Exhibit 10.35

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT (this “Agreement”) is entered into as of the
     day of                      , 20    , by and among FNB United Corp., a
North Carolina corporation and a registered bank holding company (the
“Corporation”), First National Bank and Trust Company, a national banking
association and a wholly owned subsidiary of the Corporation (the “Bank”)
(hereinafter the Corporation and the Bank, or their successors, are collectively
referred to as the “Company”), and                              (the “Officer”),
an individual residing in                              County, North Carolina.

WHEREAS, the Officer has heretofore been employed by the Company with the
title(s) of                                                  ; and

WHEREAS, the services of the Officer, the Officer’s experience and knowledge of
the affairs of the Company and reputation and contacts in the industry are
extremely valuable to the Company; and

WHEREAS, the Company wishes to attract and retain such well-qualified executives
and it is in the best interest of the Company and of the Officer to secure the
continued services of the Officer notwithstanding any change of control of the
Corporation or the Bank; and

WHEREAS, the Company considers the establishment and maintenance of a sound and
vital management team to be part of their overall corporate strategy and to be
essential to protecting and enhancing the best interests of the Company and its
shareholders; and

WHEREAS, the parties desire to enter into this Agreement to provide the Officer
with security in the event of a change of control of the Corporation or the Bank
to ensure the continued loyalty of the Officer during any change of control in
order to maximize shareholder value as well as the continued safe and sound
operation of the Company; and

WHEREAS, the Officer and the Company acknowledge and agree that the Officer’s
employment with the Company will continue to be on an at-will basis and that
this Agreement is not an employment agreement but is limited to circumstances
giving rise to a change of control of the Corporation or the Bank as set forth
herein.

NOW, THEREFORE, for and in consideration of the premises and mutual promises,
covenants, and conditions hereinafter set forth, and other good and valuable

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consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereby agree as follows:

1. Term. The initial term of this Agreement shall be for the period commencing
upon the effective date of this Agreement and ending three calendar years from
the effective date of this Agreement. On each anniversary date of this
Agreement, the term automatically shall be extended for an additional one-year
period so that the term shall again be three years unless either the Company or
the Officer notifies the other of its decision not to continue such annual
renewal by written notice given not less than 90 days prior to such anniversary
date.

2. Change of Control.

(a) In the event of a termination of the Officer’s employment by the Company in
connection with, or within twenty-four (24) months after, a “Change of Control”
(as defined in subparagraph (e) below) of the Corporation or the Bank, for
reasons other than for “cause” (as defined in subparagraph (b) below), death or
“disability” (as defined in subparagraph (c) below), the Officer shall be
entitled to receive the sum set forth on Schedule A attached hereto.

(b) For purposes of this Agreement, termination for “cause” shall mean
termination by reason of (i) an intentional, willful and continued failure by
the Officer to perform his duties as an employee of the Company (other than due
to disability); (ii) an intentional, willful and material breach by the Officer
of his fiduciary duties of loyalty and care to the Company; (iii) a conviction
of, or the entering of a plea of nolo contendere by the Officer for any felony
or any crime involving fraud or dishonesty, or (iv) a willful and knowing
violation of any material federal or state law or regulation applicable to the
Corporation or the Bank or the occurrence of any act or event as a result of
which the Officer becomes unacceptable to, or is removed, suspended or
prohibited from participating in the conduct of the Company’s affairs by any
regulatory authority having jurisdiction over the Corporation or the Bank.

(c) For purposes of this Agreement, “disability” shall mean the inability, by
reason of bodily injury or physical or mental disease, or any combination
thereof, of the Officer to perform his customary or other comparable duties with
the Company for a period of 90 consecutive days. In the event that the Officer
and the Company are unable to agree as to whether the Officer is suffering a
disability, the Officer and the Company shall each select a physician and the
two physicians so chosen shall make the determination or, if they are unable to
agree, they shall select a third physician, and the determination as to whether
the Officer is suffering a disability shall be based upon the determination of a
majority of the three physicians. The Company shall pay the reasonable fees and
expenses of all physicians selected pursuant to this subparagraph (c).

(d) The Officer shall have the right to resign his employment with the Company
and terminate this Agreement upon the occurrence of any of the following

 

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events (the “Termination Events”) within twenty-four (24) months following a
Change of Control of the Corporation or the Bank:

(i) Officer is assigned any duties and/or responsibilities that are inconsistent
with his duties or responsibilities at the time of the Change of Control;

(ii) Officer’s annual base salary rate is reduced below the annual amount in
effect as of the effective date of a Change of Control or as the same shall have
been increased from time to time following such effective date;

(iii) Officer’s life insurance, medical or hospitalization insurance, disability
insurance, stock option plans, stock purchase plans, deferred compensation
plans, management retention plans, retirement plans, or similar plans or
benefits being provided by the Company to the Officer as of the effective date
of the Change of Control are reduced in their level, scope, or coverage, or any
such insurance, plans, or benefits are eliminated, unless such reduction or
elimination applies proportionately to all salaried employees of the Company who
participated in such benefits prior to such Change of Control; or

(iv) Officer is required to transfer performance of his day-to-day services
required hereunder to a location which is more than fifty (50) miles from the
Officer’s current principal work location, without the Officer’s express written
consent.

A Termination Event shall be deemed to have occurred on the date such action or
event is implemented or takes effect.

(e) In the event that the Officer resigns his employment and terminates this
Agreement pursuant to subparagraph (d) above, the Company will be obligated to
pay or cause to be paid to the Officer an amount equal to that set forth on
Schedule A attached hereto.

(f) For the purposes of this Agreement, the term “Change of Control” shall mean
any of the following events:

(i) After the effective date of this Agreement, any “person” (as such term is
defined Section 7(j)(8)(A) of the Change in Bank Control Act of 1978), directly
or indirectly, acquires beneficial ownership of voting stock, or acquires
irrevocable proxies or any combination of voting stock and irrevocable proxies,
representing twenty-five percent (25%) or more of any class of voting securities
of the Corporation or the Bank, or acquires control of in any manner the
election of a majority of the directors of the Corporation or the Bank;

 

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(ii) The Corporation or the Bank consolidates or merges with or into another
corporation, association, or entity, or is otherwise reorganized, where the
Corporation or the Bank is not the surviving corporation in such transaction and
the holders of the voting securities of the Corporation or the Bank immediately
prior to such acquisition own less than a majority of the voting securities of
the surviving entity immediately after the transaction; or

(iii) All or substantially all of the assets of the Corporation or the Bank are
sold or otherwise transferred to or are acquired by any other corporation,
association, or other person, entity, or group; or

(iv) Individuals who, as of the date hereof, constitute the Board of Directors
of the Corporation (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director after the date hereof whose election, or nomination for election by the
Corporation’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of any “person” (as defined above) other than the
Corporation’s Board of Directors.

Notwithstanding the other provisions of this Paragraph 2, a transaction or event
shall not be considered a Change of Control if, prior to the consummation or
occurrence of such transaction or event, the Officer and the Company agree in
writing that the same shall not be treated as a Change of Control for purposes
of this Agreement.

(g) Except as otherwise provided in Paragraph 3, amounts payable pursuant to
this Paragraph 2 shall be paid in one lump sum within five business days
following the date of the termination of the Officer’s employment.

(h) Following a Termination Event which gives rise to the Officer’s rights
hereunder, the Officer shall have six months from the date of occurrence of the
Termination Event to resign his employment and terminate this Agreement pursuant
to this Paragraph 2. Any such termination shall be deemed to have occurred only
upon delivery to the Corporation or Bank, or any successors thereto, of written
notice of termination, which describes the Change of Control and Termination
Event. If the Officer does not so resign his employment and terminate this
Agreement within such six-month period, the Officer shall thereafter have no
further rights hereunder with respect to that Termination Event, but shall
retain rights, if any, hereunder with respect to any other Termination Event as
to which such period has not expired.

 

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(i) It is the intent of the parties hereto that all payments made pursuant to
this Agreement be deductible by the Corporation or the Bank for federal income
tax purposes and not result in the imposition of an excise tax on the Officer.
Notwithstanding anything contained in this Agreement to the contrary, any
payments to be made to or for the benefit of the Officer which are deemed to be
“parachute payments” as that term is defined in Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”), shall be modified or
reduced to the extent deemed to be necessary by the Company’s Board of Directors
to avoid the imposition of an excise tax on the Officer under Section 4999 of
the Code or the disallowance of a deduction to the Company under Section 280G(a)
of the Code.

(j) In the event any dispute shall arise between the Officer and the Company as
to the terms or interpretation of this Agreement, including this Paragraph 2,
whether instituted by formal legal proceedings or otherwise, including any
action taken by the Officer to enforce the terms of this Paragraph 2 or in
defending against any action taken by the Corporation or the Bank, the Bank
shall reimburse the Officer for all costs and expenses, proceedings or actions,
in the event the Officer prevails in any such action.

3. Code § 409A. It is the intent of the parties that this Agreement and all
payments made hereunder shall be in compliance with the requirements of section
409A of the Code and the regulations promulgated thereunder. If any provision of
this Agreement shall not be in compliance with section 409A of the Code and the
regulations thereunder, then such provision shall be deemed automatically
amended without further action on the part of the Company or the Officer to the
minimum extent necessary to cause such provision to be in compliance and such
provision will thereafter be given effect as so amended. If postponing payment
of any amounts due under this Agreement is necessary for compliance with the
requirements of section 409A of the Code and the regulations thereunder to avoid
adverse tax consequences to the Officer, then payment of such amounts shall be
postponed to comply with section 409A. Any and all payments that are postponed
under this Section 3 shall be paid to the Officer in a lump sum at the earliest
time that does not result in adverse tax consequences to the Officer under
section 409A.

4. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Corporation or the Bank,
which shall acquire, directly or indirectly, by conversion, merger,
consolidation, purchase, or otherwise, all or substantially all of the assets of
the Corporation or the Bank.

5. Modification; Waiver; Amendments. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Officer, the Company, except as herein
otherwise provided. No waiver by any party hereto, at any time, of any breach by
any party hereto, or compliance with, any condition or provision of this
Agreement to be performed by such party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No amendments or additions to this Agreement shall be binding unless in
writing and signed by the parties, except as herein otherwise provided.

 

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6. Applicable Law. This Agreement shall be governed in all respects whether as
to validity, construction, capacity, performance, or otherwise, by the laws of
North Carolina, except to the extent that federal law shall be deemed to apply.

7. Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of the other provision hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

CORPORATION: FNB UNITED CORP. By  

 

Name:   Title:   BANK: FIRST NATIONAL BANK AND TRUST COMPANY By  

 

Name:   Title:   OFFICER:

 

 

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