Document:

ffwm-ex105_717.htm

Exhibit 10.5

FIRST FOUNDATION INC.

2015 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

On ______ __, 20__, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of First Foundation Inc., a Delaware corporation (the “Company”), granted to ________________ (“Participant” or “you”), pursuant to the Company’s 2015 Equity Incentive Plan (the “Plan”), an option (the “Option”) entitling you to purchase the number of shares of Common Stock of the Company set forth below (the “Option Shares”) on the terms and subject to the conditions set forth in this Stock Option Agreement (this “Agreement”) and in the Plan.  Any capitalized term not defined in this Agreement shall have the same meaning ascribed to it in the Plan, unless the context in which such term is used in this Agreement indicates otherwise.

		
	
Grant Date:
	
__________ __, 20__

	
Total Number of Option Shares:
	
 Shares

	
Exercise Price Per Share:
	
$           

	
Type of Option (check one):
	
o Incentive Stock Option (“ISO”)

o Nonqualified Stock Option (“NSO”)

	
Vesting Commencement Date:
	
___________ __, 20__

	
Vesting Schedule:
	
 

 

 

 

 

	
Term of Option:
	
The Option will expire on the _____ (__th) anniversary of the Grant Date, unless sooner terminated as provided in this Option Agreement.

	
Additional Terms and Conditions:
	
 ̈If this box is checked, the additional terms and conditions set forth on Attachment A hereto (as executed by the Company) are applicable and are incorporated herein by reference.  [No document need be attached as Attachment A if the box is not checked.]

BY SIGNING BELOW, YOU ARE ACCEPTING THE OPTION AND ENTERING INTO THIS STOCK OPTION AGREEMENT AND YOU ARE AGREEING TO ALL OF THE TERMS, RESTRICTIONS AND CONDITIONS CONTAINED IN THIS AGREEMENT AND IN THE PLAN.  You also acknowledge that you have previously received copies of the following: (i) this Agreement; (ii) the Plan, and (iii) the Plan Prospectus.

		
	
PARTICIPANT:

Signature:  

Print Name:  

 
	
FIRST FOUNDATION INC.

By:  

Name:  

Its:   

(Remainder of page intentionally left blank.
Agreement continues on next page.)

 

 

 

1.Grant of Option.  The Company has granted the Option to Participant, which entitles Participant to purchase all or any portion of the number of Option Shares at the exercise price per share (the “Exercise Price”) stated on the first page of this Option Agreement and on the other terms and subject to the conditions set forth in this Agreement and in the Plan.   

2.Vesting of Option.  The right to exercise this Option shall vest and become exercisable as set forth on the first page of this Option Agreement.  No Option Shares shall vest after the date of termination of Participant’s continuous Service, but this Option shall continue to be exercisable in accordance with Section 3 hereof with respect to that number of Option Shares that had vested at on or prior to the date of the termination of Participant’s continuous Service. 

3.Term of Option.  The right of the Participant to exercise this Option shall terminate upon the first to occur of the following:

(a)the expiration of _____ (__) years from the date of this Agreement;

(b)the expiration of three (3) months from the date of termination of Participant’s continuous Service, if such termination occurs for any reason other than permanent disability, death, voluntary resignation or “Cause” (as defined in Section 2.5 of the Plan); provided, however, that if Participant dies during such three-month period, then, the provisions of Section 3(e) below shall apply;

(c)the date of termination of Participant’s continuous Service if such termination is the result of a voluntary resignation by Participant or a termination of Participant’s continuous Service for “Cause” (as defined in Section 2.5 of the Plan); 

(d)the expiration of one (1) year from the date of termination of Participant’s continuous Service if such termination is due to permanent disability of the Participant (as defined in Section 22(e)(3) of the Code); 

(e)the expiration of one (1) year from the date of termination of Participant’s continuous Service if such termination is due to Participant’s death or if death occurs during the three-month following termination of Participant’s continuous Service pursuant to Section 3(b) above; or

(f)upon the consummation of a “Corporate Transaction” (as defined in Section 2.11 of the Plan), unless the Option is assumed, as provided in Section 12.1 of the Plan, by the successor entity or acquiring person in such Corporate Transaction.

4.Exercise of Option.  On or after the vesting of any the Option Shares, in accordance with Section 2 hereof, and continuing until termination of the right to exercise this Option in accordance with Section 3 above, the Option Shares which have vested may be exercised in whole or in part by the Participant (or, after his or her death, by the person designated in Section 5 below) upon delivery of the following to the Company at its principal executive offices:

(a)a written notice of exercise which identifies this Agreement and states the number of Option Shares then being purchased (but no fractional Shares may be purchased);

(b)a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Compensation Committee has theretofore approved under the provisions of Section 13.1 of the Plan);

(c)a check or cash, or other form of payment approved by the Committee as described in Section 9(b) below, in the amount requested by the Company to satisfy the Company’s withholding obligations under federal, state or other applicable tax laws with respect to the taxable income, if any, recognized by the Participant in connection with the exercise of this Option; and

(d)a letter or agreement, if requested by the Company, in such form and substance as the Company may require, containing representations and warranties and covenants of the Participant, or Participant’s permitted transferee or Successor as the Administrator may require to enable the Company to issue the Shares in compliance with the Securities Act and applicable state securities laws.

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5.Death of Participant; Transferability.  If the Option is designated, on the first page hereof, as an “Incentive Stock Option” (which is defined in Section 422 of the Code), then, the Option may be transferred or assigned only to the extent consistent with Section 422 of the Code and in no event shall any transferee, to whom this Option may be assigned or transferred in conformity with Section 422 of the Code, be entitled to transfer the Option in whole or in part to any other person or entity.  If the Option is designated as a “Nonqualified Stock Option” or “’NSO” on the first page of this Agreement, then, unless otherwise determined by the Committee, the Option may not be sold, pledged, assigned, hypothecated, transferred or otherwise disposed of in any manner other than by will or by the laws of descent or distribution.  If the Committee has made the Option transferable, including by instrument to an inter-vivos or testamentary trust in which the Option is to be passed to beneficiaries upon the death of the trustor (settlor) or by gift or by domestic relations order to a “Permitted Transferee” (as defined in Section 2.30 of the Plan), this Agreement shall be amended to contain such additional terms and conditions as the Committee deems appropriate.  This Option will be exercisable: (a) during the Participant’s lifetime only by (i)  Participant, or (ii) Participant’s guardian or legal representative; (b) after Participant’s death, by Participant’s legal representative or heirs or legatees, and (c) by a Permitted Transferee (if any).

6.Rights as Stockholder.  The Participant (or any Permitted Transferee of this Option, whether by will or by the laws of descent and distribution or otherwise) shall have no rights as a stockholder of the Company with respect to any of the Option Shares until the Participant (or if applicable, such Permitted Transferee) has duly exercised this Option, paid the Exercise Price therefor and become a holder of record of any or all of the Option Shares.

7.Adjustments Upon Changes in Capital Structure.  In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, reverse stock split, reclassification, stock dividend or other similar change in the capital structure of the Company, then, in accordance with the provisions of Section 3.5 of the Plan, appropriate adjustment shall be made by the Compensation Committee to the number of Option Shares subject to the unexercised portion of this Option and to the Per Share Exercise Price, in order to preserve, as nearly as practical, but not to increase, the benefits of the Participant under this Option.

8.Tax Consequences.  YOU SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR SELLING OR OTHERWISE DISPOSING OF ANY OF THE OPTION SHARES.

(a)Exercising the Option.  You will not be allowed to exercise this Option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the Option exercise.

(b)Notice of Disqualifying Disposition of ISO Shares.  If you sell or otherwise dispose of any of the Option Shares acquired pursuant to an ISO on or before the later of: (i) two (2) years after the Grant Date, or (ii) one (1) year after the date of exercise, you shall immediately notify the Company in writing of such disposition.  You agree that you may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out of the current compensation paid to you.

9.Withholding Taxes and Stock Withholding Applicable to Employee Participants.  If you are an employee of the Company or any Company Affiliate, you agree as follows:

(a)Regardless of any action that may be taken by the Company or any Company Affiliate with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge and agree that (i) you are and will ultimately be liable to pay all Tax-Related Items legally due by you and (ii)  neither the Company nor any Company Affiliate (A) is making any representations or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or exercise of the Option, the subsequent sale of Option Shares acquired pursuant to such exercise, or the receipt of any dividends; and (ii) is committing to structure the grant or the terms or any other aspect of the Option to reduce or eliminate your liability for Tax-Related Items.  You acknowledge that if you are subject to Tax-Related Items in more than one jurisdiction, the Company and/or the Company Affiliate (as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)Prior to the issuance to you of any Option Shares upon exercise of the Option, you shall pay or make adequate arrangements satisfactory to the Company and/or any Company Affiliate by which you are employed, 

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if other than the Company, to satisfy all withholding and payment on account obligations of the Company and/or such Company Affiliate.  In this regard, you authorize the Company and/or such Company Affiliate to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or such Company Affiliate.  With the prior approval of the Compensation Committee (as may be evidenced by provisions contained in Attachment A hereto), these arrangements may also include, if permissible under applicable law and government regulations: (i) withholding and cancelling Option Shares that otherwise would be issued to you when you exercise the Option, provided that the Company only withholds a number of Option Shares required to satisfy the minimum statutory withholding amount, (ii) delivering to the Company for cancellation shares of Company Common Stock already owned by you, (iii) having the Company withhold taxes from the proceeds of the sale of the Option Shares, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf and you hereby authorize such sales by this authorization), (iv) your payment of a cash amount, or (v) any other arrangement approved in advance by the Compensation Committee, all under such rules as may be established by the Committee and in compliance with the Company’s Insider Trading Policy, if applicable, and applicable law.  The Fair Market Value (as defined in the Plan) of any Option Shares withheld or other shares of Company Common Stock cancelled to pay any or all Tax-Related Items will be determined as of the effective date of the Option exercise and will be applied as a credit against the withholding taxes and any other Tax Related Items payable by you.  You shall pay to the Company or such Company Affiliate (as the case may be) any amount of Tax-Related Items that the Company or the Employer Entity may be required to withhold from your compensation as a result of your participation in the Plan or your exercise or purchase of the Option Shares that cannot be satisfied by the means previously described.  Finally, you acknowledge that the Company has no obligation to deliver any Option Shares to you until you have satisfied your obligations to pay the Tax-Related Items as described in this Section.

10.Consent to Electronic Delivery of All Plan Documents and Disclosures.  By your acceptance of the Option and entry into this Agreement, you consent to the electronic delivery of this Agreement, the Plan, account statements, Plan Prospectuses required by the Securities and Exchange Commission, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Option or this Agreement.  Electronic delivery may include the delivery of a link to a Company intranet or to the internet site of a third party involved in administering the Plan, the delivery of the documents via e-mail or such other delivery method as may be determined by the Company in its discretion.  You acknowledge that (i) the Company may, in its discretion, provide or send paper copies to you of any of the foregoing documents either in lieu of or in addition to electronic copies thereof and (ii) you may elect to receive from the Company a paper copy of any such documents that have been or may be delivered electronically at no cost to you, if you contact the Company by telephone, through a postal service or electronic mail at _______@ff-inc.com.  You understand that you are not required to consent to electronic delivery and that, if you do consent to electronic delivery, your consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if you have provided an electronic mail address), at any time by you by notifying the Company of such revocation or any revised consent, by telephone, postal service or electronic mail at _______@ff-inc.com.  

11.Compliance with Laws and Regulations.  

(a)The exercise of the Option and issuance of Option Shares upon such exercise will be subject to and conditioned upon compliance by the Company and you with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Common Stock may be listed or quoted at the time of such exercise.  The Option Shares issued pursuant to this Agreement shall be endorsed with appropriate legends, if any, as determined by the Company in its sole discretion.

(b)The Company will use its diligent efforts to obtain from any applicable regulatory agency such authority or approvals as may be required in order to issue Option Shares to you upon exercise of the Option, in whole or in part.  The inability of the Company to obtain any such authority or any approvals which are deemed by the Company’s counsel to be necessary for the lawful issuance of the Shares hereunder and under the Plan shall relieve the Company of any liability in respect of the nonissuance of such Shares as to which such requisite authority or any such approvals have not been obtained.

12.Governing Law; Severability; Jurisdiction over Disputes.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereunder and under the Plan shall be 

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governed, construed and interpreted in accordance with, and enforced under, the laws of the State of Delaware, without giving effect to its conflicts of law rules or principles.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.  In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of this Agreement shall be interpreted as if such provision were so excluded and (c) the balance of this Agreement shall be enforceable in accordance with its terms.  Unless otherwise agreed in writing by the Company, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state or federal court located within the State of Delaware) shall be the sole and exclusive forum for purposes of litigating any dispute that may arise directly or indirectly out of or in connection with the Option, or its grant or exercise, the issuance of the Option Shares or this Agreement or the Plan and each of you and the Company irrevocably consents to the exclusive jurisdiction of such courts with respect to the litigation of any such disputes.

13.No Effect on Employment or Service.  Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a Parent, Subsidiary or Affiliate of the Company, to terminate your Service, for any reason, with or without Cause.

14.Lock-Up Agreement.  Upon request of the Company or the underwriter or underwriters managing any underwritten offering of the Company’s securities (the “Managing Underwriter(s)”), you hereby agree not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such managing underwriter(s), as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration (the “Lockup Period”) as may be requested by the Company or such managing underwriter(s) and to execute an agreement reflecting the foregoing as may be requested by the Company or the managing underwriter(s) at the time of, or within thirty (30) days prior to, the filing of the registration statement for such underwritten offering; provided, however, that, if during the last seventeen (17) days of the Lockup Period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the Lockup Period the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the Lockup Period, then, upon the request of the managing underwriter(s), to the extent required by any FINRA rules, the restrictions imposed by this Section shall continue to apply until the end of the third trading day following the expiration of the fifteen (15)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.  In no event will the restricted period extend beyond two hundred sixteen (216) days after the effective date of the registration statement.  The rights of the Company and any managing underwriter(s), and your obligations, under this Section 14 shall survive the grant and exercise of the Option until such time as the Option Shares acquired on exercise of the Option have been sold or otherwise transferred in compliance with the Securities Act (as defined in the Plan) or in reliance on any exemptions from the registration requirements thereof.

15.Award Subject to Company Clawback or Recoupment.  To the extent permitted by applicable law, the Option, the Option Shares and the proceeds from any sale or other transfer or disposition of the Option Shares shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of your employment or other Service with the Company or any Company Affiliate that is applicable to you.  In addition to any other remedies available under such policy, applicable law may require the cancellation of your Option (whether vested or unvested) and/or the recoupment of any gains realized upon or in connection with the sale or other disposition of any of the Option Shares.

16.Entire Agreement; Amendments and Waivers.  This Agreement (inclusive of Attachment A) and the Plan constitute the entire agreement and contain all of the understandings of the parties relating to the subject matter herein and supersede all prior discussions between them with respect thereto.  Any prior agreements, commitments or negotiations concerning this Option are superseded.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing and signed by the parties to this Agreement.  The failure by either party to enforce any rights under this Agreement, prior to the expiration or earlier termination of such rights under this Agreement or the Plan, shall not be construed as a waiver of any rights of such party.

17.Binding Agreement.  All covenants and agreements herein contained by or on behalf of any of the parties shall bind and inure to the benefit of the parties and their respective successors by operation of law and any 

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persons to which the Company may assign its rights hereunder and any Permitted Transferee of Participant to whom the Option or Participant’s rights hereunder may be assigned or transferred in accordance with this Agreement and the Plan.

18.Interpretation.  This Agreement is the result of arms’-length negotiations between the parties hereto and no provision hereof shall, for any reason, be construed against a party.  Unless the context in which such terms are used clearly and unambiguously indicates otherwise, (i) the term “or” shall not be exclusive, (ii) the terms “including” and “include” shall not be limiting and shall mean “including, but not limited to,” or “include without limitation”, and (iii) the terms “herein,” “hereof,” “hereto,” “hereunder”, “hereinafter” and other similar terms shall refer to this Agreement as a whole and not merely to the specific section, subsection, paragraph or clause where such terms may appear.  The section, subsection and any paragraph headings contained herein are for convenience of reference only and are not intended to and shall not define, limit or affect, and shall not be considered in connection with, the interpretation or application of any of the terms or provisions of this Agreement.

19.Conflicts.  If any of the terms or provisions contained in this Agreement conflict with any of the terms or provisions of the Plan, and such conflict cannot be resolved by the Committee in a manner that is consistent with the terms and purposes of the Plan, then the terms or provisions of the Plan shall control in that instance.

20.Notices.  Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid (or by such other method as the Administrator may from time to time deem appropriate), and addressed, if to the Company, at its principal place of business, Attention:  the Chief Financial Officer, and if to the Participant , at his or her most recent address as shown in the employment or stock records of the Company.

21.Counterparts.  This Agreement may be executed in two or more counterparts, and each such executed counterpart, and any photocopy, facsimile copy, digital and pdf. copy thereof, shall be deemed an original, but all of which together shall be deemed one and the same instrument.

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ATTACHMENT A

ADDITIONAL TERMS AND CONDITIONS

Set forth below are additional terms or conditions that are applicable to the Option, which terms or conditions are hereby incorporated into and made an integral part of the Option Agreement.  

Any term with an initial capital letter contained, but not defined, in this Attachment A, shall have the meaning given to it in this Option Agreement or in the Plan, unless the context in which such term is used in this Attachment A clearly indicates that a different meaning is intended. 

1.Payment of Exercise Price (check appropriate box): 

Subject to applicable law, Participant shall:  oParticipant shall not:  o  be permitted to pay the Exercise Price of his/her Option by (i) the Company’s cancellation of a number of the Option Shares otherwise issuable on exercise of the Option, or delivery to the Company and cancellation of a number of shares of Company Common Stock already owned by Participant, in either case, with a Fair Market Value, as of the date of exercise of the Option, equal to the aggregate exercise price of the Option Shares being exercised, or (ii) from the proceeds of a voluntary sale or a mandatory sale arranged by the Company of Option Shares which are at least sufficient to pay the aggregate Exercise Price of the Option Shares being exercised, or any combination of the foregoing.

2.Payment of Withholding Taxes (check appropriate box):1   

Subject to applicable law, Participant shall:  o Participant shall not:  o: be permitted to pay the withholding taxes and any other Tax-Related Items (as defined in the Option Agreement) by (i) the Company’s cancellation of a number of the Option Shares otherwise issuable on exercise of the Option, or delivery to the Company and cancellation of a number of shares of Company Common Stock already owned by Participant, in either case, with a Fair Market Value, as of the date of exercise of the Option, equal to the aggregate amount of the withholding taxes and any other Tax-Related Items required to be withheld in connection with or as a result of the exercise of the Option, or any combination of the foregoing.

[NOTE:  If there are no other additional terms or conditions, please insert the word “NONE” below.  If, on the other hand, there are other additional terms or conditions (for example, such as, but not limited to, performance conditions), insert those other terms and/or conditions below and on additional pages if necessary.]

 

 

 

 

 

		
	
PARTICIPANT:

Signature:  

Print Name:  

 
	
FIRST FOUNDATION INC.

By:  

Name:  

Its:   

 

	
	 

	
1  
	
Applicable only to Participants who are employees of the Company or of any Affiliate of the Company.

A-1MACON
BANK

LONG-TERM CAPITAL APPRECIATION
PLAN 

 

 

 

 

2004
Amendment and Restatement

 

 

 

 

The
Board of Directors of Macon
Bank, Inc.,
by resolution dated December 15, 2004,
amends and restates this Long-term Capital Appreciation Plan (“Plan”) effective as of January 1,
2005 in order to establish that all amounts deferred or
vested after December 31, 2004 shall be governed by the sub-plan (the “Sub-plan”) attached as Exhibit
“C” hereto. The purpose of the Plan is to provide incentive compensation on a deferred basis for its directors and select
executive officers. The Plan is not tax-qualified under Section 401 of the Code,
and is unfunded and primarily for a select group of management
or highly compensated employees within the meaning of Section 201(2) of the Employee Retirement Income Security Act of 1974, as
amended.

 

ARTICLE
I 

Definitions

 

The following
words and phrases, when used in the Plan with an initial capital letter, shall have the meanings set forth below unless the context
clearly indicates otherwise.

 

1.1
“Acceptance” shall
mean acceptance, by the Committee, of a Deferral Election Form, a
Distribution Election Form, or an Investment
Election Form (which acceptance shall be presumed unless, within ten business
days of delivery of a
Participant’s election to a Director, the Committee provides the Participant with a written notice detailing the reasons for its
rejection).

 

1.2 “Account”
shall mean a bookkeeping account maintained by the Bank in the name of each Participant.

 

1.3
“Affiliate” shall mean any “parent
corporation” or “subsidiary corporation” of the Bank, as the terms are defined in Section 424(e) and (f), respectively,
of the Code.

 

1.4
’‘Appreciation Percentage” shall
mean the percentage (if any) by which the Book Value appreciates between the date on which the Committee credits a Capital Appreciation
Right to a Participant’s
Account and the date on which the Participant terminates Service (subject, however, to Section 3.4 hereof).

 

1.5
“Bank” shall
mean Macon
Bank, Inc., and
any successor to its interest.

 

1.6 “Beneficiary” shall
mean the person or persons whom a Participant may designate as the beneficiary of the Participant’s Benefits under
Article II, and
shall mean the Participant’s estate in the absence of a valid designation. A Participant’s election of a
Beneficiary shall be made on the Distribution Election
Form, shall be revocable by the Participant during his or her lifetime, and
shall be effective
only upon its Acceptance by the Committee.

 

    	 	1	 

     

    

1.7
“Benefits” shall mean any and all benefits that accrue under Article II of
the Plan.

 

1.8 “Board”
shall mean the Board of Directors of the Bank.

 

1.9
“Book Value” shall mean the book value of the Bank and any Affiliates, as determined in accordance with Generally
Accepted Accounting Principles (GAAP), provided that the Committee shall have
the discretion to take into account or to disregard any extraordinary financial events affecting the Bank or an Affiliate.

 

1.10 “Capital
Appreciation Right” shall mean a credit that the Committee makes to a Participant’s Account pursuant to Article II.

 

1.11
“Change in Control” shall mean: (i) the execution of an agreement for the sale of all or a material portion of
the assets of the Bank; (ii) the execution of an agreement for a merger, consolidation, or other transaction of the Bank whereby
the Bank is not the surviving entity; (iii) a change of control of the Bank, as defined or determined either by the Bank’s primary
banking regulator or under regulations promulgated by it; (iv)
the acquisition, directly or indirectly, of the beneficial ownership within the meaning of that term as it is used in Section 13(d)
of the 1934 Act and the rules and regulations promulgated thereunder) of twenty-five percent (25%) or more of the outstanding voting
proxies or securities of the Bank by any person, trust, entity, or group; or; (v) during any period of two consecutive years, individuals
(the “Continuing Directors”) who at the beginning of such period constitute the Board of Directors of the Bank or its
mutual holding company (the “Existing Board”) cease for any reason to constitute at least two-thirds thereof, provided
that any individual whose election or nomination for election as a member
of the Existing Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered
a Continuing Director. This limitation shall not apply to a transaction in which either the Bank merely converts stock form or
forms a holding company or up to 30% of any class of securities of the Bank are purchased by a tax-qualified employee stock benefit
plan of the Bank or an affiliate. The term “person” refers to an individual or a corporation, partnership,
trust, bank, joint venture, pool, syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed herein.

 

1.12 “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

1.13
“Committee” shall mean any committee that the Board may appoint to administer and effectuate the
Plan. The Committee shall act only by a majority of its members, and may act through meetings
or written consents. Notwithstanding the foregoing, the Board may at any time act in lieu of the Committee with respect to any
action that the Committee may take pursuant to the Plan.

 

1.14
“Common Stock” shall mean the
common stock, if any,
of the Bank, but shall mean common stock of a holding company
of the Bank if one is formed for that purpose independently of a Change in Control.

 

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1.15
“Deferrals”
shall mean any Participant-directed deferrals that occur pursuant to Section
2.1 hereof.

 

1.16
“Deferral Election Form” shall mean the form attached hereto
as Exhibit “A”

 

1.17 “Director”
shall mean a member of the Board, or the Board of Directors of an Affiliate.

 

1.18 “Distribution
Election Form” shall mean the form attached hereto as Exhibit “B”.

 

1.19
“Effective Date” shall mean July 1, 1998.

 

1.20
“Employee” shall mean any person to whom the Bank or an Affiliate pays
“wages” that are reportable to the Internal Revenue Service on Form W-2 (or a successor form thereto).

 

1.21
“Just Cause” shall mean misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violations of any law, rule
or regulation (other than traffic violations or similar offenses), or final cease-and-desist orders.

 

1.22
“Participant” shall mean (i) executive officers Stiles, Plemens, Jeffress, Morgan,
and Brown, (ii) an
individual who serves as a Director of the Bank on the
Effective Date, regardless
of whether or not the Director is an Employee,
and (ii) any Director or Employee whom the Board specifically selects for participation in
the Plan after the Effective Date, provided that an Employee shall be eligible for Plan participation
only if the Employee is a member of a select group of the Bank’s management or highly compensated
employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

1.23 “Plan”
shall mean this Macon Bank Long-term Capital Appreciation Plan.

 

1.24 “Plan
Year” shall mean the one-year period that begins each July 1, except the initial Plan Year shall begin on the Effective
Date and end on June 30, 1999.

 

1.25 “Service”
shall mean an individual’s service as an Employee or Director, but shall not include service performed as an advisory director
or director emeritus.

 

1.26
“Trust” shall mean the trust created under the Trust Agreement.

 

1.27
“Trust Agreement” shall mean the agreement entered into between the Bank
and the Trustee, pursuant
to the terms hereof.

 

1.28 “Trustee”
shall mean the person(s) or entity appointed by the Board pursuant to the Trust Agreement to hold legal title to the Plan Assets
for the purposes set forth herein.

 

1.29
“Vested Percentage” shall be determined for each Participant by dividing the Participant’s actual Years
of Service by 10; provided that a Participant’s Vested Percentage shall automatically accelerate
to 100% in the event the Participant’s Service terminates due to the Participant’s
death or disability (as determined by the Committee), or a Change in Control.

 

    	 	3	 

     

    

1.30
“Year of Service”
shall mean each full year of a Participant’s Service, measured from the
Effective Date forward; provided that Years of Service in excess
of 10 shall be disregarded for this purpose.

 

ARTICLE
II 

Credits to Accounts

 

2.1
Deferrals. Each
Participant may elect, on the Deferral Election Form, to make Deferrals by directing that his or her fees, salary, bonuses, or
other cash compensation be reduced on a pre-tax basis. Such elections shall (i) be irrevocable until the end of the calendar year
in which they are made, and (ii) be effective
on the January 1st following their Acceptance, provided that a Participant may elect to have an election take effect as soon as
administratively practicable with respect to cash compensation that the Participant may receive in the future and as to which the
Participant currently has no legal right or claim. As soon as practicable after the end of each pay period, the Bank shall credit
each Participant’s Account with any Deferrals that occurred during the pay period.

 

2.2
Initial Credits. On
the Effective Date, the
Bank shall credit $4,500 to the account of each Participant who is a Director
on that date.

 

2.3
Investment Return on Deferrals. At
the end of each Plan Year during which a Participant’s Account has a positive value,
the Bank shall credit the average balance of the Participant’s Account that
is attributable to Deferrals and Initial
Credits under Section 2.2
with an investment return equal to the average return-on-equity achieved by the Bank and its Affiliates for the current fiscal
year and the two immediately preceding fiscal years. For this purpose, the Committee shall determine return-on-equity in accordance
with Generally Accepted Accounting Principles, provided that the Committee may in its discretion take into account or disregard
any extraordinary financial events. In the event of a stock conversion by the Bank, each Participant may elect to have
his or her Account credited, on a prospective basis, with the total return that stockholders receive on Common Stock.

 

2.4
Capital Appreciation Rights. As
of the Effective Date, the Bank shall credit Capital Appreciation
Rights to the Accounts of Participants according to the following schedule: 

 

	 	Participant	Capital Appreciation Right
	 	 	 
	 	Each non-Employee Director	 
	 	E. Stiles	 
	 	R. Plemens 

S. Jeffress 

M. Morgan 

B. Brown	 

 

The Committee
may, in its discretion, make future credits of Capital Appreciation Rights to the Accounts of Participants.

 

    	 	4	 

     

    
2.5
Termination of Service. The Committee shall determine the Account balance, that is
payable to a Participant in accordance with Article III, as of the last day of the calendar quarter that coincides with or next
follows the Participant’s termination of Service (or a Change in Control, if earlier). The Participant’s Account balance as of
that date shall equal the sum of-

 

(i) all Deferrals
made by the Participant, Initial Credits made pursuant to Section 2.2 hereof, and any earnings credited pursuant to Section 2.3
hereof, and

 

(ii) the product
obtained when each of the Participant’s Capital Appreciation Rights is multiplied by both the Participant’s Vested Percentage and
the applicable Appreciation Percentage.

 

2.6 Earnings
Credits on Final Account Balances. From the date as of which the Committee determines a Participant’s final Account balance
pursuant to Section 2.5 hereof, the Bank shall credit the Participant’s Account with simple interest that shall accrue monthly
on any unpaid balances at a rate of 8% per annum.

 

ARTICLE
III 

Distributions from Accounts

 

3.1
Normal Form and Timing of Distributions. In
the absence of a valid Distribution Election pursuant to Section 3 .2 hereof or Section 3
..1 of the Sub-plan, whichever is applicable, (and subject to Section 3.3 hereof), the Bank shall pay a Participant’s Account balance
in cash, in substantially equal monthly payments over a period of five years; beginning as soon as administratively practicable
following the last day of the month in which the Committee determines the Participant’s final Account balance pursuant to Section
2.5 hereof.

 

3.2
Distribution Elections. Subject to Section 3.3 hereof, a Participant may elect on the Distribution Election Form to have
his or her final Account balance paid in annual payments over a period of between 5 and 10 years, in a lump sum distribution that
occurs more than two years after the Participant terminates service, or a combination of these choices. In
order to be effective, Acceptance of a Participant’s Distribution Election
Form must occur either (i)
more than one year before the date on which the Participant’s Service terminates
for any reason or (ii) within 30 days of the Participant’s initial commencement of Plan participation,
or (iii) more than 90 days before the closing of a Change in Control. In
the event a Participant files more than one valid Distribution Election Form,
the most recent valid election shall supersede any and all prior elections. Nevertheless, Beneficiary designations made pursuant
to executed Election Forms shall be revocable during the Participant’s lifetime and a Participant may, by submitting an effective
superseding Election Form at any time and from time to time, prospectively change the designated Beneficiary and the manner of
payment to a Beneficiary.

 

3.3 Forfeiture.
The portion of a Participant’s final Account balance that is attributable to Capital Appreciation Rights (as calculated pursuant
to Section 2.5 (ii) hereof) shall be forfeited immediately if either of the following events occur:

 

(i)
The Committee determines that the Participant’s Service ended, voluntarily or involuntarily, due to Just Cause.

 

    	 	5	 

     

    

 

(ii)
Within 24 months after terminating Service,
the Participant becomes an employee, consultant, director, or 10% or more stockholder of a company that provides products that
compete with those of the Bank or its Affiliates, within 50 miles of any place where the Bank or its Affiliates is doing business
on the date the Participant’s Service terminates.

 

3.4
Change in Control. In the event of a Change in Control, the Bank and the Participant
have the right to mutually agree to limit payments that they might consider excess “golden parachute payments” as defined
under §§280G and 4999 of the Code. In addition, upon the closing date of a Change in Control: the forfeiture provision
set forth in Section 3.3(ii) hereof shall lapse and become null and void, each Participant’s Vested Percentage shall become 100%,
and the Appreciation Percentage for each Participant shall be calculated by assuming that the appreciation percentage that occurred
between the initial credit of a Capital Appreciation Right and the Change in Control continues through date on which the Participant’s
Vested Percentage would have reached 100% pursuant to Section 1.29 hereof.

 

3.5
Death Benefits. If a Participant dies before receiving
all Benefits payable pursuant to Section 3.1, then the vested but unpaid balance of the Participant’s Account shall be distributed
in a lump sum to the Participant’s Beneficiary as soon as administratively practicable following the date of the Participant’s
death, provided that a Participant may specify on the Distribution Election Form the distribution period elected therein by the
Participant.

 

ARTICLE
IV 

Source of Benefits

 

4.1 General
Rule. Benefits accumulated under the Plan shall constitute an unfunded, unsecured promise by the Bank to provide such payments
in the future, as and to the extent such Benefits become payable. Benefits accumulated under the Plan shall be paid from the general
assets of the Bank, and no person shall, by virtue of this Plan, have any interest in such assets, other than as an unsecured creditor,
of the Bank. For any Plan Year during which a Trust is maintained, (i) the Trustee shall inform the Committee annually prior to
the commencement of each Plan Year as to the manner in which such Trust assets shall be invested, and (ii) the Committee shall,
as soon as practicable after the end of each calendar quarter, provide the Trustee with a schedule specifying the amount of any
Trust contribution that is attributable to the Participant’s Account for purposes only of Section 2.5 of this Plan. The Bank shall
also, at least annually, provide the Trustee with a schedule specifying the amounts payable to each Participant, and the time for
making such payments. All interest, dividends, and realized gain/losses on Trust assets will be taxed to the Bank.

 

4.2
Trust Funding on Change in Control. In the event of a Change in Control, the Bank shall contribute to the Trust an amount
sufficient to provide the Trust with assets having an overall value equivalent to the value of the aggregate Account balances under
the Plan (calculated as though each Participant’s Service terminates coincident with the Change
in Control).

 

    	 	6	 

     

    

ARTICLE
V

Recordkeeping;
Plan Expenses

 

The Committee
shall be responsible for maintaining all Accounts, with particular reference to contribution sources and allocating gains and losses
(at least annually), and shall prepare Account reports for the Participants and the Bank. The Committee may in its discretion appoint
or remove a third-party recordkeeper. The Bank shall pay all expenses associated with the Plan and the Trust.

 

ARTICLE
VI 

Assignment

 

Except
as otherwise expressly provided by this Plan, it is agreed that neither the Participant nor his or her Beneficiary, nor the Participant’s
executors and administrators, heirs, legatees, distributees,
and any other person or persons claiming any benefits under him or her under this Plan, shall have any right to assign, transfer,
pledge, hypothecate, sell, transfer, alienate and encumber
or otherwise convey the right to receive any Benefits hereunder, which Benefits and
the rights thereto are expressly declared to be nontransferable.
The right to receive Benefits under this Plan shall likewise not be subject to execution, attachment, garnishment, sequestration
or similar legal, equitable or other process to the benefit of the Participant’s creditors. Any attempted assignment, transfer,
pledge, hypothecation
or other disposition of the Participant’s rights to receive Benefits under this Plan or the levy of any attachment,
garnishment or similar process thereupon, shall be null and void and without effect.

 

ARTICLE
VII

No
Retention of Services

 

The Benefits
payable under this Plan shall be independent of, and in addition to, any other compensation payable by the Bank to a Participant,
whether in the form of fees, bonus, retirement income under employee benefit plans sponsored or maintained by the Bank or otherwise.
This Plan shall not be deemed to constitute a contract of employment between the Bank and any Participant.

 

ARTICLE VIII

Rights
of Participants and Beneficiaries

 

The
rights (if any) of Participants and their Beneficiaries under this Plan shall be solely those rights
of unsecured creditors of the Bank.

 

ARTICLE IX 

Reorganization

 

The
Bank agrees that it will not merge or consolidate with any other corporation or organization,
or permit its business activities to be taken over by any other organization, unless and until the succeeding or continuing corporation
or other organization shall expressly assume the rights
and obligations of the Bank herein set forth. The Bank further agrees that it will not cease
its business activities or terminate its existence,
other than as heretofore set forth in this Article IX, without having made adequate provision for the fulfillment of its obligation
hereunder.

 

    	 	7	 

     

    

ARTICLE
X

Amendment
and Termination

 

The
Board may amend or terminate the Plan at any time, provided
that no such amendment or termination shall, without the written consent of an affected Participant, alter or impair any vested
rights of the Participant under the Plan.

 

ARTICLE
XI 

State Law

 

This
Plan shall be construed and governed in all respects under and by the laws of the State of North Carolina, except to the extent
preempted by federal law. If any provision of this Plan shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

 

ARTICLE
XII 

Headings; Gender

 

Headings and
subheadings in this Plan are inserted for convenience and reference only and constitute no part of this Plan. This Plan shall be
construed, where required, so that the masculine gender includes the feminine.

 

ARTICLE
XIII 

Interpretation of the Plan

 

The Committee
shall have sole and absolute discretion to administer, construe, and interpret the Plan, and the decisions of the Committee shall
be conclusive and binding on all affected parties, unless such decisions are arbitrary and capricious.

 

ARTICLE
XIV 

Disputes; Legal Fees

 

14.1 Generally.
Any controversy or claim that arises under this Plan and cannot be settled by the parties shall be addressed solely in the
federal or state courts located in Franklin, North Carolina, or in the closest jurisdiction thereto if no state or federal court
exists in Franklin at the time of such review.

 

14.2 Reimbursement of
Legal Fees. In the event that any dispute arises between a Participant and the Bank as to the terms or interpretation of this
Plan, whether instituted by formal legal proceedings or otherwise, including any action that the Participant takes to enforce
the terms of this Plan or to defend against any action taken by the Bank or an Affiliate, the Participant shall be reimbursed
for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or actions, provided
that the Participant shall obtain a final judgment or settlement substantially in favor of the Participant either in a court of
competent jurisdiction or in binding arbitration under the rules of the American Arbitration Association or in a written settlement
of the dispute. Such reimbursement shall be paid within ten (10) days of Participant’s furnishing to the Bank written evidence,
which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Participant.

 

    	 	8	 

     

    

14.3
Indemnification.
To the maximum extent
allowed by law, the Bank shall indemnify each member of the Committee and
each Trustee who is a Director or Employee for any loss arising from their actions under the Plan and Trust;
provided that such indemnification shall not occur for actions that constitute Just Cause.

 

ARTICLE
XV

Duration
of Plan

 

Unless
terminated earlier in accordance with Article X, this Plan
shall remain in effect during the term of service of the Participants
and until all Benefits payable hereunder have been made.

 

    	 	9	 

     

    

Exhibit "A"

 

MACON
BANK

LONG-TERM CAPITAL APPRECIATION PLAN

 

 

 

 

 

Pre-2005 Deferral
Election Form

 

 

 

 

 

AGREEMENT,
made this___ day of________
, 20__ by and between _____________(the
“Participant”) and Macon Bank. Inc. (the Bank”),

 

WHEREAS,
the Bank has established the Macon Bank Long-term Capital Appreciation Plan (the “Plan”),
and the Participant is eligible to participate in said Plan.

 

NOW
THEREFORE, it is mutually agreed as follows:

 

1.
The Participant, by the execution hereof, agrees to participate in the Plan upon the terms and conditions set forth therein,
and, in accordance therewith, elects to defer the receipt of:

 

____
% of the Participant’s base salary, director’s fees, and/or retainers.

 

____
% of
any additional cash compensation that the Participant may receive.

 

Unless the Participant
checks this space ___ thereby designating the next January
1st as this election’s effective date, this
election will supersede any prior election and will take effect as soon as practicable hereafter (but only with respect to future
compensation as to which the Participant has no current legal right or claim through the rending of services).

 

2.
This election will continue in force until either the effective date of a superseding election by the Participant,
or until the Participant terminates service with the Bank, or until the Plan is terminated
by appropriate corporate action, whichever shall first occur.

 

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first
above-written.

 

	 	Witnessed by:	 	PARTICIPANT
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Witnessed by:	 	MACON BANK, INC.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	A member of the Board

 

    	 

     

    

Exhibit “B”

 

MACON BANK

LONG-TERM CAPITAL APPRECIATION PLAN

 

 

 

 

Pre-2005
Distribution Election Form

 

 

 

 

AGREEMENT, made this _  day of 
; 20  by and between the undersigned participant (the “Participant”) in the
Macon Bank Long-term Capital Appreciation Plan (the “Plan”), and Macon Bank,
Inc. (the “Bank”) with respect to distribution of those Participant’s benefits under the Plan that were deferred
and vested before January 1, 2005.

 

NOW THEREFORE,
it is mutually agreed as follows:

 

1.
Form of Payment Generally. The Participant, by the execution
hereof, agrees to participate in the Plan upon the terms and conditions set forth therein,
and, in accordance therewith, elects to have his or her Account distributed as follows:

 

	 	[  ]	in a lump sum that is paid as soon as practicable after the ____ year following the Participant's termination of Service. [You may choose a number between 2 and 10.]
	 	 	 
	 	[  ]	in substantially equal monthly payments over a period of _  years. [You may choose a number  between  5 and 10.]

 

2.
Timing of Payment.
Payment of a Participant’s first monthly installment from his or her Account shall occur as soon as administratively practicable
after the Committee determines the Participant’s Final Account balance, unless the Participant elects to defer commencing distributions
until --

 

	 	[ ]	The date on which the Participant attains age. [You may choose an age between 60 and 75.]
	 	 	 
	 	[ ]	 ______________________ ___, ____. [You may choose any date that occurs before you reach age 75.]
	 	 	 

 

3. Form of Payment
to Beneficiary. In the event of the Participant’s death, his or her Account shall be distributed -

 

	 	[ ]	in one lump sum payment
	 	 	 
	 	[ ]	in accordance with the payment schedule selected in paragraphs 1  and 2 hereof (with payments made as though the Participant survived to collect all benefits, and as though the Participant terminated service on the date of his or her death, if payments had not already begun)

    	 	2	 

     

    

4.
Designation of Beneficiary. In the event of the Participant’s death before he or she has collected all of the benefits payable
under the Plan, the Participant hereby directs that any survivorship benefits payable under Article III of the Plan be distributed
to the beneficiary or beneficiaries designated under subparagraphs a and b of this paragraph in the manner elected pursuant to
paragraph 3 above:

 

a.
Primary Beneficiary. The Participant hereby designates the person(s) named below to be his or her primary beneficiary and
to receive the balance of any unpaid benefits under the Plan.

 

	Name of

Primary Beneficiary	Mailing Address	Percentage of

Death Benefit
	 	 	%
	 	 	%

 

b. Contingent Beneficiary.
In the event that the primary beneficiary or beneficiaries named above are not living at the time of the Participant’s death,
the Participant hereby designates the following person(s) to be his or her contingent beneficiary for purposes of the Plan:

 

	Name  of

Contingent Beneficiary	Mailing Address	Percentage of
	Death Benefit
	 	 	%
	 	 	%

 

5.
Effect of Election. The elections made in paragraphs I and 2 hereof shall become irrevocable on the earlier of the Participant’s
death, (2) the date one year before the Participant first becomes entitled to receive a distribution under Article III of the Plan,
and (3) the date 90 days before a Change in Control. The Participant may, by submitting an
effective superseding Distribution Election Form at any time and from time to time, prospectively change the beneficiary designation
and the manner of payment to a Beneficiary. Such elections shall, however, become irrevocable upon the Participant’s death.

 

6. Mutual
Commitments. The Bank agrees to make payment of all amounts due the Participant in accordance with the terms of the Plan and
the elections made by the Participant herein. The Participant agrees to be bound by the terms of the Plan, as in effect on the
date hereof or properly amended hereafter.

 

    	 	3	 

     

    

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first above-written.

 

	 	Witnessed by:	 	PARTICIPANT
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Witnessed by:	 	MACON BANK, INC.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	A duly authorized Committee Member

 

    	 	4	 

     

    

MACON BANK 

AMENDED AND RESTATED

LONG-TERM CAPITAL APPRECIATION PLAN

 

2005 Sub-Plan

Applicable
to Compensation Deferred or

Vested
After December 31, 2004

 

 

 

 

PURPOSE
AND SCOPE

 

This
sub-plan (the “Sub-plan”) hereby incorporates
the terms of the Macon Bank Long• Term Capital Appreciation Plan (the “Plan”) by reference, subject to the limited
modifications set forth below. Terms within the Sub-plan that begin with initial capital letters shall have the particular defined
meaning set forth herein or in the Plan, unless the context clearly indicates otherwise. This Sub-plan shall apply to compensation
that is deferred pursuant to the terms below or that vests on or after January 1, 2005. No provision
of this Sub-plan shall apply to Compensation that was deferred and vested on or before December 31, 2004. References within the
Plan to Accounts shall not apply to amounts deferred or vested under this Sub-plan after December 31, 2004, and references herein
to Accounts shall not apply to Accounts under the Plan.

 

ARTICLE
I 

Definitions

 

The
following words and phrases, when used in the Plan with an initial capital letter,
shall have the meanings set forth below unless the context clearly indicates otherwise.

 

1.1
“Change in Control” shall mean any of the following, subject to the Committee’s absolute discretion to
interpret this definition in a manner that conforms with the requirements of Section 409A of the Code and associated regulations:
(i) the execution of an agreement for the sale of all or a material portion of the assets of the Bank; (ii) the execution of an
agreement for a merger, consolidation, or other transaction of the Bank whereby
the Bank is not the surviving entity; (iii) a change of
control of the Bank, as defined or determined either by the Bank’s primary banking regulator or under regulations promulgated
by it; (iv) the acquisition, directly or indirectly, of
the beneficial ownership within the meaning of that term as it is used in Section 13(d) of the 1934 Act and the rules and regulations
promulgated thereunder) of twenty-five percent (25%) or more of the outstanding voting proxies or securities of the Bank by any
person, trust, entity, or group; or; (v) during any period
of two consecutive years, individuals (the “Continuing
Directors”) who at the beginning of such period constitute the Board of Directors of the Bank or its mutual holding company
(the “Existing Board”) cease for any reason to constitute at least two-thirds thereof, provided that any individual
whose election or nomination for election as a member of the Existing Board was approved by a vote of at least two-thirds of the
Continuing Directors then in office shall be considered a Continuing Director. This limitation shall not apply to a transaction
in which either the Bank merely converts stock form or forms a holding company or
up to 30% of any class of securities of the Bank are purchased by a tax-qualified employee
stock benefit plan of the Bank or an affiliate. The term “person” refers to an individual or a corporation,
partnership, trust, bank, joint
venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically
listed herein.

 

    	 	1	 

     

    

ARTICLE
II 

Credits to Accounts

 

2.1
Deferrals. Each Participant may elect, on the Deferral Election Form
attached hereto as Exhibit “D”, to
make Deferrals by directing that his or her fees, salary, bonuses, or
other cash compensation be reduced on a pre-tax basis. Such elections shall (i) be irrevocable until the end of the calendar year
in which they are made, and (ii) be effective on the January 1st following their Acceptance, provided that a Participant who is
newly eligible to participate in the Plan may elect within thirty (30)
days of first becoming eligible to participate to defer cash compensation earned after the Acceptance of the applicable Deferral
Election Form. As soon as practicable after the end of each pay period, the Bank shall credit each Participant’s
Account with any Deferrals that occurred during the pay period.

 

ARTICLE
III

Distributions
from Accounts

 

3.1
Distribution Elections. At the time a Participant elects to defer compensation pursuant to Section 2.1, subject to Section
3.3 of the Plan, the Participant shall elect on the Distribution Election Form attached hereto as Exhibit “E” to have
his or her final Account balance paid in annual payments over a period of between 5 and 10 years, in a lump sum distribution that
occurs more than two years after the Participant terminates service, or a combination of these choices. Such elections shall apply
to the portion of the Participant’s Account that is attributable to compensation deferred under the applicable Deferral Election
Form, but may be changed through Acceptance of one or more subsequent elections that in each case (i) are delivered to the Committee
at least one year before the date on which distributions are otherwise scheduled to commence pursuant to the Participant’s
current election, and (ii) defer the commencement of distributions
by at least five (5) years from the originally scheduled commencement date. Nevertheless, Beneficiary designations made pursuant
to executed Election Forms shall be revocable during the
Participant’s lifetime and a Participant may, by submitting an effective superseding Election Form at any time and from time to
time, prospectively change the designated Beneficiary and the manner of payment to a Beneficiary.

 

3.2
Change in Control. In the event of a Change in Control, the Bank and the Participant have the right to mutually agree to
limit payments that they might consider excess “golden parachute payments” as defined under §§280G and 4999
of the Code to the extent not inconsistent with the provisions of Code Section 409A and associated regulations. In addition, upon
the closing date of a Change in Control: the forfeiture provision set forth in Section 3.3(ii) of the Plan shall lapse and become
null and void, each Participant’s Vested Percentage shall
become 100%, and the Appreciation Percentage for each Participant shall be calculated by assuming that the appreciation percentage
that occurred between the initial credit of a Capital Appreciation Right and the Change in Control continues through date on which
the Participant’s Vested Percentage would have reached 100% pursuant to Section 1.29 of the Plan.

    	 	2	 

     

    

Exhibit “D”

 

 

MACON
BANK 

AMENDED AND RESTATED

LONG-TERM
CAPITAL APPRECIATION PLAN

 

 

 

 

Post-2004
Deferral Election Form

 

 

 

 

AGREEMENT, made
this __ day of ____________, 2___, by and between _______________
(the “Participant”) and Macon Bank, Inc. (the “Bank”).

 

WHEREAS, the
Bank has established the Macon Bank Long-term Capital Appreciation Plan (the “Plan”), and the Participant is eligible
to participate in said Plan.

 

NOW THEREFORE, it is mutually
agreed as follows:

 

1.
By the execution hereof, the Participant agrees to participate in the Plan upon the terms and conditions set forth therein, and,
in accordance therewith, make the elections set forth herein effective -

 

____ on the
January 1st that follows Acceptance of this Deferral Election
Form and the corresponding Distribution Election Form.

 

____ on the first day of the next calendar month,
but only if this election occurs within the 30-day period after the Participant first become eligible for Plan participation (NOTE:
only newly elected directors or newly eligible officers may choose this option).

 

2.
For the duration of this election (as determined under paragraph 3 below), the
Participant agrees to participate in the Plan upon the terms and conditions set forth therein,
and, in accordance therewith, elects to defer the receipt of:

 

____ %
of the Participant’s base salary, director’s fees, and/or retainers.

 

____ % of any additional
cash compensation that the Participant may receive.

 

3.
This election will continue in force until either the effective date of a superseding election by
the Participant, or until the Participant terminates service with the Bank, or until the Plan
is terminated by appropriate corporate action, whichever shall first occur.

 

 

[Signature
page follows]

 

 

    	 

     

    

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first above-written.

 

	 	Witnessed by:	 	PARTICIPANT
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Witnessed by:	 	MACON BANK, INC.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	A member of the Board

 

    	 

     

    

Exhibit “E”

 

 

MACON
BANK AMENDED AND RESTATED

LONG-TERM CAPITAL
APPRECIATION PLAN

 

 

 

 

Post-2004
Distribution Election Form

 

 

 

 

AGREEMENT,
made this__ day of ____________, 2___, by and between
the undersigned participant (the “Participant”) in the Macon Bank Long-term Capital Appreciation Plan (the “Plan”),
and Macon Bank, Inc. (the “Bank”) with respect to distribution of the Participant’s benefits under the Plan.

 

NOW THEREFORE, it is mutually
agreed as follows:

 

1. Effect of Election. The elections
made in paragraphs 2 and 3 hereof shall apply -

 

o
to any compensation that is deferred pursuant to the Participant’s Post-2004 Deferral
Election Form executed ____________, 20___.

 

o
to the entire value of the Participant’s Account, provided that these elections may
only be changed at least one year in advance of the earliest date on which payments would otherwise commence pursuant to paragraph
3 hereof, and may only be changed pursuant to an election
that conforms with the requirements set forth in Section 3.1 of the Sub-plan.

 

With
respect to the elections made in paragraphs 3 and 4 hereof, the Participant may,
by submitting an effective superseding Distribution Election Form at any time and from time to time,
prospectively change the beneficiary designation and the manner of payment to a Beneficiary.
Such elections shall, however, become irrevocable upon
the Participant’s death.

 

2.
Form of Payment Generally. The Participant, by the execution hereof, agrees
to participate in the Plan upon the terms and conditions set forth therein, and, in accordance therewith,
elects to have his or her Account distributed as follows:

 

	 	[ ]	in a lump sum that is paid as soon as practicable after the year following the Participant's termination of Service. [You may choose a number between 2 and 10.]
	 	 	 
	 	[ ] 	in substantially equal monthly payments over a period of ___ years. [You may choose a number  between  5 and 10.]

 

    	 

     

    

3.
Timing of Payment. Payment of a Participant’s first monthly installment from his or her Account shall occur as soon as administratively
practicable after the Committee determines the Participant’s Final Account balance, unless
the Participant elects to defer commencing distributions until -- 

 

	 	[ ]	The date on which the Participant attains age ____. [You may choose an age between 60 and 75.}
	 	 	 
	 	[ ] 	____________ __, 2____  [You may choose any date that occurs before you reach age 75.}

 

4. Form of Payment to Beneficiary.
In the event of the Participant’s death, his or her

Account shall be distributed -

 

	 	[ ]	in one lump sum payment
	 	 	 
	 	[ ]	in accordance  with the payment  schedule  selected  in paragraphs   1  and 2 hereof  (with payments  made as though the Participant  survived to collect all benefits,  and as though the Participant  terminated  service  on the date of his or her death,  if payments  had not already begun)

 

5. Designation
of Beneficiary. In the event of the Participant’s death before he or she has collected all of the benefits payable under the
Plan, the Participant hereby directs that any survivorship benefits payable under Article III of the Plan be distributed to the
beneficiary or beneficiaries designated under subparagraphs a and b of this paragraph in the manner elected pursuant to paragraph
4 above:

 

a.
Primary Beneficiary. The Participant hereby designates the person(s) named below to be his or her primary beneficiary and
to receive the balance of any unpaid benefits under the Plan.

 

	Name of

Primary Beneficiary	Mailing Address	Percentage of

Death Benefit
	 	 	%
	 	 	%

 

b.
Contingent Beneficiary. In the event that the primary beneficiary
or beneficiaries named above are not living at the time of the Participant’s death, the Participant hereby designates the following
person(s) to be his or her contingent beneficiary for purposes of the Plan:

 

	Name of

Contingent Beneficiary	Mailing Address	Percentage of
	Death Benefit
	 	 	%
	 	 	%

 

6. Mutual Commitments. The Bank agrees to make
payment of all amounts due the Participant in accordance with the terms of the Plan and the elections made by the Participant
herin. The Participant agrees to be bound by the terms of the Plan, as in effect on the date hereof or properly amended hereafter.

 

    	 

     

    

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first
above-written.

 

	 	Witnessed by:	 	PARTICIPANT
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Witnessed by:	 	MACON BANK, INC.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	A duly authorized Committee Member

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00255-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00255-of-00352.parquet"}]]