Document:

Exhibit 10.1
                                                                    ------------

            Form of Stock Option Agreement for Non-Employee Directors
            ---------------------------------------------------------

                             FOUR OAKS FINCORP, INC.

                                STOCK OPTION PLAN

                         FORM OF STOCK OPTION AGREEMENT
                             (Non-Employee Director)

     This Option Agreement is made as of the ______ day of _______, ____, by and
between Four Oaks Fincorp, Inc., a North Carolina business corporation (the
"Company"), and __________, a director of the Company (the "Director").

     The Company desires to carry out the purpose of its Stock Option Plan (the
"Plan") by affording the Director an opportunity to purchase shares of its
common stock, par value one dollar ($1.00) per share (the "Common Stock"), as
provided in this Agreement.

     NOW, THEREFORE, in consideration of the mutual convenience set forth in
this Agreement and for other good and valuable consideration, the Company and
the Director have agreed, and do by this Agreement agree, as follows:

     1. Grant of Option. The Company by this Agreement irrevocably grants to the
Director the right and option (the "Option") to purchase ______ (____) shares of
Common Stock (such number being subject to adjustment as provided in Paragraph 7
of this Agreement) on the terms and conditions set forth in this Agreement.

     2. Purchase Price. The purchase price of the shares of the Common Stock
covered by this Option shall be ______ dollars per share.

     3. Term of Option. The term of the Option shall be for a period of four (4)
years from the date of this Agreement, subject to earlier termination as
provided in Paragraphs 5,6,8, and 10 of this Agreement. The Option shall not be
exercisable before the first anniversary of the date of this Agreement. The
purchase price of the shares of Common Stock as to which the Option shall be
exercised shall be paid in full in cash at the time of exercise. Except as
provided in Paragraphs 5 and 6 of this Agreement, the Option may not be
exercised at any time unless the Director shall be in the Company's continuous
employment from the date of this Agreement to the date of the exercise of the
Option. The Director as holder of the Option shall not have any of the rights of
a shareholder with respect to the shares of Common Stock covered by the Option
except to the extent that one or more certificates for such shares shall be
issued to her upon the due exercise of the Option and payment of the purchase
price and the Company shall make not adjustments for dividends or other rights
for which the record date is before the date the Company issues the certificates
representing such shares.

     4. Nontransferability. The Option shall not be transferable otherwise than
by will or the laws of descent and distribution, and during the lifetime of the
Director only he may exercise the Option. More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as provided above) pledged or hypothecated in any way, shall
not be assignable by operation of law and shall not be subject to execution,
attachment, or similar processes. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions of
this Agreement and the levy of any execution, attachment, or similar process
upon the Option shall be null and void and without effect.

<PAGE>

     5. Termination of Director Relationship. In the event that the Director's
director relationship with the Company shall terminate (except by reason of his
death), the Director may exercise the Option (to the extent he is entitled to do
so at such termination) at any time within fifteen (15) months after such
termination but not more than four (4) years after the date of this Agreement;
provided, however, the Option may not be exercised if the Option was previously
terminated pursuant to the provisions of Paragraph 8 of the Agreement.

     6. Death of Director. If the Director shall die while he shall be a
director of the Company or shall die within fifteen (15) months after the
termination of his directorship, the Option may be exercised (to the extent that
the Director was entitled to do so at his death) by any legatee of the Option
under the Director's will, by the Director's personal representative or by any
distributees of the Option any time within fifteen (15) months after his death,
but not more than four(4) years after the date of this Agreement; provided,
however, the Option may not be exercised if the Option was previously terminated
pursuant to the provision of Paragraph 5 or 8 of this Agreement.

     7. Changes in Capital Structure. Subject to the provisions of Paragraph 8
of this Agreement, if all or any portion of the Option shall be exercised after
any stock dividend, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, separation, reorganization, or liquidation
occurring after the date of this Agreement, as a result of which shares of any
class shall be issued in respect of outstanding shares of Common Stock, or
shares of Common Stock shall be changed into the same or a different number of
shares of the same or another class or classes, the person who exercises the
Option shall receive, for the aggregate price paid upon such exercises, the
aggregate number and class of shares which, if shares of Common Stock (as
authorized at the date of this Agreement) had been purchased by the person as of
the date of this Agreement for the same aggregate price (on the basis of the
price per share set forth in Paragraph 2) and had not been disposed of, such
person would be holding, at the time of such exercise, as a result of such
purchase and all such dividend, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations, or liquidations, provided, however, that no fractional share
shall be issued upon any such exercise, and the aggregate price paid shall be
appropriately reduced to account for any fractional share not issued. No
adjustment shall be made in the minimum number of shares which may be purchased
at any one time, as fixed by Paragraph 3.

     8. Termination of Option on Merger or Sale of Assets. A liquidation of the
Company, a merger or consolidation in which the Company is not the surviving or
resulting corporation or a sale of all or substantially of the Company's assets
shall cause the Option to the extent outstanding to terminate on the effective
date of such action. Notwithstanding the preceding sentence, upon a liquidation
of the Company, a merger or consolidation in which the Company is not the
surviving or resulting corporation or a sale of all or substantially all of the
Company's assets, the Director shall have the right, within his sole discretion
and without regard to the provision of Paragraph 3 making the Option exercisable
only on or after the first anniversary of the date of this Agreement to exercise
the Option before the effective date of such action to the extent he shall not
have already exercised the Option. To the extent not so exercised the Option
shall terminate on the effective date of such action.

<PAGE>

     9. Method of Exercising Option. Subject to the terms and conditions of this
Agreement, the option may be exercised by written notice to the Company. Such
notice shall state the election to exercise the Option and the number of shares
in respect of which is being exercised and shall be signed by the person who
shall exercise the Option. Such notice shall either (a) be accompanied by
payment of the full purchase price of such shares, in which event the Company
shall deliver a certificate or certificates representing such shares as soon as
practicable after notice shall be received; or (b) fix a date (not less than
five (5) nor more than fifteen (15) business days from the date such notice
shall be received by the Company) for the payment of the full purchase price of
such shares against delivery of a certificate or certificates representing such
shares. A certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the person who
shall exercise the Option, and shall be delivered as provided above to or upon
the written order of the person who shall exercise the Option. As a condition to
the issuance of the shares as to which the Option shall be exercised, the
Director authorizes the Company to withhold from any regular cash compensation
payable to him any taxes required to be withheld by the Company under Federal,
North Carolina or other local law as a result of the exercise of the Option;
provided, however, if the Company so requests, the person who shall exercise the
Option shall in the alternative remit to the Company at the time of any exercise
of the Option any taxes required to be withheld by the Company under Federal,
North Carolina or other local law as a result of the exercise of the Option. In
the event the Option shall be exercised pursuant to Paragraph 6, by any person
other than the Director, the notice of exercise shall be accompanied by
appropriate proof of the right of such person to exercise the Option. All shares
that shall be purchased in the exercise of the Option shall be fully paid and
non-assessable.

     10. Forfeiture. If the number of shares of Common Stock available to the
Director under the plan, exceeds 40 percent of the sum of (a) the numbers of
shares of Common Stock reserved under the Plan (including those shares subject
to options) at the time of making the determination and (b) the number of shares
of Common Stock purchased under the Plan, Director shall forfeit the option to
purchase a number of shares of Common Stock equal to the number of shares in
excess of 40 percent of such sum. In computing such excess, adjustments in the
number of shares of Common Stock shall be made in a manner consistent with
Paragraph 7. Options shall be forfeited in order of purchase price with higher
priced options forfeited before lower priced options, without regard to whether
the options are evidenced by this Option Agreement or another option agreement.
Within the same price range, options shall be forfeited in order of age with
older options forfeited before more recently granted options.

     11. General. The Company shall make available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of this
Agreement. The exercise of the Option shall be subject to the condition that if
at any time the Company shall determine in its discretion that (a) the
satisfaction of withholding tax or other withholding liabilities, (b) the
listing upon any securities exchange or the registration or qualification under
any state or Federal law of any shares of Common Stock otherwise deliverable
upon such exercise or (c) the consent or approval of any regulatory body is
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of shares of Common Stock pursuant to such exercise,
then in any such event, such exercise shall not be effective unless such
withholding listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.
The Option shall not constitute an incentive stock option (within the meaning of
Internal Revenue Code 422).

<PAGE>

     12. Severability and Governing Law. If any provision of this Agreement or
its application to any circumstance be deemed invalid or unenforceable, then the
remainder of this Agreement and the application of such provision to other
circumstances shall not be affected. This Agreement shall not be effective until
executed by the Company at its principal office in Four Oaks, North Carolina,
and shall be governed by and construed in accordance with the laws of the State
of North Carolina.

     13. Notices. Any notices provided under this Agreement shall be in writing
and shall be delivered in person to the party to be notified or sent by
certified mail. Notices sent to the Company shall be addressed to the Company's
principal office in Four Oaks, North Carolina. Notices sent to the Director
shall be addressed to the Director at his address as it appears in the Company's
regular records.

     14. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Director with respect to the subject matter of this
Agreement. No waiver, modification or amendment of any of the terms or
conditions of this Agreement shall be effective unless set forth in writing
signed by the Company and the Director.

     IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officers, and the Director has set his hand and
seal to this Option Agreement, all as of the day and year first above written.

                                           FOUR OAKS FINCORP, INC.

                                           BY: ____________________________
                                                  Authorized Officer

(CORPORATE SEAL)

ATTEST

__________________________
Secretary

                                           ________________________________
                                                       DirectorExhibit 10.2
                                                                    ------------

                  Form of Stock Option Agreement for Employees
                  --------------------------------------------

                             FOUR OAKS FINCORP, INC.

                                STOCK OPTION PLAN

                         FORM OF STOCK OPTION AGREEMENT
                                   (Employee)

     This Option Agreement is made as of the day of , , by and between Four Oaks
Fincorp, Inc., a North Carolina business corporation (the "Company"), and an
employee of the Company (the "Employee").

     The Company desires to carry out the purpose of its Stock Option Plan (the
"Plan") by affording the Employee an opportunity to purchase shares of its
common stock, par value one dollar ($1.00) per share (the "Common Stock"), as
provided in this Agreement.

     NOW, THEREFORE, in consideration of the mutual convenience set forth in
this Agreement and for other good and valuable consideration, the Company and
the Employee have agreed, and do by this Agreement agree, as follows:

     1. Grant of Option. The Company by this Agreement irrevocably grants to the
Employee the right and option (the "Option") to purchase ( ) shares of Common
Stock (such number being subject to adjustment as provided in Paragraph 7 of
this Agreement) on the terms and conditions set forth in this Agreement.

     2. Purchase Price. The purchase price of the shares of the Common Stock
covered by this Option shall be dollars cents per share.

     3. Term of Option. The term of the Option shall be for a period of four (4)
years from the date of this Agreement, subject to earlier termination as
provided in Paragraphs 5, 6, 8, and 10 of this Agreement. The Option shall not
be exercisable before the first anniversary of the date of this Agreement. The
purchase price of the shares of Common Stock as to which the Option shall be
exercised shall be paid in full in cash at the time of exercise. Except as
provided in Paragraphs 5 and 6 of this Agreement, the Option may not be
exercised at any time unless the Employee shall be in the Company's continuous
employment from the date of this Agreement to the date of the exercise of the
Option. The Employee as holder of the Option shall not have any of the rights of
a shareholder with respect to the shares of Common Stock covered by the Option
except to the extent that one or more certificates for such shares shall be
issued to him/her upon the due exercise of the Option and payment of the
purchase price and the Company shall make no adjustments for dividends or other
rights for which the record date is before the date the Company issues the
certificates representing such shares.

     4. Nontransferability. The Option shall not be transferable otherwise than
by will or the laws of descent and distribution, and during the lifetime of the
Employee only he/she may exercise the Option. More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as provided above) pledged or hypothecated in any way, shall
not be assignable by operation of law and shall not be subject to execution,
attachment, or similar processes. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions of
this Agreement and the levy of any execution, attachment, or similar process
upon the Option shall be null and void and without effect.

<PAGE>

     5. Termination of Employment. In the event of any termination of the
Employee's employment that is either (a) for cause, or (b) voluntary on the part
of the Employee and without the Company's written consent, the Option shall
(except to the extent exercised before termination of the Employee's employment)
immediately terminate. "Cause" means (a) criminal conviction for fraud,
embezzlement, misappropriation or the like, (b) misconduct involving moral
turpitude or (c) a failure to perform the Employee's duties faithfully,
diligently, competently, and to the best of his/her ability for reasons other
than serious physical disability or other incapacity, as determined in the
Committee's sole discretion. Retirement in accordance with the Company's normal
retirement policies or termination of employment in the event of disability as
determined in the Committee's sole discretion shall not be deemed to be
voluntary on the part of the Employee.

In the event that the Employee's employment shall otherwise terminate (except by
reason of his/her death) the Employee may exercise the Option (to the extent she
is entitled to do so at the termination of employment) at any time within
fifteen (15) months after such termination but not more than four (4) years
after the date of this Agreement; provided, however, the Option may not be
exercised if the Option was previously terminated pursuant to the provisions of
Paragraph 8 of the Agreement. So long as the Employee shall continue to be an
employee of the Company the Option shall not be affected by any change in her
duties or position. Nothing in this Agreement shall confer upon the Employee any
right to continue in the Company's employment or interfere in any way the
Company's right to terminate his/her employment at any time.

     6. Death of employee. If the Employee shall die while he shall be employed
by the Company or shall die within fifteen (15) months after the termination of
his/her employment, the Option may be exercised (to the extent that the Employee
was entitled to do so at his death) by any legatee of the Option under the
Employee's will, by the Employee's personal representative or by any
distributees of the Option any time within fifteen (15) months after his/her
death, but not more than four(4) years after the date of this Agreement;
provided, however, the Option may not be exercised if the Option was previously
terminated pursuant to the provision of Paragraph 5 or 8 of this Agreement.

     7. Changes in Capital Structure. Subject to the provisions of Paragraph 8
of this Agreement, if all or any portion of the Option shall be exercised after
any stock dividend, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, separation, reorganization, or liquidation
occurring after the date of this Agreement, as a result of which shares of any
class shall be issued in respect of outstanding shares of Common Stock, or
shares of Common Stock shall be changed into the same or a different number of
shares of the same or another class or classes, the person who exercises the
Option shall receive, for the aggregate price paid upon such exercises, the
aggregate number and class of shares which, if shares of Common Stock (as
authorized at the date of this Agreement) had been purchased by the person as of
the date of this Agreement for the same aggregate price (on the basis of the
price per share set forth in Paragraph 2) and had not been disposed of, such
person would be holding, at the time of such exercise, as a result of such
purchase and all such dividend, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations, or liquidations, provided, however, that no fractional share
shall be issued upon any such exercise, and the aggregate price paid shall be
appropriately reduced to account for any fractional share not issued. No
adjustment shall be made in the minimum number of shares which may be purchased
at any one time, as fixed by Paragraph 3.

<PAGE>

     8. Termination of Option on Merger or Sale of Assets. A liquidation of the
Company, a merger or consolidation in which the Company is not the surviving or
resulting corporation or a sale of all or substantially all of the Company's
assets shall cause the Option to the extent outstanding to terminate on the
effective date of such action. Notwithstanding the preceding sentence, upon a
liquidation of the Company, a merger or consolidation in which the Company is
not the surviving or resulting corporation or a sale of all or substantially all
of the Company's assets, the Employee shall have the right, within his/her sole
discretion and without regard to the provision of Paragraph 3 making the Option
exercisable only on or after the first anniversary of the date of this Agreement
to exercise the Option before the effective date of such action to the extent
he/she shall not have already exercised the Option. To the extent not so
exercised the Option shall terminate on the effective date of such action.

     9. Method of Exercising Option. Subject to the terms and conditions of this
Agreement, the option may be exercised by written notice to the Company. Such
notice shall state the election to exercise the Option and the number of shares
in respect of which is being exercised and shall be signed by the person who
shall exercise the Option. Such notice shall either (a) be accompanied by
payment of the full purchase price of such shares, in which event the Company
shall deliver a certificate or certificates representing such shares as soon as
practicable after notice shall be received; or (b) fix a date (not less than
five(5) nor more than fifteen (15) business days from the date such notice shall
be received by the Company) for the payment of the full purchase price of such
shares against delivery of a certificate or certificates representing such
shares. A certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the person who
shall exercise the Option, and shall be delivered as provided above to or upon
the written order of the person who shall exercise the Option. As a condition to
the issuance of the shares as to which the Option shall be exercised, the
Employee authorizes the Company to withhold from any regular cash compensation
payable to him any taxes required to be withheld by the Company under Federal,
North Carolina or other local law as a result of the exercise of the Option;
provided, however, if the Company so requests, the person who shall exercise the
Option shall in the alternative remit to the Company at the time of any exercise
of the Option any taxes required to be withheld by the Company under Federal,
North Carolina or other local law as a result of the exercise of the Option. In
the event the Option shall be exercised pursuant to Paragraph 6, by any person
other than the Employee, the notice of exercise shall be accompanied by
appropriate proof of the right of such person to exercise the Option. All shares
that shall be purchased in the exercise of the Option shall be fully paid and
non-assessable.

     10. Forfeiture. If the sum of (a) the number of shares of Common Stock
purchased by the employee under the Company's Employee Stock Purchase and Bonus
Plan and (b) the number of shares of Common Stock available to the Employee
under the Plan, exceeds 40 percent of the sum of (a) the numbers of shares of
Common Stock reserved under the Plan (including those shares subject to options)
at the time of making the determination and (b) the number of shares of Common
Stock purchased under the Plan, Employee shall forfeit the option to purchase a
number of shares of Common Stock equal to the number of shares in excess of 40
percent of such sum. In computing such excess, adjustments in the number of
shares of Common Stock shall be made in a manner consistent with Paragraph 7.
Options shall be forfeited in order of purchase price with higher priced options
forfeited before lower priced options, without regard to whether the options are
evidenced by this Option Agreement or another option agreement. Within the same
price range, options shall be forfeited in order of age with older options
forfeited before more recently granted options.

<PAGE>

     11. General. The Company shall make available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of this
Agreement. The exercise of the Option shall be subject to the condition that if
at any time the Company shall determine in its discretion that (a) the
satisfaction of withholding tax or other withholding liabilities, (b) the
listing upon any securities exchange or the registration or qualification under
any state or Federal law of any shares of Common Stock otherwise deliverable
upon such exercise or (c) the consent or approval of any regulatory body is
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of shares of Common Stock pursuant to such exercise,
then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Company. The Option shall not constitute an incentive stock option (within the
meaning of Internal Revenue Code 422).

     12. Severability and Governing Law. If any provision of this Agreement or
its application to any circumstance be deemed invalid or unenforceable, then the
remainder of this Agreement and the application of such provision to other
circumstances shall not be affected. This Agreement shall not be effective until
executed by the Company at its principal office in Four Oaks, North Carolina,
and shall be governed by and construed in accordance with the laws of the State
of North Carolina.

     13. Notices. Any notices provided under this Agreement shall be in writing
and shall be delivered in person to the party to be notified or sent by
certified mail. Notices sent to the Company shall be addressed to the Company's
principal office in Four Oaks, North Carolina. Notices sent to the Employee
shall be addressed to the Employee at his address as it appears in the Company's
regular records.

     14. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to the subject matter of this
Agreement. No waiver, modification or amendment of any of the terms or
conditions of this Agreement shall be effective unless set forth in writing
signed by the Company and the Employee.

     IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by its duly authorized officers, and the Employee has set his/her hand
and seal to this Option Agreement, all as of the day and year first above
written.

                                           FOUR OAKS FINCORP, INC.

                                           BY: ____________________________
                                                  Authorized Officer

(CORPORATE SEAL)

ATTEST

__________________________
Secretary

                                           ________________________________
                                                       Employee

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