Exhibit 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made and entered into effective
as of March 31, 2015 (the “Effective Date”), by and between Four Oaks Bank &
Trust Company (the “Bank”) and Warren D. Herring, Jr. (“Employee”).
The Bank desires to employ Employee, and Employee desires to accept such
employment on the terms set forth below.
In consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Bank and Employee agree as follows:
1.    EMPLOYMENT. Employee’s employment shall be subject to the terms and
conditions set forth in this Agreement.
2.    NATURE OF EMPLOYMENT/DUTIES. Employee shall serve as Acting Chief Credit
Officer of the Bank. Employee shall report to Chief Executive Officer of the
Bank and shall have such responsibilities and authority as the Bank may
designate from time to time consistent with his title and position. Upon receipt
of approval from the Board of Governors of the Federal Reserve System (“Federal
Reserve”) pursuant to Section 32 of the Federal Deposit Insurance Act (12 U.S.C.
§ 1831i) and Subpart H of Regulation Y of the Federal Reserve (12 C.F.R. § 225)
and the N.C. Office of the Commissioner of Banks, Employee shall (i) be promoted
to Executive Vice President and Chief Credit Officer of the Bank; (ii) manage
all credit of the Bank, including special assets; and (iii) have all other
responsibilities and authority as the Bank may designate from time to time
consistent with his title and position.
2.1    Employee shall perform all duties and exercise all authority in
accordance with, and otherwise comply with, all Company policies, procedures,
practices and directions.
2.2    Employee shall devote substantially all working time, best efforts,
knowledge and experience to perform successfully his duties and advance the
Bank’s interests. During his employment, Employee shall not engage in any other
business activities of any nature whatsoever for which he receives compensation
without the Bank’s prior written consent; provided, however, this provision does
not prohibit him from personally owning and trading in stocks, bonds,
securities, real estate, commodities or other investment properties for his own
benefit and which do not create actual or potential conflicts of interest with
the Bank.
3.    COMPENSATION.
3.1    Base Salary. Employee’s annual base salary for all services rendered
shall initially be One Hundred Seventy-Five Thousand and 00/100 Dollars
($175,000.00) (less applicable taxes and withholdings) payable in accordance
with the Bank’s customary payroll practices as they may exist from time to time
(“Base Salary”). The Employee’s Base Salary may be reviewed and further
increased by the Bank at its sole discretion, in accordance with the Bank’s
policies, procedures and practices as they may exist from time to time.
3.2    Bonus. For the year 2015 and subsequent years of employment hereunder,
Employee shall be eligible for a cash bonus of up to fifty percent (50%) of his
Base Salary (“Annual Bonus”) (less applicable taxes and withholdings). The
Compensation Committee of the Board of Directors (the “Compensation Committee”)
of Four Oaks Fincorp, Inc. (the “Company”) shall have the sole discretion to
determine the amount of the Annual Bonus. The Annual Bonus shall be provided to
Employee provided

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that Employee is employed by the Bank on the last day of the year for which the
award was earned. The Annual Bonus shall be paid no later than two and one-half
months following the end of the year for which it was earned. In addition,
Employee shall be entitled to receive a one-time cash bonus of Thirty-Five
Thousand and 00/100 Dollars ($35,000.00) (less applicable taxes and
withholdings) which shall be paid no later than thirty (30) days following the
Effective Date (the “Signing Bonus”).
3.3    Equity. On the Effective Date, Employee shall be entitled to receive
eighty thousand (80,000) shares of Restricted Stock (as defined in the Plan (as
defined below)) pursuant to that certain Four Oaks Fincorp, Inc. 2015 Restricted
Stock Plan, dated as of January 16, 2015 (the “Plan”). The terms and conditions,
including vesting, for such Restricted Stock shall be (i) set forth in the Plan
and an Award Agreement between Employee and the Company and in substantially the
form and substance attached hereto as Exhibit A and (ii) subject to such other
the terms and conditions as the Compensation Committee shall deem appropriate
based on the recommendation of the Chief Executive Officer of the Bank.
3.4    Benefits. Employee may participate in all medical, dental, disability,
insurance, 401(k), vacation and other employee benefit plans and programs which
may be made available from time to time to Company employees at Employee’s
level; provided, however, that Employee’s participation is subject to the
applicable terms, conditions and eligibility requirements of these plans and
programs as they may exist from time to time. Nothing in this Agreement shall
require the Bank to create, continue or refrain from amending, modifying,
revising or revoking any of its group plans, programs or benefits that are
offered to employees. Employee acknowledges that the Bank, in its sole
discretion, may amend, modify, revise or revoke any such group plans, programs
or benefits and any amendments, modifications, revisions and revocations of
these plans, programs and benefits shall apply to Employee.
3.5    Business Expenses. Employee shall be reimbursed for reasonable and
necessary expenses actually incurred by him in performing services under this
Agreement in accordance with and subject to the terms and conditions of the
applicable Company reimbursement policies, procedures and practices as they may
exist from time to time. All such reimbursements shall be made no later than
March 15 of the year following the year in which Employee incurred the expense.
3.6    Clawback. Notwithstanding any other provisions in this Agreement to the
contrary, any incentive-based compensation, or any other compensation, paid to
Employee pursuant to this Agreement or any other agreement or arrangement with
the Bank which is subject to recovery under any law, government regulation or
stock exchange listing requirement, including, but not limited to, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the
“Act”), and implementing rules and regulations of the Act, will be subject to
such deductions and clawback as may be required to be made pursuant to such law,
government regulation or stock exchange listing requirement (or any policy
adopted by the Bank pursuant to any such law, government regulation or stock
exchange listing requirement). Employee shall, upon written demand by the Bank,
promptly repay any such incentive-based compensation or other compensation, or
take such other action as the Bank may require for compliance with this Section.
4.    TERM OF EMPLOYMENT AND TERMINATION. The initial term of this Agreement and
Employee’s employment hereunder shall be the one-year period commencing on the
Effective Date and terminating on the first anniversary of the Effective Date
(the “Initial Term”), provided that, on such anniversary of the Effective Date
and on each annual anniversary thereafter, this Agreement and Employee’s
employment hereunder shall automatically renew for successive one year periods
on the same terms and conditions set forth herein unless: (i) earlier terminated
or amended as provided herein or (ii) either party gives the other written
notice of non-renewal at least sixty (60) days prior to the end of the Initial
Term or any renewal term of this Agreement, in which case, this Agreement and
Employee’s employment hereunder

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shall terminate at the end of the Initial Term or renewal term, as applicable.
The Initial Term and all applicable renewals thereof are referred to herein as
the “Term.”
4.1    Without Cause, Upon Notice. Either the Bank or Employee may terminate
Employee’s employment and this Agreement without cause at any time upon giving
the other party thirty (30) days’ written notice.
4.2    For Cause. The Company may terminate Employee’s employment and this
Agreement immediately without notice at any time for “Cause,” which shall mean
the following: (i) Employee’s demonstrated gross negligence or willful
misconduct in the execution of his duties; (ii) Employee’s refusal to comply
with the Bank’s policies, procedures, practices or directions, after notice and
opportunity to cure within fifteen (15) days after such notice; (iii) Employee’s
commission of an act of dishonesty; (iv) Employee’s being convicted of a felony;
or (v) Employee’s breach of this Agreement.
4.3    By Death or Disability. Employee’s employment and this Agreement shall
terminate upon Employee’s Disability or death. For purposes of this Agreement,
“Disability” shall mean Employee’s physical or mental inability to perform
substantially all of Employee’s duties, with or without reasonable
accommodation, for a period of ninety (90) days, whether or not consecutive,
during any 365-day period, as determined in the Bank’s reasonable discretion and
in accordance with any applicable law. The Company shall give Employee written
notice of termination for Disability and the termination shall be effective as
of the date specified in such notice.
4.4    Following a Change in Control, by Employee for Good Reason. Following a
Change in Control, as defined herein, Employee may terminate his employment and
this Agreement if he has “Good Reason” to do so.
For purposes of this Agreement, “Good Reason” shall mean the occurrence of any
of the following events or conditions without Employee’s consent:
(i) a material diminution in Employee’s title, authority, duties, or
responsibilities from such immediately prior to the Change in Control;
(ii) a material diminution in Employee’s Base Salary;
(iii) a material change in the geographic location at which Employee must
perform his services under this Agreement; or
(iv) any other action or inaction that constitutes a material breach by the Bank
of this Agreement.
Provided that, in order for Employee to be able to terminate for Good Reason,
Employee must first provide notice to the Bank of the condition Employee
contends constitutes Good Reason within thirty (30) days of the initial
existence of such condition, and the Bank must have thirty (30) days in which to
remedy the condition, and provided further, if the condition is not remedied,
Employee must terminate his employment within thirty (30) days of the end of the
Bank’s thirty (30) day remedy period.
For purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred on:
(i)    the date on which any “person” or “group” (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), other than the Bank or any entity
owned, directly or indirectly, by the

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stockholders of the Bank in substantially the same proportions as their
ownership of the Bank’s common stock, becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act) of shares representing more
than thirty-three percent (33%) of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the Company; or
(ii)    the date on which (a) the Company merges with any other entity, (b) the
Company consummates a statutory share exchange with another entity, or (c) the
Company conveys, transfers or leases all or substantially all of its assets to
any person; provided, however, that in the case of subclauses (a) and (b), a
Change in Control shall not be deemed to have occurred if the shareholders of
the Company immediately before such transaction own, directly or indirectly
immediately following such transaction, more than fifty percent (50%) of the
combined voting power of the outstanding securities of the corporation resulting
from such transaction in substantially the same proportions as their ownership
of securities immediately before such transaction.
4.5    Survival. Section 6 (Trade Secrets, Confidential Information, Company
Property and Competitive Business Activities) of this Agreement shall survive
the termination of Employee’s employment and/or the termination of this
Agreement, regardless of the reasons for such termination.
5.    COMPENSATION AND BENEFITS UPON TERMINATION. Upon termination of his
employment and this Agreement for any reason, Employee shall be entitled to
receive payment of any earned but unpaid compensation as of the date of such
termination (“Accrued Earnings”).
6.    TRADE SECRETS, CONFIDENTIAL INFORMATION, COMPANY PROPERTY AND COMPETITIVE
BUSINESS ACTIVITIES. Employee acknowledges that: (i) by virtue of his senior
management and key leadership position with the Bank, Employee has had and will
continue to have access to Trade Secrets and Confidential Information, as
defined below; (ii) the Bank is engaged in the business of providing financial
services and products in retail, commercial, and corporate banking (the
“Business”); and (iii) the provisions set forth in this Trade Secrets,
Confidential Information, Company Property and Competitive Business Activities
Section are reasonably necessary to protect the Bank’s legitimate business
interests, are reasonable as to time, territory and scope of activities which
are restricted, do not interfere with public policy or public interest and are
described with sufficient accuracy and definiteness to enable him to understand
the scope of the restrictions imposed upon him.
6.1    Trade Secrets and Confidential Information. Employee acknowledges that:
(i) the Bank will disclose to him certain Trade Secrets and Confidential
Information; (ii) Trade Secrets and Confidential Information are the sole and
exclusive property of the Bank (or a third party providing such information to
the Bank) and the Bank or such third party owns all worldwide rights therein
under patent, copyright, trade secret, confidential information, or other
property right; and (iii) the disclosure of Trade Secrets and Confidential
Information to Employee does not confer upon him any license, interest or rights
of any kind in or to the Trade Secrets or Confidential Information.
6.1.1    Employee may use the Trade Secrets and Confidential Information only in
accordance with applicable Company policies and procedures and solely for the
Bank’s benefit while he is employed or otherwise retained by the Bank. Except as
authorized in the performance of services for the Bank, Employee will hold in
confidence and not directly or indirectly, in any form, by any means, or for any
purpose, disclose, reproduce, distribute, transmit, or transfer Trade Secrets or
Confidential Information or any portion thereof. Upon the Bank’s request,
Employee shall return Trade Secrets and Confidential Information and all related
materials.

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6.1.2    If Employee is required to disclose Trade Secrets or Confidential
Information pursuant to a court order or other government process or such
disclosure is necessary to comply with applicable law or defend against claims,
he shall: (i) notify the Bank promptly before any such disclosure is made; (ii)
at the Bank’s request and expense take all reasonably necessary steps to defend
against such disclosure, including defending against the enforcement of the
court order, other government process or claims; and (iii) permit the Bank to
participate with counsel of its choice in any proceeding relating to any such
court order, other government process or claims.
6.1.3    Employee’s obligations with regard to Trade Secrets shall remain in
effect for as long as such information shall remain a trade secret under
applicable law.
6.1.4    Employee’s obligations with regard to Confidential Information shall
remain in effect while he is employed or otherwise retained by the Bank and for
fifteen (15) years thereafter.
6.1.5    As used in this Agreement, “Trade Secrets” means information of the
Bank, suppliers, customers, or prospective or customers, including, but not
limited to, data, formulas, patterns, compilations, programs, devices, methods,
techniques, processes, financial data, financial plans, product plans, or lists
of actual or potential customers or suppliers, which: (i) derives independent
actual or potential commercial value, from not being generally known to or
readily ascertainable through independent development by persons or entities who
can obtain economic value from its disclosure or use; and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
6.1.6    As used in this Agreement, “Confidential Information” means information
other than Trade Secrets, that is of value to its owner and is treated as
confidential, including, but not limited to, future business plans, marketing
campaigns, and information regarding employees, provided, however, Confidential
Information shall not include information which is in the public domain or
becomes public knowledge through no fault of Employee.
6.2    Company Property. Upon the termination of his employment or upon
Company’s earlier request, Employee shall: (i) deliver to the Bank all records,
memoranda, data, documents and other property of any description which refer or
relate in any way to Trade Secrets or Confidential Information, including all
copies thereof, which are in his possession, custody or control; (ii) deliver to
the Bank all Company property (including, but not limited to, keys, credit
cards, customer files, contracts, proposals, work in process, manuals, forms,
computer-stored work in process and other computer data, research materials,
other items of business information concerning any Company customer, or Company
business or business methods, including all copies thereof) which is in his
possession, custody or control; (iii) bring all such records, files and other
materials up to date before returning them; and (iv) fully cooperate with the
Bank in winding up his work and transferring that work to other individuals
designated by the Bank.
6.3    Competitive Business Activities. Employee agrees that during the Term of
this Agreement and for a period of time ending on the date occurring one (1)
year after the later of the date his employment terminates and/or this Agreement
terminates (irrespective of the circumstances of such termination), Employee
will not engage in the following activities without the written consent of the
Bank:
(i)    on Employee’s own or another’s behalf, whether as an officer, director,
stockholder, partner, associate, owner, employee, consultant or otherwise:
(a)    compete with the Bank in the Bank’s Business;

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(b)    solicit or do business which is the same, similar to or otherwise in
competition with the Bank’s Business, from or with persons or entities: (1) who
are customers of the Bank; (2) who Employee or someone for whom he was
responsible solicited, negotiated, contracted, serviced or had contact with on
the Bank’s behalf; or (3) who were customers of the Bank at any time during the
last year of Employee’s employment with the Bank; or
(c)    offer employment to or otherwise solicit for employment any employee or
other person who had been employed by the Bank during the last year of
Employee’s employment with the Bank;
(ii)    be employed or retained in (i) a management capacity, (ii) other
capacity providing the same or similar services which Employee provided to the
Bank, or (iii) any capacity connected with competitive business activities, by
any person or entity that engages in the same, similar or otherwise competitive
business as the Bank’s Business; or
(iii)    directly or indirectly take any action, which is materially
detrimental, or otherwise intended to be adverse to the Bank’s goodwill, name,
business relations, prospects and operations.
6.3.1    The restrictions set forth in clauses (i)(a) and (ii) of this Section
6.3 shall apply to the following geographical areas: (i) within a 60-mile radius
of the location of the Bank’s headquarters during Employee’s employment with the
Bank; (ii) Wake County, North Carolina; and (iii) Johnston County, North
Carolina; provided, however, that, notwithstanding anything herein to the
contrary, if Employee terminates his employment and this Agreement without cause
pursuant to Section 4.1, then the restrictions set forth in clauses (i)(a) and
(ii) of this Section 6.3 shall only apply to the restricted financial
institutions (including any parent, subsidiary or affiliate thereof) described
on Schedule 1 attached hereto and incorporated herein by reference.
6.3.2    Notwithstanding the foregoing, Employee’s ownership, directly or
indirectly, of not more than three percent of the issued and outstanding stock
of a corporation the shares of which are regularly traded on a national
securities exchange or in the over-the-counter market shall not violate this
Section 6.3.
6.4    Remedies. Employee acknowledges that his failure to abide by the Trade
Secrets and Confidential Information, Company Property or Competitive Business
Activities provisions of this Agreement would cause irreparable harm to the Bank
for which legal remedies would be inadequate. Therefore, in addition to any
legal or other relief to which the Bank may be entitled by virtue of Employee’s
failure to abide by these provisions; the Bank may seek legal and equitable
relief, including, but not limited to, preliminary and permanent injunctive
relief, for Employee’s actual or threatened failure to abide by these provisions
without the necessity of posting any bond, and Employee will indemnify the Bank
for all expenses including attorneys’ fees in seeking to enforce these
provisions.
6.5    Tolling. The period during which Employee must refrain from the
activities set forth in Sections 6.1 and 6.3 shall be tolled during any period
in which he fails to abide by these provisions.
6.6    Other Agreements. Nothing in this Agreement shall terminate, revoke or
diminish Employee’s obligations or the Bank’s rights and remedies under law or
any agreements relating to trade secrets, confidential information,
non-competition and intellectual property which Employee has executed in the
past, or may execute in the future or contemporaneously with this Agreement.

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7.    EXECUTIVE REPRESENTATION. Employee represents and warrants that his
employment and obligations under this Agreement will not (i) breach any duty or
obligation he owes to another or (ii) violate any law, recognized ethics
standard or recognized business custom.
8.    WAIVER OF BREACH. The Company’s or Employee’s waiver of any breach of a
provision of this Agreement shall not waive any subsequent breach by the other
party.
9.    ENTIRE AGREEMENT. Except as expressly provided in this Agreement, this
Agreement: (i) supersedes all other understandings and agreements, oral or
written, between the parties with respect to the subject matter of this
Agreement; and (ii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that: (i) no
representations, inducements, promises or agreements, oral or written, have been
made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement; and (ii) no agreement, statement or promise not
contained in this Agreement shall be valid. No change or modification of this
Agreement shall be valid or binding upon the parties unless such change or
modification is in writing and is signed by the parties.
10.    SEVERABILITY. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally, if any of the provisions,
clauses or phrases in Section 6, Trade Secrets, Confidential Information,
Company Property and Competitive Business Activities, are held unenforceable by
a court of competent jurisdiction, then the parties desire that such provision,
clause, or phrase be “blue-penciled” or rewritten by the court to the extent
necessary to render it enforceable.
11.    PARTIES BOUND. The terms, provisions, covenants and agreements contained
in this Agreement shall apply to, be binding upon and inure to the benefit of
the Bank’s successors and assigns. Employee may not assign this Agreement.
12.    REMEDIES. Employee acknowledges that his breach of this Agreement would
cause the Bank irreparable harm for which damages would be difficult, if not
impossible, to ascertain and legal remedies would be inadequate. Therefore, in
addition to any legal or other relief to which the Bank may be entitled by
virtue of the Employee’s breach or threatened breach of this Agreement, the Bank
may seek equitable relief, including but not limited to preliminary and
injunctive relief, and such other available remedies.    
13.    GOVERNING LAW. This Agreement and the employment relationship created by
it shall be governed by North Carolina law without giving effect to North
Carolina choice of law provisions. The parties hereby consent to exclusive
jurisdiction in North Carolina for the purpose of any litigation relating to
this Agreement and agree that any litigation by or involving them relating to
this Agreement shall be conducted in the courts of Wake County, North Carolina
or the federal courts of the United States for the Eastern District of North
Carolina.
14.    SECTION 409A OF THE INTERNAL REVENUE CODE.
14.1    Parties’ Intent. The parties intend that the provisions of this
Agreement comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations thereunder (collectively, “Section
409A”) and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Section
409A. If any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause Employee to incur any
additional tax or interest under Section 409A, the Bank shall, upon the specific
request of Employee, use its reasonable business efforts to in good faith reform
such provision to comply with Code

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Section 409A; provided, that to the maximum extent practicable, the original
intent and economic benefit to Employee and the Bank of the applicable provision
shall be maintained, and the Bank shall have no obligation to make any changes
that could create any additional economic cost or loss of benefit to the Bank.
The Company shall timely use its reasonable business efforts to amend any plan
or program in which Employee participates to bring it in compliance with Section
409A. Notwithstanding the foregoing, the Bank shall have no liability with
regard to any failure to comply with Section 409A so long as it has acted in
good faith with regard to compliance therewith.
14.2    Separation from Service. A termination of employment shall not be deemed
to have occurred for purposes of any provision of this Agreement providing for
the payment of any amounts or benefits upon or following a termination of
employment unless such termination also constitutes a “Separation from Service”
within the meaning of Section 409A and, for purposes of any such provision of
this Agreement, references to a “termination,” “termination of employment,”
“separation from service” or like terms shall mean “Separation from Service.”
14.3    Separate Payments. Any installment payment required under this Agreement
shall be considered a separate payment for purposes of Section 409A.
14.4    Delayed Distribution to Key Employees. If the Bank determines in
accordance with Sections 409A and 416(i) of the Code and the regulations
promulgated thereunder, in the Bank’s sole discretion, that the Employee is a
Key Employee of the Bank on the date his employment with the Bank terminates and
that a delay in benefits provided under this Agreement is necessary to comply
with Code Section 409A(A)(2)(B)(i), then any severance payments and any
continuation of benefits or reimbursement of benefit costs provided by this
Agreement, and not otherwise exempt from Section 409A, shall be delayed for a
period of six (6) months following the date of termination of the Employee’s
employment (the “409A Delay Period”). In such event, any severance payments and
the cost of any continuation of benefits provided under this Agreement that
would otherwise be due and payable to the Employee during the 409A Delay Period
shall be paid to the Employee in a lump sum cash amount in the month following
the end of the 409A Delay Period. For purposes of this Agreement, “Key Employee”
shall mean an employee who, on an Identification Date (“Identification Date”
shall mean each December 31) is a key employee as defined in Section 416(i) of
the Code without regard to paragraph (5) thereof. If the Employee is identified
as a Key Employee on an Identification Date, then Employee shall be considered a
Key Employee for purposes of this Agreement during the period beginning on the
first April 1 following the Identification Date and ending on the following
March 31.
15.    Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, with the same effect as if the signatures affixed
thereto were upon the same instrument.

[signature page follows]

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IN WITNESS WHEREOF, the parties have entered into this Agreement on the day and
year first written above.

EMPLOYEE

/s/ Warren D. Herring Jr.                
Warren D. Herring, Jr.

FOUR OAKS BANK & TRUST COMPANY

By: /s/ Ayden R. Lee, Jr.            
Name:     Ayden R. Lee, Jr.
Title:     Chief Executive Officer

[Signature Page to Employment Agreement (Warren D. Herring, Jr.)]

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Exhibit A

Form of Award Agreement

[see attached]

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FOUR OAKS FINCORP, INC.
2015 RESTRICTED STOCK PLAN

AWARD AGREEMENT
(Awarding Restricted Stock)

THIS AWARD AGREEMENT (this “Agreement”) is made by and between Four Oaks
Fincorp, Inc., a North Carolina corporation (the “Company”), and «Name» (the
“Participant”) pursuant to the provisions of the Four Oaks Fincorp, Inc. 2015
Restricted Stock Plan (the “Plan”), which is incorporated herein by reference.
Capitalized terms not defined in this Agreement shall have the meanings given to
them in the Plan.

WITNESSETH:

WHEREAS, the Participant is providing, or has agreed to provide, services to the
Company, or Affiliate or a Subsidiary of the Company, as an Employee, Director
or Third Party Service Provider; and

WHEREAS, the Company considers it desirable and in its best interests that the
Participant be given a personal stake in the Company’s growth, development and
financial success through the grant of Shares in the form of Restricted Stock,
pursuant to the terms and conditions of the Plan and this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, the parties agree as follows:

1.    Grant of Restricted Stock. Effective as of «Grant Date» (the “Grant
Date”), the Company hereby awards to the Participant «Number» shares of
Restricted Stock, having a Fair Market Value per share of $«FVM» on the Grant
Date. The Restricted Stock is subject to the terms and conditions of the Plan
and this Agreement.

2.    Vesting Schedule. Provided that the Participant continues to render
services to the Company through the applicable vesting date, the Restricted
Stock will be eligible to vest in two (2) separate tranches, fifteen percent
(15%) at the end of the one-year Performance Period ending on December 31, 2015,
and eighty-five percent (85%) at the end of the three-year performance period
ending on December 31, 2018, in each case based on the Performance Measures and
goals for each such period set forth on Addendum A hereto. Each tranche will
vest on the later of the last day of the Performance Period and the date the
Committee determines in its discretion that the performance goals for that
particular Performance Period have been met. If the performance goals for a
particular Performance Period are not met, that tranche of Restricted Stock will
be forfeited.

3.    Termination of Service Relationship. Any Restricted Stock that has not
vested at the time of the termination of the Participant’s service relationship
will be forfeited, although, consistent with the Plan, the Committee has the
power, in its sole and absolute discretion, to accelerate vesting where such
termination is as a result of the Participant’s death or Disability or in other
termination situations.
4.    Book Entry and Delivery of Shares. The Participant agrees that the
Participant’s ownership of the Restricted Stock will be evidenced solely by a
computerized or manual entry in the records of the Company or its designated
stock transfer agent in the Participant’s name. Once the Restricted Stock has
vested, the Company will deliver (subject to any withholding of Shares as
described in Section 5 below) the

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Shares to the Participant either by (i) delivering one or more stock
certificates representing such Shares to the Participant, registered in the name
of the Participant, or (ii) electronically depositing such Shares into an online
securities account maintained for the Participant with such brokerage firm as
may be designated by the Company in connection with any Company plan or
arrangement providing for investment in Shares. All certificates for Shares and
all Shares shall be subject to such stop transfer orders and other restrictions
as the Company may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange or
quotation system upon which the Shares are then listed or quoted, and any
applicable federal or state securities law.

5.    Withholding and Taxes. In connection with the vesting of Restricted Stock,
the Company shall have the right to require that the Participant make such
provision, or furnish the Company such authorization, as may be necessary or
desirable so that the Company may satisfy any obligation it has under applicable
income tax laws to withhold for income or other taxes due upon or incident to
such vesting. The Committee may, in its discretion, permit or require such
withholding obligation to be satisfied through the withholding of Shares that
otherwise would be delivered to the Participant. In the event the Participant
elects immediate Federal income taxation with respect to all or any portion of
this Award pursuant to Section 83(b) of the Code, the Participant agrees to
deliver a copy of such election to the Company within ten (10) days after filing
such election with the Internal Revenue Service.

6.    Non-Transferability of Restricted Stock. Except as may be otherwise
determined by the Committee in its sole discretion, prior to its vesting, the
Restricted Stock may not be sold, transferred, pledged, assigned, encumbered,
alienated, hypothecated or otherwise disposed of (whether voluntarily or
involuntarily or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings, including bankruptcy).

7.    Restrictions on Shares. This Agreement shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental agencies
or stock exchange as may be required. The Participant agrees to take all steps
the Committee determines are necessary to comply with all applicable provisions
of federal and state securities law in exercising his or her rights under this
Agreement. The Committee may impose such restrictions on any Shares acquired
pursuant to this Agreement as it deems advisable, including without limitation,
minimum holding period requirements, restrictions under applicable federal
securities laws, under the requirements of any stock exchange or market upon
which such Shares are then listed or traded, or under any blue sky or state
securities laws as may be applicable to such Shares.

8.    Forfeiture. Where a Participant engages in certain competitive activity or
is terminated by the Company for Cause, his or her Restricted Stock and Shares
are subject to forfeiture conditions under Section 7.3 of the Plan. Upon the
occurrence of any of the events set forth in Section 7.3 of the Plan, in
addition to the remedies provided in Section 7.3, the Company shall be entitled
to issue a stop transfer order or other document implementing the forfeiture to
its transfer agent, the depository or any of its nominees, and any other person
with respect to the Restricted Stock and Shares.

9.    Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, the terms and conditions of the Plan
and this Agreement shall be binding upon the Participant and his or her heirs,
executors, administrators, successors and assigns.

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10.    Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by the Participant or by the Company forthwith to
the Committee, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on all
parties.

11.    Acknowledgement. The Participant acknowledges and agrees: (i) that the
Plan is discretionary in nature and may be suspended or terminated by the
Company at any time; (ii) that the award of Restricted Stock does not create any
contractual or other right to receive future Awards or any right to continue an
employment or other relationship with the Company (for the vesting period or
otherwise); (iii) that the Participant remains subject to discharge from such
relationship to the same extent as if the Restricted Stock had not been granted;
(iv) that all determinations with respect to any such future grants, including,
but not limited to, when and on what terms they shall be made, will be at the
sole discretion of the Committee; (v) that participation in the Plan is
voluntary; (vi) that the value of the Restricted Stock is an extraordinary item
of compensation that is outside the scope of the Participant’s employment
contract if any; and (vii) that the Restricted Stock is not part of normal or
expected compensation for purposes of calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar benefits.

12.    Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the
Participant with respect to the subject matter hereof, and may not be modified
adversely to the Participant’s interest except by means of a writing signed by
the Company and Participant. This Agreement is governed by the internal
substantive laws but not the choice of law rules of North Carolina.

[The remainder of this page left blank intentionally]

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[Signature Page to Restricted Stock Agreement]

By signing below, you accept the award of this Restricted Stock and agree that
this Award is subject in all respects to the terms and conditions of the Plan. 
Copies of the Plan and a Prospectus containing information concerning the Plan
are available upon request to Wanda Blow at (919) 963-2177.

PARTICIPANT                FOUR OAKS FINCORP, INC.

_____________________________        By:___________________________________
Signature                    Name: _______________________________
Title: ________________________________

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Addendum A to Restricted Stock Agreement

Performance Measures and Goals

I.
For Performance Period Ending December 31, 2015

The Performance Measures for the one-year period ending December 31, 2015 will
be (1) budgeted Net Income as set forth in the Company’s 2015 budget and (2) the
Company having Net Income in each quarter of 2015.

Provided that the Company has Net Income in each quarter of 2015, the
performance-based Shares will vest as follows:

Percentage of Budgeted Net Income Achieved
Number of Shares Vested
Less than 70%

0% of total Award
70
%
10.5% of total Award
80
%
12% of total Award
90
%
13.5% of total Award
100
%
15% of total Award

Where achievement against budgeted Net Income falls between the performance
levels set out above, the number of Shares vested shall be determined based on
straight line interpolation.

Shares will vest on the later of December 31, 2015 and the date the Committee
determines in its discretion that the performance goals for the Performance
Period have been met. If the performance goals are not met, 15% of the total
Award will be forfeited.

II.    For Performance Period Ending December 31, 2018

The Performance Measures and related goals for the three-year period ending
December 31, 2018 will be determined by the Committee in its sole discretion in
the fourth quarter of 2015.

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AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

This Amendment No. 1 to Employment Agreement (“Amendment No. 1”) is effective as
of May 1, 2015, by and between Four Oaks Bank & Trust Company (the “Bank”) and
Warren D. Herring, Jr. (“Employee”).

WHEREAS, Employee is currently employed with the Bank pursuant to that certain
Employment Agreement entered into effective March 31, 2015 (the “Employment
Agreement”); and

WHEREAS, the parties to the Employment Agreement desire to amend the Employment
Agreement as provided in this Amendment No. 1 to reflect a change in position
for Employee.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Employment Agreement shall be amended as follows:

1.Amendment.
A.Section 2 “NATURE OF EMPLOYMENT/DUTIES” is amended by deleting the first
paragraph of that Section and replacing it with the following:
Employee shall serve as Chief Credit Officer of the Bank. Employee shall manage
all credit of the Bank, including special assets and report to Chief Executive
Officer of the Bank and shall have such responsibilities and authority as the
Bank may designate from time to time consistent with his title and position.
2.Counterparts. This Amendment No. 1 may be executed in counterparts, each of
which shall be an original, with the same effect as if the signatures affixed
thereto were upon the same instrument.
3.Effect of Amendment. Except as amended hereby, the Employment Agreement shall
remain in full force and effect and is hereby ratified and confirmed in all
respects by the parties to the Employment Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of the day
and year set forth above.

EMPLOYEE

/s/ Warren D. Herring, Jr.            
Warren D. Herring, Jr.

FOUR OAKS BANK & TRUST COMPANY

By: /s/ Ayden R. Lee, Jr.            
Name:     Ayden R. Lee, Jr.
Title:     Chief Executive Officer

[Signature Page to Amendment No. 1 to Employment Agreement (Warren D. Herring,
Jr.)]