Document:

Letter Agreement, dated January 30, 2009

 Exhibit 10.1 
 UST Seq. No. 381 
 UNITED STATES DEPARTMENT OF
THE TREASURY 
 1500 PENNSYLVANIA AVENUE, NW 
 WASHINGTON, D.C. 20220 
 Dear Ladies and
Gentlemen: 
 The company set forth on the signature page hereto (the “Company”) intends to issue in a private placement the
number of shares of a series of its preferred stock set forth on Schedule A hereto (the “Preferred Shares”) and a warrant to purchase the number of shares of its common stock set forth on Schedule A hereto (the
“Warrant” and, together with the Preferred Shares, the “Purchased Securities”) and the United States Department of the Treasury (the “Investor”) intends to purchase from the Company the Purchased
Securities. 
 The purpose of this letter agreement is to confirm the terms and conditions of the purchase by the Investor of the Purchased
Securities. Except to the extent supplemented or superseded by the terms set forth herein or in the Schedules hereto, the provisions contained in the Securities Purchase Agreement – Standard Terms attached hereto as Exhibit A (the
“Securities Purchase Agreement”) are incorporated by reference herein. Terms that are defined in the Securities Purchase Agreement are used in this letter agreement as so defined. In the event of any inconsistency between this
letter agreement and the Securities Purchase Agreement, the terms of this letter agreement shall govern. 
 Each of the Company and the
Investor hereby confirms its agreement with the other party with respect to the issuance by the Company of the Purchased Securities and the purchase by the Investor of the Purchased Securities pursuant to this letter agreement and the Securities
Purchase Agreement on the terms specified on Schedule A hereto. 
 This letter agreement (including the Schedules hereto) and the Securities
Purchase Agreement (including the Annexes thereto) and the Warrant constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to
the subject matter hereof. This letter agreement constitutes the “Letter Agreement” referred to in the Securities Purchase Agreement. 
 This letter agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages
to this letter agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered. 
 *** 

 UST Seq. No. 381 
  

 In witness whereof, this letter agreement has been duly executed and delivered by the duly authorized
representatives of the parties hereto as of the date written below. 
  

			
	UNITED STATES DEPARTMENT OF THE TREASURY
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	COMPANY:
	
	OAK RIDGE FINANCIAL SERVICES, INC.
		
	By:	 	 /s/ Ronald O. Black

	Name:	 	Ronald O. Black
	Title:	 	President and Chief Executive Officer

 Date: January 30, 2009 
  

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 UST Seq. No. 381 
  

 EXHIBIT A 
 SECURITIES PURCHASE AGREEMENT 
  

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 UST Seq. No. 381 
  

 SCHEDULE A 
 ADDITIONAL TERMS AND CONDITIONS 
 Company Information: 
 Name of the Company: Oak Ridge Financial Services, Inc. 
 Corporate or other organizational form: Corporation 
 Jurisdiction of Organization: North Carolina

 Appropriate Federal Banking Agency: Federal Reserve Bank 
  

			
	Notice Information:	 	Ronald O. Black
		 	President and Chief Executive Officer
		 	Oak Ridge Financial Services, Inc.
		 	P.O. Box 2
		 	2211 Oak Ridge Road
		 	Oak Ridge, North Carolina 27310
		
	With a copy to:	 	Robert A. Singer, Esq.
		 	Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
		 	230 N. Elm Street, Suite 2000
		 	Greensboro, North Carolina 27401

 Terms of the Purchase: 
 Series of Preferred Stock Purchased: Fixed Rate Cumulative Perpetual Preferred Stock, Series A 
 Per Share
Liquidation Preference of Preferred Stock: $1,000 
 Number of Shares of Preferred Stock Purchased: 7,700 
 Dividend Payment Dates on the Preferred Stock: February 15, May 15, August 15 and November 15 
 Number of Initial Warrant Shares: 163,830 
 Exercise Price of the Warrant: $7.05 
 Purchase Price: $7,700,000.00 
 Closing: 
  

			
	Location of Closing:	 	Squire, Sanders & Dempsey L.L.P.
		 	One Tampa City Center
		 	201 N. Franklin Street, Suite 2100
		 	Tampa, Florida 33602
		
	Time of Closing:	 	9:00 a.m. EST
		
	Date of Closing:	 	January 30, 2009

  

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 UST Seq. No. 381 
  

			
	Wire Information for Closing:	 	ABA Number: 061003415
		 	Bank: Silverton Bank, NA
		 	Account Name: Bank of Oak Ridge
		 	Account Number:
		 	Beneficiary: Bank of Oak Ridge

 UST Seq. No. 381 
  

 SCHEDULE B 
 CAPITALIZATION 
 Capitalization Date: December 31, 2008 
 Common Stock 
 Par value: None 
 Total Authorized: 50,000,000 
 Outstanding:
1,791,474 
 Subject to warrants, options, convertible securities, etc.: 857,874 
 Reserved for benefit plans and other issuances: None. 
 Remaining authorized but unissued: 47,350,652 
 Shares issued after Capitalization Date (other than pursuant to warrants, options,
convertible securities, etc. as set forth above): 0 
 Preferred Stock 
 Par value: None 
 Total Authorized: 10,000,000 
 Outstanding (by series): 10,000,000 
 Reserved
for issuance: 0 
 Remaining authorized but unissued: 10,000,000 
  

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 UST Seq. No. 381 
  

 SCHEDULE C 
 REQUIRED STOCKHOLDER APPROVALS 
  

					
	 	  	Required1	  	% Vote Required
	 Warrants—Common Stock Issuance
	  		  	
	 Charter Amendment
	  		  	
	 Stock Exchange Rules
	  		  	

 If no stockholder approvals are required, please so indicate by checking the box:  x 
  

	 1
	 If stockholder approval is required, indicate applicable class/series of capital stock that are required to vote.

  

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 UST Seq. No. 381 
  

 SCHEDULE D 
 LITIGATION 
 List any exceptions to the representation and warranty in Section 2.2(l) of the Securities
Purchase Agreement – Standard Terms. 
 If none, please so indicate by checking the box:  x 
  

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 UST Seq. No. 381 
  

 SCHEDULE E 
 COMPLIANCE WITH LAWS 
 List any exceptions to the representation and warranty in the second sentence of
Section 2.2(m) of the Securities Purchase Agreement – Standard Terms. 
 If none, please so indicate by checking the
box:  x 
 List any exceptions to the representation and warranty in the last sentence of Section 2.2(m) of
the Securities Purchase 
 Agreement – Standard Terms. 
 If none, please so indicate by checking the box:  x 
  

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 UST Seq. No. 381 
  

 SCHEDULE F 
 REGULATORY AGREEMENTS 
 List any exceptions to the representation and warranty in Section 2.2(s) of the
Securities Purchase Agreement – Standard Terms. 
 In response to the examination conducted by the Office of the Commissioner of Banks that
commenced on April 18, 2007 (the “Report of Examination”), the Board of Directors of the Bank, on December 18, 2007, adopted the following resolutions at the request of the North Carolina Office of the Commissioner of Banks:

  

	(1)	Within 60 days, a review of the bank’s staffing needs will be performed to ensure that the personnel changes in the accounting and finance department subsequent to the
examination are sufficient to meet the bank’s needs. 

  

	(2)	Within 60 days, a review of the bank’s internal audit function will be made to ensure that a process for tracking audit findings and follow up for corrective actions is
implemented. 

  

	(3)	Within 60 days, an independent review of the bank’s policy and procedures for the sale of nondeposit investment products is made to ensure compliance with the Interagency
Statement on Retail Sales of Nondeposit Investment Products. 

  

	(4)	Within 60 days, the Asset/Liability Management Policy (“ALM”) will be amended to require an annual independent review of the bank’s interest rate management program
that encompasses the ALM, the modeling system, the applicability to the bank of the assumptions used in the model, and backtesting the system for reasonableness. The ALM should be updated to define permissible derivative instruments, hedging, and
position-taking activities. It should also outline allowable strategies and set appropriate limits for their use. The ALM should also be amended to include the recommendations regarding liquidity outlined on page 8 of the Report of Examination.

  

	(5)	Within 90 days, an independent review of the bank’s commercial relationships will be performed and the Allowance for Loan and Lease Loss Allowance (“ALLL”) Policy
will be amended to reflect changes made to the ALLL methodology. 

  

	(6)	Within 60 days, the BSA/AML Policy and procedures will be amended to include the recommendations in the report regarding brokered deposit relationships; the BSA officer’s
responsibilities relating to new products, services, mergers, and acquisitions; a compliance audit; the training program; suspicious activity report documentation; a currency transaction report review process; maintenance of a high risk customer
list; obtaining sufficient safe deposit box customer information; distinguishing between foreign and domestic wire transfers; and a log for the sale of monetary instruments. 

  

	(7)	 Within 60 days, actions will be taken to address violations of laws, regulations, and 

  

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 UST Seq. No. 381 
 SCHEDULE F 
  

	 	 
contraventions of policy statements listed on pages 11 through 14 of the Report of Examination, as well as the internal control deficiencies listed on page
20, that were not previously corrected during the examination. 

  

	(8)	Within 30 days after the end of each calendar quarter, beginning with the quarter ending December 31, 2007, management shall prepare a status report detailing the actions taken
to implement these resolutions. The status report shall be presented to the Board for approval, and the Board shall then forward copies of the status report to both the Atlanta Regional Director of the Federal Deposit Insurance Corporation
(“FDIC”) and the North Carolina Office of the Commissioner of Banks. 

 Pursuant to the FDIC Report of Examination as of
March 31, 2008, compliance with the above resolutions is considered generally adequate. 
 On April 21, 2008, the Board of Directors of the Company
adopted the following resolutions at the request of the Federal Reserve Bank of Richmond: 
  

	 	1.	The Board of Directors will take all steps necessary to ensure compliance with any directives, agreements, or commitments between the subsidiary banks and the Federal Deposit
Insurance Corporation and the State of North Carolina Office of Commissioner of Banks. 

  

	 	2.	The Company will ensure that any dividends taken from its subsidiary banks are in conformance with applicable laws and will not serve to reduce the subsidiary banks’ level of
capital below acceptable norms. 

  

	 	3.	The Company will not incur any debt without prior approval by the Federal Reserve Bank of Richmond. 

  

	 	4.	The Company will preserve its cash assets and not dissipate those assets except for the benefit of the subsidiary bank to the effect that approval by the Federal Reserve Bank of
Richmond is granted prior to any use of the Company’s cash assets other than (i) investment in obligations or equity of the subsidiary bank; (ii) investment in short-term, liquid assets; (iii) Company dividends declared in
conformance with the November 14, 1985 policy statement of the Board of Governors of the Federal Reserve System; or (iv) the Company’s normal and customary expenses. 

 If none, please so indicate by checking the box   ̈ 
  

 11Form of Employment Agreement Amendment

 Exhibit 10.2 
 AMENDMENT TO 
 EMPLOYMENT AGREEMENT 
 WHEREAS, Oak Ridge Financial Services, Inc. (“Company”) intends to enter into a letter agreement with the United States Department of the
Treasury (“UST”) pursuant to which the Company shall issue shares of preferred stock and a warrant to purchase shares of common stock (together the “Purchased Securities”) and the UST shall purchase from the Company the Purchased
Securities (the “Program”); and 
 WHEREAS, a condition to participation in the Program under the Emergency Economic Stabilization
Act of 2008, enacted October 3, 2008 (“EESA”), is that employment agreements and other agreements with the chief executive officer, the chief financial officer and certain other executive officers of the Company or its subsidiaries
(each, a “Covered Employee”) must be amended to comply with the provisions of the EESA, Treasury Notice 2008-PSSFI, Treasury Notice 2008-TARP, IRS Notice 2008-94, 31 C.F.R. Part 30 and any additional applicable rules or regulations adopted
under the EESA (the “Authorities”); and 
 WHEREAS,
                     (“Executive”) is a Covered Employee and is a party with the Bank of Oak Ridge, a wholly-owned subsidiary of the
Company (the “Bank”), to an Employment Agreement, dated                          (“Employment
Agreement”). 
 NOW, THEREFORE, the Bank and Executive agree to amend the Employment Agreement by adding thereto the following:

 (16) Special Provisions During Treasury Holding Period. The following provisions shall be in force and effective throughout the
period that the UST holds an equity or debt position in the Company pursuant to the Program (the “Treasury Holding Period”): 
 (a)
Controlled Group of Companies. The term “Company” as used herein shall be deemed to include all members of a “controlled group of corporations” (as such term is defined in the Authorities) of which the Bank or the Company
is a member. 

 (b) Return of Incentive and Bonus Compensation. In the event that Executive receives one or more
payments of incentive compensation and/or bonus compensation during the Treasury Holding Period, whether pursuant to a plan, agreement, understanding, policy, action by the Board of Directors of the Bank, action of the Board of Directors of the
Company or other similar arrangement, and it shall thereafter be determined by the Bank’s Board of Directors, the Company’s Board of Directors, the UST or the Company’s or the Bank’s primary federal regulator that the payments of
such incentive compensation and/or bonus compensation were calculated, in whole or part, based upon materially inaccurate financial statements of the Company or the Bank and/or materially inaccurate performance metric criteria, then Executive shall
promptly, but in no event less than thirty (30) days after such determination is made, pay to the Company (or, at the Company’s direction, to the Bank) a sum equal to (A) the amount of each such payment less (B) the amount which
such payment would have been if calculated using accurate financial statements of the Company or the Bank and accurate performance metric criteria. 
  

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 Within ten (10) days of being advised of any such determination, Executive may exercise an appeal
and seek redress from such determination, after having made the repayment set forth in the preceding paragraph, as follows: 
 i. If such determination was made by the Company’s Board of Directors or the Bank’s Board of Directors, Executive may require such Board of Directors to promptly engage an independent audit firm (which may be the Company’s
independent audit firm if permissible under laws, regulations and rules applicable to such firm) to review and evaluate the bases of such determination. Such review shall be concluded promptly but in no event more than thirty (30) days after
the engagement of such firm. The report of the firm engaged shall be final and may not be challenged by Executive whether by the filing of a civil lawsuit or otherwise (and Executive expressly waives and releases any and all rights to do so). In the
event that the firm engaged determines either that (x) neither the applicable financial statements nor the performance metric criteria were materially inaccurate or (y) that aggregate inaccuracies in the financial statements and/or the
performance metric criteria were less than 10% of the amounts identified as inaccurate in the applicable determination, then the Company or the Bank shall pay the fees and expenses of such firm incurred in connection with such review and report. In
all other instances, Executive shall be responsible for such fees and expenses. 
 ii. If such determination was made by the
UST or the Company’s or the Bank’s primary federal banking regulator, Executive shall have such opportunities for redress as are permitted by the UST or such federal regulator, as applicable, or otherwise by applicable law. 
 (c) Incentive Compensation Arrangements. Executive agrees that notwithstanding any provision of the Employment Agreement or any incentive 

  

 3 

 
compensation plan, agreement, understanding, policy, action of the Bank’s Board of Directors, action of the Company’s Board of Directors or other
similar arrangement, during the Treasury Holding Period, Executive will only be entitled to participate (to the extent Executive is entitled to participate in incentive compensation arrangements of the Company or the Bank pursuant to an action of
the Board of Directors of the Company or the Bank, as applicable, the Employment Agreement, a policy of the Company or the Bank or other similar development) in incentive compensation arrangements that the compensation committee of the
Company’s or the Bank’s Board of Directors (or a committee acting in a similar capacity) has reviewed as provided in Treasury Notice 2008-PSSFI and has determined do not encourage the Company’s senior executive officers to take
unnecessary and excessive risks that threaten the value of the Company or the Bank, and that have been certified by such compensation committee (or committee acting in a similar capacity) as required under Treasury Notice 2008-PSSFI as not
encouraging the Company’s or the Bank’s senior executive officers to take unnecessary and excessive risks that threaten the value of the Company or the Bank. 
 (d) Prohibited Golden Parachute Payments. In the event that Executive is severed from employment with the Company or the Bank during the Treasury Holding Period (i) by reason of an involuntary termination
of Executive by the Company or the Bank, or (ii) in connection with any bankruptcy filing, insolvency or receivership of the Company or the Bank, each of the terms in items (i) and (ii) as defined in the Authorities, notwithstanding
any other provision of the Employment Agreement; any stock award plan, award, grant, agreement, understanding or other arrangement; any supplemental employee retirement plan, pension plan or profit sharing plan (other than a 

  

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tax qualified plan); or any other plan, agreement, understanding or other arrangement between the Company and Executive or the Bank and Executive providing
compensation to or economic benefit for Executive upon the termination of Executive’s employment by the Company or the Bank, Executive shall not receive an aggregate of payments on account of such a severance from employment having a present
value which equals or exceeds the “parachute payment” amount set forth in Section 280G(e) of the Internal Revenue Code (“IRC”), as added by the EESA. The calculation of the amount of the present value of aggregate payments
of compensation to, or for the benefit of, Executive shall be calculated as provided in IRC Section 280G(e) and IRS Notice 2008-94. Executive shall be permitted to elect which payments and/or benefits shall be reduced and in what amounts to
effect any reduction necessary to comply with the foregoing prohibition; provided, however, that if Executive does not make such election within fifteen (15) days following the severance of Executive’s employment, the Board of Directors of
the Company or the Bank (or any successor entity) or its designee shall make such election. Executive waives any and all rights to contest, seek redress for, or file a civil action to enjoin or obtain damages in connection with any such election by
such Board of Directors or its designee. 
 (Remainder of page intentionally left blank) 
  

 5 

 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment to the Employment Agreement as of
January 30, 2009. 
  

			
	OAK RIDGE FINANCIAL SERVICES, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	BANK OF OAK RIDGE
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	EXECUTIVE:
	
	  

	
	  

  

 6

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