Exhibit 10.12


                       AMENDMENT TO EMPLOYEMENT AGREEMENT
                              TO STATE END OF TERM


     THIS  AMENDMENT  TO  EMPLOYMENT  AGREEMENT  (the  "Amendment")  is made and
entered  into as of the  16th  day of May  2002  by and  between  FNB  FINANCIAL
SERVICES  CORPORATION,  a  North  Carolina  corporation,  and  its  wholly-owned
subsidiary FNB SOUTHEAST,  a North Carolina commercial bank, (which are referred
to herein jointly as the "Company"); and ERNEST J. SEWELL (the "Employee").


                                   WITNESSETH:

     WHEREAS,  the parties  entered into an Employment  Agreement  dated May 18,
1995 (the  "Agreement")  which  provides  for the Company to employ  Employee as
President and Chief Executive Officer; and

     WHEREAS, the Agreement provides in Article 2 that the term of the Agreement
shall be three years and shall be renewed on the first day of each month  unless
a party gives notice of nonrenewal; and

     WHEREAS,  the parties wish to amend the  Agreement to provide that the term
of the  agreement  shall  continue  from the date  hereof  until the 31st day of
January,  2006 and that there shall be no renewals after that date except as may
be agreed in writing between the parties.

     NOW, THEREFORE,  for consideration  hereby deemed to be just and sufficient
by the parties, it is hereby agreed as follows:

     1.   Article 2 of the  Agreement is deleted and replaced in its entirety by
          the following:


     2.   Term.  The term of this Agreement  shall continue until  terminated by
          either  party as  provided  herein.  If not  sooner  terminated,  this
          Agreement  shall  terminate  on the 31st day of  January,  2006.  Such
          termination  shall be without  prejudice  to the  Employee  continuing
          thereafter to be employed by the Company on such terms and  conditions
          as may be agreed  between  the  parties  in  writing  hereafter.  This
          agreement  shall not be renewed  or  extended  after the date  hereof,
          except as expressly agreed between the parties in writing.




     Except as provided in the  preceding  Paragraph  1 of this  Amendment,  the
          Agreement  shall remain in full force and effect pursuant to its terms
          and conditions.

<PAGE>

     IN WITNESS  THEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and sealed by the Employee as of the date first above written.


                                            FNB FINANCIAL SERVICES CORPORATION



                                            By: /s/ Barry Z. Dodson
                                                --------------------
                                                   Barry Z. Dodson


                                            FNB SOUTHEAST


                                            By: /s/ Barry Z. Dodson
                                                --------------------
                                                   Barry Z. Dodson



                                            EMPLOYEE


                                            By: /s/ Ernest J. Sewell
                                                ----------------------
                                                    Ernest J. Sewell