EXHIBIT 10.16

                         FOUR OAKS BANK & TRUST COMPANY

                        SEVERANCE COMPENSATION AGREEMENT


         THIS AGREEMENT is entered into as of this 23 day of October, 1995, by
and between FOUR OAKS BANK & TRUST COMPANY, a North Carolina banking corporation
(the "Bank"), and JEFF D. POPE ("Employee").

                                   WITNESSETH

         WHEREAS, the Bank considers the maintenance of a vital management group
to be essential to protecting and enhancing the best interests of the Bank and
its shareholders;

         WHEREAS, the Bank recognizes that, as is the case with many publicly
held corporations, there is a possibility of a change in control of the Bank,
and that the uncertainty and questions which such a possibility raise may result
in the departure or distraction of management personnel to the detriment of the
Bank and its shareholders;

         WHEREAS, the Bank's Board of Directors has determined that appropriate
steps should be taken (1) to reinforce and encourage the continued attention and
dedication of members of the Bank's management to their assigned duties without
distraction arising from the possibility of a change in control of the Bank and
(2) to dispel any concerns that Employee may have about taking an active part in
the defense against an inappropriate attempt to bring about a change in control
of the Bank; and

         WHEREAS, the purpose of this Agreement is to assure Employee that, in
the event of termination of employment after a change of control (to the extent
set forth this Agreement), Employee will continue to receive compensation for a
period which should be sufficient for Employee to find other employment.

         NOW THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the legal sufficiency and adequacy of which are hereby
acknowledged, the parties agree as follows:

         1. Employment. Employee agrees that so long as he is employed by the
Bank, Employee shall devote his full-time efforts during normal business hours
to the business and affairs of the Bank and shall support decisions and
determinations of the Board of Directors and Bank policy including, but not
limited to, any decision or determination with respect to responding to an
approach or attempt to effect a Change in Control (as later defined).

         2. Term.

         (a) The term of this Agreement shall be for two (2) years from the date
on which it is executed ("the Effective Date") unless sooner terminated upon:

                  (i) Employee's written notice to the Bank that he is
         terminating this Agreement effective upon a specified date not less
         than one month after his notice is given;

                  (ii) Employee's death;

                  (iii) Employee's illness or other disability incapacitating
         Employee from performing his duties for six (6) consecutive months as
         determined in good faith by the Chief Executive Officer, the Board of
         Directors of the Bank or a committee of the Board;

                  (iv) A determination by the Chief Executive Officer or the
         Board of Directors of the Bank that Employee is no longer a key
         executive employee and the delivery of notice to Employee of such
         determination and the termination of this Agreement. Such termination
         shall be effective upon the delivery of the notice or at a later date
         specified in the notice; provided, however, such determination shall
         not be made, and if made, shall have no effect, after a Change in
         Control;

         (b) Unless this Agreement is terminated in accordance with subparagraph
2(a), on each anniversary of the Effective Date of this Agreement, the term of
this Agreement automatically shall be extended for an additional successive
period of one year, unless either the Employee or the Bank shall give written
notice to the other at least three (3) months before such anniversary date that
the term of this Agreement shall not be extended.


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         (c) In the event of a Change in Control of the Bank at any time before
the termination of this Agreement, the term of this Agreement shall be
automatically extended to the earlier of (i) a date two (2) years after the date
such Change in Control occurred and (ii) the occurrence of an event of
termination described in clause 2(a)(ii) or (iii).

         (d) In the event of a Termination (as later defined) of Employee's
employment during the term of this Agreement, the term of this Agreement shall
be automatically extended until all obligations under the Agreement are fully
performed.

         3. Change in Control. For purposes of this Agreement, a "Change in
Control" means one or more of the following occurrences:

         (a) A corporation, person or group acting in concert as described in
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), holds or acquires beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act of a number of shares of voting capital stock
of the Bank which constitutes either (i) more than fifty percent (50%) of the
shares which voted in the election of directors of the Bank at the Shareholders'
meeting immediately preceding such determination, or (ii) more than thirty-three
(33%) of the Bank's then outstanding shares entitled to vote.

         (b) A merger or consolidation to which the Bank is a party (other than
a pro forma transaction for a purpose such as changing the state of
incorporation or name of the Bank), if either (i) the Bank is not the surviving
corporation, or (ii) the directors of the Bank immediately before the merger or
consolidation constitute less than a majority of the Board of Directors of the
surviving corporation; provided, however, the occurrence described in clause (i)
shall not constitute a Change in Control if the holders of the Bank's voting
capital stock immediately before the merger or consolidation have the same
proportional ownership of voting capital stock of the surviving corporation
immediately after the merger or consolidation.

         (c) All or substantially all of the assets of the Bank are sold,
leased, or disposed of in one transaction or a series of related transactions.

         (d) An agreement, plan, contract, or other arrangement is entered into
providing for any occurrence which, as defined in this Agreement, would
constitute a Change in Control.

         4. Termination Following Change in Control.

         (a) Termination of Employee's employment after the occurrence of a
Change in Control ("Termination") entitles Employee to the benefits described in
Paragraphs 5 and 6, unless such Termination is (i) by the Bank for cause or
because of disability or (ii) because of Employee's death.

         (b) "Cause" means: (i) the willful and continued failure by Employee
for a significant period of time to substantially perform his duties with the
Bank (other than any such failure resulting from his disability) after a demand
for substantial performance is delivered to Employee by the Bank's Chief
Executive Officer, Board of Directors, or a committee of the Board which
specifically identifies the manner in which the Chief Executive Officer or Board
of Directors believes that Employee has not substantially performed his duties;
(ii) the willful engaging by Employee in gross misconduct materially and
demonstrably injurious to the Bank or (iii) the conviction of Employee of any
crime involving fraud or dishonesty. No act, or failure to act, on Employee's
part shall be considered "willful" unless done, or omitted to be done, by
Employee, not in good faith and without reasonable belief that his action or
omission was in the best interests of the Bank. The burden of establishing the
validity of any Termination for cause shall rest upon the Bank.

         5. Benefits. In the event of Employee's Termination for any reason
except those set forth in clauses 4(a)(i) or (ii), the Bank shall pay Employee
as severance pay an amount equal to two (2) times Employee's most recent annual
compensation, including the amount of his most recent annual bonus at the time
of termination ("Severance Pay"). The Severance Pay shall be paid in twenty four
(24) equal monthly installments without interest, commencing one month after
termination, unless and until the Employee obtains other full-time employment,
at which time the balance of the Severance Pay shall be paid within thirty (30)
days in a lump sum amount.

         6. Other Benefits. In addition, in the event of Employee's Termination,
the Bank shall:



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         (a) Maintain in full force and effect, for twenty-four (24) months
after the date of Termination, or unless and until Employee obtains other
full-time employment, all life insurance, health (medical and dental),
accidental death and dismemberment and disability plans or programs in which
Employee is entitled to participate immediately prior to the date of Termination
and include Employee as a participant in such plans on the same terms as he
participated before Termination; provided that Employee's continued
participation is possible under the federal terms and provisions of such plans
and programs. In the event that Employee's participation in any such plan or
program is barred, the Bank shall arrange upon comparable terms to provide
Employee with benefits substantially similar to those which he would be entitled
to receive under such plans and programs. At the end of the period of coverage,
Employee shall have the option to have assigned to him, at no cost and with no
apportionment of prepaid premiums, any assignable insurance policy owned by the
Bank and relating specifically to Employee.

         (b) To the extent permitted by the applicable plan, pay Employee in
alump sum (or otherwise as specified by Employee to the extent permitted by the
applicable plan) any and all amounts contributed to a Bank pension or retirement
plan (other than any nonqualified deferred compensation plan) to which Employee
is entitled under the terms of any such plan.

         7. No Duty to Mitigate. Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment or benefit as provided for be
reduced by any compensation earned by Employee as the result of employment by
another employer or by retirement benefits after the date of Termination, or
otherwise except as specifically provided in this Agreement.

         8. Miscellaneous.

         (a) Limit on Effect. This Agreement shall have no effect on any
termination of Employee's employment before a Change in Control or after the
termination of this Agreement, or upon any termination of employment at any time
as a result of disability, retirement, or death, or as a result of Employee's
voluntary termination of this Agreement and, in such event, Employee shall
receive only those benefits to which Employee would have become entitled before
a Change in Control. After a Change in Control and during its term, this
Agreement is in lieu of any other Bank severance policy involving cash payments,
but not in lieu of other Bank severance policies including, but not limited to,
those items provided in Paragraph 6. This Agreement does not entitle Employee to
employment for any term whatsoever.

         (b) Successors.

                  (i) The Bank will require any successor (whether direct or
         indirect, by purchase, merger, consolidation or otherwise) to all or
         substantially all of the business or assets of the Bank to assume and
         agree to perform this Agreement in the same manner and to the same
         extent that the Bank would be required to perform if no such succession
         had taken place. Failure of the Bank to obtain such agreement before
         the effectiveness of any such succession shall entitle the Employee
         immediately to the benefits provided in Paragraphs 5 and 6 hereof.

                  (ii) Employee may not assign this Agreement, but this
         Agreement shall inure to the benefit of and be enforceable by
         Employee's personal or legal representatives, executors,
         administrators, heirs, distributees, devisee and legatees. If Employee
         should die while any amounts would still be payable to Employee under
         this Agreement if Employee had continued to live, all such amounts,
         unless otherwise provided in this Agreement, shall be paid in
         accordance with the terms of this Agreement to Employee's devisee,
         legatee or other designee or, if there be no such designee, to his
         estate.

         (c) Expenses. The Bank agrees that if Employee is entitled to Severance
Pay or other benefits under this Agreement and the Bank or its survivor disputes
the obligation to pay Severance Pay or other benefits and Employee prevails, in
whole or in part, the Bank or its survivor shall then promptly pay or reimburse
Employee for all expenses incurred by Employee in such dispute, including, but
not limited to, attorneys' fees and associated costs.

         (d) Notice. All necessary notices, demands, or requests required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person or mailed by United States certified
mail, postage prepaid, to the parties at the addresses set forth below or to
such other address as either party may have furnished to the other.

              If to Bank:                      Four Oaks Bank & Trust Company
                                               6144 U.S. 301 South
                                               Four Oaks, North Carolina 27524


              If to Employee:                  Jeff  D. Pope
                                               101 Stevens Street
                                               Smithfield, North Carolina 27577


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         (e) Modifications. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by the Employee and the Bank. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

         (f) Counterparts; Interpretation. This Agreement may be executed in
several identical counterparts, each of which when so executed shall be deemed
an original, but all such counterparts shall constitute one and the same
instrument. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of North Carolina. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

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

                                     FOUR OAKS BANK & TRUST COMPANY


                                      By:  /s/ Ayden R. Lee, President & CEO
                                      --------------------------------------
                                           Authorized Officer


         ATTEST:

         /s/ Wanda C. Jones
         ------------------
                 Secretary

         [SEAL]

                                                 /s/ Jeff D. Pope
                                                 ----------------
                                                     JEFF D. POPE
                                                     Employee





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