Administrator before the Executive’s death.

 

4.3Acknowledgment. No designation or change
in designation of a Beneficiary shall be effective until received, accepted, and acknowledged in writing by the Plan Administrator
or its designated agent.

 

4.4No Beneficiary Designation. If the
Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, the Executive’s
spouse shall be the designated Beneficiary. If the Executive has no surviving spouse the benefits shall be paid to the Executive’s
estate.

 

4.5Facility of Payment. If a benefit is
payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property,
the Bank may pay the benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated
person, or incapable person. The Bank may require proof of incapacity, minority, or guardianship as it may deem appropriate before
distribution of the benefit. Distribution shall completely discharge the Bank from all liability for the benefit.

 

Article 5

General Limitations

 

5.1Termination with Cause. Despite any
contrary provision of this Agreement, the Bank shall not pay any benefit under this Agreement and this Agreement shall terminate
if Separation from Service is a Termination with Cause.

 

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5.2Suicide or Misstatement. The Bank shall
not pay any benefit under this Agreement if the Executive commits suicide within two years after the Effective Date or if the Executive
makes any material misstatement of fact on any application or resume provided to the Bank or on any application for benefits provided
by the Bank.

 

5.3Removal. If the Executive is removed
from office or permanently prohibited from participating in 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. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order.

 

5.4Default. Despite any contrary provision
of this Agreement, if the Bank is in “default” or “in danger of default,” as those terms are defined in
section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.

 

5.5FDIC Open-Bank Assistance. All obligations
under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued
operation of the Bank, when the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf
of the Bank under the authority contained in Federal Deposit Insurance Act section 13(c). 12 U.S.C. 1823(c). Rights of the parties
that have already vested shall not be affected by such action, however.

 

5.6Violation of Article 9. Despite any
contrary provision of this Agreement, the Bank shall not pay any benefit under this Agreement and this Agreement shall terminate
if the Executive violates Article 9 of this Agreement.

 

Article 6

Claims and Review
Procedures

 

6.1Claims Procedure. A person or beneficiary
(“claimant”) who has not received benefits under this Agreement that he or she believes should be paid shall make a
claim for such benefits as follows –

 

6.1.1Initiation – written claim.
The claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If the claim relates to the
contents of a notice received by the claimant, the claim must be made within 60 days after the notice was received by the claimant.
All other claims must be made within 180 days after the date of the event that caused the claim to arise. The claim must state
with particularity the determination desired by the claimant.

 

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

 

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6.1.3Notice of decision. If the Bank denies
part or all of the claim, the Bank shall notify the claimant in writing of the denial. The Bank shall write the notification in
a manner calculated to be understood by the claimant. The notification shall set forth –

 

		6.1.3.1	the specific reasons for the denial,

		6.1.3.2	a reference to the specific provisions of the Agreement on which the denial is based,

		6.1.3.3	a description of any additional information or material necessary for the claimant to perfect the claim and an explanation
of why it is needed,

		6.1.3.4	an explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and

		6.1.3.5	a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse benefit determination
on review.

 

6.2Review Procedure. If the Bank denies
part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows
–

 

6.2.1Initiation – written request.
To initiate the review, the claimant, within 60 days after receiving the Bank’s notice of denial, must file with the Bank
a written request for review.

 

6.2.2Additional submissions – information
access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information
relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to and copies
of all documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s
claim for benefits.

 

6.2.3Considerations on review. In considering
the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without
regard to whether the information was submitted or considered in the initial benefit determination.

 

6.2.4Timing of Bank response. The Bank
shall respond in writing to the claimant within 60 days after receiving the request for review. If the Bank determines that special
circumstances require additional time for processing the claim, the Bank may extend the response period by an additional 60 days
by notifying the claimant in writing before the end of the initial 60-day period that an additional period is required. The notice
of extension must state the special circumstances and the date by which the Bank expects to render its decision.

 

    	11

    	 

    

 

 

6.2.5Notice of decision. The Bank shall
notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood
by the claimant. The notification shall set forth –

 

		6.2.5.1	the specific reason for the denial,

		6.2.5.2	a reference to the specific provisions of the Agreement on which the denial is based,

		6.2.5.3	a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all
documents, records, and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for
benefits, and

		6.2.5.4	a statement of the claimant’s right to bring a civil action under ERISA section 502(a).

 

Article 7

Miscellaneous

 

7.1Amendments and Termination. Subject
to section 7.14, this Agreement may be amended solely by a written agreement signed by the Bank and by the Executive, and except
for termination occurring under Article 5 this Agreement may be terminated solely by a written agreement signed by the Bank and
by the Executive.

 

7.2Binding Effect. This Agreement shall
bind the Executive, the Bank, and their beneficiaries, survivors, executors, successors, administrators, and transferees.

 

7.3No Guarantee of Employment. This Agreement
is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Bank nor does it
interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee
or interfere with the Executive’s right to terminate employment at any time.

 

7.4Non-Transferability. Benefits under
this Agreement may not be sold, transferred, assigned, pledged, attached, or encumbered.

 

7.5Successors; Binding Agreement. By an
assumption agreement in form and substance satisfactory to the Executive, the Bank shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Bank
to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required
to perform this Agreement had no succession occurred.

 

 

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7.6Tax Withholding. The Bank shall withhold
any taxes that are required to be withheld from the benefits provided under this Agreement.

 

7.7Applicable Law. This Agreement and
all rights hereunder shall be governed by the laws of the State of North Carolina, except to the extent preempted by the laws of
the United States of America.

 

7.8Unfunded Arrangement. The Executive
and Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent
the mere promise by the Bank to pay benefits. Rights to benefits are not subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of
the Bank to which the Executive and Beneficiary have no preferred or secured claim.

 

7.9Entire Agreement. This Agreement constitutes
the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under
this Agreement other than those specifically set forth. This Agreement amends and restates in its entirety the January 1, 2004
Agreement entered into by the Bank and the Executive under the Bank’s Executive Supplemental Retirement Plan.

 

7.10Severability. If any provision of
this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held invalid, and each
such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Agreement
is held invalid in part, such invalidity shall not affect the remainder of the provision not held invalid, and the remainder of
such provision together with all other provisions of this Agreement shall continue in full force and effect to the full extent
consistent with law.

 

7.11Headings. Caption headings and subheadings
herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of
this Agreement.

 

7.12Notices. All notices, requests, demands
and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed,
certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address
as either party may designate by like notice. If to the Bank, notice shall be given to the board of directors, Carolina Bank, 101
North Spring Street, P.O. Box 10209, Greensboro, North Carolina 27401, or to such other or additional person or persons as the
Bank shall have designated to the Executive in writing. If to the Executive, notice shall be given to the Executive at the Executive’s
address appearing on the Bank’s records, or to such other or additional person or persons as the Executive shall have designated
to the Bank in writing.

 

    	13

    	 

    

 

 

7.13Payment of Legal Fees. The Bank is
aware that after a Change in Control management of the Bank could cause or attempt to cause the Bank to refuse to comply with its
obligations under this Agreement, or could institute or cause or attempt to cause the Bank 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 Bank intends that the Executive not
be required to incur 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 Bank intends 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 Bank has
failed to comply with any of its obligations under this Agreement, or (y) the Bank 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 recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes
the Executive from time to time to retain counsel of the Executive’s choice, at the Bank’s expense as provided in this
section 7.13, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against
the Bank or any director, officer, stockholder, or other person affiliated with the Bank, in any jurisdiction. Despite any existing
or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this section 7.13, the
Bank irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Bank 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 shall be paid or reimbursed to the Executive by the Bank
on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by counsel in accordance
with counsel’s customary practices, up to a maximum aggregate amount of $125,000, whether suit be brought or not and regardless
of whether incurred in trial, bankruptcy, or appellate proceedings. The Bank’s obligation to pay the Executive’s legal
fees provided by this section 7.13 operates separately from and in addition to any legal fee reimbursement obligation the Bank
may have with the Executive under any separate employment, severance, or other agreement between the Executive and the Bank. Despite
any contrary provision within this Agreement however, the Bank 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].

 

7.14Termination or Modification of Agreement
Because of Changes in Law, Rules or Regulations. The Bank is entering into this Agreement on the assumption that certain existing
tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change
has a material detrimental effect on this Agreement, the Bank reserves the right to terminate or modify this Agreement accordingly,
subject to the written consent of the Executive, which shall not be unreasonably withheld. This section 7.14 shall become null
and void effective immediately upon a Change in Control.

 

    	14

    	 

    

 

Article 8

Administration
of Agreement

 

8.1Plan Administrator Duties. This Agreement
shall be administered by a Plan Administrator consisting of the Bank’s board of directors or such committee or person(s)
as the board shall appoint. The Executive may not be a member of the Plan Administrator. The Plan Administrator shall have the
discretion and authority to (x) make, amend, interpret, and enforce all appropriate rules and regulations for the administration
of this Agreement and (y) decide or resolve any and all questions that may arise, including interpretations of this Agreement.

 

8.2 Agents. In the administration of this
Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting
through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.

 

8.3Binding Effect of Decisions. The decision
or action of the Plan Administrator concerning any question arising out of the administration, interpretation, and application
of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Agreement. No Executive or Beneficiary shall be deemed to have any right, vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not limited to the discount rate and calculation method
described in section 1.1.

 

8.4Indemnity of Plan Administrator. The
Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses,
or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct
by the Plan Administrator or any of its members.

 

8.5Bank Information. To enable the Plan
Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters
relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive and such
other pertinent information as the Plan Administrator may reasonably require.

 

Article 9

Competition After
Employment Termination

 

9.1.Restrictions on the Executive’s
Post-Employment Activities. These restrictions have been negotiated, presented
to, and accepted by the Executive contemporaneous with the offer and acceptance by the Executive of this Agreement signed or to
be signed in 2014 by the Executive and the Bank. The Bank’s decision to enter into this Agreement is conditioned upon the
Executive’s agreement to be bound by the restrictions contained in this Article 9.

 

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(a)Promise of no solicitation. The Executive
promises and agrees that during the Restricted Period (as defined in section 9.3) and in the Restricted Territory (as defined in
section 9.3) the Executive will1:

 

1.not directly or indirectly solicit,
or attempt to solicit any Customer (as defined below) to accept or purchase Financial Products or Services (as defined below) of
the same nature, kind, or variety as provided to the Customer by the Bank during the two years immediately preceding the Executive’s
employment termination with the Bank,

 

2.not directly or indirectly influence
or attempt to influence any Customer, joint venturer, or other business partner of the Bank to alter that person or entity’s
business relationship with the Bank in any respect, and

 

3.not accept the Financial Products
or Services business of any Customer or provide Financial Products or Services to any Customer on behalf of anyone other than the
Bank.

 

(b)Promise of no competition. The Executive promises
and agrees that during the Restricted Period in the Restricted Territory the Executive will not engage, undertake, or participate
in the business of providing, selling, marketing, or distributing Financial Products or Services of a similar nature, kind, or
variety (x) as offered by the Bank to Customers during the two years immediately preceding the Executive’s employment
termination with the Bank, or (y) as offered by the Bank to any of its Customers during the Restricted Period. 1Subject
to the above provisions and conditions of this subparagraph (b), the Executive promises that during the Restricted Period the Executive
will not become employed by or serve as a director, partner, consultant, agent, or owner of 5% or more of the outstanding
stock of or contractor to any entity providing these prohibited Financial Products or Services that is located in or that conducts
business in the Restricted Territory.

 

(c)Promise of no raiding/hiring. The Executive
promises and agrees that during the Restricted Period the Executive will not solicit or attempt to solicit and will not
encourage or induce in any way any employee, joint venturer, or business partner of the Bank to terminate an employment or contractual
relationship with the Bank. The Executive agrees that the Executive will not hire any person employed by Bank during the
two-year period before the Executive’s employment termination with the Bank or any person employed by the Bank during the
Restricted Period.

 

(d)Promise of no disparagement. The Executive
promises and agrees that during the Restricted Period the Executive will not cause statements to be made (whether written
or oral) that reflect negatively on the business reputation of the Bank.

 

________________________

 

1
For Example, the promise of no solicitation applies if the Executive is conducting prohibited business in the Restricted
Territory or if the entity with, for or to whom the Executive is conducting prohibited business is located within the Restricted
Territory.

 

    	16

    	 

    

 

 

9.2Remedy. (a) If the Executive violates
the provisions of section 9.1, the Executive and the Executive’s Beneficiary shall forfeit all rights and interest in this
Agreement and the benefits provided by this Agreement. This Agreement and all obligations of the Bank under this Agreement shall
terminate immediately if the Bank determines that the Executive has violated section 9.1. The Bank shall have sole authority to
determine whether a violation of section 9.1 by the Executive has occurred. If the Bank determines that a violation has occurred,
the Bank shall give written notice to the Executive of termination of this Agreement within 30 days after termination of the Agreement,
advising the Executive of the provision or provisions of section 9.1 violated by the Executive. The Bank may exercise its remedy
under this section 9.2 (a) without having to prove actual damages caused by the Executive’s violation of section 9.1.

 

(b)The Bank and the Executive acknowledge and agree
that the provisions of this Article 9 shall survive termination of the Executive’s employment relationship, but the provisions
of this Article 9 shall be null and void if a Change in Control occurs before the Executive’s employment termination. The
parties agree that if any of the provisions of this Article 9 are deemed unenforceable by a court of competent jurisdiction, the
unenforceable provisions may be stricken as independent clauses by the court in order to enforce the remaining territory restrictions
and that the intent of the parties is to afford the broadest restriction on post-employment activities as set forth in this Agreement.
The Executive and the Bank acknowledge and agree that the provisions of this Article 9 have been negotiated and carefully determined
to be reasonable and necessary for the protection of the Bank’s legitimate business interests. The Executive and the Bank
acknowledge and agree that a violation by the Executive of Article 9 is likely to cause immediate and irreparable harm to the Bank.

 

 

9.3Definitions. (a) The term “Restricted
Period” as used herein means the period beginning with the Executive’s employment termination and ending on the earliest
of (x) the date the Executive attains age 80, (y) the date on which this Agreement terminates under Article 5, or
(z) the date on which the Bank’s obligation to make payments under Article 2 to the Executive is fully discharged.
The Restricted Period shall be extended in an amount equal to any time period during which a violation of Article 9 of this Agreement
is proven.

 

(b)The term “Restricted Territory” as used
herein means all of Alamance, Forsyth, Guilford, and Randolph Counties in North Carolina and any other county in which the Bank
has an office when the Executive’s employment termination occurs. The parties agree that if any of these separate territories
are deemed too broad to be enforced by a court of competent jurisdiction, that the territories are divisible and severable territories
that may be stricken as independent clauses by the court in order to enforce the remaining territory restrictions.

 

(c)The term “Customer” as used herein means
any individual, joint venturer, entity of any sort, or other business partner of the Bank, with, for, or to whom the Bank has provided
Financial Products or Services during the last two years of the Executive’s employment with the Bank, or any individual,
joint venturer, entity of any sort, or business partner whom the Bank has identified as a prospective customer of Financial Products
or Services within the last two years of the Executive’s employment with the Bank.

 

    	17

    	 

    

 

 

(d)The term “Financial Products or Services”
as used herein means any product or service that a financial institution or a financial holding company could offer by engaging
in any activity that is financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company
Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including
but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products
or services of the type of which the Executive was involved during the Executive’s employment with the Bank.

 

 

In
Witness Whereof, the Executive and a duly authorized officer of the Bank have executed this Salary Continuation Agreement
as of the date first written above.

 

	Executive:	Bank:	 	 
	 	Carolina Bank	 
	 	 	 	 
	 /s/ John Richard Spiker II   	By:   /s/ Robert T. Braswell	 
	John Richard Spiker II	 	 	 
	 	Its:      President and CEO	 
	 	 	 	 
	 	And By: /s/ T. Allen Liles	 
	 	 	 	 
	 	Its:       EVP and CFO	 

 

    	18

    	 

    

  

Beneficiary Designation

Carolina Bank

Salary Continuation
Agreement

 

I, John Richard Spiker, II, designate the
following as beneficiary of any death benefits under this Salary Continuation Agreement –

 

	 	Primary: 	 	 
	 	 	 	 
	 	 	 	 
	 	Contingent: 	 	 
	 		 	 

 

Note: To name a trust as beneficiary,
please provide the name of the trustee(s) and the exact name and date of the trust agreement.

 

I understand that I may change these beneficiary
designations by filing a new written designation with the Bank. I further understand that the designations will be automatically
revoked if the beneficiary predeceases me, or if I have named my spouse as beneficiary and our marriage is subsequently dissolved.

 

		Signature:	________________________ 
	 	 	John
Richard Spiker, II

 

Date:
_______________ , 2014

 

 

Accepted by the Bank this _____  day of
 ________________, 2014

 

By: __________________________________

 

Print Name: ___________________________

 

Title: ________________________________

 

    	19

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