EX-10.23


    Exhibit
      10.23

    FNB
      FINANCIAL SERVICES CORPORATION

    


    LONG
      TERM INCENTIVE PLAN

    


    FNB
      Financial Services Corporation, parent of FNB Southeast (collectively referred
      to herein as “FNB” or the “Employer”), hereby adopts a Long Term Incentive Plan
      (the “Plan”) for those senior management employees who have significant
      policy-making roles and who are designated as eligible to participate in the
      Plan. This Plan is effective January 1, 2006.

    


    1.   
  Purpose
      of the Plan

    


    The
      Purpose of the Plan is to encourage eligible senior management employees to
      make
      long term decisions that increase FNB’s shareholder value and to enhance FNB’s
      ability to retain such employees. 

    


    2.   
 Definitions

    


    (a)    
 Average
      Annual Base Salary
      - Shall
      mean the average of the base annual salary of the Participant for the
      Measurement Period, provided however, that salary shall not include amounts
      awarded or received under this Plan, Annual Incentive bonuses, commissions,
      overtime pay, or benefits (or the value of benefits) provided by FNB’s
      contributions pursuant to its pension, 401(k), profit sharing, health care,
      life
      insurance or similar benefit programs. However, the annual Base Salary shall
      include the amount of any pre-tax deferrals made by the Participant to FNB’s
      Section 125 welfare plans, 401(k) or non-qualified deferred compensation
      plan.

    


    (b)    
 Beneficiary
      - The
      person or persons last designated in writing by the Participant to receive
      any
      amount of Incentive Compensation to which he is entitled under this Plan at
      the
      time of, or in the event of, his death; or if no designation shall be in effect
      at the time of a Participant’s death or if all designated beneficiaries shall
      have predeceased the Participant, then the beneficiary shall be the following,
      in the order listed: 

    


    
      	 	
              (i)

            	
              Such
                Participant’s surviving spouse, if
                any;

            


    

    


    
      	 	
              (ii)

            	
              Otherwise,
                the Participant’s estate

            


    

    


    (c)    
 Board
      - The
      Board of Directors of FNB Financial Services Corporation. 

    


    (d)    
 Change
      in Control
      - In
      accordance with Code Section 409A, a “Change in Control” shall be deemed to have
      occurred under this Plan, upon the occurrence of any one or more of the events
      described below in Sections 2(d)1, 2(d)2, 2(d)3, in each case as defined herein
      and as further defined and interpreted in Section 409A: 

    


    
      	 	
              1.

            	
              Change
                in Ownership of the Employer
                - A
                “change
                in ownership”
                occurs on the date that any one person, or more than one persons
                acting as
                a group, acquires ownership of stock of the Employer that, together
                with
                stock already held by such person or group, constitutes more than
                50% of
                the total fair market value or total voting power of the stock of
                the
                Employer.

            


    

    


    
      	 	
              2.

            	
              Change
                in effective Control of the Employer
                - A
                “change
                in effective control”
                occurs on the date either one of the following events occurs:
                

            


    

    


    
      	 	
              a)

            	
              Any
                one person, or more than one person acting as a group acquires (or
                has
                acquired during the 12-month period ending on the date of the most
                recent

            


    


    
      
         

      

      
        89

        
          

        

      

      
         

      

    


               
      acquisition by such person or persons) ownership of stock of the Employer
      possessing 35% or more of the total voting power of the stock of the Employer;
      or

    


    
      	 	
              b)

            	
              A
                majority of members of the Employer’s Board of Directors are replaced
                during any 12-month period by directors whose appointment or election
                is
                not endorsed by a majority of the members of the Employer’s Board of
                Directors prior to the date of the appointment or election; provided
                that
                for purposes of this paragraph (b) the term Employer shall refer
                to the
                Employer for which no other corporation is a majority shareholder
                for
                purposes of this paragraph.

            


    

    


    
      	 	
              3.

            	
              Change
                in the ownership of a substantial portion of the assets of the
                Employer.
                A
                “change
                in the ownership of a substantial portion of the assets of the
                Employer” occurs
                on the date that any one person, or more than one person acting as
                a
                group, acquires (or has acquired during the 12-month period ending
                on the
                date of the most recent acquisition by such person or persons) assets
                from
                the Employer that have a total gross fair value equal to 40% or more
                of
                the total gross fair market value of all the assets of the Employer
                immediately prior to such acquisition or acquisitions.
                

            


    

    


    (e)    
 Committee
      - The
Compensation
      Committee
      of the
      Board of FNB or any other Committee of the Board that is designated to perform
      the functions of compensation and personnel related matters. 

    


    (f)     
       Common
      Stock
      - The
      common stock of FNB Financial Services Corporation, with no par value per share,
      or as amended. 

    


    (g)     
       Disability
      - For
      purposes of this Plan and in accordance with Code Section 409A, a participant
      shall be considered disabled if the participant either is:

    


    
      	 	
              (i)

            	
              Unable
                to engage in any substantial gainful activity by reason of any medically
                determinable physical or mental impairment which can be expected
                to result
                in death or can be expected to last for a continuous period of not
                less
                than 12 months, or

            


    

    


    
      	 	
              (ii)

            	
              By
                reason of any medically determinable physical or mental impairment
                (which
                can be expected to result in death or can be expected to last for
                a
                continuous period of not less than 12 months) receiving income replacement
                benefits for a period of 3 or more months under an accident and health
                plan covering employees of the
                Employer.

            


    

    


    (h)    
 Employer
      - FNB
      Financial Services Corporation, FNB Southeast and/or any other entity designated
      by the Board whose senior management employees are eligible to participate
      in
      this Plan. 

    


    (i)     
       Executive
      Officer -
      An
      executive officer of the Employer who has been designated by the Committee
      responsible for recommending to the Committee those senior management employees
      of the Employer for participation in this Plan.

    


    (j)     
       Fair
      Market Value
      - The
      Fair Market Value of a share of Common Stock on any particular date shall mean:
      

    


    (i)     
 If
      the
      Common Stock is not then traded on a national stock exchange, the average
      closing price for a share of Common Stock, as quoted by NASDAQ or its market
      makers; or 

    


    (ii)     
       If
      the
      Common Stock is then traded on a national stock exchange, the average closing
      price for a share of the Common Stock as traded on the largest stock exchange
      on
      which it is then traded. 


    
      
         

      

      
        90

        
          

        

      

      
         

      

    


    (k)    
 Good
      Reason -
      A
“voluntary” termination of employment by the Participant because
      of:

    


    
      	 	
              (i)

            	
              The
                assignment to the Participant, without his express consent, of duties
                inconsistent with his executive position with FNB on the effective
                date of
                the Change in Control or, in the event of a Threatened Change in
                Control,
                the first date the threat becomes manifest; or


            


    

    


    
      	 	
              (ii)

            	
              A
                reduction in the Participant’s Base Annual Salary below the annual amount
                in effect as of the first date a Threatened Change in Control becomes
                manifest or as of the effective date of the Change in Control; or
                

            


    

    


    
      	 	
              (iii)

            	
              A
                material reduction in the level, scope or coverage of life insurance,
                medical or hospitalization insurance, disability insurance or of
                similar
                plans or benefits (including FNB’s pension or other retirement plan) below
                that being provided by FNB to the Participant as of the first date
                a
                Threatened Change in Control becomes manifest, or as of the effective
                date
                of the Change in Control, or the elimination of any such insurance,
                plans
                or benefits, unless such reduction or elimination applies proportionately
                to all salaried employees of FNB who participated in such benefits
                prior
                to the Change in Control or Threatened Change in Control; or
                

            


    

    


    
      	 	
              (iv)

            	
              The
                failure by FNB to obtain the express written assumption of the obligations
                under this Plan by any successor as contemplated
                herein.

            


    

    


    (k)   Incentive
      Compensation Award -
      The
      amount which is to be paid to a Participant under this Plan, based upon FNB
      Financial Services Corporation’s achievement of the Performance Objectives
      during the Measurement Period. 

    


    (l)  
       Measurement
      Period -
      A
      multiple Plan Year period with respect to which the Performance Objectives
      and
      Performance Goals are established. The Board shall establish the number of
      calendar years for each Measurement Period, which shall generally be three
      (3)
      to five (5) calendar years. The Measurement Period, once established by the
      Board, shall defined in the Plan
      Rules
      and
      included in the Exhibit
      as
      provided in Section 5(d).

    


    (m)
       Participant
      Award Certificate -
      The
      certificate or letter provided to each Participant under the Plan which sets
      forth for a Measurement Period the length of the Measurement Period, the
      Performance Objectives, the Performance Goals, the Incentive Compensation award
      levels and certain other information. 

    


    (n) 
       Participants -
      The
      senior management employees of the Employer who have significant policy-making
      roles or who have an ability to affect policy and who are recommended to
      participate by the Executive Officer and their participation has been approved
      by the Board. 

    


    (o) 
       Performance
      Objectives
      - The
      basis of measurement established by the Board for a Measurement Period which
      will include for each Measurement Period one or more of the following
      measurement factors:

    


    
      	 	
              (i)

            	
              Total
                shareholder return,

            


      	 	 	 


    

    
      	 	
              (ii)

            	
              Return
                on average assets,

            


      	 	 	 


    

    
      	 	
              (iii)

            	
              Return
                on average equity,

            


      	 	 	 


    

    
      	 	
              (iv)

            	
              Growth
                in average earning assets,

            


      	 	 	 


    

    
      	 	
              (v)

            	
              Increase
                in diluted earnings per share,

            


      	 	 	 


    

    
      	 	
              (vi)

            	
              Increase
                in book value per share,

            


      	 	 	 


    

    
      	 	
              (vii)

            	
              Ratio
                of operating revenue to operating overhead (efficiency)
                or

            


    


    
      
         

      

      
        91

        
          

        

      

      
         

      

    


    
      	 	
              (viii)

            	
              Other
                measurement factors as determined by the Board.


            


    

    


    In
      selecting the Performance Objectives for a Measurement Period, the Board may
      establish different weights to be given to each Performance Objective in
      determining an award of Incentive Compensation.

    


    (p) 
       Performance
      Goals
      - The
      achievement level established by the Board relating to each Performance
      Objective for a Measurement Period and which are used to determine the amount
      of
      Incentive Compensation Award to be awarded to a Participant. 

    


    (q) 
       Plan
      Year
      - A
      calendar year during which this Plan is in effect. 

    


    (r) 
       Retirement
      -
      Shall
      mean the date that a Participant qualifies for Early or Normal Retirement under
      the Employer’s qualified Defined Benefit Plan, known as the FNB Financial
      Services Employee’s Pension Plan.

    


    (s) 
       Section
      409A-
      Shall
      mean Section 409A of the Internal Revenue Code Section 409A, including
      regulations and guidance issued thereunder.

    


    (t) 
       Terminate-
      Shall
      mean, when used in connection with termination of employment, that a Participant
      has incurred a “separation from service” within the meaning of Section
      409A.

    


    (u) 
       Termination
      Date
      -
      December 31, 2015. No Measurement Periods may commence under this Plan after
      the
      Termination Date, but each Measurement Period then in progress shall continue
      until it is completed (unless otherwise terminated earlier in accordance with
      any other provision of the Plan). 

    


    (v)
       Termination
      “For Cause”
-
      Shall
      mean the involuntary termination of employment of an Participant by the Employer
      “For Cause.” For purposes of this Plan, “For Cause” shall mean:

    


    
      	 	
              (i)

            	
              the
                continued failure of a Participant to perform substantially the duties
                of
                his executive position with the Employer (other than because of his/her
                Disability as herein defined) after a written demand for such substantial
                performance is delivered to the Executive by either the Chief Executive
                Officer of the Employer or the Board. Such notice delivered shall
                identify
                the manner and the areas believed to be lacking in the substantial
                performance of the Participant’s
                duties;

            


    

    


    
      	 	
              (ii)

            	
              the
                engaging by the Participant in illegal or gross misconduct which
                is
                materially and demonstrably injurious to
                FNB;

            


    

    


    
      	 	
              (iii)

            	
              an
                act by a Participant which constitutes a material breach of his fiduciary
                duty to FNB which is intended by the Participant to injure the reputation
                or business of FNB.

            


    

    


    (w)
       Termination
      “Without Cause”
-
      Shall
      mean any involuntary termination of employment of a Participant by the Employer
      for any reason other than “For Cause.”

    


    (x)  Threatened
      Change in Control
      - Any
      pending tender offer for FNB Financial Services Corporation’s outstanding shares
      of Common Stock, or any pending bona fide offer to acquire FNB Financial
      Services Corporation by merger or consolidation, or any other pending action
      or
      plan to effect a Change in Control of FNB Financial Services Corporation.


    


    3.    
 Administration
      and Operation of the Plan

    


    The
      Committee, subject to Board approval, shall have the authority to:



    
      
         

      

      
        92

        
          

        

      

      
         

      

    


    


    
      	 	
              (a)

            	
              Approve
                or disapprove the senior management employees recommended by the
                Employer’s Executive Officer to participate in the Plan for each
                Measurement Period; 

            


    

    


    
      	 	
              (b)

            	
              Establish
                Measurement Periods, Performance Objectives and the weight to be
                given to
                each Performance Objective, Performance Goals and Incentive Compensation
                levels; 

            


    

    


    
      	 	
              (c)

            	
              Amend
                and/or terminate the Plan as provided in paragraphs 7(c) and 7(d);
                

            


    

    


    
      	 	
              (d)

            	
              Determine
                rights to payment and methods of payment of Incentive Compensation;
                

            


    

    


    
      	 	
              (e)

            	
              Perform
                all other functions required to administer and to operate the Plan,
                including the adoption of such rules and regulations as may be necessary
                to carry out its functions; 

            


    

    


    
      	 	
              (f)

            	
              Make
                all other determinations necessary or desirable in administering
                the Plan,
                including the discretionary power to interpret the provisions of
                the Plan;
                and 

            


    

    


    
      	 	
              (g)

            	
              Construe
                and interpret the Plan and determine the eligibility for benefits
                and the
                amount of such benefits. 

            


    

    


    
      	 	
              (h)

            	
              Notwithstanding
                anything to the contrary, the Committee will construe and interpret
                the
                Plan in a manner so as to comply with Section 409A.

            


    

    


    4.     
      Participation
      and Plan Entry Date

    


    
      	 	
              (a)

            	
              Participation
                and Plan Entry at beginning of a Measurement
                Period

            


    

    


    At
      the
      beginning of each Measurement Period the Employer’s Executive Officer shall
      recommend to the Board the proposed list of eligible Participants for that
      Measurement Period. The Board shall approve the Participants for participation
      for said Measurement Period, and the approved Participants shall become
      Participants as of the first day of the Measurement Period

    


    
      	 	
              (b)

            	
              Participation
                and Plan Entry after the beginning of a Measurement
                Period

            


    

    


    The
      Employer’s Executive Officer may recommend and the Board may approve an eligible
      Participant for entry into the Plan during the course of a Measurement Period.
      Notwithstanding the preceding sentence, no eligible Participant will be
      permitted to join the Plan during the last 12 months of any Measurement Period
      in progress. The amount of a Participant’s Target Award shall be adjusted pro
      rata to take into account his/her potential participation for less that the
      full
      term of the Measurement Period. 

    


    5.     
       Performance
      Objectives, Performance Goals and Incentive Compensation
      Levels

    


    At
      or
      prior to the beginning of each Plan Year (unless a later date is selected and
      is
      permissible), the Committee (subject to Board approval), may implement a new
      Plan for the Measurement Period beginning with such Plan Year and shall
      designate the following: 

    


    
      	 	
              (a)

            	
              The
                senior management employees who are recommended by the Executive
                Officer
                and eligible to participate in the Plan for the Measurement
                Period.

            


    

    


    
      	 	
              (b)

            	
              The
                Performance Objectives and the weight to be given to each objective,
                the
                Performance Goals and Incentive Compensation award level for the
                Measurement Period. For each Performance Objective and Performance
                Goal,
                the Committee may establish a:

            


    


    
      
         

      

      
        93

        
          

        

      

      
         

      

    


                            
(i)     
 Threshold
      - At
      which
      an Incentive Compensation Award amount would be paid and below which no
      Incentive Compensation Award would be paid,

    


    
      	 	
              (ii)

            	
              Target
                - At
                which the target Incentive Compensation Award would be paid and
                

            


    

    


    
      	 	
              (iii)

            	
              Maximum
                - At
                or above which the maximum Incentive Compensation Award would be
                paid.

            


    

    


    The
      Committee, subject to Board approval, may
      also
      establish the Incentive Compensation Award amount payable for each Participant
      at the threshold,
      target
      and
      maximum
      levels
      of attainment. 

    


    
      	 	
              (c)

            	
              In
                the event during any Measurement Period (where an award is dependent
                upon
                a Performance Objective involving Common Stock) there is (i) any
                dividend
                payable in shares of Common Stock; (ii) any re-capitalization,
                reclassification, split-up or consolidation, or other change in the
                Common
                Stock; or (iii) an exchange of the outstanding shares of Common Stock
                for
                a different number or class of shares of stock or other securities
                of any
                other corporation in connection with a merger, consolidation or other
                reorganization of or involving FNB Financial Services Corporation,
                then
                the Board shall, in such manner as it shall determine in its sole
                discretion, appropriately adjust the Performance Objectives and the
                Performance Goals, and the threshold, target and maximum amounts
                with
                respect thereto, in order to reflect such change. Any such adjustments
                made by the Board shall be final, conclusive and binding upon all
                persons,
                including, without limitation, FNB Financial Services Corporation,
                FNB
                Southeast its corporate successors and any Participants.
                

            


    

    


    
      	 	
              (d)

            	
              An
                Exhibit
                shall be prepared and attached to the Plan reflecting the Committee’s or
                Board’s designation of the items set forth in subparagraphs 5(a), 5(b)
                and
                5(c) above. This Exhibit shall be referred to as the “Plan
                Rules”
                for each Measurement Period. Each Participant approved by the Board
                will
                be provided a Participant Award Certificate indicating his participation
                in the Plan and the Performance Objectives, the Performance Goals
                and the
                Incentive Compensation Award levels applicable to him/her.
                

            


    

    


    6.     Payment
      of Incentive Compensation

    


    
      	 	
              (a)

            	
              In
                General

            


    

    


    1.           
       If
      a
      Participant remains in the continuous employment of the Employer until the
      last
      day of the applicable Measurement Period, such Participant shall be entitled
      to
      receive the Incentive Compensation Award he/she has earned based upon the levels
      of attainment of the Performance Goals for the Measurement Period, subject
      to
      any forfeiture as provided in Section 6(a)(3) below.

    


    2.           
      Payment
      of Awards Earned
      - Unless
      otherwise provided in this Plan, payments of any Incentive Compensation Award
      will be made in three (3) annual installments as follows: 

    


    
      	 	
              (i)

            	
              The
                first annual installment shall be in an amount equal to 50% of the
                Incentive Compensation Award amount, and shall be made on the
                60th
                day after
                the end of the Measurement Period. 

            


    

    


    
      	 	
              (ii)

            	
              The
                second annual installment shall be equal to 30% of the Incentive
                Compensation Award amount and shall be paid 12 months after the payment
                of
                the first annual installment payment. 

            


      	 	 	 


      	 	(iii) 	The
              third and final annual installment shall be equal to 20% of the Incentive
              Compensation Award amount and shall be paid 12 months after the payment
              of
              the second annual installment. 


    


    
      
         

      

      
        94

        
          

        

      

      
         

      

    

     

    


    3.          
       Forfeiture
      of Annual Installment Payments
      -
      Notwithstanding any other provision of this Plan, should a Participant’s
      employment terminate with the Employer for any reason, other than resignation
      of
      employment for “Good Reason,” Termination “Without Cause,” Death, Disability,
      Retirement or a Change in Control in accordance with Sections 6(d), prior to
      payment by the Employer to him of any or all of the three annual installments
      payments due him, such Participant shall forfeit any remaining unpaid annual
      installment payment(s).

    


    4.           
       Payment
      of Awards earned in the form of Cash or Employer Common Stock
      - If
      payment of an Incentive Compensation Award in the form of Common Stock has
      not
      been approved by FNB Financial Services Corporation’s shareholders, or, if
      approved, payment of Incentive Compensation Award in the form of Common Stock
      is
      not designated by the Committee or is not permitted by applicable law, all
      Incentive Compensation Awards shall be paid in cash. If at any time the Board
      of
      FNB Financial Services Corporation (at its discretion) seeks to have this Plan
      approved by FNB Financial Services Corporation’s shareholders and such approval
      is obtained, the Incentive Compensation Award may, at the option of the Board,
      be paid in the form of Common Stock if such payment is permitted by applicable
      law, unless the Participant requests to receive a portion of his distribution
      in
      cash (not to exceed 40% of the Incentive Compensation Award) for purposes of
      paying his tax obligations and such request is approved by the Committee. For
      purposes of determining the number of shares of Common Stock to be paid to
      a
      Participant, the Fair Market Value of Common Stock shall be determined as of
      the
      last trading day of the applicable Measurement Period.

    


    5.          
       Income
      Taxes Withheld
      - The
      Committee shall also have the authority to withhold from the number of shares
      of
      Common Stock (or cash if payable in cash) it distributes to a Participant an
      amount sufficient to pay any outstanding withholding tax obligations with
      respect to the Participant’s distribution. 

    


    
      	 	
              (b)

            	
              Termination
                of Employment Prior to End of a Measurement
                Period

            


    

    


    1.       
       Voluntary
      Termination or Termination “For Cause”
      - Except
      as provided in Sections 6(b)(2), 6(d) and 6(e) below, if a Participant
      voluntarily terminates employment with the Employer or is terminated by the
      Employer “For Cause” prior to the last day of the Measurement Period, his
      participation in the Plan shall cease immediately and he shall not be entitled
      to payment (forfeit rights to any payment) for any Incentive Compensation Award
      for such Measurement Period.

    


    2.       
       Death,
      Disability, Retirement or Termination “Without Cause”
      -
      Notwithstanding the above paragraph, if a Participant’s employment is terminated
      because of his death, Disability, or normal or early Retirement (as defined
      in
      FNB’s Pension Plan), or terminated “Without Cause,” prior to the last day of the
      Measurement Period, the Participant (or his Beneficiary) shall be eligible
      to
      receive a prorata payment of his Incentive Compensation Award at the end of
      the
      Measurement Period for any Measurement Period then in progress. The prorata
      amount shall be determined based upon the number of whole months during the
      Measurement Period that he/she was employed compared to the total number of
      whole months in such Measurement Period. Amounts payable in accordance with
      this
      subparagraph 6(b) shall be paid at the end of the Measurement Period after
      the
      Performance Objectives have been measured and the Incentive Compensation Award
      amounts (if any) have been determined, and shall be paid in installments in
      the
      same manner as provided in Section 6(a)(2) above.
      Notwithstanding the above, no payment shall be made until after 6 months has
      elapsed since the Employee’s employment ended. 

    


    
      	 	
              (c)

            	
              Failure
                to Obtain a Satisfactory Performance Evaluation
                -
                If a Participant fails to receive a “satisfactory” performance evaluation,
                he shall automatically be removed from the Plan. The Executive Officer
                of
                the Employer may, at his discretion, recommend the Participant
                for

            



      
        
           

        

        
          95

          
            

          

        

        
           

        

      



    


    
      	 	
               

            	
              reinstatement
                in the Plan following a subsequent “satisfactory” performance evaluation.
                Upon approval of the recommended reinstatement by the Committee,
                the
                Participant will be entitled to a pro-rata payment (based on the
                period of
                time the Participant was active in the Plan) of his Incentive Compensation
                Award which amount shall be paid in accordance with Section 6(a)(2)
                above.

            


    

    


    
      	 	
              (d)

            	
              Change
                in Control -
                Notwithstanding anything in Sections 6(a) or 6(b) above to the contrary,
                if (i) a Change in Control occurs during a Measurement Period, then,
                in
                such event, the Participant’s Incentive Compensation Award shall be
                determined for each such Measurement Period as though each such
                Measurement Period had ended as of the end of the calendar quarter
                prior
                to any public announcement of such Change in Control, and any outstanding
                Awards will be paid pro rata based on actual performance to such
                date. The
                Incentive Compensation Award determined in accordance with the preceding
                sentence shall be fully vested (subject to the employment requirements
                in
                the next sentence) and payable in accordance with the next paragraph.
                The
                Participant will be entitled to payment of the Incentive Compensation
                Award earned for each such Measurement Period only
                if:

            


    

    


    
      	 	
              (i)

            	
              He/she
                remains employed by FNB (or its successor) until the date that would
                have
                been the last day of the applicable Measurement Period, or
                if

            


    

    


    
      	 	
              (ii)

            	
              Prior
                to the end of the applicable Measurement Period, his employment is
                terminated by FNB (or its successor) “without cause,” or he/she retires
                (whether early, normal or late) under FNB’s qualified Pension Plan, or
                dies or incurs a Disability, or 

            


    

    


    
      	 	
              (iii)

            	
              He/she
                resigns from employment with FNB (or its successor) for “Good Reason” as
                defined, prior to the end of the applicable Measurement
                Period.

            


    

    


    Any
      amount payable under Section 6(d)(i) above shall be paid in three annual
      installments in accordance with Section 6(a)(2) after the last day of the
      applicable Measurement Period. Any amount payable under Sections 6(d)(ii) and
      6(d)(iii) above shall be paid in a single lump sum payment six (6) months after
      the date of the Participant’s termination of employment “Without Cause,”
Retirement, death, Disability, or resignation for “Good Reason.” 

    


    Upon
      a
      Change in Control, the dollar amount of the Incentive Compensation Award or
      the
      number of shares of Common Stock (or stock or other securities into which the
      Common Stock has been converted and all dividends thereafter paid thereon)
      to be
      paid to a Participant shall be credited to the Participant and held by the
      Employer (or its successor) for the benefit of the Participant until the payment
      date specified in the preceding paragraph.

    


    
      	 	
              (e)

            	
              Threatened
                Change in Control
                -
                Notwithstanding anything in Sections 6(a) or 6(b) above to the contrary,
                if a Threatened Change in Control take place during any Measurement
                Period, then, in such event, the Participant’s Incentive Compensation
                Award shall be determined for each such Measurement Period as though
                each
                such Measurement Period had ended as of the end of the calendar quarter
                prior to any public announcement of the Threatened Change in Control,
                and
                any outstanding Awards will be paid pro rata based on actual performance
                to such date. The Incentive Compensation Award determined in accordance
                with the preceding sentence shall be fully vested (subject to the
                employment requirements in the next sentence) and payable in accordance
                with the next paragraph. The Participant will be entitled to payment
                of
                the Incentive Compensation Award earned for each such Measurement
                Period
                only
                if:

            


    

     

                        
      (i)  
 He/she
      remains employed by FNB (or its successor) until the date that would have been
      the last day of the applicable Measurement Period, or


    
      
         

      

      
        96

        
          

        

      

      
         

      

    

     

    


    
      	 	
              (ii)

            	
              Prior
                to the end of the applicable Measurement Period, his employment is
                terminated by FNB (or its successor) “Without Cause,” or he/she retires
                (whether early, normal or late) under FNB’s qualified Pension Plan, or
                dies or incurs a Disability, or

            


    

    


    
      	 	
              (iii)

            	
              He/she
                resigns from employment with FNB (or its successor) for “Good Reason” as
                defined, prior to the end of the applicable Measurement
                Period.

            


    

    


    Any
      amount payable under Section 6(e)(i) above shall be paid in three annual
      installments in accordance with Section 6(a)(2) after the last day of the
      applicable Measurement Period. Any amount payable under Sections 6(e)(ii) and
      6(e)(iii) above shall be paid in a single lump sum payment six (6) months after
      the date of a Participant’s termination of employment “Without Cause,”
Retirement, death, Disability or resignation of employment for “Good
      Reason.”

    


    
      	 	
              (f)

            	
              Exceptional
                Event
                -
                In the event of an “exceptional event,” the Board reserves the right at
                its sole discretion to terminate the Plan in effect and pay pro rata
                all
                participant based on the attainment of the Plan’s Performance Objectives
                as of the end calendar quarter immediately preceding the “exceptional
                event.” An “Exceptional Event” would be any event that the Board
                determines in its sole discretion, has had or will have both a
                “substantial” and“material”
effect
                on one or more of the Plan’s Performance Objectives. Any
                such decision made by the Board shall be final, conclusive and binding
                upon all persons, including, without limitation, FNB Financial Services
                Corporation, FNB Southeast, its corporate successors and any Participants.
                

            


    

    


    
      	 	
              (g)

            	
              Profit
                Center and Business Unit “Minimum” Performance Goal Requirements under
                Part B (Internal Factors) of the Plan -
                Each individual Profit Center and/or Business Unit must achieve certain
                minimum Performance Goals under Part
                B
                of
                the Plan, otherwise the amount of Incentive Compensation Award that
                would
                be payable under any measured Performance Goal under Part
                B
                will be forfeited as follows: 

            


    

    


    (i)       
       If the Employer achieves at least the Threshold
      level of
      performance of any measured
      Performance Goal under Part
      B
      (Internal
      Factors)
      of the
      Plan but less than the Target
      level
      of
      such measured Performance Goal,
      then each Profit Center and/or Business Unit must achieve at least 85% of such
      Threshold
      measured
      Performance Goal otherwise any Participant who is designated as a member of
      such
      Profit Center and/or Business Unit will forfeit any Incentive Compensation
      Award
      payable for that measured Performance Goal under Part
      B
      (Internal
      Factors)
      of the
      Plan. 

    


    (i)       
       If
      the
      Employer achieves the Target
      level,
      or
      any
      higher level (such as Maximum)
      of
      performance of
      any measured
      Performance Goal under Part
      B
      (Internal
      Factors)
      of the
      Plan, then each Profit Center and/or Business Unit must achieve at least the
      Threshold
      level
      of
      such measured
      Performance Goal otherwise any Participant who is designated as a member of
      such
      Profit Center and/or Business Unit will forfeit any Incentive Compensation
      Award
      payable for that measured Performance Goal under Part
      B
      (Internal
      Factors)
      of the
      Plan. 

    


    Regardless
      of the level of individual performance by any Profit Center and/or Business
      Unit
      under Part
      B (Internal Factors),
      the
      amount of Incentive Compensation Award earned and payable under Part
      A (External Factors)
      by any
      Participant who is designated as a member of such Profit Center and/or Business
      Unit shall not be affected by this Section 6(g). 

    


    
      	 	
              (h)

            	
              Regulatory
                Issues and/or Events -
                In
                the event that the Employer is under
                any IRS, SEC or other Regulatory Authority enforcement action, such
                as a
                Memorandum of Understanding (MOU), or other similar event, the Board
                reserves the right, at its sole discretion, to terminate or amend
                this
                Plan and to either delay or declare “null and void” the payment of any
                bonuses earned under this Plan. Any such decision made by the Board
                shall
                be final, conclusive and binding upon


            


    


    
      
         

      

      
        97

        
          

        

      

      
         

      

    


              
all
      persons, including, without limitation, FNB Financial Services Corporation,
      FNB
      Southeast, its corporate successors and any Participants. 

    


    7.       
       Miscellaneous

    


    
      	 	
              (a)

            	
              No
                Assignment
                -
                No right or benefit under this Plan or under any Participant’s Award
                Certificate issued hereunder, may be sold, assigned, transferred,
                pledged,
                hypothecated or otherwise disposed of in any way by a Participant
                (except,
                upon death, to a Beneficiary) and any attempt by a Participant to
                sell,
                assign, transfer, pledge, hypothecate or dispose of his interest
                shall be
                null and void and shall not be recognized by the Plan. Notwithstanding
                the
                foregoing, any business entity succeeding to substantially all of
                the
                business of FNB by purchase, merger, consolidation, sale of assets
                or
                otherwise, shall be bound by and shall adopt and assume FNB’s obligations
                under this Plan. 

            


    

    


    
      	 	
              (b)

            	
              Employment
                -
                Except for the benefits provided by this Plan, nothing in this Plan
                or in
                any grant of Incentive Compensation Award hereunder is intended or
                should
                be interpreted to confer upon any Participant the right to continue
                in the
                employ of the Employer, or to interfere with or restrict in any way
                the
                right of the Employer to discharge or terminate the employment of
                any
                Participant at any time for any reason whatsoever, with or without
                cause.
                

            


    

    


    
      	 	
              (c)

            	
              Amendments
                -
                The Board shall have the right to amend the Plan at any time; provided,
                however, that no such amendment shall reduce or cancel an outstanding
                Participant Award Certificate or any Incentive Compensation already
                earned
                by a Participant under the Plan. 

            


    

    


    
      	 	
              (d)

            	
              Termination
                -
                The Employer expects to continue this Plan until the Termination
                Date, but
                does not obligate itself to do so. The Board reserves the right to
                discontinue and terminate this Plan at any time and for any reason
                (including a change, or an impending change, in the tax laws of the
                United
                States or any State). Termination of the Plan shall be binding on
                all
                Participants, but in no event may such termination reduce or cancel
                an
                outstanding Participant Award Certificate or any Incentive Compensation
                already earned by a Participant under the
                Plan.

            


    

    


    If
      the
      Plan is terminated, the Board may, at its option, determine each Participant’s
      Incentive Compensation for each Measurement Period then in progress as though
      each such Measurement Period had ended as of the end of the Plan Year in which
      termination occurs. In such event, any outstanding awards will be paid pro
      rated
      based on actual performance to such date and shall be paid in the same manner,
      and be subject to the same limitations, as set forth in Section 6(b)(2).


    


    
      	 	
              (e)

            	
              Taxes
                -
                If the whole or any part of any Participant’s Incentive Compensation Award
                is subject to the payment of any estate, inheritance, income or other
                tax
                which FNB shall be required to pay or withhold, FNB shall have the
                full
                power and authority to withhold and pay such tax out of any monies
                or
                other property in its hand for the account of such Participant. Prior
                to
                making any payment of Incentive Compensation Award, FNB may require
                such
                releases or other documents from any lawful taxing authority as it
                shall
                deem necessary. 

            


    

    


    
      	 	
              (f)

            	
              Benefits
                Unfunded
                -
                The benefits provided by this Plan shall be unfunded. All amounts
                payable
                under this Plan to Participants shall be paid from the general assets
                of
                FNB, and nothing contained in this Plan shall require FNB to set
                aside or
                hold in trust any amounts or assets for the purpose of paying benefits
                to
                Participants. This Plan shall create only a contractual obligation
                on the
                part of FNB and Participants shall have the status of general unsecured
                creditors of FNB under the Plan with respect to amounts payable to
                them
                hereunder. 

            


    

    


    
      	 	
              (g)

            	
              Receipt
                or Release
                -
                Any payment to a Participant in accordance with the provisions of
                this
                Plan shall, to the extent thereof, be in full satisfaction of all
                claims
                against FNB and its directors, officers, agents and employees, and
                the
                Board may require such Participant, as a condition precedent to such
                payment, to execute a receipt and release to such effect.
                

            


    


    
      
         

      

      
        98

        
          

        

      

      
         

      

    

     

    


    
      	 	
              (h)

            	
              Controlling
                Law
                -
                The Plan shall be construed and enforced in accordance with the laws
                of
                the State of North Carolina.

            


    

    


    
      	 	
              (i)

            	
              Amendment
                or Termination to Comply with Section 409A.
                Notwithstanding anything to the contrary, this Plan shall not be
                amended
                or terminated unless the amendment or termination is in compliance
                with
                Section 409A. 

            


    

    


    
      	 	
              (j)

            	
              Compliance
                with Section 409A.
                It is intended that this Plan shall comply with Section 409A. Accordingly,
                in interpreting, construing or applying any provisions of this Plan,
                the
                same shall be construed in such a manner as shall meet and comply
                with
                Section 409A, and in the event of any inconsistency with Section
                409A, the
                same shall be reformed so as to comply with Section
                409A.

            


    

    


    


    


    IN
      WITNESS WHEREOF, the undersigned have executed this Plan this ____ day of
      ___________________________, 2005.

    


    


    FNB
      FINANCIAL SERVICES CORPORATION

    


    


    By:
      ________________________________

    Chairman
      of the Board

    


    COMPENSATION
      COMMITTEE

    


    


    By:
      ________________________________

    Chairman
      of Compensation Committee


    
      
         

      

      
        99

        
          

        

      

      
         

      

    


    


    EXHIBIT
      #1

    


    FNB
      Financial Services Corporation

    Long
      Term Incentive Plan

    


    Plan
      Rules for Awards - Effective January 1, 2006

    


    Measurement
      Period

    


    January
      1, 2006 through December 31, 2009 (4 years)

    


    Relative
      Weights of Factors

    


    
      	 	
              Weight

            	
              Factors

            
	
              Part
                A

            	
              40%

            	
              External
                Factors

            
	
              Part
                B

            	
              60%

            	
              Internal
                Factors

            


    

    


    Performance
      Objectives

    


    
      	
              Part
                A - External Factors - Shareholder
                Return

            


    

    


    Average
      Annual Shareholder Return

    


    Measures
      the average
      percentage increase in total shareholder return for each of the calendar years
      during the Measurement Period. This is determined by adding the percentage
      increase in shareholder return for each
      calendar
      year during the Measurement Period and then dividing the total sum by the number
      of years in the Measurement Period. Total shareholder return for a calendar
      year
      is determined by taking the difference in the Beginning Price and Ending Price
      for each calendar year plus the total cash dividends for such year and then
      dividing this total return (or loss) by the Beginning Price for such year.
      Figures will be adjusted for any stock splits or dividends. The Ending Price
      is
      the average closing price of FNB stock over the last 15 business days in each
      December. The “Beginning Price” is the Ending Price for the prior calendar
      year.

    


    


    Example:
      (The
      table below is based on the attainment of the target
      goal.)

    


    


    
      	
              Year

            	
              Beginning
                Price

            	
              Ending
                Price

            	
              $Price
                Increase

            	
              Cash
                Dividend

            	
              Total
                $return

            	
              Total%
                Return

            
	
              2006

              2007

              2008

              2009

            	
              $18.00

              $19.30

              $20.73

              $22.30

            	
              $19.30

              $20.73

              $22.30

              $24.03

            	
              $1.30

              $1.43

              $1.57

              $1.73

            	
              $.50

              $.50

              $.50

              $.50

            	
              $1.80

              $1.93

              $2.07

              $2.23

            	
              10%

              10%

              10%

              10%

            
	
              Average
                Annual Shareholder Return  

            	
              10%

            


    

     


    
      
         

      

      
        100

        
          

        

      

      
         

      

    


    


    


    
      	
              Part
                B - Internal Factors

            


    

     

    
      
        	
                Internal
                  Measurements

              	
                Relative
                  Weights

              
	 	 
	
                1.     Average
                  Annual Return on Average Assets (ROAA)

                2.     Growth
                  in Average Earning Assets

              	
                40%

                20%

              
	
                Total            

              	
                60%

              


      



    


    Average
      Annual Return on Average Assets
      (ROAA) -
      Shall mean the average of the Average Annual Return on Average Assets for each
      of the Plan Years in the Measurement Period.

    


    Growth
      in Average Earning Assets
      - Shall
      mean the compounded annual growth in the Average Earning Assets of FNB Financial
      Services Corporation from the last day of the month prior to the beginning
      of
      the Measurement Period to the last day of the month of the Measurement
      Period.

    


    Performance
      Goals

    


    
      	
              Part
                A

            	
              Average
                Annual 

              Shareholder
                Return

            
	
              Threshold

            	
              7.5%

            
	
              Target

            	
              10.0%

            
	
              Maximum

            	
              15.0%

            


    

    


    


    
      	
              Part
                B

            	
              Performance
                Objectives

            
	
              Average
                ROAA

            	
              Growth
                in Average 

              Earning
                Assets

            
	
              Threshold

            	
              1.0%

            	
              8.5%

            
	
              Target

            	
              1.1%

            	
              11.0%

            
	
              Maximum

            	
              1.25%

            	
              16.0%

            


    

    


    Incentives
      to be Paid

    


    
      	
              At
                Threshold

            	
              50%
                of Target Award

            
	
              At
                Target Levels

            	
              100%
                of Target Award

            
	
              At
                Maximum Levels (or above)

            	
              150%
                of Target Award

            


    

    



    
      
         

      

      
        101

        
          

        

      

      
         

      

    


    


    


    Schedule
      of Incentive Compensation Target Awards

    


    


    


    
      	
              Participant

            	
              Title

            	
              Average
                Base 

              Annual
                

              Salary*

              (Estimated)

            	
              Target

              %

            	
              Target
                A

              ward

              (Estimated)

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              Total            

            	 	 	 	
              $1,605,661

            


    

    


    *Note:
       Takes
      2005 Base salary and assume 5% annual increase. However, at the end of the
      measurement period the amounts will be adjusted based on the actual average
      Base
      annual salaries.

    


    **
      Those
      Participants who are marked by ** are Participants who are assigned to a Profit
      Center and/or Business Unit of the Employer.

    


    


    Average
      base salary and target percentage information will remain confidential. Each
      participant in the Long Term Incentive Plan will receive a Participant
      Certificate that will provide the estimated average annual base salary, target
      percentage and estimated target award. A sample bonus calculation will also
      be
      included in this Certificate.


    
      
         

      

      
        102

        
          

        

      

      
         

      

    


    


    


    Incentive
      Compensation Determination Table

    


    


    
      	
              Part
                A

            	
              Part
                B

            
	
              Average
                Annual Shareholder Return

            	
              Average
                Annual ROAA

            	
              Compounded
                Growth in Average Earning Assets

            	
              %
                of Target Award Payable

            
	
              Threshold

            	
              7.5%

            	
              1.00%

            	
              8.5%

            	
              50%

            
	 	
              8.0%

            	
              1.02%

            	
              9.0%

            	
              60%

            
	 	
              8.5%

            	
              1.04%

            	
              9.5%

            	
              70%

            
	 	
              9.0%

            	
              1.06%

            	
              10.0%

            	
              80%

            
	 	
              9.5%

            	
              1.08%

            	
              10.5%

            	
              90%

            
	
              Target

            	
              10.0%

            	
              1.10%

            	
              11.0%

            	
              100%

            
	 	
              11.0%

            	
              1.13%

            	
              12.0%

            	
              110%

            
	 	
              12.0%

            	
              1.16%

            	
              13.0%

            	
              120%

            
	 	
              13.0%

            	
              1.19%

            	
              14.0%

            	
              130%

            
	 	
              14.0%

            	
              1.22%

            	
              15.0%

            	
              140%

            
	
              Maximum

            	
              15.0%

            	
              1.25%

            	
              16.0%

            	
              150%

            


    

    


    


    


    Summary
      of Corporate Goals

    


    


    
      	 	
              Threshold

            	
              Target

            	
              Maximum

            
	
              1. Average
                Annual Shareholder Return

               

              2. Average
                Annual ROAA

               

              3. Compounded
                Annual Growth in Average Earning Assets

            	
              7.5%

               

              1.0%

               

              8.5%

            	
              10%

               

              1.1%

               

              11%

            	
              15%

               

              1.25%

               

              16%

            


    

    


    



    
      
         

      

      
        103

        
          

        

      

      
         

      

    


    


    


    Sample
      Calculation

    


    Incentive
      Compensation Bonus Calculation

    for

    


    (Plan
      Participant)

    


    End
      of 4
      year Measurement Period, December 31, 2009, the following goals were
      obtained:

    


    
      	 	
              a.

            	
              Average
                Annual Shareholder Return = 9.0% 

            


    

    


    
      	 	
              b.

            	
              Average
                Annual ROAA = 1.08% 

            


    

    


    
      	 	
              c.

            	
              Compounded
                Annual Growth in Average Earning Assets = 12%


            


    

    


    
      	 	
              d.

            	
              Average
                annual Base Salary $
                130,112

            


    

    


    
      	 	
              %
                Goal

            	
              Weight

            	
              Target
                Award

            	
              Incentive
                Compensation

            
	
              Shareholder
                Return

            	
              80%

            	
              40%

            	
              $
                52,045

            	
              41,636

            
	
              ROAA

            	
              90%

            	
              40%

            	
              52,045

            	
              46,840

            
	
              Asset
                Growth

            	
              110%

            	
              20%

            	
              26,022

            	
              28,624

            
	 	
              Total
                Award        

            	
              117,100

            


    

    


    


    


    


    104