Document:

Settlement Agreement

 Exhibit 10.18 
 SETTLEMENT AGREEMENT AND RELEASE 
 This Settlement Agreement and Release (“Agreement”) is
made by and between Parviz Ghaffaripour (“Employee”) and Advanced Analogic Technologies, Inc. (“AATI” or the “Company”) together with all of its direct or indirect parent companies, subsidiaries or subsidiaries of its
parent companies) (Employee and the Company collectively referred to as the “Parties” or individually referred to as a “Party”). 
 RECITALS 
 WHEREAS, Employee was employed by the Company pursuant to an offer letter from the Company dated February 5,
2007 (the “Offer Letter”) in the capacity of Executive Vice President, Products and Chief Operating Officer. Employee’s initial base salary in the Offer Letter was $275,000 per annum, and his final salary was $294,250.08 per annum.
According to the Offer Letter, Employee’s target award percentage under the Management Bonus Program was 50% of base salary. Employee was actually paid a bonus for 2007 over 112% of his base salary; 
 WHEREAS, the Company and Employee have entered into the following two (2) stock option agreements granting Employee the option to purchase shares of
the Company’s common stock subject to the terms and conditions of the Company’s 2005 Equity Inventive Plan (for Option numbers 00003317 and 00003135): a Stock Option Agreement dated October 31, 2007 (Option number 00003317, for
100,000 shares), and a Stock Option Agreement dated February 2, 2007 (Option number 00003135, for 500,000 shares) (collectively, the “Stock Agreements” and the options subject to the Stock Agreements, the “Options”);

 WHEREAS, Employee departed from employment with the Company effective June 23, 2008 (the “Separation Date”); and

 WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that
(A) the Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of, or in any way related to Employee’s employment with, or separation from, the Company
and (B) certain claims that Employer may have against Employee; 
 NOW, THEREFORE, in consideration of the mutual promises made herein,
the Company and Employee hereby agree as follows: 
 1. Consideration. 
 a. Cash Salary. The Company agrees to pay Employee a lump sum equivalent to six (6) months of Employee’s base salary, for
a total of One Hundred Forty-Seven Thousand One Hundred Twenty-Five Dollars and Four Cents ($147,125.04), less applicable withholding. This payment will be made to employee within ten (10) business days after the Effective Date of this
Agreement. In addition, in consideration of Employee’s ADEA waiver included in Section 5 hereof, the Company shall pay Employee an additional Twelve Thousand Eight Hundred and Seventy Five Dollars ($12,875.00), less applicable withholding

  

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 b. Cash Bonus. Employee shall be eligible to receive payments under the
Company’s 2008 Bonus Plan (the “2008 Plan”) if and to the extent that the Company’s CEO or CFO shall receive a payment thereunder. If the Company’s CEO or CFO shall receive any such payment, the Company shall pay Employee
within ten business days after such payment, one-half of the amount which would have been payable to the Employee under the 2008 Plan if the Employee had remained an employee of the Company throughout 2008 and until the date of payment under the
2008 Plan and if the Employee was paid the same percentage of his target award percentage under the 2008 Plan. Employee hereby waives any rights to receive any remaining or additional payments under the 2008 Plan. 
 c. Stock. In further consideration of Employee’s execution of this Agreement, the Company agrees to accelerate the vesting of
Option number 00003135 held by Employee through February 9, 2009, as of the Effective Date. The Company and Employee hereby agree that the Stock Agreements are hereby amended to comply with the Board minutes granting the Options and entitle the
Employee to exercise the Options up to nine months after the Separation Date. Furthermore, in order to facilitate accurate and timely required public reporting by both the Company and Employee (including Employee’s continuing reporting
obligations under Section 16 of the Securities Exchange Act of 1934, as amended), Employee agrees, until six (6) months from the Separation Date, to immediately inform the Company and its representatives of any transactions engaged in by
Employee involving the Company’s securities. Employee shall be deemed to comply with the requirements of the preceding sentence if Employee or an authorized representative of Employee provides full details of any such transaction no later than
the business day following the date on which such transaction occurred to any one of the following individuals via electronic mail or facsimile: Brian McDonald (bmcdonald@analogictech.com; 408-716-2525); Scott Miller
(smiller@analogictech.com; 408-330-1546); Alexander Phillips (aphillips@wsgr.com; 650-493-6811); Nicole Soluri (nsoluri@wsgr.com; 650-493-6811). 
 d. Benefits. Employee’s health insurance benefits (including medical, vision and dental) shall cease on the last day of June 2008, subject to Employee’s right to elect COBRA. Provided that Employee
timely elects COBRA coverage and submits proof of premium payment, the Company will reimburse Employee for up to six (6) months of COBRA coverage pursuant to its normal expense reimbursement policies and procedures. The Company will assist
Employee to timely elect COBRA coverage. Employee’s participation in all other benefits and incidents of employment, including, but not limited to, vesting in stock options, other than in accordance with the Option Agreements as amended hereby,
and the accrual of bonuses, vacation, and paid time off, ceased as of the Separation Date. 
 e. Laptop Computer and Cell
Phone. The Company will reimburse Employee for the cost of a notebook computer up to $4,000.00 upon presentation to Company of an expense report and appropriate back-up invoices. Employee shall retain his cell phone and current line at the
Company’s expense until the end of December 2008, and the Company will enable Employee to transfer that cell phone number to Employee for use thereafter. 
  

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 2. Payment of Salary. Subject to reimbursement of pending business expenses,
Employee acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid all salary, wages, bonuses, accrued vacation/paid time off, housing allowances, relocation costs, interest, severance,
outplacement costs, fees, commissions, and any and all other benefits and compensation due to Employee. 
 3. Release of
Claims. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, divisions, and subsidiaries, and predecessor and successor corporations and assigns (the “Releasees”). Employee, on his own behalf, and on behalf of his respective heirs, family members, executors,
agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of
any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this
Agreement, including, without limitation: 
 a. any and all claims relating to or arising from Employee’s employment
relationship with the Company and the termination of that relationship; 
 b. any and all claims relating to, or arising from,
Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law; 
 c. any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction
of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; conversion; workers’ compensation, to the extent permitted by law, and disability benefits; 
 d. any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Americans with
Disabilities Act of 1990; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker
Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the California Family Rights Act; the California Labor Code, except as prohibited by law; the California Workers’ Compensation Act,
except as prohibited by law; and the California Fair Employment and Housing Act. 
 e. any and all claims for violation of the
federal or any state constitution; 
  

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 f. any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination; 
 g. any claim for any loss, cost, damage, or expense arising out of any dispute
over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and 
 h. any and all claims for attorneys’ fees and costs. 
 Employee agrees that the release set forth in this section shall be and remain in
effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement. This release does not release claims that cannot be released as a matter of law,
including, but not limited to, claims under Division 3, Article 2 of the California Labor Code (which includes California Labor Code section 2802 regarding indemnity for necessary expenditures or losses by employee) and claims prohibited from
release as set forth in California Labor Code section 206.5 (specifically “any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has been made”). 

Company, on its behalf, and on behalf of the Releasees, hereby and forever releases the Employee and his successors and heirs from, and agrees not to sue concerning,
or in any manner to institute, prosecute or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to the Released Matters (as hereinafter defined). For purposes of this Agreement, “Released Matters”
include any claim that Company or any Releasee may have arising from (i) statements made by Employee to the members of the Company’s Board of Directors at the meeting held following his separation from the Company, (ii) any email
correspondence to the Company’s Board of Directors related to such meeting and (iii) any truthful responses in the course of any internal or external Company investigation, or as part of any investigation by a state or federal
administrative agency. 
 4. Directors & Officers Liability Insurance (“D&O Policy”). The
Parties acknowledge and understand that the Company’s D&O Policy will cover Employee throughout the time period in which Employee was an officer of the Company and will cover all applicable claims against Employee in accordance with the
terms of the D&O Policy, in such capacity or otherwise, even if made after the Separation Date. Company acknowledges that the Indemnification Agreement dated February 7, 2007 between the Company and Employee remains in full force and
effect. 
 5. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any
rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this waiver and release does not apply to any rights or claims that may
arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee further acknowledges
that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to 

  

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consider this Agreement; (c) he has seven (7) days following his execution of this Agreement to revoke the Agreement; (d) this Agreement shall
not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does
it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee
hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Employee acknowledges and understands that revocation must be accomplished by a written notification to Lorelei Poulton
or Scott Miller, that is received prior to the Effective Date. 
 6. California Civil Code Section 1542. Employee
acknowledges that he has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits unknown claims, which provides as follows: 
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 
 Employee, being aware of said code
section, agrees to expressly waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect. 
 7. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other
Releasees. Employee also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Releasees. The Company represents that it has no lawsuits, claims,
or actions pending in its name or on behalf of any other person or entity, against the Employee or his successors or heirs. The Company also represents that it does not intend to bring any claims on its own behalf or on behalf of any other person or
entity against the Employee or his successor or heirs based on information known at this time. 
 8. Confidentiality.
Each party agrees to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”).
Separation Information shall not include (i) any information in the Offer Letter, (ii) the terms of Employee’s employment with the Company until the Separation Date, (iii) any information concerning Employee’s departure from
the Company included in any press release or SEC filing made by the Company, and (iv) any information concerning Employee’s departure from the Company or the substance of this Agreement that is reasonably disclosed by the Company or
Employee for business, commercial, or compliance purposes. Except as required by law, Employee may disclose Separation Information only to his immediate family members. Separation Information may be disclosed by either Party to its professional
advisors, including its insurers or legal, tax and accounting advisors, or a Party may disclose Separation Information if required (i) by an order of a Court having jurisdiction or under 

  

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subpoena from a court of law or an appropriate government agency, (ii) in order to obtain legal, accounting or tax or other professional services,
(iii) in order to enforce this Agreement before an arbitral tribunal or court, or (iv) as may be legally required by the SEC, The NASDAQ Market LLC, the Financial Institutional Regulatory Authority or other applicable rules or regulations.
The Parties intend that this confidentiality provision be interpreted as broadly as possible in order to provide the maximum confidentiality. Employee agrees that he will not publicize, directly or indirectly, any Separation Information. 

Each Party acknowledges and agrees that the confidentiality of the Separation Information is of the essence. The Parties agree that if either
of them proves that the other breached this confidentiality provision, the non-breaching Party shall be entitled to an award of its costs spent enforcing this provision, including all reasonable attorneys’ fees associated with the enforcement
action, without regard to whether the non-breaching Party can establish actual damages from the breach, except to the extent that such breach constitutes a legal action by Employee that directly pertains to the ADEA. Any such individual breach or
disclosure shall not excuse a Party from his obligations hereunder, nor permit him to make additional disclosures. Each Party warrants to the other that he or it has not disclosed, orally or in writing, directly or indirectly, any of the Separation
Information to any unauthorized party. 
 9. Trade Secrets and Confidential Information/Company Property. Employee
agrees to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the President or the Board of Directors of the Company, any Company
Confidential Information. “Company Confidential Information” means any non-public information that relates to the actual or anticipated business, research or development of the Company, or to the Company’s technical data, trade
secrets or know-how, including, but not limited to, research, product plans or other information regarding the Company’s products or services and markets therefore, customer lists and customers, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances and other business information; provided, however Company Confidential Information does not include any of the foregoing items to the
extent the same have become publicly known and made generally available through no wrongful act of Employee or of others. Employee’s signature below constitutes his certification under penalty of perjury that he has returned all documents and
other items provided to Employee by the Company, developed or obtained by Employee in connection with his employment with the Company, or otherwise belonging to the Company. Company acknowledges that Employee has retained (in digital format) his
correspondence file accumulated during the course of his employment with the Company. 
 10. No Cooperation. Employee
agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the
Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish,
within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Employee shall explain, without more, that he cannot provide counsel or assistance because of restrictions contained in a contract with the Company. 
  

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 11. Non-Disparagement. Employee agrees to refrain from any disparagement,
defamation, libel, or slander of any of the Releasees, and agrees to refrain from any tortious interference with the contracts and relationships of any of the Releasees. Company agrees to refrain from any disparagement, defamation, libel, or slander
of Employee, and agrees to refrain from any tortious interference with the contracts and relationships of Employee. Company agrees that any communication made by Employee to any member of the Company’s Board of Directors prior to the date
hereof shall not in any event constitute disparagement, defamation, libel or slander of any of the Releasees. The parties agree that truthful responses in the course of any internal or external Company investigation, or as part of any investigation
by a state of federal administrative agency, will not constitute disparagement under this Agreement. Employee acknowledges and agrees that the Company’s obligation under this paragraph is limited to the Company’s current Officers and
Members of the Board of Directors, and only for so long as they remain employees or directors of the Company. Employee shall direct any inquiries by potential future employers to the Company’s human resources department, which shall use its
best efforts to only provide Employee’s last position and dates of employment. Company shall forward to Employee emails that he has received between June 19, 2008 and the Effective Date hereof through his Company email account that do not
involve Company business. Company shall use commercially reasonable efforts to tell persons calling Employee over the telephone other than on Company business where they can contact him. Company will forward to Employee promptly after the Effective
Date a digital copy of his contact list from the Company’s email system. 
 12. Breach. Employee acknowledges and
agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of any provision of the
confidentiality provisions of this Agreement (Sections 8 and 9) shall entitle the Company immediately to seek appropriate remedies as provided by law. Except as provided by law, Employee shall also be responsible to the Company for all costs,
attorneys’ fees, and any and all damages incurred by the Company in enforcing Employee’s obligations under those confidentiality provisions. 
 13. No Admission of Liability. Both parties understand and acknowledge that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims. No action taken by either
party hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any potential claims or (b) an acknowledgment or admission by that party of any fault or
liability whatsoever to the other party or to any third party. 
 14. Non-Solicitation. Employee agrees that for a
period of twelve (12) months immediately following the Effective Date of this Agreement, Employee shall not directly or indirectly solicit any of the Company’s employees to leave their employment at the Company. 
  

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 15. Costs. Except that the Company shall pay all fees and expenses of counsel to
the Employee, the Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement. 
 16. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND
ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION IN SANTA CLARA COUNTY, BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY
ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF
ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE FINAL,
CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE ARBITRATOR
SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. 
 17. Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payments
provided to Employee or made on his behalf under the terms of this Agreement. Employee agrees and understands that he is responsible for payment, if any, of local, state, and/or federal taxes on the payments made hereunder by the Company and any
penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the
Company for any amounts claimed due on account of Employee’s failure to pay, or Employee’s delayed payment of, federal or state taxes payable by Employee. 
 18. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to
bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein. 
 19. No Representations. Employee represents that he has had an opportunity to consult with an attorney, and has carefully read and
understands the scope and effect of the provisions of this Agreement. Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement. 
  

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 20. Severability. In the event that any provision or any portion of any provision
hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision. 
 21. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a determination in good faith of the validity
of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action. 
 22.
Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with and separation from the Company and the
events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with the Company, with the exception of the
Offer Letter and the Stock Agreements. To the extent that the terms and conditions of the Stock Agreements conflict with this Agreement, the provisions of this Agreement shall control. 
 23. No Oral Modification. This Agreement may only be amended in a writing signed by Employee and the Company’s Chief Executive
Officer. 
 24. Governing Law. This Agreement shall be governed by the laws of the State of California, without regard
for choice-of-law provisions. 
 25. Effective Date. Each Party has seven (7) days after that Party signs this
Agreement to revoke it. This Agreement will become effective after seven (7) days have passed since Employee signed the Agreement, provided that it is not revoked by either Party before that date (the “Effective Date”). 
 26. Counterparts. This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have
the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 
 27. Voluntary Execution of Agreement. Employee understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company of any third party.
Employee acknowledges that: 
 (a) He has read this Agreement; 
  

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 (b) He has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of his own choice or has elected not to retain legal counsel; 
 (c) He understands the terms and
consequences of this Agreement and of the releases it contains; and 
 (d) He is fully aware of the legal and binding effect
of this Agreement. 
 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. 
  

							
				
	Dated: July 30, 2008	 		 	By:	 	/s/ Parviz Ghaffaripour
		 		 		 	Parviz Ghaffaripour, an individual
		 		 		 	
				
	Dated: July 30, 2008	 		 	By:	 	/s/ Richard Williams
		 		 		 	Richard Williams, President & CEO
		 		 		 	Advanced Analogic Technologies, Inc.

  

 Page 10 of 102008 Omnibus Equity Plan

 EXHIBIT 10.1 
 2008 OMNIBUS EQUITY PLAN 
 1ST
FINANCIAL SERVICES CORPORATION 
 ARTICLE 1 
 PURPOSE AND EFFECTIVE DATE 
 1.1 Purpose. The purpose of this 2008 Omnibus Equity Plan of 1st Financial Services Corporation is to promote the long-term financial success of
1st Financial Services Corporation, increasing stockholder value by providing employees and directors the opportunity to acquire an ownership interest in 1st Financial Services Corporation and enabling 1st Financial Services Corporation and its
related entities to attract and retain the services of the employees and directors upon whom the successful conduct of 1st Financial Services Corporation’s business depends. 
 1.2 Effective Date. This Plan shall be effective when it is adopted by 1st Financial Services Corporation’s board of directors and approved
thereafter by the affirmative vote of 1st Financial Services Corporation stockholders in accordance with applicable rules and procedures, including those in Internal Revenue Code section 422 and Treasury Regulation section 1.422-3. Any award granted
under this Plan before stockholder approval shall be null and void if stockholders do not approve the Plan within 12 months after the Plan’s adoption by 1st Financial Services Corporation’s board of directors. Subject to Article 12, the
Plan shall continue until the tenth anniversary of the date it is approved by 1st Financial Services Corporation’s board of directors. 
 ARTICLE 2 
 DEFINITIONS 
 When used in this Plan, the following words, terms, and phrases have the meanings given in this Article 2 unless another meaning is expressly provided
elsewhere in this document or is clearly required by the context. When applying these definitions and any other word, term, or phrase used in this Plan, the form of any word, term, or phrase shall include any and all of its other forms. 

2.1 Award means a grant of (a) the right under Article 6 to purchase 1st Financial Services Corporation common stock at a stated
price during a specified period of time (an “Option”), which Option may be (x) an Incentive Stock Option that on the date of the Award is identified as an Incentive Stock Option, satisfies the conditions imposed under
Internal Revenue Code section 422, and is not later modified in a manner inconsistent with Internal Revenue Code section 422 or (y) a Nonqualified Stock Option, meaning any Option that is not an Incentive Stock Option, or
(b) Restricted Stock, meaning a share of 1st Financial Services Corporation common stock granted to a Participant contingent upon satisfaction of conditions described in Article 7, or (c) Performance Shares, meaning shares of 1st
Financial Services Corporation common stock granted to a Participant contingent upon satisfaction of conditions described in Article 8, or (d) a Stock Appreciation Right or “SAR,” meaning an Award granted under Article 9 and
consisting of the potential appreciation of the shares of 1st Financial Services Corporation common stock underlying the Award. 
 2.2
Award Agreement means the written or electronic agreement between 1st Financial Services Corporation and each Participant containing the terms and conditions of an Award and the manner in which it will or may be settled if earned. If there is a
conflict between the terms of this Plan and the terms of the Award Agreement, the terms of this Plan shall govern. 
 2.3 Covered
Officer means those Employees whose compensation is or likely will be subject to limited deductibility under Internal Revenue Code section 162(m) as of the last day of any calendar year. 
 2.4 Director means a person who, on the date an Award is made to him or to her, is not an Employee but who is a member of 1st Financial Services
Corporation’s board of directors, a member of the board of directors of a Related Entity, or a member of the governing body of any unincorporated Related Entity. For purposes of applying this definition a Director’s status shall be
determined as of the date an Award is made to him or to her. 

 2.5 Employee means any person who, on any applicable date, is a common law employee of 1st
Financial Services Corporation or a Related Entity. A worker who is not classified as a common law employee but who is subsequently reclassified as a common law employee for any reason and on any basis shall be treated as a common law employee
solely from the date reclassification occurs. Reclassification shall not be applied retroactively for any purpose of this Plan. 
 2.6
Exercise Price means the amount, if any, a Participant must pay to exercise an Award. 
 2.7 Fair Market Value means the value of
one share of 1st Financial Services Corporation common stock, determined according to the following rules: (x) if 1st Financial Services Corporation common stock is traded on an exchange or on an automated quotation system giving closing
prices, the reported closing price on the relevant date if it is a trading day and otherwise on the next trading day, (y) if 1st Financial Services Corporation common stock is traded over-the-counter with no reported closing price, the
mean between the highest bid and the lowest asked prices on that quotation system on the relevant date if it is a trading day and otherwise on the next trading day, or (z) if neither clause (x) nor clause
(y) applies, the fair market value as determined by the Plan Committee in good faith and, for Incentive Stock Options, consistent with the rules prescribed under Internal Revenue Code section 422. 
 2.8 Internal Revenue Code means the Internal Revenue Code of 1986, as amended or superseded after the date this Plan becomes effective under
section 1.2, and any applicable rulings or regulations issued under the Internal Revenue Code of 1986. 
 2.9 Participant means an
Employee or Director to whom an Award is granted, for as long as the Award remains outstanding. 
 2.10 Plan means this 2008 Omnibus
Equity Plan of 1st Financial Services Corporation, as amended from time to time. 
 2.11 Plan Committee means a committee of 1st
Financial Services Corporation’s board of directors consisting entirely of individuals (a) who are outside directors as defined in Treasury Regulation section 1.162-27(e)(3)(i), (b) who are non-employee directors within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, (c) who do not receive remuneration from 1st Financial Services Corporation or any Related Entity in any capacity other than as a director, except as permitted under
Treasury Regulation section 1.162-27(e)(3), and (d) who are independent directors within the meaning of The Nasdaq Stock Market, Inc.’s rules. The Plan Committee shall consist of at least three individuals. 
 2.12 Plan Year means 1st Financial Services Corporation’s fiscal year. 
 2.13 Related Entity means an entity that is or becomes related to 1st Financial Services Corporation through common ownership, as determined under
Internal Revenue Code section 414(b) or (c) but modified as permitted under Treasury Regulation section 1.409A-1(b)(5)(iii)(E) and any successor to those regulations. 
 2.14 1st Financial Services Corporation means 1st Financial Services Corporation, a North Carolina corporation. Except for purposes of determining
whether a Change in Control has occurred (according to Article 11), the term 1st Financial Services Corporation also means any corporation or entity that is a successor to 1st Financial Services Corporation or substantially all of its assets and
that assumes the obligations of 1st Financial Services Corporation under this Plan by operation of law or otherwise. 
 ARTICLE 3 
 PARTICIPATION 
 3.1 Awards to Employees. Consistent with the terms of the Plan and subject to section 3.3, the Plan Committee alone shall decide which Employees
will be granted Awards, shall specify the types of Awards granted to Employees, and shall determine the terms upon which Awards are granted and may be earned. The Plan Committee may establish different terms and conditions for each type of Award
granted to an Employee and for each Employee receiving the same type of Award, regardless of whether the Awards are granted at the same or different times. The Plan Committee shall have exclusive authority to determine whether an Award qualifies or
is intended to qualify for the exemption from the deduction limitations of Internal Revenue Code section 162(m) for performance-based compensation. 
  

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 3.2 Awards to Directors. Consistent with the terms of the Plan and subject to section 3.3, 1st
Financial Services Corporation’s board of directors alone may grant to Directors Nonqualified Stock Options under section 6.1 and Restricted Stock under section 7.1. 
 3.3 Conditions of Participation. By accepting an Award, each Employee and Director agrees (x) to be bound by the terms of the Award Agreement and the Plan and to comply with other conditions imposed
by the Plan Committee, and (y) that the Plan Committee (or 1st Financial Services Corporation’s board of directors, as appropriate) may amend the Plan and the Award Agreements without any additional consideration if necessary to
avoid penalties arising under Internal Revenue Code section 409A, even if the amendment reduces, restricts, or eliminates rights that were granted under the Plan, the Award Agreement, or both before the amendment. 
 ARTICLE 4 
 ADMINISTRATION 
 4.1 Duties. The Plan Committee is responsible for administering the Plan and shall
have all powers appropriate and necessary for that purpose. Consistent with the Plan’s objectives, 1st Financial Services Corporation’s board of directors and the Plan Committee may adopt, amend, and rescind rules and regulations relating
to the Plan to protect 1st Financial Services Corporation’s and Related Entities’ interests. Consistent with the Plan’s objectives, 1st Financial Services Corporation’s board of directors and the Plan Committee shall have
complete discretion to make all other decisions necessary or advisable for the administration and interpretation of the Plan. Actions of 1st Financial Services Corporation’s board of directors and the Plan Committee shall be final, binding, and
conclusive for all purposes and upon all persons. 
 4.2 Delegation of Duties. In its sole discretion, 1st Financial Services
Corporation’s board of directors and the Plan Committee may delegate ministerial duties associated with the Plan to any person that it deems appropriate, including an Employee. However, neither 1st Financial Services Corporation’s board of
directors nor the Plan Committee shall delegate a duty it must discharge to comply with the conditions for exemption of performance-based compensation from the deduction limitations of section 162(m). 
 4.3 Award Agreement. As soon as administratively practical after an Award is made, the Plan Committee or 1st Financial Services Corporation’s
board of directors shall prepare and deliver an Award Agreement to each affected Participant. The Award Agreement shall – 
 (a)
describe the terms of the Award, including the type of Award and when and how it may be exercised or earned, 
 (b) state the Exercise Price,
if any, associated with the Award, 
 (c) state how the Award will or may be settled, 
 (d) if different from the terms of the Plan, describe (x) any conditions that must be satisfied before the Award is earned or may be
exercised, (y) any objective restrictions placed on the Award and any performance-related conditions and performance criteria that must be satisfied before those restrictions are released, and (z) any other applicable terms
and conditions affecting the Award. 
 4.4 Restriction on Repricing. Regardless of any other provision of this Plan or an Award
Agreement, neither 1st Financial Services Corporation’s board of directors nor the Plan Committee may reprice (as defined under rules of the New York Stock Exchange or The Nasdaq Stock Market) any Award unless the repricing is approved in
advance by 1st Financial Services Corporation’s stockholders acting at a meeting. 
  

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 ARTICLE 5 
 LIMITS ON STOCK SUBJECT TO AWARDS 
 5.1 Number of Authorized Shares of Stock. With any adjustments required by section 5.4, the
maximum number of shares of 1st Financial Services Corporation common stock that may be subject to Awards under this Plan is 288,292, which includes 38,292 shares authorized to be granted under the Employee Stock Option Plan of Mountain
1st Bank & Trust Company that was assumed by 1st Financial Services Corporation and that are not subject to outstanding awards under that
plan on the date this Plan becomes effective under section 1.2, but excluding any shares subject to awards issued under the Employee Stock Option Plan that are subsequently forfeited under the terms of that plan. However, if this Plan is not
approved by 1st Financial Service Corporation’s stockholders, the Employee Stock Option Plan shall be unaffected and shall remain in effect for the remaining term specified in that plan. The shares of 1st Financial Services Corporation common
stock to be delivered under this Plan may consist in whole or in part of treasury stock or authorized but unissued shares not reserved for any other purpose. 
 5.2 Award Limits and Annual Participant Limits. (a) Award Limits. Of the shares authorized under section 5.1, up to 50,000 may be reserved for issuance under Incentive Stock Options. 
 (b) Annual Participant Limits. The aggregate number of shares of 1st Financial Services Corporation common stock underlying Awards granted under
this Plan to an individual Participant in any Plan Year (including but not limited to Options and SARs), regardless of whether the Awards are thereafter canceled, forfeited, or terminated, shall not exceed 15% of the total number of shares issuable
under the Plan (43,244 shares). This annual limitation is intended to include the grant of all Awards, including but not limited to Awards representing performance-based compensation described in Internal Revenue Code section 162(m)(4)(C).

 5.3 Share Accounting. (a) As appropriate, the number of shares of 1st Financial Services Corporation common stock available
for Awards under this Plan shall be conditionally reduced by the number of shares of 1st Financial Services Corporation common stock subject to outstanding Awards, including the full number of shares underlying SARs. 
 (b) As appropriate, the number of shares of 1st Financial Services Corporation common stock available for Awards under this Plan shall be absolutely
reduced by (x) the number of shares of 1st Financial Services Corporation common stock issued through Option exercises, (y) the number of shares of 1st Financial Services Corporation common stock issued because of
satisfaction of the terms of an Award Agreement for Performance Shares or Restricted Stock that, by the terms of the applicable Award Agreement, are to be settled in shares of 1st Financial Services Corporation common stock, and (z) the
full number of shares of 1st Financial Services Corporation common stock underlying an earned and exercised SAR. 
 (c) As appropriate,
shares of 1st Financial Services Corporation common stock subject to an Award that for any reason is forfeited, cancelled, terminated, relinquished, exchanged, or otherwise settled without the issuance of 1st Financial Services Corporation common
stock or without payment of cash equal to its Fair Market Value or the difference between the Award’s Fair Market Value and its Exercise Price, if any, may again be granted under the Plan. If the Exercise Price of an Award is paid in shares of
1st Financial Services Corporation common stock, the shares received by 1st Financial Services Corporation shall not be added to the maximum aggregate number of shares of 1st Financial Services Corporation common stock that may be issued under
section 5.1. 
 5.4 Adjustment in Capitalization. If after the date this Plan becomes effective under section 1.2 there is a stock
dividend or stock split, recapitalization (including payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares or other similar corporate change affecting 1st
Financial Services Corporation common stock, then consistent with the applicable provisions of Internal Revenue Code sections 162(m), 409A, 422, and 424 and associated regulations and to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan, the Plan Committee shall, in a manner the Plan Committee considers equitable, adjust (a) the number of Awards that may be granted to Participants during a Plan Year,
(b) the aggregate number of shares available for Awards under section 5.1 or subject to outstanding Awards, as well as any share-based limits imposed under this Plan, (c) the respective Exercise Price, number of shares, and
other limitations applicable to outstanding or subsequently granted Awards, and (d) any other factors, limits, or terms affecting any outstanding or subsequently granted Awards. 
  

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 ARTICLE 6 
 OPTIONS 
 6.1 Grant of Options. Subject to
Article 10 and the terms of the Plan and the associated Award Agreement, at any time during the term of this Plan the Plan Committee may grant Incentive Stock Options and Nonqualified Stock Options to Employees and 1st Financial Services
Corporation’s board of directors may grant Nonqualified Stock Options to Directors. Unless an Award Agreement provides otherwise, Options awarded under this Plan are intended to satisfy the requirements for exclusion from coverage under
Internal Revenue Code section 409A. All Option Award Agreements shall be construed and administered consistent with that intention. 
 6.2
Exercise Price. Except as necessary to implement section 6.6, each Option shall have an Exercise Price per share at least equal to the Fair Market Value of a share of 1st Financial Services Corporation common stock on the date of grant, meaning
the closing price on the date of grant if 1st Financial Services Corporation common stock is traded on an exchange or on an automated quotation system giving closing prices (or the closing price on the next trading day if the grant date is not a
trading day). However, the Exercise Price per share of an Incentive Stock Option shall be at least 110% of the Fair Market Value of a share of 1st Financial Services Corporation common stock on the date of grant for any Incentive Stock Option issued
to an Employee who, on the date of grant, owns (as defined in Internal Revenue Code section 424(d)) 1st Financial Services Corporation common stock possessing more than 10% of the total combined voting power of all classes of stock (or the combined
voting power of any Related Entity), determined according to rules issued under Internal Revenue Code section 422. 
 6.3 Exercise of
Options. Subject to Article 10 and any terms, restrictions, and conditions specified in the Plan and unless specified otherwise in the Award Agreement, Options shall be exercisable at the time or times specified in the Award Agreement, but
(x) no Incentive Stock Option may be exercised more than ten years after it is granted, or more than five years after it is granted in the case of an Incentive Stock Option granted to an Employee who on the date of grant owns (as defined
in Internal Revenue Code section 424(d)) 1st Financial Services Corporation common stock possessing more than 10% of the total combined voting power of all classes of stock or the combined voting power of any Related Entity, determined under rules
issued under Internal Revenue Code section 422, (y) no Nonqualified Stock Option granted to a Director shall be exercisable more than ten years after it is granted, and (z) Nonqualified Stock Options not granted to Directors
shall be exercisable for the period specified in the Award Agreement, but not more than ten years after the grant date if no period is specified in the Award Agreement. 
 6.4 Incentive Stock Options. Despite any provision in this Plan to the contrary – 
 (a) no
provision of this Plan relating to Incentive Stock Options shall be interpreted, amended, or altered, nor shall any discretion or authority granted under the Plan be exercised, in a manner that is inconsistent with Internal Revenue Code section 422
or, without the consent of the affected Participant, to cause any Incentive Stock Option to fail to qualify for the federal income tax treatment provided by Internal Revenue Code section 421, 
 (b) the aggregate Fair Market Value of the 1st Financial Services Corporation common stock (determined as of the date of grant) for which Incentive Stock
Options are exercisable for the first time by a Participant in any calendar year under all stock option plans of 1st Financial Services Corporation and all Related Entities shall not exceed $100,000 (or other amount specified in Internal Revenue
Code section 422(d)), determined under rules issued under Internal Revenue Code section 422, and 
 (c) no Incentive Stock Option shall be
granted to a person who is not an Employee on the grant date. 
 6.5 Exercise
Procedures and Payment for Options. The Exercise Price associated with each Option must be paid according to procedures described in the Award Agreement. The Plan Committee shall establish acceptable methods and forms of payment of the Exercise
Price, which may include but are not limited to: (x) payment in cash or a cash equivalent, (y) actual or constructive transfer by the Participant to 1st Financial Services Corporation of unrestricted shares of 1st Financial Services Corporation common stock as 

  

 5 

 
partial or full payment of the Exercise Price, either by actual delivery of the shares or by attestation, with each share valued at the Fair Market Value of
a share of 1st Financial Services Corporation common stock on the exercise date, or (z) a form of cashless exercise or net exercise of the Option. In its sole discretion the Plan Committee may withhold its approval for any method of
payment for any reason, including but not limited to concerns that the proposed method of payment will result in adverse financial accounting treatment, adverse tax treatment for 1st Financial Services Corporation or the Participant, or a violation
of the Sarbanes-Oxley Act of 2002, as amended from time to time, and related regulations and guidance. A Participant may exercise an Option solely by sending to the Plan Committee or its designee a completed exercise notice in the form prescribed by
the Plan Committee along with payment, or designation of an approved payment procedure, of the Exercise Price. 
 6.6 Substitution of
Options. In 1st Financial Services Corporation’s discretion, persons who become Employees as a result of a transaction described in Internal Revenue Code section 424(a) may receive Options in exchange for options granted by their former
employer or the former Related Entity subject to the rules and procedures prescribed under section 424. 
 6.7 Rights Associated With
Options. A Participant holding an unexercised Option shall have no voting or dividend rights associated with shares underlying the unexercised Option. The Option shall be transferable solely as provided in section 14.1. Unless otherwise
specified in the Award Agreement or as otherwise specifically provided in the Plan, 1st Financial Services Corporation common stock acquired by Option exercise shall have all dividend and voting rights associated with 1st Financial Services
Corporation common stock and shall be transferable, subject to applicable federal securities laws, applicable requirements of any national securities exchange or system on which shares of 1st Financial Services Corporation common stock are then
listed or traded, and applicable blue sky or state securities laws. 
 ARTICLE 7 
 RESTRICTED STOCK 
 7.1 Grant of Restricted Stock. Subject to the terms, restrictions, and conditions specified in the Plan and the associated Award Agreement, at any time during the term of this Plan the Plan Committee may grant
shares of Restricted Stock to Employees and 1st Financial Services Corporation’s board of directors may grant shares of Restricted Stock to Directors. Restricted Stock may be granted at no cost or at a price per share determined by the Plan
Committee or the board of directors, which may be less than the Fair Market Value of a share of 1st Financial Services Corporation common stock on the date of grant. 
 7.2 Earning Restricted Stock. Subject to the terms, restrictions, and conditions specified in the Plan and the associated Award Agreement and unless otherwise specified in the Award Agreement – 

(a) terms, restrictions, and conditions imposed on Restricted Stock granted to Employees and Directors shall lapse as described in the Award Agreement,

 (b) during the period in which satisfaction of the conditions imposed on Restricted Stock is to be determined, Restricted Stock and any
shares of common stock issuable as a dividend or other distribution on the Restricted Stock shall be held by 1st Financial Services Corporation as escrow agent, 
 (c) at the end of the period in which satisfaction of the conditions imposed on Restricted Stock is to be determined, the Restricted Stock shall be (x) forfeited if all terms, restrictions, and conditions
described in the Award Agreement are not satisfied (with a refund, without interest, of any consideration paid by the Participant), or (y) released from escrow and distributed to the Participant as soon as practicable after the last day
of the period in which satisfaction of the conditions imposed on Restricted Stock is to be determined if all terms, restrictions, and conditions specified in the Award Agreement are satisfied. Any Restricted Stock Award relating to a fractional
share of 1st Financial Services Corporation common stock shall be rounded to the next whole share when settled. 
 7.3 Rights Associated
With Restricted Stock. During the period in which satisfaction of the conditions imposed on Restricted Stock is to be determined and unless the Restricted Stock Award Agreement specifies otherwise, Restricted Stock may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated. Except as otherwise required for compliance with the conditions for exemption of performance- based compensation from the deduction limitations of Internal Revenue Code 

  

 6 

 
section 162(m) and except as otherwise required by the terms of the applicable Award Agreement, during the period in which satisfaction of the
conditions imposed on Restricted Stock is to be determined each Participant to whom Restricted Stock is issued may exercise full voting rights associated with that Restricted Stock and shall be entitled to receive all dividends and other
distributions on that Restricted Stock; provided, however, that if a dividend or other distribution is paid in the form of shares of common stock, those shares shall also be considered Restricted Stock and shall be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted Stock to which the dividend or distribution relates. 
 7.4
Internal Revenue Code Section 83(b) Election. The Plan Committee may provide in an Award Agreement that the Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election under Internal Revenue
Code section 83(b). If a Participant makes an election under Internal Revenue Code section 83(b) concerning a Restricted Stock Award, the Participant must promptly file a copy of the election with 1st Financial Services Corporation. 
 ARTICLE 8 
 PERFORMANCE SHARES 
 8.1 Generally. Subject to the terms, restrictions, and conditions specified in the Plan or the Award Agreement, the granting or vesting of Performance Shares shall, in the Plan Committee’s sole discretion, be based on
achievement of performance objectives derived from one or more of the Performance Criteria specified in section 8.2. Performance Shares may be granted (x) to Covered Officers on terms and in a manner that qualifies as performance-based
compensation under Internal Revenue Code section 162(m) or (y) to Employees who are not Covered Officers on terms and in any manner reasonably determined by the Plan Committee. Unless an Award Agreement provides otherwise, Performance
Shares awarded under this Plan are intended to satisfy the requirements for exclusion from coverage under Internal Revenue Code section 409A. All Performance Share Award Agreements shall be construed and administered consistent with that intention.
Despite any contrary provision in this Plan, the Plan Committee shall not have the authority to accelerate the vesting of or to amend a Covered Officer’s Performance Share award (including but not limited to waiver of performance conditions to
vesting) if (x) accelerated vesting or amendment of the award would disqualify the award from performance-based compensation treatment under Internal Revenue Code section 162(m) and (y) all or part of the award would as a
result be non-deductible by 1st Financial Services Corporation under section 162(m). 
 8.2 Performance Criteria. (a) Vesting of Performance Shares that are intended to qualify as performance-based compensation under Internal
Revenue Code section 162(m) shall be based on one or more or any combination of the following criteria (the “Performance Criteria”) and may be applied solely with reference to 1st Financial Services Corporation, to a Related Entity, to 1st
Financial Services Corporation and a Related Entity, or relatively between 1st Financial Services Corporation, a Related Entity, or both and one or more unrelated entities – 
  

	 	1)	net earnings or net income (before or after taxes), 

  

	 	2)	earnings per share, 

  

	 	3)	deposit or asset growth, 

  

	 	4)	net operating income, 

  

	 	5)	return measures (including return on assets and equity), 

  

	 	6)	fee income, 

  

	 	7)	earnings before or after taxes, interest, depreciation and/or amortization, 

  

	 	8)	interest spread, 

  

	 	9)	productivity ratios, 

  

	 	10)	share price, including but not limited to growth measures and total stockholder return, 

  

	 	11)	expense targets, 

  

	 	12)	credit quality, 

  

	 	13)	efficiency ratio, 

  

	 	14)	market share, 

  

	 	15)	customer satisfaction, and 

  

	 	16)	net income after cost of capital. 

  

 7 

 (b) Vesting of Performance Shares granted to Participants who are not Covered Officers may be based on
one or more or any combination of the Performance Criteria listed in section 8.2(a) or on other factors the Plan Committee considers relevant and appropriate. 
 (c) Different Performance Criteria may be applied to individual Employees or to groups of Employees and, as specified by the Plan Committee, may be based on the results achieved (x) separately by 1st
Financial Services Corporation or any Related Entity, (y) by any combination of 1st Financial Services Corporation and Related Entities, or (z) by any combination of segments, products, or divisions of 1st Financial Services
Corporation and Related Entities. 
 (d) The Plan Committee shall make appropriate adjustments of Performance Criteria to reflect the effect
on any Performance Criteria of any stock dividend or stock split affecting 1st Financial Services Corporation common stock, a recapitalization (including without limitation payment of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to stockholders, exchange of shares, or similar corporate change. Also, the Plan Committee shall make a similar adjustment to any portion of a Performance Criterion that is not based on 1st Financial Services
Corporation common stock but that is affected by an event having an effect similar to those described. As permitted under Internal Revenue Code section 162(m), the Plan Committee may make appropriate adjustments of Performance Criteria to reflect a
substantive change in an Employee’s job description or assigned duties and responsibilities. 
 (e) Performance Criteria shall be
established in an associated Award Agreement as soon as administratively practicable after the criteria are established, but in the case of Covered Officers no later than the earlier of (x) 90 days after the beginning of the applicable
Performance Period and (y) the expiration of 25% of the applicable period in which satisfaction of the applicable Performance Criteria is to be determined. 
 8.3 Earning Performance Shares. Except as otherwise provided in the Plan or the Award Agreement, at the end of each applicable period in which satisfaction of the Performance Criteria is to be determined, the
Plan Committee shall certify that the Employee has or has not satisfied the Performance Criteria. Performance Shares shall then be – 
 (a) forfeited to the extent the Plan Committee certifies that the Performance Criteria are not satisfied, or 
 (b) to the extent the Performance Criteria are certified by the Plan Committee as having been
satisfied, distributed to the Employee in the form of shares of 1st Financial Services Corporation common stock (unless otherwise specified in the Award Agreement) on or before the later of (x) the 15th day of the third month after the end of the Participant’s first taxable year in which the Plan Committee certifies that the related Performance Criteria are satisfied and
(y) the 15th day of the third month after the end of 1st Financial Services Corporation’s first taxable year in which the Plan
Committee certifies that the related Performance Criteria are satisfied. However, the Performance Shares may be distributed later if 1st Financial Services Corporation reasonably determines that compliance with that schedule is not administratively
practical and if the distribution is made as soon as practical. 
 8.4 Rights Associated with Performance Shares. During the
applicable period in which satisfaction of the Performance Criteria is to be determined, Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated. During the applicable period in which satisfaction
of the Performance Criteria is to be determined and unless the Award Agreement provides otherwise, Employees may not exercise voting rights associated with their Performance Shares and all dividends and other distributions paid on Performance Shares
shall be held by 1st Financial Services Corporation as escrow agent. At the end of the period in which satisfaction of the applicable Performance Criteria is to be determined, dividends or other distributions held in escrow shall be distributed to
the Participant or forfeited as provided in section 8.3. No interest or other accretion shall be credited on dividends or other distributions held in escrow. If a dividend or other distribution is paid in the form of shares of common stock, the
shares shall be subject to the same restrictions on transferability and forfeitability as the shares of 1st Financial Services Corporation common stock to which the dividend or distribution relates. 
  

 8 

 ARTICLE 9 
 STOCK APPRECIATION RIGHTS 
 9.1 SAR Grants. Subject to the terms of the Plan and the associated Award Agreement, the Plan Committee may grant SARs to Employees at any time during the term of this Plan. Unless an Award Agreement provides otherwise, SARs awarded
under this Plan are intended to satisfy the requirements for exclusion from coverage under Internal Revenue Code section 409A. All SAR Award Agreements shall be construed and administered consistent with that intention. 
 9.2 Exercise Price. The Exercise Price specified in the Award Agreement shall not be less than 100% of the Fair Market Value of a share of 1st
Financial Services Corporation common stock on the date of grant. 
 9.3 Exercise and Settling of SARs. SARs shall be exercisable
according to the terms specified in the Award Agreement. A Participant exercising an SAR shall receive whole shares of 1st Financial Services Corporation common stock or cash (as determined in the Award Agreement) having a value equal to
(a) the excess of (x) the Fair Market Value of a share of 1st Financial Services Corporation common stock on the exercise date over (y) the Exercise Price, multiplied by (b) the number of shares of 1st Financial
Services Corporation common stock for which the SAR is exercised. The value of any fractional share of 1st Financial Services Corporation common stock produced by this formula shall be settled in cash. 
 ARTICLE 10 
 TERMINATION 
 10.1 Termination for Cause. (a) If a Participant’s employment
or director service terminates for Cause or if in 1st Financial Services Corporation’s judgment a basis for termination for Cause exists, all Awards held by the Participant that are outstanding shall be forfeited, regardless of whether the
Awards are exercisable and regardless of whether Participant’s employment or director service with 1st Financial Services Corporation or a Related Entity actually terminates, except that Restricted Stock or Performance Shares that have been
released from escrow and distributed to the Participant shall not be affected by termination for Cause. 
 (b) The term “Cause”
shall mean one or more of the acts described in this section 10.1. However, Cause shall not be deemed to exist merely because the Participant is absent from active employment during periods of paid time off, consistent with the applicable paid
time-off policy of 1st Financial Services Corporation or the Related Entity with which the Participant is employed, as the case may be, sickness or illness or while suffering from an incapacity due to physical or mental illness, including a
condition that does or may constitute a Disability, or other period of absence approved by 1st Financial Services Corporation or the Related Entity, as the case may be: 
 1) an act of fraud, intentional misrepresentation, embezzlement, misappropriation, or conversion by the Participant of the assets or
business opportunities of 1st Financial Services Corporation or a Related Entity, 
 2) conviction of the Participant of or
plea by the Participant of guilty or no contest to a felony or a misdemeanor, 
 3) violation by the Participant of the
written policies or procedures of 1st Financial Services Corporation or the Related Entity with which the Participant is employed, including but not limited to violation of 1st Financial Services Corporation’s or the Related Entity’s code
of ethics, 
 4) unless disclosure is inadvertent, disclosure to unauthorized persons of any confidential information not in
the public domain relating to 1st Financial Services Corporation’s or a Related Entity’s business, including all processes, inventions, trade secrets, computer programs, technical data, drawings or designs, information concerning pricing
and pricing policies, marketing techniques, plans and forecasts, new product information, information concerning methods and manner of operations, and information relating to the identity and location of all past, present, and prospective customers
and suppliers, 
  

 9 

 5) intentional breach of any contract with or violation of any legal obligation owed to
1st Financial Services Corporation or a Related Entity, 
 6) dishonesty relating to the duties owed by the Participant to 1st
Financial Services Corporation or a Related Entity, 
 7) the Participant’s willful and continued refusal to
substantially perform assigned duties, other than refusal resulting from sickness or illness or while suffering from an incapacity due to physical or mental illness, including a condition that does or may constitute a Disability, 
 8) the Participant’s willful engagement in gross misconduct materially and demonstrably injurious to 1st Financial Services
Corporation or a Related Entity, 
 9) the Participant’s breach of any term of this Plan or an Award Agreement,

 10) intentional cooperation with a party attempting a Change in Control of 1st Financial Services Corporation, unless 1st
Financial Services Corporation’s board of directors approves or ratifies the Participant’s action before the Change in Control or unless the Participant’s cooperation is required by law, or 
 11) any action that constitutes cause as defined in any written agreement between the Participant and 1st Financial Services Corporation
or a Related Entity. 
 10.2 Termination for any Other Reason. Unless specified otherwise in the Award Agreement or in this Plan and
except as provided in section 10.1, the portion of a Participant’s outstanding Award that is unvested and unexercisable when the Participant’s employment or director service terminates shall be forfeited and the portion of any Restricted
Stock Award or Performance Share Award that is unvested and held in escrow shall be forfeited. Options and SARs that are exercisable when termination occurs shall be forfeited if not exercised before the earlier of (x) the expiration
date specified in the Award Agreement or (y) 90 days after the termination date. 
 ARTICLE 11 

EFFECT OF A CHANGE IN CONTROL

 11.1 Definition of Change in Control. The term “Change in Control” shall have the meaning given in any written
agreement between the Employee and 1st Financial Services Corporation or a Related Entity. However, if an Award is subject to Internal Revenue Code section 409A, the term Change in Control shall have the meaning given in section 409A. If an Award is
not subject to Internal Revenue Code section 409A and if the term Change in Control is not defined in a written agreement between the Employee and 1st Financial Services Corporation or a Related Entity, any of the following events occurring on or
after the date this Plan becomes effective under section 1.2 shall constitute a Change in Control – 
 (a) Change in board
composition. If individuals who constitute 1st Financial Services Corporation’s board of directors on the date this Plan becomes effective under section 1.2 (the “Incumbent Directors”) cease for any reason to constitute a
majority of the board of directors. A person who becomes a director after the date this Plan becomes effective and whose election or nomination for election is approved by a vote of at least two-thirds (2/3) of the Incumbent Directors on the
board of directors shall be deemed to be an Incumbent Director. The necessary two-thirds approval may take the form of a specific vote on that person’s election or nomination or approval of 1st Financial Services Corporation’s proxy
statement in which the person is named as a nominee for director, without written objection by Incumbent Directors to the nomination. A person elected or nominated as a director of 1st Financial Services Corporation initially as the result of an
actual or threatened director-election contest or any other actual or threatened solicitation of proxies by or on behalf of any person other than 1st Financial Services Corporation’s board of directors shall never be considered an Incumbent
Director unless at least two-thirds (2/3) of the Incumbent Directors specifically vote to treat that person as an Incumbent Director. 
 (b) Significant ownership change. If any person directly or indirectly is or becomes the beneficial owner of securities whose combined voting power in the election of 1st Financial Services Corporation’s directors is –

  

 10 

 1) 50% or more of the combined voting power of all of 1st Financial Services
Corporation’s outstanding securities eligible to vote for the election of 1st Financial Services Corporation directors, 
 2) 25% or more, but less than 50%, of the combined voting power of all of 1st Financial Services Corporation’s outstanding securities eligible to vote in the election of 1st Financial Services Corporation’s directors, except that
an event described in this paragraph (b)(2) shall not constitute a Change in Control if it is the result of any of the following acquisitions of 1st Financial Services Corporation’s securities – 
 (a) by 1st Financial Services Corporation or a Related Entity, reducing the number of 1st Financial Services Corporation securities
outstanding (unless the person thereafter becomes the beneficial owner of additional securities that are eligible to vote in the election of 1st Financial Services Corporation directors, increasing the person’s beneficial ownership by more than
one percent), 
 (b) by or through an employee benefit plan sponsored or maintained by 1st Financial Services Corporation or a
Related Entity and described (or intended to be described) in Internal Revenue Code section 401(a), 
 (c) by or through an
equity compensation plan maintained by 1st Financial Services Corporation or a Related Entity, including this Plan and any program described in Internal Revenue Code section 423, 
 (d) by an underwriter temporarily holding securities in an offering of securities, 
 (e) in a Non-Control Transaction, as defined in section 11.1(c), or 
 (f) in a transaction (other than one described in section 11.1(c)) in which securities eligible to vote in the election of 1st Financial
Services Corporation directors are acquired from 1st Financial Services Corporation, if a majority of the Incumbent Directors approves a resolution providing expressly that the acquisition shall not constitute a Change in Control. 
 (c) Merger. Consummation of a merger, consolidation, share exchange, or similar form of corporate transaction involving 1st Financial Services
Corporation or a Related Entity and requiring approval of 1st Financial Services Corporation’s stockholders, whether for the transaction or for the issuance of securities in the transaction (a “Business Combination”), unless
immediately after the Business Combination – 
 1) more than 50% of the total voting power of either (x) the
corporation resulting from consummation of the Business Combination (the “Surviving Corporation”) or, if applicable, (y) the ultimate parent corporation that directly or indirectly beneficially owns 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”) is represented by securities that were eligible to vote in the election of 1st Financial Services Corporation directors and that were
outstanding immediately before the Business Combination (or, if applicable, represented by securities into which the 1st Financial Services Corporation securities were converted in the Business Combination), and that voting power among the holders
thereof is in substantially the same proportion as the voting power of securities eligible to vote in the election of 1st Financial Services Corporation directors among the holders thereof immediately before the Business Combination, 
 2) no person (other than any employee benefit plan sponsored or maintained by the Surviving Corporation or the Parent Corporation or any
employee stock benefit trust created by the Surviving Corporation or the Parent Corporation) directly or indirectly is or becomes the beneficial owner of 25% or more of the total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and 
 3) at least a
majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were Incumbent Directors when the initial agreement providing for the Business Combination was approved by
1st Financial Services Corporation’s board of directors. 
  

 11 

 A Business Combination satisfying all of the criteria specified in clauses (1), (2), and (3) of this
section 11.1(c) shall constitute a “Non-Control Transaction,” or 
 (d) Sale of Assets. If 1st Financial Services
Corporation’s stockholders approve a plan of complete liquidation or dissolution of 1st Financial Services Corporation or a sale of all or substantially all of its assets, but in any case if and only if 1st Financial Services Corporation’s
assets are transferred to an entity not owned directly or indirectly by 1st Financial Services Corporation or its stockholders. 
 11.2
Effect of Change in Control. If a Change in Control occurs, the Plan Committee shall have the right in its sole discretion to – 
 (a) accelerate the exercisability of any or all Options or SARs, despite any limitations contained in the Plan or Award Agreement, 
 (b) accelerate the vesting of Restricted Stock, despite any limitations contained in the Plan or Award Agreement, 
 (c) accelerate
the vesting of Performance Shares, despite any limitations contained in the Plan or Award Agreement, 
 (d) cancel any or all outstanding
Options, SARs, unvested Restricted Stock, and Performance Shares in exchange for the kind and amount of shares of the surviving or new corporation, cash, securities, evidences of indebtedness, other property, or any combination thereof that the
holder of the Option, SAR, unvested Restricted Stock, or Performance Share would have received upon consummation of the Change-in-Control transaction (the “Acquisition Consideration”) had the Restricted Stock been vested or had the
Option, SAR, or Performance Share been exercised or converted into shares of 1st Financial Services Corporation common stock before the transaction, less the applicable exercise or purchase price, 
 (e) cause the holders of any or all Options, SARs, and Performance Shares to have the right during the term of the Option, SAR, or Performance Share to
receive upon exercise – or cause the holders of unvested Restricted Stock to receive – the Acquisition Consideration receivable upon consummation of the transaction by a holder of the number of shares of 1st Financial Services Corporation
common stock that might have been obtained upon exercise or conversion of all or any portion thereof, less the applicable exercise or purchase price therefore, or to convert the Stock Option, SAR, unvested Restricted Stock, or Performance Share into
a stock option, appreciation right, restricted share, or performance share relating to the surviving or new corporation in the transaction, or 
 (f) take such other action as it deems appropriate to preserve the value of the Award to the Participant. 
 The Plan Committee may
provide for any of the foregoing actions in an Award Agreement in advance, may provide for any of the foregoing actions in connection with the Change in Control, or both. Alternatively, the Plan Committee shall also have the right to require any
purchaser of 1st Financial Services Corporation’s assets or stock, as the case may be, to take any of the actions set forth in the preceding sentence as such purchaser may determine to be appropriate or desirable. The manner of application and
interpretation of the provisions of this section 11.2 shall be determined by the Plan Committee in its sole and absolute discretion. Despite any provision of this Plan or an Award Agreement to the contrary, a Participant shall not be entitled to any
amount under this Plan if he or she acted in concert with any person to effect a Change in Control, unless the Participant acted at the specific direction of 1st Financial Services Corporation’s board of directors and in his or her capacity as
an employee of 1st Financial Services Corporation or a Related Entity. For purposes of this Plan the term “person” shall be as defined in section 3(a)(9) and as used in sections 13(d)(3) and 14(d) (2) of the Securities Exchange
Act of 1934, and the terms “beneficial owner” and “beneficial ownership” shall have the meaning given in the Securities and Exchange Commission’s Rule 13d-3 under the Securities Exchange Act of 1934.

 The Plan Committee shall not have the discretion, however, to accelerate the vesting or exercisability of any Award held by a Covered
Officer to the extent that (x) the Award is eligible for the exemption of performance-based compensation from the deduction limitation of Internal Revenue Code section 162(m) and (y) the existence of the Plan Committee’s
authority to accelerate vesting or exercisability or actual acceleration of vesting or exercisability would render unavailable for the Award the exemption of performance-based compensation from the deduction limitation of Internal Revenue Code
section 162(m). 
  

 12 

 ARTICLE 12 
 AMENDMENT, MODIFICATION, AND TERMINATION OF THIS PLAN 
 1st Financial Services Corporation may terminate, suspend, or amend the Plan at any time without stockholder approval, unless stockholder approval is
necessary to satisfy applicable requirements imposed by (a) Rule 16b-3 under the Securities Exchange Act of 1934, or any successor rule or regulation, (b) the Internal Revenue Code, which requirements may include
qualification of an Award as performance-based compensation under Internal Revenue Code section 162(m), or (c) any securities exchange, market, or other quotation system on or through which 1st Financial Services Corporation’s securities
are listed or traded. However, no Plan amendment shall (x) result in the loss of a Plan Committee member’s status as a “non-employee director,” as that term is defined in Rule 16b-3 under the Securities Exchange Act of
1934 or any successor rule or regulation, (y) cause the Plan to fail to satisfy the requirements imposed by Rule 16b-3, or (z) without the affected Participant’s consent (and except as specifically provided otherwise in
this Plan or the Award Agreement), adversely affect any Award granted before the amendment, modification, or termination. Despite any provision in the Plan, including this Article 12, to the contrary, 1st Financial Services Corporation shall have
the right to amend the Plan and any Award Agreements without additional consideration to affected Participants if amendment is necessary to avoid penalties arising under Internal Revenue Code section 409A, even if the amendment reduces, restricts,
or eliminates rights granted under the Plan, the Award Agreement, or both before the amendment. 
 ARTICLE 13

 ISSUANCE OF SHARES AND SHARE
CERTIFICATES 
 13.1 Issuance of Shares. 1st Financial Services Corporation shall issue or cause to
be issued shares of its common stock as soon as practicable upon exercise or conversion of an Award that is payable in shares of 1st Financial Services Corporation common stock. No shares shall be issued until full payment is made, if payment is
required by the terms of the Award. Until a stock certificate evidencing the shares is issued and except as otherwise provided in this Plan, no right to vote or receive dividends or any other rights as a stockholder shall exist for the shares of 1st
Financial Services Corporation common stock to be issued, despite the exercise or conversion of the Award payable in shares, except as may be otherwise provided in this Plan. Issuance of a stock certificate shall be evidenced by the appropriate
entry on the books of 1st Financial Services Corporation or of a duly authorized transfer agent of 1st Financial Services Corporation 
 13.2 Delivery of Share Certificates. 1st Financial Services Corporation shall not be required to issue or deliver any certificates until all of the following conditions are fulfilled – 
 (a) payment in full for the shares and for any tax withholding, 
 (b) completion of any registration or other qualification of the shares the Plan Committee in its discretion deems necessary or advisable under any Federal or state laws or under the rulings or regulations of the
Securities and Exchange Commission or any other regulating body, 
 (c) if 1st Financial Services Corporation common stock is listed on The
Nasdaq Stock Market or another exchange, admission of the shares to listing on The Nasdaq Stock Market or the other exchange, 
 (d) if the
offer and sale of shares of 1st Financial Services Corporation common stock is not registered under the Securities Act of 1933, qualification of the offer and sale as a private placement under the Securities Act of 1933 or qualification under
another registration exemption under the Securities Act of 1933, 
 (e) obtaining any approval or other clearance from any Federal or state
governmental agency the Plan Committee in its discretion determines to be necessary or advisable, and 
 (f) the Plan Committee is satisfied
that the issuance and delivery of shares of 1st Financial Services Corporation common stock under this Plan complies with applicable Federal, state, or local law, rule, regulation, or ordinance or any rule or regulation of any other regulating body,
for which the Plan Committee may seek approval of 1st Financial Services Corporation’s counsel. 
  

 13 

 13.3 Applicable Restrictions on Shares. Shares of 1st Financial Services Corporation common stock
issued may be subject to such stock transfer orders and other restrictions as the Plan Committee may determine are necessary or advisable under any applicable Federal or state securities law rules, regulations and other requirements, the rules,
regulations and other requirements of The Nasdaq Stock Market or any stock exchange upon which 1st Financial Services Corporation common stock is listed, and any other applicable Federal or state law. Certificates for the common stock may bear any
restrictive legends the Plan Committee considers appropriate. 
 13.4 Book Entry. Instead of issuing stock certificates evidencing
shares, 1st Financial Services Corporation may use a book entry system in which a computerized or manual entry is made in the records of 1st Financial Services Corporation to evidence the issuance of shares of 1st Financial Services Corporation
common stock. 1st Financial Services Corporation’s records are binding on all parties, unless manifest error exists. 
 ARTICLE 14 
 MISCELLANEOUS 
 14.1 Assignability. Except as described in this section or as provided in section 14.2, an Award may not be transferred except by will or by the
laws of descent and distribution, and an Award may be exercised during the Participant’s lifetime solely by the Participant or by the Participant’s guardian or legal representative. However, with the permission of the Plan Committee a
Participant or a specified group of Participants may transfer Awards other than Incentive Stock Options to a revocable inter vivos trust of which the Participant is the settlor, or may transfer Awards other than Incentive Stock Options to a
member of the Participant’s immediate family, a revocable or irrevocable trust established solely for the benefit of the Participant’s immediate family, a partnership or limited liability company whose only partners or members are members
of the Participant’s immediate family, or an organization described in Internal Revenue Code section 501(c)(3). An Award transferred to one of these permitted transferees shall continue to be subject to all of the terms and conditions that
applied to the Award before the transfer and to any other rules prescribed by the Plan Committee. A permitted transferee may not retransfer an Award except by will or by the laws of descent and distribution, and the transfer by will or by the laws
of descent and distribution must be a transfer to a person who would be a permitted transferee according to this section 14.1. 
 14.2
Beneficiary Designation. Each Participant may name a beneficiary or beneficiaries to receive or to exercise any vested Award that is unpaid or unexercised at the Participant’s death. Beneficiaries may be named contingently or successively.
Unless otherwise provided in the beneficiary designation, each designation made shall revoke all prior designations made by the same Participant. A beneficiary designation must be made on a form prescribed by the Plan Committee and shall not be
effective until filed in writing with the Plan Committee. If a Participant has not made an effective beneficiary designation, the deceased Participant’s beneficiary shall be his or her surviving spouse or, if none, the deceased
Participant’s estate. None of 1st Financial Services Corporation, its board of directors, or the Plan Committee is required to infer a beneficiary from any other source. The identity of a Participant’s designated beneficiary shall be based
solely on the information included in the latest beneficiary designation form completed by the Participant and shall not be inferred from any other evidence. 
 14.3 No Implied Rights to Awards or Continued Services. No potential participant has any claim or right to be granted an Award under this Plan, and there is no obligation of uniformity of treatment of
participants under this Plan. Nothing in the Plan guarantees or shall be construed to guarantee that any Participant will receive a future Award. Neither this Plan nor any Award shall be construed as giving any individual any right to continue as an
Employee or Director of 1st Financial Services Corporation or a Related Entity. Neither the Plan nor any Award shall constitute a contract of employment, and 1st Financial Services Corporation expressly reserves to itself and all Related Entities
the right at any time to terminate employees free from liability or any claim under this Plan, except as may be specifically provided in this Plan or in an Award Agreement. 
 14.4 Tax Withholding. (a) 1st Financial Services Corporation shall withhold from other amounts owed to the Participant or require a
Participant to remit to 1st Financial Services Corporation an amount sufficient to satisfy federal, state, and local withholding tax requirements on any Award, exercise, or cancellation of an Award or purchase of stock. If these amounts are not to
be withheld from other payments due to the Participant or if there are no other payments due to the Participant, 1st Financial Services Corporation shall defer payment of cash or issuance of shares of stock until the earlier of (x) 30
days after the settlement date, or (y) the date the Participant remits the required amount. 
  

 14 

 (b) If the Participant does not remit the required amount within 30 days after the settlement date, 1st
Financial Services Corporation shall permanently withhold from the value of the Awards to be distributed the minimum amount required to be withheld to comply with applicable federal, state, and local income, wage, and employment taxes, distributing
the balance to the Participant. 
 (c) In its sole discretion, which may be withheld for any reason or for no reason, the Plan Committee may
permit a Participant to reimburse 1st Financial Services Corporation for this tax withholding obligation through one or more of the following methods, subject to conditions the Plan Committee establishes – 
 1) having shares of stock otherwise issuable under the Plan withheld by 1st Financial Services Corporation, but only to the extent of the
minimum amount that must be withheld to comply with applicable state, federal, and local income, employment, and wage tax laws, 
 2) delivering to 1st Financial Services Corporation previously acquired shares of 1st Financial Services Corporation common stock, 
 3) remitting cash to 1st Financial Services Corporation, or 
 4) remitting a personal check
immediately payable to 1st Financial Services Corporation 
 14.5 Indemnification. Each individual who is or was a member of 1st
Financial Services Corporation’s board of directors or Plan Committee shall be indemnified and held harmless by 1st Financial Services Corporation against and from any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be made a party or in which he or she may be involved by reason of any action taken or not taken under the Plan as a director
of 1st Financial Services Corporation or as a Plan Committee member and against and from any and all amounts paid, with 1st Financial Services Corporation’s approval, by him or her in settlement of any matter related to or arising from the Plan
as a 1st Financial Services Corporation director or as a Plan Committee member or paid by him or her in satisfaction of any judgment in any action, suit or proceeding relating to or arising from the Plan against him or her as a 1st Financial
Services Corporation director or as a Plan Committee member, but only if he or she gives 1st Financial Services Corporation an opportunity at its expense to handle and defend the matter before he or she undertakes to handle and defend it in his or
her own behalf. The right of indemnification described in this section is not exclusive and is independent of any other rights of indemnification to which the individual may be entitled under 1st Financial Services Corporation’s organizational
documents, by contract, as a matter of law, or otherwise. 
 14.6 No Limitation on Compensation. Nothing in the Plan shall be
construed to limit the right of 1st Financial Services Corporation to establish other plans or to pay compensation to its employees or directors in cash or property in a manner not expressly authorized under the Plan. 
 14.7 Governing Law. The Plan and all agreements hereunder shall be construed in accordance with and governed by the laws, other than laws
governing conflict of laws, of the State of North Carolina. This Plan is not intended to be governed by the Employee Retirement Income Security Act of 1974. The Plan shall be construed and administered in a manner consistent with that intent.

 14.8 No Impact on Benefits. Plan Awards are not compensation for purposes of calculating a Participant’s rights under any
employee benefit plan that does not specifically require the inclusion of Awards in benefit calculations. 
 14.9 Securities and Exchange
Commission Rule 16b-3. The Plan is intended to comply with all applicable conditions of Securities and Exchange Commission Rule 16b-3 under the Securities Exchange Act of 1934, as that rule may be amended from time to time. All transactions
involving a Participant who is subject to beneficial ownership reporting under section 16(a) of the Securities Exchange Act of 1934 shall be subject to the conditions set forth in Rule 16b-3, regardless of whether the conditions are expressly set
forth in this Plan, and any provision of this Plan that is contrary to Rule 16b-3 shall not apply to that Participant. 
  

 15 

 14.10 Internal Revenue Code Section 162(m). The Plan is intended to comply with applicable
requirements of section 162(m) for exemption of performance-based compensation from the deduction limitations of section 162(m). Unless the Plan Committee expressly determines otherwise, any provision of this Plan that is contrary to those section
162(m) exemption requirements shall not apply to an Award that is intended to qualify for the exemption for performance-based compensation. 
 14.11 Successors. All obligations of 1st Financial Services Corporation under Awards granted under this Plan are binding on any successor to 1st Financial Services Corporation, whether as a result of a direct or indirect purchase,
merger, consolidation, or otherwise of all or substantially all of the business or assets of 1st Financial Services Corporation. 
 14.12
Severability. If any provision of this Plan or the application thereof to any person or circumstances is held to be illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan or other applications, and
this Plan is to be construed and enforced as if the illegal or invalid provision had not been included. 
 14.13 No Golden Parachute
Payments. Despite any provision in this Plan or in an Award Agreement to the contrary, 1st Financial Services Corporation shall not be required to make any payment under this Plan or an Award Agreement that would be a prohibited golden parachute
payment within the meaning of section 18(k) of the Federal Deposit Insurance Act. 
  

 16

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