Document:

exv10w2

EXHIBIT 10.2

SPECIAL RETENTION AWARD AGREEMENT

This Special Retention Award Agreement (the “Agreement”), made and entered into this
23rd day of October 2009, is by and between Bank of Granite, a bank organized and
existing under the laws of the State of North Carolina (the “Bank” ) and D. Mark Stephens
(“Employee”), an employee of the Bank.

1. Purpose. Employee participates in the Amended and Restated Bank of Granite Salary
Continuation Plan, dated January 1, 2008 (the “Plan”) pursuant to the terms of the Participation
Agreement, dated December 19, 2008, between the Bank and Employee (the “Participation Agreement”).
The purpose of this Agreement is to provide a cash payment to Employee in exchange for Employee’s
agreement to remain employed by the Bank for a specified period of time, the termination of
Employee’s participation in the Plan, and Employee’s release of all claims to any benefits under
the Plan or the Participation Agreement.

2. Special Retention Award. The Bank agrees to pay to Employee:

(a) as soon as reasonably practicable following the effective date of this Agreement, one
lump sum cash payment in the amount of $125,000.00 (the “Retention Payment”); and

(b) by December 31, 2009, one lump sum cash payment to assist Employee in paying any tax and
interest incurred by Employee pursuant to Section 409A(a)(1)(B) of the Internal Revenue Code
as a result of Employee’s receipt of the Retention Payment (the “Gross-up” and together with
the Retention Payment, the “Special Retention Award”).

3. Continued Employment. Employee agrees to remain an Employee of the Bank through January
31, 2010; provided, however, that nothing in this Agreement shall interfere with or otherwise
restrict in any way the rights of the Bank to terminate Employee’s employment at any time for any
reason.

4. Clawback. If Employee is discharged For Cause or if Employee terminates his employment
with the Bank for any reason other than death or Disability prior to the earlier of (a) January 31,
2010 and (b) a Change in Control, Employee agrees to repay to the Bank within 30 days of the date
of such discharge or termination the amount of the Special Retention Award previously paid to
Employee.

5. Release of Claims. Employee hereby acknowledges that this Agreement terminates
Employee’s participation in the Plan and extinguishes all of Employee’s rights under, or interest
in, the Plan and the Participation Agreement. In consideration of the receipt of the Special
Retention Award, Employee hereby irrevocably and unconditionally releases and fully discharges the
Bank, its subsidiaries and affiliates and its and their predecessors, successors and assigns, as
well as its and their officers, directors, employees, attorneys and agents, together with the Plan
and the fiduciaries, administrators and trustees thereof, from any and all causes of action, suits,
claims, demands, liabilities, and obligations whatsoever in law or in equity, whether

 

 

the same are now known or unknown, which he ever had, now has, or may claim to have, upon or by
reason of the occurrence of any matter, cause or thing whatsoever up to the date of his execution
of this Agreement, including without limitation any claims or compensation arising from any claims
for survivorship or other benefits under the Plan and the Participation Agreement, any
representations or statements made regarding any benefits available under the Plan and the
Participation Agreement, any claims under the Employee Retirement Income Security Act of 1974, any
claim for breach of any contract, and all relief associated with any of such claims, including any
lost wages or benefits (present or future), interest, emotional distress or any other form of
economic loss or injuries resulting from any action of any released party herein, all claims for
liquidated, double, punitive or treble damages, as well as legal fees or costs incurred by Employee
in the pursuit of or related in any way to the claims or allegations made against the Bank, the
Plan or its or their fiduciaries, officers, directors or employees.

6. Responsibility for Taxes. Employee agrees that Employee shall be responsible for the
payment of all obligations owed by Employee to a taxing authority as a result of Employee’s receipt
of the Special Retention Award. Employee acknowledges that any references to taxes or interest in
connection with the calculation of the Special Retention Award are merely estimates used by the
parties to determine the amount of the Special Retention Award and do not represent the actual
amount of taxes and/or interest Employee may owe to a taxing authority upon receipt of the Special
Retention Award.

7. Miscellaneous. Capitalized terms not defined herein have the meanings given to
them in the Plan and the Participation Agreement. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of this Agreement, and
this Agreement shall be construed in all respects as if such invalid or unenforceable provision has
been omitted. Except to the extent pre-empted by federal law, this Agreement and Employee’s rights
under it shall be construed and determined in accordance with the laws of the State of North
Carolina. This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. No change,
modification or waiver of any provision of this Agreement shall be valid unless the same be in
writing and signed by the parties.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	BANK OF GRANITE	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ D. Mark Stephens
 

	 	 
	 	By:
	 	/s/ Jerry A. Felts
 

	 	 
	D. Mark Stephens	 	 	 	Name: Jerry A. Felts	 	 
	 	 	 	 	Title: Chief Financial Officerexv10w3

Exhibit 10.3

DIRECTOR FEES

On August 24, 2009, the Board of Directors of Bank of Granite Corporation (the “Company”) approved
changes in the Company’s director fees for the remainder of 2009, as recommended by the Board of
Director’s Compensation Committee and its Nominating and Corporate Governance Committee. Beginning
in October 2009, the following fees will be paid to non-employee directors:

The Chairman will receive an annual retainer of $11,250, payable in quarterly installments of
$2,812.50, in addition to a meeting fee of $750 per board meeting chaired, payable quarterly.

The Vice Chairman will receive an annual retainer of $10,500, payable in quarterly installments of
$2,625, in addition to a meeting fee of $375 paid to directors for each board meeting attended,
payable quarterly.

Each director other than the Chairman and Vice-Chairman will receive an annual retainer in the
amount of $7,500, payable in quarterly installments of $1,875, in addition to a meeting fee of $375
for each board meeting attended, payable quarterly.

Committee members will receive a meeting fee, payable quarterly, in the amount of $187.50 for each
committee meeting attended. Committee chairpersons will receive a meeting fee, payable quarterly,
in the amount of $300 for each committee meeting they conduct, which is in lieu of the $187.50
committee meeting fee paid to the other committee members in attendance.exv10w6

Exhibit 10.6

BANK OF GRANITE

SUMMARY OF AGREEMENT FOR JERRY A. FELTS

     On July 7, 2009, the Board of Directors (the “Board”) of Bank of Granite Corporation (the
“Company”) and its banking subsidiary, Bank of Granite (the “Bank”), appointed Jerry A. Felts,
Chief Operating Officer of both the Company and the Bank since July 2008, to serve in the
additional capacity as Chief Financial Officer of both the Company and the Bank, effective July 31,
2009. Prior to his appointment as Chief Operating Officer, Mr. Felts served Bank of Granite as
Independent Contractor/Advisor with respect to loan operations and accounting matters and internal
control matters, beginning in November 2007.

     According to the oral agreement between the Bank and Jerry A. Felts effective July 1, 2009,
Mr. Felts will receive nonemployee compensation as Chief Operating Officer and Chief Financial
Officer at an hourly amount of $150, not to exceed $25,000 per month, plus reimbursement for
out-of-pocket business related expenses. He will report directly to Scott Anderson, Chief
Executive Officer of both the Company and the Bank.

     Either party can terminate this agreement upon appropriate notice.exv10w10

EXHIBIT 10.10

STATE OF NORTH CAROLINA

COUNTY OF CALDWELL

AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT

     THIS CHANGE OF CONTROL AGREEMENT (hereinafter referred to as this “Agreement”) is entered into
as of the 19th day of December, 2008 and among BANK OF GRANITE CORPORATION (the
“Corporation”), a Delaware corporation, or its successors, the Corporation’s wholly-owned
subsidiary BANK OF GRANITE (the “Bank”), a banking association organized under the laws of the
state of North Carolina, or its successors (hereinafter the Corporation and the Bank, or their
successors, are collectively referred to as the “Company”), and D. Mark Stephens (the “Officer”),
an individual residing in Catawba County, North Carolina.

     WHEREAS, the Officer has heretofore been employed by the Company with the title of “Senior
Vice President and Chief Information Officer/Director of Operations”; and

     WHEREAS, the services of the Officer, the Officer’s experience and knowledge of the affairs of
the Company and reputation and contacts in the industry are extremely valuable to the Company; and

     WHEREAS, the Company wishes to attract and retain such well-qualified executives and it is in
the best interest of the Company and of the Officer to secure the continued services of the Officer
notwithstanding any change of control of the Corporation or the Bank; and

     WHEREAS, the Company considers the establishment and maintenance of a sound and vital
management team to be part of their overall corporate strategy and to be essential to protecting
and enhancing the best interest of the Company and the its shareholders; and

     WHEREAS, the parties desire to enter into this Agreement to provide the Officer with security
in the event of a change of control of the Corporation or the Bank to ensure the continued loyalty
of the Officer during any change of control in order to maximize shareholder value as well as the
continued safe and sound operation of the Company.

     WHEREAS, the Officer, the Company acknowledge and agree that this Agreement is not an
employment agreement but is limited to circumstances giving rise to a change of control of the
Corporation or the Bank as set forth herein.

     NOW, THEREFORE, for and in consideration of the premises and mutual promises, covenants, and
conditions hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereby do agree as follows:

 

 

	 	1.	 	Term. The initial term of this Agreement shall be for the period
commencing upon the effective date of this Agreement and ending two (2) calendar years
from the effective date of this Agreement. At each anniversary date of this Agreement,
the term automatically shall be extended for an additional two (2) calendar years on the
same terms and conditions set forth herein, unless the Company shall give written notice
to the Officer of its intention not to extend this Agreement for an additional two (2)
calendar years, which notice shall be given at least thirteen (13) months prior to the
next anniversary date.
	 
	 	2.	 	Change of Control.

(a) In the event of an involuntary termination of the Officer’s employment in connection
with, or within thirty-six (36) months after, a “Change of Control” (as defined in
Subparagraph (f) below) of the Corporation or the Bank, for reasons other than for
“cause” (as defined in Subparagraph (c) below), the Officer shall be entitled to receive
the sum set forth in Subparagraph (e) below. Said sum shall be payable as provided in
Subparagraph (g) below, provided, however, that the Officer is employed on a full-time
basis by the Bank at the effective time of the “Change of Control”, except as provided in
Subparagraph (k) below.

(b) For purposes of this Agreement, “termination of the Officer’s employment” means a
termination that qualifies as a “separation from service” under Treasury Regulation
§1.409A-1(h) and occurs when the level of bona fide services that the Officer is
performing for the Company has decreased to a level equal to 20% or less of the average
level of services performed by the Officer during the immediately preceding 36-month
period (or the full period of service with the Company, if less than 36 months).

(c) For purposes of this Agreement, termination “for cause” shall mean (i) any dishonest,
illegal or other act of moral turpitude (such as theft, fraud or embezzlement) by the
Officer which is materially detrimental to the interest and well-being of the Company,
(ii) the conviction of a felony, (iii) the unreasonable failure or refusal of the Officer
to perform to the best of his ability on a reasonable basis his duties hereunder, or (iv)
any violation by the Officer of any state or federal law, rule or regulation relating to
banking, financial institutions or securities laws, the violation of which would be
materially detrimental to the interest and well-being of the Company.

(d) The Officer shall have the right to terminate this Agreement upon the occurrence of
any of the following events (the “Termination Events”) within twenty-four (24 months
following a Change of Control of the Company or the Bank:

	 	(i)	 	Officer is assigned any duties and/or responsibilities that are
inconsistent with his duties or responsibilities at the time of the Change of
Control;
	 
	 	(ii)	 	Officer’s annual base salary is reduced below the amount in effect
as of the effective date of a Change of Control;
	 
	 	(iii)	 	Officer’s life insurance, medical or hospitalization insurance,
disability insurance, stock option plans, stock purchase plans, deferred

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	 	 	 	compensation plans, management retention plans, retirement plans, or similar plans or
benefits being provided by the Company to the Officer as of the effective date of
the Change of Control are reduced in their level, scope, or coverage, or any such
insurance, plans, or benefits are eliminated, unless such reduction or
elimination applies proportionately to all salaried employees of the Company who
participated in such benefits prior to such Change of Control; or
	 
	 	(iv)	 	Officer is required to transfer performance of his day-to-day
services required hereunder to a location which is more than fifty (50) miles
from the Officer’s current principal work location, without the Officer’s express
written consent.

	 	 	 	Any change in circumstances described by (i), (ii) or (iii) above must be a material
change in circumstances in order to qualify as a Termination Event. A Termination
Event shall be deemed to have occurred on the date such action or event is implemented
or takes effect.

(e) In the event that the Officer terminates this Agreement pursuant to this Paragraph 2,
the Company will be obligated to pay or cause to be paid to the Officer an aggregate
amount equal to: (i) two (2) times the Officer’s then current salary; plus (ii) two (2)
times the average of the cash bonus incentive paid to the Officer by the Company under
the Company’s bonus incentive plan during the immediately preceding three years; plus
(iii) the amount that would have been contributed under the Company’s profit sharing plan
and supplemental executive retirement plan on behalf of the Officer, as reasonably
determined by the Company, if the Officer were to participate in such plans for the
twenty-four (24) month period following the termination date at the same compensation
level he had immediately prior to the termination; plus (iv) an amount equal to two (2)
times the cost to the Company in its fiscal year immediately preceding the year in which
the termination occurred of any of the following benefits the Officer was receiving and
entitled to at such termination date under the Company’s benefit programs and plans:
medical, disability, life and accident insurance coverage and reasonable costs and fees
associated with the maintenance and renewal of professional licenses. In addition, for
the twenty-four (24) month period following the termination date the Officer will be
entitled to continued vesting in incentive stock option plans and reimbursement of the
reasonable costs of education of the Officer.

(f) For the purposes of this Agreement, the term “Change of Control” shall mean any of
the following events:

	 	(i)	 	After the effective date of this Agreement, any “person” (as such
term is defined Section 7(j)(8)(A) of the Change in Bank Control Act of 1978),
directly or indirectly, acquires beneficial ownership of voting stock, or
acquires irrevocable proxies or any combination of voting stock and irrevocable
proxies, representing fifty percent (50%) or more of any class of voting
securities of the Corporation or the Bank, or acquires control of in any manner
the election of a majority of the directors of the Corporation or the Bank;

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	 	(ii)	 	The Corporation or the Bank consolidates or merges with or into
another corporation, association, or entity, or is otherwise reorganized, where
the Corporation or the Bank is not the surviving corporation in such transaction
and the holders of the voting securities of the Corporation or the Bank
immediately prior to such acquisition own less than a majority of the voting
securities of the surviving entity immediately after the transaction; or
	 
	 	(iii)	 	All or substantially all of the assets of the Corporation or the
Bank are sold or otherwise transferred to or are acquired by any other
corporation, association, or other person, entity, or group.
	 
	 	Notwithstanding the other provisions of this Paragraph 2, a transaction or event shall
not be considered a Change of Control if, prior to the consummation or occurrence of
such transaction or event, the Officer and the Company agree in writing that the same
shall not be treated as a Change of Control for purposes of this Agreement.

(g) The Officer may elect in writing by December 31, 2008 to receive amounts payable
pursuant to this Paragraph 2 either in one lump sum or in twenty-four (24) equal monthly
installments. If the Company has not received the Officer’s valid written election by 5
p.m. Eastern Time on December 31, 2008, any amount payable to the Officer pursuant to
this Paragraph 2 shall be paid in twenty-four (24) equal monthly installments, beginning
with the month following the month of the Officer’s termination. If (i) the Officer is
at the time of termination a “specified employee” under Internal Revenue Code Regulation
§1.409A-1(i), and (ii) the amount payable pursuant to this Paragraph 2 in the first six
months following the date of his termination exceeds the Threshold Amount (defined
below), the Company shall pay during the first six months following the date of
termination a portion of the amount otherwise payable in such six-month period not
exceeding the Threshold Amount, and pay in a single lump sum on the first day after such
six-month period the Excess Amount (defined below). The “Threshold Amount” is an amount
equal to two times the lesser of (A) the sum of the Officer’s annualized compensation for
the fiscal year preceding the year in which the termination occurred and (B) the maximum
amount that may be taken into account under a qualified plan pursuant to Internal Revenue
Code Section 401(a)(17) for the year in which the termination occurred. The “Excess
Amount” is the amount otherwise payable during the first six months following the date of
termination that exceeds the Threshold Amount.

(h) The Officer shall notify the Company in writing within ninety (90) days of the
occurrence of a Termination Event and the Company shall have thirty (30) days from
receipt of such notice to remedy the conditions giving rise to the Termination Event.
Following a Termination Event that is not cured by the Company in the allotted time, the
Officer shall have two (2) years from the date of the occurrence of the Termination Event
to terminate this Agreement pursuant to this Paragraph 2. Any such termination shall be
deemed to have occurred only upon delivery to the Corporation or Bank, or any successors
thereto, of written notice of termination, which describes the Change of Control and
Termination Event. If the Officer does not so terminate this Agreement within such
two-year period, the Officer shall thereafter have no further rights hereunder with
respect to that Termination Event, but

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shall retain rights, if any, hereunder with respect to any other Termination Event as to
which such period has not expired.

(i) It is the intent of the parties hereto that all payments made pursuant to this
Agreement be deductible by the Corporation or the Bank for federal income tax purposes
and not result in the imposition of an excise tax on the Officer. Notwithstanding
anything contained in this Agreement to the contrary, any payments to be made to or for
the benefit of the Officer which are deemed to be “parachute payments” as that term is
defined in Section 280G(b)(2) of the Internal Revenue Code, as amended (the “Code”),
shall be modified or reduced to the extent deemed to be necessary by the Company’s Board
of Directors to avoid the imposition of an excise tax on the Officer under Section 4999
of the Code or the disallowance of a deduction to the Company under Section 280G(a) of
the Code.

(j) In the event any dispute shall arise between the Officer and the Company as to the
terms or interpretation of this Agreement, including this Paragraph 2, whether instituted
by formal legal proceedings or otherwise, including any action taken by the Officer to
enforce the terms of this Paragraph 2 or in defending against any action taken by the
Corporation or the Bank, the Bank shall reimburse the Officer for all costs and expenses,
proceedings or actions, in the event the Officer prevails in any such action.

(k) It is further agreed that the payment agreed in this Paragraph 2 to be paid by the
Company to the Officer shall be due and paid to the Officer should a Change of Control
(as defined above) be agreed to by the Corporation or the Bank or be consummated within
six (6) months of the Officer’s involuntary termination of employment with the
Corporation or the Bank for reasons other than for “cause” as such term is defined in
Subparagraph 2(c) hereof.

	 	3.	 	Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon any corporate or other successor of the Corporation or the Bank, which
shall acquire, directly or indirectly, by conversion, merger, consolidation, purchase,
or otherwise, all or substantially all of the assets of the Corporation or the Bank.
	 
	 	4.	 	Modification; Waiver; Amendments. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Officer, the Company, except as herein otherwise
provided. No waiver by any party hereto, at any time, of any breach by any party hereto,
or compliance with, any condition or provision of this Agreement to be performed by such
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No amendments or additions to this Agreement
shall be binding unless in writing and signed by the parties, except as herein otherwise
provided.
	 
	 	5.	 	Applicable Law. This Agreement shall be governed in all respects whether
as to validity, construction, capacity, performance, or otherwise, by the laws of North
Carolina, except to the extent that federal law shall be deemed to apply.
	 
	 	6.	 	Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of the other provision hereof.

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	 	7.	 	Internal Revenue Code Section 409A. The parties intend that each element
of compensation potentially payable to the Officer hereunder either be exempt from, or
comply with, the requirements of Internal Revenue Code Section 409A, and that any
ambiguities in construction be interpreted to give effect to such intent.

     IN TESTIMONY WHEREOF, the Company have caused this Agreement to be executed under seal and in
such form as to be binding, all by authority of their Board(s) of Directors first duly given, and
the individual party hereto has set said party’s hand hereto and has adopted as said party’s seal
the typewritten word “SEAL” appearing beside said party’s name, this the day and year first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BANK:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	Bank of Granite	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Karen B. Warlick
	 	 	 	By:
	 	/s/ R. Scott Anderson	 	 
	 

	 	 

Karen B. Warlick
	 	 
	 	 	 	 

R. Scott Anderson
	 	 
	 

	 	SVP and Chief Administrative Officer
	 	 	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CORPORATION:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	Bank of Granite Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Karen B. Warlick
	 	 	 	By:
	 	/s/ R. Scott Anderson	 	 
	 

	 	 

Karen B. Warlick
	 	 
	 	 	 	 

R. Scott Anderson
	 	 
	 

	 	SVP & Chief Administrative Officer
	 	 	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	OFFICER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/s/ D. Mark Stephens	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	D. Mark Stephens	 	 

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