FIRST AMENDMENT TO THE FIRST NATIONAL BANK OF POLK COUNTY EXECUTIVE SALARY CONTINUATION AGREEMENT

This FIRST AMENDMENT is made and entered into on the 9 th day of December, 2008, by and between The First National Bank of Polk County (the “Bank”), a national banking association, and Larry T. Kuglar, an executive of the Bank (the “Executive”).

WHEREAS, the Bank and the Executive previously entered into that certain Executive Salary Continuation Agreement, dated February 7, 2000, (the “Agreement”); and

WHEREAS, the Bank and the Executive desire to amend the Agreement to comply with the final regulations issued under Internal Revenue Code Section 409A.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Bank and the Executive do hereby agree, effective as of January 1, 2009, to amend the Agreement as follows:

1.             By deleting Paragraph III(A) in its entirety and substituting therefor the following:

“A.            Retirement Date :

‘Retirement Date’ shall mean the date the Executive experiences a Separation from Service on or after the Executive’s Normal Retirement Age.”

2.             By deleting from Paragraph III(D) the phrase “without cause” and substituting therefor the phrase “other than for cause”.

3.             By deleting Paragraph III(E) in its entirety and substituting therefor the following:

“E.            Separation from Service :

‘Separation from Service’ shall mean a termination of the Executive’s employment where either (1) the Executive has ceased to perform any services for the Bank and all affiliated companies that, together with the Bank, constitute the ‘service recipient’ within the meaning of Code Section 409A and the regulations thereunder (collectively, the ‘Service Recipient’) or (2) the level of bona fide services the Executive performs for the Service Recipient after a given date (whether as an employee or as an independent contractor) permanently decreases (excluding either a decrease as a result of military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or if longer, so long as the Executive retains a right to reemployment with the Service Recipient under an applicable statute or by contract or any other decrease permitted under Code Section 409A) to no more than twenty percent (20%) of the average level of bona fide services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding thirty-six-(36)-month period (or the full period of service if the Executive has been providing services to the Service Recipient for less than thirty-six (36) months).”

4.             By deleting Paragraph III(G) in its entirety and substituting therefor the following:

“G.            Change of Control :

‘Change of Control’ means (1) with respect to the Bank or Southcrest Financial Group, Inc. (the ‘Holding Company’) a ‘change in ownership of a corporation’ as defined under Code Section 409A; (2) with respect to the Holding Company, a ‘change in effective control of a corporation’ as defined under Code Section 409A; or (3) with respect to the Bank or the Holding Company, a ‘change in ownership of a substantial portion of a corporation’s assets’ as defined under Code Section 409A, but substituting ‘eighty-five percent (85%)’ for the phrase ‘40 percent’ in Treasury Regulation Section 1.409A-3(i)(5)(vii)(A), or any successor thereto.”

5.             By deleting Paragraph III(H) in its entirety and substituting therefor the following:

“H.            Restriction on Timing of Distribution :

Notwithstanding any provision in the Agreement to the contrary, to the extent necessary to avoid the imposition of tax on the Executive under Code Section 409A, any payments that are otherwise payable to the Executive within the first six (6) months following the effective date of his Separation from Service, shall be suspended and paid as soon as practicable following the end of the six-month period following such effective date if, immediately prior to the Executive’s Separation from Service, the Executive is determined to be a “specified employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) of the Bank (or any related “service recipient” within the meaning of Code Section 409A and the regulations thereunder).  Any payments suspended by operation of the foregoing sentence shall be paid as a lump sum to the Executive during the seventh month following the date of his Separation from Service.  Payments (or portions thereof) that would be paid latest in time during the six-month period will be suspended first.”

6.             By adding the following new Paragraph III(J):

‘Accrued Liability Retirement Account’ means the bookkeeping account established and maintained by the Bank to reflect the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) for the Bank’s obligation to the Executive under this Agreement.”