BNC Bancorp (BNCN)

NOTE N - DIRECTOR AND EXECUTIVE OFFICER BENEFIT PLANS

The Company during 2004 entered into Salary Continuation Agreements with its chief executive officer and two other executive officers. These agreements replace the existing Supplemental Executive Retirement Plans for these executives. All of the Salary Continuation Agreements provide for lifetime benefits to be paid to each executive with the payment amounts varying upon different retirement scenarios, such as normal retirement, early termination, disability, or change in control. The Company has purchased life insurance policies on the participating officers in order to provide future funding of benefit payments. Provisions of $440,000 in 2008, $465,000 in 2007 and $535,000 in 2006 were expensed for future benefits to be provided under these plans. The corresponding liability related to this plan was $2.8 million and $2.4 million as of December 31, 2008 and 2007, respectively.

The Company also has a deferred compensation plan for its directors. Expense provided under the plan totaled $208,000, $141,000 and $186,000 for the years ended December 31, 2008, 2007 and 2006, respectively. Since 2003, directors have had the option to invest amounts deferred in Company common stock that is held in a rabbi trust established for that purpose. At December 31, 2008 and 2007, the trust held 98,265 and 77,848 shares of Company common stock, respectively.

NOTE N - DIRECTOR AND EXECUTIVE OFFICER BENEFIT PLANS

The Company during 2004 entered into Salary Continuation Agreements with its chief executive officer and two other executive officers. These agreements replace the existing Supplemental Executive Retirement Plans for these executives. All of the Salary Continuation Agreements provide for lifetime benefits to be paid to each executive with the payment amounts varying upon different retirement scenarios, such as normal retirement, early termination, disability, or change in control. The Company has purchased life insurance policies on the participating officers in order to provide future funding of benefit payments. Provisions of $465,000 in 2007, $535,000 in 2006 and $441,000 in 2005 were expensed for future benefits to be provided under these plans. The corresponding liability related to this plan was $2.4 million and $2.0 million as of December 31, 2007 and 2006, respectively.

The Company also has a deferred compensation plan for its directors. Expense provided under the plan totaled $141,000, $186,000 and $102,000 for the years ended December 31, 2007, 2006 and 2005, respectively. Since 2003, directors have had the option to invest amounts deferred in Company common stock that is held in a rabbi trust established for that purpose. At December 31, 2007 and 2006, the trust held 77,848 and 61,055 shares of Company common stock, respectively.

NOTE N - DIRECTOR AND EXECUTIVE OFFICER BENEFIT PLANS

The Company during 2004 entered into Salary Continuation Agreements with its chief executive officer and two other executive officers. These agreements replace the existing Supplemental Executive Retirement Plans for these executives. All of the Salary Continuation Agreements provide for lifetime benefits to be paid to each executive with the payment amounts varying upon different retirement scenarios, such as normal retirement, early termination, disability, or change in control. The Company has purchased life insurance policies on the participating officers in order to provide future funding of benefit payments. Provisions of $572,000 in 2006, $441,000 in 2005 and $307,000 in 2004 were expensed for future benefits to be provided under these plans. The corresponding liability related to this plan was $2.0 million and $1.4 million as of December 31, 2006 and 2005, respectively.

The Company also has a deferred compensation plan for its directors. Expense provided under the plan totaled $202,000, $102,000 and $102,000 for the years ended December 31, 2006, 2005 and 2004, respectively. Since 2003, directors have had the option to invest amounts deferred in Company common stock that is held in a rabbi trust established for that purpose. At December 31, 2006 and 2005, the trust held 61,055 and 49,179 shares of Company common stock, respectively.

NOTE L - DIRECTOR AND EXECUTIVE OFFICER BENEFIT PLANS

The Company during 2004 entered into Salary Continuation Agreements with its chief executive officer and two other executive officers. These agreements replace the existing Supplemental Executive Retirement Plans for these executives. All of the Salary Continuation Agreements provide for lifetime benefits to be paid to each executive with the payment amounts varying upon different retirement scenarios, such as normal retirement, early termination, disability, or change in control. The Company has purchased life insurance policies on the participating officers in order to provide future funding of benefit payments. Provisions of $441,000 in 2005, $307,000 in 2004 and $294,000 in 2003 were expensed for future benefits to be provided under these plans. The corresponding liability related to this plan was $1.4 million and $1.0 million as of December 31, 2005 and 2004, respectively.

F-24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005, 2004 and 2003

The Company also has a deferred compensation plan for its directors. Expense provided under the plan totaled $102,000, $102,000 and $75,000 for the years ended December 31, 2005, 2004 and 2003, respectively. Since 2003, directors have had the option to invest amounts deferred in Company common stock that is held in a rabbi trust established for that purpose. At December 31, 2005 and 2004, the trust held 46,624 and 41,844 shares of Company common stock, respectively.