Document:

ex10_23.htm

    EXHIBIT
10.23

     

    FNB
UNITED CORP.

     

    2003
STOCK INCENTIVE PLAN

    

    (as
amended and restated as of December 31, 2008)

    

    

    

    1.         
   PURPOSE.

     

    The
purpose of this Plan is to attract and retain Key Employees and Non-Employee
Directors for FNB United Corp. (FNB) and to provide such persons with incentives
and rewards for superior performance and increased shareholder value. This Plan
will authorize the Committee to grant Incentive Stock Options, Non-Qualified
Stock Options, Restricted Shares, Stock Appreciation Rights, Deferred Shares,
Performance Shares, Performance Units and Other Stock-Based Awards to those
officers, Key Employees and Non-Employee Directors who are selected to
participate in the Plan.

     

    2.          
  DEFINITIONS.

     

    As used
in this Plan, the following terms shall be defined as set forth
below:

     

    "AFFILIATE"
means (i) any entity that, directly or indirectly, is controlled by the Company,
(ii) any entity in which the Company has a significant equity interest, (iii) an
affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12
of the Exchange Act, and (iv) any entity in which the Company has at least
twenty percent (20%) of the combined voting power of the entity's outstanding
voting securities, in each case as designated by the Board as being a
participating employer in the Plan.

     

    "AWARD"
means any Option, Stock Appreciation Right, Restricted Shares, Deferred Shares,
Performance Shares, Performance Units or Other Stock-Based Awards granted under
the Plan, whether singly, in combination, or in tandem, to a Participant by the
Committee pursuant to such terms, conditions, restrictions and/or limitations,
if any, as the Committee may establish.

     

    "AWARD
AGREEMENT" means any written agreement, contract, or other instrument or
document evidencing any Award approved or authorized by the Committee and
delivered to a Participant.

     

    "BASE
PRICE" means the price to be used as the basis for determining the Spread upon
the exercise of a Stock Appreciation Right.

     

    "BOARD"
means the Board of Directors of FNB United Corp.

     

    "CHANGE
IN CONTROL" means (a) the Company is merged or consolidated or reorganized into
or with another corporation, person or entity (including, without limitation, a
merger in which the Company is the surviving entity) and, as a result of such
transaction, the holders of the Company's Common Stock immediately before the
transaction, as a group, hold less than 50% of the combined voting power of the
outstanding securities of the surviving entity

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    immediately
after the transaction; (b) the Company's Common Stock is acquired in a share
exchange pursuant to Section 55-11-02 of the General Statutes of North Carolina
and, as a result of such transaction, the holders of the Company's Common Stock
immediately before the transaction, as a group, hold less than 50% of the
combined voting power of the outstanding securities of the acquiring corporation
immediately after the transaction; (c) the Company sells or otherwise transfers
assets having an aggregate fair market value (as determined in good faith by the
Board of Directors of the Company) of more than 50% of the Company's total
assets, as reflected on the most recent audited consolidated balance sheet of
the Company, and, as a result of such transaction, neither the Company nor the
holders of the Company's Common Stock immediately before the transaction, as a
group, hold 50% or more of the combined voting power of the outstanding
securities of the transferee immediately after the transaction; (d) there is a
report filed on Schedule 13D or Schedule 14D-1 of the Securities Exchange Act of
1934, as amended, by a person (other than a person that satisfies the
requirements of Rule 13d-1(b)(1) under the Exchange Act for filing such report
on Schedule 13G), which report as filed discloses that any person (as the term
"person" is used in Section 13(d) and Section 14(d) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 under the Exchange Act) of securities representing more than 50% of
the Company's Common Stock (whether by purchase, recapitalization of the Company
or otherwise); or (e) if during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company's shareholders, of
each director of the Company first elected during such period was approved by a
vote of at least two-thirds of the directors of the Company then still in office
who were directors of the Company at the beginning of any such period.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred for purposes of the Plan if the Company or any Company-sponsored
employee benefit plan (or any trustee of any such plan on its behalf) files or
becomes obligated to file a report or proxy statement disclosing beneficial
ownership by a Company-sponsored employee benefit plan of more than 50% of the
Company's Common Stock.  Further notwithstanding the foregoing, with
respect to any Award that constitutes a “nonqualified deferred compensation
plan” within the meaning of Section 409A, “Change in Control” shall mean a
“change in the ownership of the corporation,” a “change in effective control of
the corporation” or a “change in the ownership of a substantial portion of the
assets of the corporation,” as such terms are defined in Section
409A.

     

    "CODE"
means the Internal Revenue Code of 1986, as amended from time to
time.

     

    "COMMITTEE"
means a Committee of the Board which shall have a least two members, each of
whom shall be appointed by and shall serve at the pleasure of the Board and all
of whom shall be "disinterested persons" with respect to the Plan within the
meaning of Section 16 of the Exchange Act.

     

    "COMPANY"
means FNB United Corp. or any successor corporation.

     

    "COVERED
OFFICER" means at any date (i) any individual who, with respect to the previous
taxable year of the Company, was a "covered employee" of the company within the
meaning of Section 162(m) of the Code; provided, however, that the term "Covered
Officer" shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any Award or at any subsequent
time, as reasonably expected not to be such a "covered employee" with respect to
the current taxable year of the Company and (ii) any individual who
is

     

    
      
         

      

      
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    designated
by the Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected to be such a "covered employee" with
respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be
paid.

     

    "DEFERRAL
PERIOD" means the period of time during which Deferred Shares are subject to
deferral limitations enumerated in Section 10 of this Plan.

     

    "DEFERRED
SHARES" means an Award pursuant to Section 10 of this Plan providing the right
to receive Shares at the end of a specified Deferral Period.

     

    "DISABILITY"
means, unless otherwise defined in the applicable Award Agreement, a disability
that would qualify as a total and permanent disability under the Company's then
current long-term disability plan.  Notwithstanding the foregoing,
with respect to any Award that constitutes a “nonqualified deferred compensation
plan” within the meaning of Section 409A, “Disability” has the meaning set forth
in Section 409A.

     

    "DIVIDEND
EQUIVALENTS" means amounts equivalent to the dividends paid on Shares of common
stock. They may be granted in connection with Awards denominated in notional
Shares, or they may be granted on a freestanding basis.

     

    "EARLY
RETIREMENT" means, unless otherwise defined in the applicable Award Agreement,
the termination of a Participant from the employ or service of the Company or
any of its Subsidiaries or Affiliates at a time when the Participant would meet
the age and service requirements for "early retirement" under the terms of the
applicable Company pension plan.

     

    "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended from time to
time.

     

    "FAIR
MARKET VALUE" on any date with respect to the Stock means (1) if the Stock is
listed on a national securities exchange, the last reported sale price of the
Stock on such exchange, or (2) if the Stock is otherwise publicly traded, the
last reported sale price of the Stock under the quotation system under which
such sale price is reported, or (3) if no such last sale price is available on
such date, the last reported sale price of the Stock for the immediately
preceding business day (a) on the national securities exchange on which the
Stock is listed or, (b) if the Stock is otherwise publicly traded, under the
quotation system under which such data are reported, or (4) if none of the
prices described above is available, the fair market value per share of the
Stock using any reasonable method determined by the Board that satisfies the
requirements of Section 409A, particularly Treasury Regulation Section
1.409A-1(b)(5)(iv).

     

    "FNB"
means FNB United Corp. or any successor to such corporation.

     

    "GRANT
DATE" means the date specified by the Committee on which a grant of an Award
shall become effective, which shall not be earlier than the date on which the
Committee takes action with respect thereto.

     

    "GRANTEE"
means the person so designated in an agreement as the recipient of an Award
granted by the Company.

     

    
      
         

      

      
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    "HARDSHIP"
means an unanticipated emergency that is caused by an event beyond the control
of the Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or accident of
the Participant or a dependent of the Participant, (ii) a loss of the
Participant's property due to casualty, or (iii) such other extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant, all as determined in the sole discretion of the
Committee.

     

    "INCENTIVE
STOCK OPTION (ISO)" means any Option that is intended to qualify as an
"Incentive Stock Option" under Section 422 of the Code or any successor
provision.

     

    "KEY
EMPLOYEE" means an employee of FNB or any Subsidiary who, in the judgment of the
Committee acting in its absolute discretion, is key to the business performance
and success of FNB.

     

    "NON-EMPLOYEE
DIRECTOR" means a member of the Board or of an advisory board of a Subsidiary
who is not an employee of the Company or an Affiliate.

     

    "NONQUALIFIED
STOCK OPTION" or "NQSO" means an Option that is not intended to qualify as an
Incentive Stock Option.

     

    "NORMAL
RETIREMENT" means, unless otherwise defined in the applicable Award Agreement,
retirement of a Participant from the employ or service of the Company or any of
its Subsidiaries or Affiliates in accordance with the terms of the applicable
Company pension plan at or after attainment of age 65, or if a Participant is
not covered by any such plan, retirement on or after attainment of age
65.

     

    "OPTION"
means any Option (ISO or NQSO) to purchase Shares granted under this
Plan.

     

    "OPTION
PRICE" means the purchase price payable to purchase one share upon the exercise
of an Option or other Award.

     

    "OPTIONEE"
means the person so designated in an agreement evidencing an outstanding Option
or other Award.

     

    "OTHER
STOCK-BASED AWARD" means any Award granted under Section 12 of the
Plan.

     

    "PARENT
CORPORATION" means any corporation, which is a parent of FNB within the meaning
of Section 424(e) of the Code.

     

    "PARTICIPANT"
means an officer, a Key Employee or a Non-Employee Director who is selected by
the Board or the Committee to receive benefits under this Plan, provided that
Non-Employee Directors shall not be eligible to receive grants of Incentive
Stock Options.

     

    "PERFORMANCE
OBJECTIVES" means performance goals or targets established pursuant to this Plan
for Participants who have received grants of Performance Shares or Performance
Units or, when so determined by the Committee, Deferred Shares, Options,
Restricted Shares or Other Stock-Based Awards. Performance Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the

     

    
      
         

      

      
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    individual
Participant or the division, department or function within the Company or
Subsidiary in which the Participant is employed. Any Performance Objectives
applicable to Awards intended to qualify as "performance-based compensation"
under Section 162(m) of the Code shall be limited to specified levels of, or
increases in, the Company's or Subsidiary's return on equity, earnings per
share, earnings growth, return on capital, return on assets, divisional return
on capital, divisional return on net assets, total shareholder return and/or
increase in the Fair Market Value of the Shares. Except in the case of
Performance Objectives related to an Award intended to qualify under Section
162(m) of the Code, if the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Performance Objectives unsuitable, subject to Section 11(h) of this
Plan, the Committee, after the date of grant, may modify such Performance
Objectives, in whole or in part, as the Committee deems appropriate and
equitable.

     

    "PERFORMANCE
PERIOD" means a period of time established under Section 11 of this Plan within
which the Performance Objectives relating to a Performance Share, Performance
Unit, Option, Deferred Share or Restricted Share are to be
achieved.

     

    "PERFORMANCE
SHARE" means an Award pursuant to Section 11 of this Plan that provides the
Participant the opportunity to earn one or more Shares contingent upon the
achievement of one or more Performance Objectives during a Performance
Period.

     

    "PERFORMANCE
UNIT" means an Award pursuant to Section 11 of this Plan that provides the
Participant the opportunity to earn one or more units, denominated in Shares or
cash or a combination thereof, contingent upon achieving one or more Performance
Objectives during a Performance Period.

     

    "PERSON"
means any individual, corporation, partnership, associate, joint-stock company,
trust, unincorporated organization, government or instrumentality of a
government or other entity.

     

    "PLAN"
means this FNB United Corp. 2003 Stock Incentive Plan as effective as of the
date adopted by the Board in 2003 and as amended from time to time
thereafter.

     

    "RESTRICTED
SHARES" means Shares granted under Section 9 of this Plan subject to such
restrictions, including, but not limited to, service requirements and/or
Performance Objectives, as may be determined by the Committee at the time of
grant.

     

    "RULE
16B-3" means Rule 16b-3 of the Exchange Act and any successor provision thereto
as in effect from time to time.

     

    “SECTION
409A” means Code Section 409A, including any proposed and final regulations and
other guidance issued thereunder by the Department of the Treasury and/or the
Internal Revenue Service.

     

    "SHARES"
or "STOCK" means Shares of the common stock of FNB United Corp. $2.50 par value,
or any security into which Shares may be converted by reason of any transaction
or event of the type referred to in Section 4 of this Plan.

     

    
      
         

      

      
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    "SPREAD"
means, in the case of a Stock Appreciation Right, the amount by which the Fair
Market Value on the date when any such right is exercised exceeds the Base Price
specified in such right or, in the case of a Tandem Stock Appreciation Right,
the amount by which the Fair Market Value on the date when any such right is
exercised exceeds the Option Price specified in the related Option.

     

    "STOCK
APPRECIATION RIGHT" means a right granted under Section 8 of this Plan,
including a Stock Appreciation Right or a Tandem Stock Appreciation
Right.

     

    "SUBSIDIARY"
means a corporation or other entity (i) more than 50 percent of whose
outstanding Shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (ii) which does not
have outstanding Shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50 percent of whose
ownership interest (representing the right generally to make decisions for such
other entity) is, as of the date this Plan is approved by the Board and
thereafter owned or controlled directly or indirectly by the Company, provided
that for purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, "Subsidiary" means any
corporation in which the Company owns or controls directly or indirectly more
than 50 percent of the total combined voting power represented by all classes of
stock issued by such corporation at the time of such grant.

     

    "TANDEM
STOCK APPRECIATION RIGHT" means a Stock Appreciation Right granted pursuant to
Section 8 of this Plan that is granted in tandem with an Option or any similar
right granted under any other Plan of the Company such that the exercise of one
results in the cancellation of the other.

     

    "TEN
PERCENT SHAREHOLDER" means a person who owns, at the time of an Award and after
taking into account the attribution rules of Section 424(d) of the Code, more
than ten percent (10%) of the total combined voting power of all classes of
stock of either FNB, a Subsidiary or a Parent Corporation.

     

    3.           SHARES
AVAILABLE UNDER THE PLAN.

     

    (a)           Subject
to adjustment as provided in Section 4 of this Plan, the number of Shares that
may be (i) issued or transferred upon the exercise of Options or Stock
Appreciation Rights, (ii) Awarded as Restricted Shares and released from
substantial risk of forfeiture, or (iii) issued or transferred in payment of
Deferred Shares, Performance Shares, Performance Units, or Other Stock Based
Awards, shall not in the aggregate exceed 1,145,000 Shares.  Such
Shares may be Shares of original issuance or Shares that have been reacquired by
the Company. The number of Performance Units granted under this Plan may not in
the aggregate exceed 200,000.

     

    (b)           Upon
the payment of any Option Price by the transfer to the Company of Shares or upon
satisfaction of tax withholding obligations under the Plan by the transfer or
relinquishment of Shares, there shall be deemed to have been issued or
transferred only the number of Shares actually issued or transferred by the
Company, less the number of Shares so transferred or relinquished. In any event,
the number of Shares actually issued or transferred by the Company upon the
exercise of Incentive Stock Options may not exceed 1,145,000, subject to
adjustment as provided in Section 4 of the Plan. Upon the payment in cash of a
benefit provided by any Award under this Plan, any Shares that were subject to
such Award shall again be

     

    
      
         

      

      
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    available
for issuance or transfer under this Plan.  Performance Units that are
paid in Shares or are not earned by a Participant at the end of a Performance
Period are available for future grants of Performance Units.

     

    (c)           If
an Award expires or terminates for any reason without being exercised in full or
is satisfied without the distribution of Stock, or Stock distributed pursuant to
an Award is forfeited or reacquired by the Company, or is surrendered upon
exercise of an Award, the Stock subject to such Award or so forfeited,
reacquired or surrendered shall again be available for distribution for purposes
of the Plan.

     

    (d)           No
Participant may receive Awards, including Options, during any one calendar year
representing more than 50,000 Shares or more than 25,000 Performance
Units.

     

    (e)           Any
shares issued by the Company in connection with the assumption or substitution
of outstanding grants from any acquired corporation shall not reduce the Shares
available for Awards under the Plan.

     

    4.           ADJUSTMENTS.

     

    In the
event that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is necessary in order to prevent
dilution or enlargement of the rights of Optionees or Grantees, then, the
Committee shall in such manner as it may deem equitable: (i) adjust any or all
of (1) the aggregate number of Shares or other securities of the Company (or
number and kind of other securities or property) with respect to which Awards
may be granted under the Plan; (2) the number of Shares or other securities of
the Company (or number and kind of other securities or property) subject to
outstanding Awards under the Plan; and (3) the grant or exercise price with
respect to any Award under the Plan, provided that in each case, the number of
shares subject to any Award shall always be a whole number; (ii) in cancellation
of an option, provide for an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect; or (iii) in cancellation of an award, make provision
for a cash payment to the holder of an outstanding
Award.  Notwithstanding the foregoing: (x) any adjustments or
substitutions made pursuant to this Section 4 to Awards that constitute a
“nonqualified deferred compensation plan” within the meaning of Section 409A
shall be made in compliance with the requirements of Section 409A; (y) any
adjustments or substitutions made pursuant to this Section 4 to Awards that do
not constitute a “nonqualified deferred compensation plan” subject to Section
409A shall be made in such a manner as to ensure that after such adjustment or
substitution, the Awards either (A) continue not to be subject to Section 409A
or (B) comply with the requirements of Section 409A; and (z) in any event,
neither the Committee nor the Board shall have the authority to make any
adjustments or substitutions pursuant to this Section 4 to the extent the
existence of such authority would cause an Award that is not intended to be
subject to Section 409A at the date of grant to violate Section
409A.

     

    
      	
              5.

            	
              ADMINISTRATION
      OF THE PLAN.

            

    

     

    

     

    
      
         

      

      
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    (a)           This
Plan shall be administered by one or more Committees appointed by the Board. Any
grants of Awards to officers who are subject to Section 16 of the Exchange Act
shall be made by a Committee composed of not less than two members of the Board,
each of whom shall be a "Non-Employee Director" within the meaning of Rule
16b-3. Any grant of an Award that is intended to qualify as "performance-based
compensation" under Section 162(m) of the Code shall be made by a Committee
composed of not less than two members of the Board, each of whom shall be an
"outside director" within the meaning of the regulations under Section 162(m) of
the Code. For purposes of grants of Awards to Non-Employee Directors, the entire
Board shall serve as the Committee.

     

    (b)           The
Committee, or Committees, shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority: (i) to
select the officers and other Key Employees of the Company, its Subsidiaries and
Affiliates to whom Awards may from time to time be granted; (ii) to determine
the time or times of grant, and the extent, if any, of Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Deferred Stock Awards, Other Stock-Based Awards, Performance Share Awards,
Performance Unit Awards, or any combination of the foregoing, granted to any one
or more Participants; (iii) to determine the number of Shares to be covered by
any Award; (iv) to establish the terms and conditions of any Award, including,
but not limited to: (A) the Share price; (B) any restriction or limitation on
the grant, vesting or exercise of any Award (including but not limited to, the
attainment (and certification of the attainment) of one or more Performance
Objectives (or any combination thereof) that may apply to the individual
Participant, a Company business unit, including a Subsidiary or an Affiliate, or
the Company as a whole); and (C) any waiver or acceleration of vesting or
forfeiture provisions regarding any Stock Option or other Award and the Stock
relating thereto, based on such factors as the Committee shall determine; and to
determine whether, to what extent and under what circumstances Stock and other
amounts payable with respect to an Award shall be deferred either automatically
or at the election of the Participant, and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates determined by
the Committee), dividends or deemed dividends on such deferrals.

     

    (c)           Subject
to the provisions of the Plan, the Committee shall have full and conclusive
authority to interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; to amend or modify the terms of any
Award at or after grant with the consent of the holder of the Award, except to
the extent prohibited by Section 7(b); to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Award agreements and to make all other determinations necessary or
advisable for the proper administration of the Plan.  The Committee's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards under
the Plan (whether or not such persons are similarly situated). No member of the
Committee shall be liable to any person or entity for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.

     

    (d)           Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all Persons, including the
Company, any Subsidiary and Affiliate,

     

    
      
         

      

      
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    and
Participant, any holder or beneficiary of any Award, any Employee and any
Non-Employee Director.

     

    (e)           Notwithstanding
the foregoing, the Committee may not take any actions pursuant to the exercise
of its power and authority granted under this Section 5 that would (i) cause
Awards not subject to Section 409A at the date of grant either (A) to become
subject to Section 409A or (B) to fail to comply with the requirements of
Section 409A; or (ii) cause any Award subject to Section 409A to fail to comply
with the requirements of Section 409A.

     

    
      	
              6.

            	
              ELIGIBILITY.

            

    

     

    Any
officer, Key Employee (including any employee-director of the Company or of any
Subsidiary or Affiliate who is not a member of the Committee) or Non-Employee
Director shall be eligible to be designated a Participant; provided, however,
that, notwithstanding anything herein to the contrary, any Award that
constitutes a “stock right,” within the meaning of Section 409A, shall be
granted only to persons eligible to be designated a Participant with respect to
whom the Company is an “eligible issuer of service recipient stock” under
Section 409A.

     

    
      	
              7.

            	
              OPTIONS.

            

    

     

    The
Committee may from time to time authorize grants to Participants of Options to
purchase Shares upon such terms and conditions as the Committee may determine in
accordance with the following provisions:

     

    (a)           Each
grant shall specify the number of Shares to which it pertains.

     

    (b)           Each
grant shall specify an Option Price per Share. Except in the case of substitute
awards, the Option Price of an Option may not be less than 100% of the Fair
Market Value of the Shares with respect to which the Option is granted on the
Grant Date. If an officer or Key Employee owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Company or any
Subsidiary or Parent Corporation (within the meaning of Section 424(e) of the
Code), and an Incentive Stock Option is granted to such officer or Key Employee,
the Option Price shall be no less than 110% of the Fair Market Value on the
Grant Date. Notwithstanding the foregoing and except as permitted by the
provisions of Sections 4 and 19(c) hereof, the Committee shall not have the
power to (i) amend the terms of previously granted Options to reduce the Option
Price of such Options, or (ii) cancel such Options and grant substitute Options
with a lower Option Price than the cancelled Options.

     

    (c)           Each
Option may be exercised in whole or in part at any time, with respect to whole
shares only, within the period permitted for the exercise thereof and shall be
exercised by written notice of intent to exercise the Option, delivered to the
Company at its principal office, and payment in full to the Company at said
office of the amount of the Option Price for the number of Shares with respect
to which the Option is then being exercised. Each grant shall specify the form
of consideration to be paid in satisfaction of the Option Price and the manner
of payment of such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the Company, (ii)
nonforfeitable, unrestricted Shares that have been owned by the Optionee for at
least six months and have a value at the time of exercise that is equal to the
Option Price, together with any applicable withholding taxes, (iii) any
other

     

    
      
         

      

      
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    legal
consideration that the Committee may deem appropriate, on such basis as the
Committee may determine in accordance with this Plan, (including without
limitation any form of consideration authorized under Section 7(d) below),
provided, however that, such consideration (A) may not cause Awards intended to
be exempt from Section 409A to become subject to Section 409A and (B) may not
cause the Awards subject to Section 409A to violate the requirements of Section
409A, or (iv) any combination of the foregoing.

     

    (d)           On
or after the Grant Date of any Option other than an Incentive Stock Option, the
Committee may determine that payment of the Option Price may also be made in
whole or in part in the form of Restricted Shares or other Shares that are
subject to risk of forfeiture or restrictions on transfer.  Unless
otherwise determined by the Committee, whenever any Option Price is paid in
whole or in part by means of any of the forms of consideration specified in this
Section 7(d), the Shares received by the Optionee upon the exercise of the
Options shall be subject to the same risks of forfeiture or restrictions on
transfer as those that applied to the consideration surrendered by the Optionee,
provided that such risks of forfeiture and restrictions on transfer apply only
to the same number of Shares received by the Optionee as applied to the
forfeitable or Restricted Shares surrendered by the Optionee.

     

    (e)           Any
grant may provide, to the extent permitted by law, for payment of the Option
Price from the proceeds of sale through a bank or broker on the date of exercise
of some or all of the Shares to which the exercise relates.

     

    (f)           Each
Option grant may specify a period of continuous employment of the Optionee by
the Company or any Subsidiary (or, in the case of a Non-Employee Director,
service on the Board) or other terms and conditions, such as achievement of
Performance Objectives, that may be determined by the Committee that is
necessary before the Options or installments thereof shall become exercisable,
and any grant may provide for the earlier exercise of such rights in the event
of a Change in Control of the Company or other similar transaction or event;
provided, however, that such provision (A) may not cause Awards intended to be
exempt from Section 409A to become subject to Section 409A and (B) may not cause
the Awards subject to Section 409A to violate the requirements of Section
409A,.

     

    (g)           Options
granted under this Plan may be Incentive Stock Options, Nonqualified Stock
Options, or a combination of the foregoing, provided that only Nonqualified
Stock Options may be granted to Non-Employee Directors. Each grant shall specify
whether (or the extent to which) the Option is an Incentive Stock Option or a
Nonqualified Stock Option. Notwithstanding any such designation, to the extent
that the aggregate Fair Market Value of the Shares with respect to which Options
designated as Incentive Stock Options or Tandem Stock Appreciation Rights
related to such Incentive Stock Options are exercisable for the first time by an
Optionee during any calendar year (under all Plans of the Company) exceeds
$100,000 such Options shall be treated as Nonqualified Stock
Options.

     

    (h)           No
Option granted under this Plan may be exercised more than 10 years from the
Grant Date; provided, however, that if an Incentive Stock Option is granted to
an employee who owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Subsidiary or Parent Corporation (within
the meaning of Section 424(e) of the Code), the term of such Incentive Stock
Option shall be no more than five years from the date of grant.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    (i)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Optionee and containing such terms and
provisions as the Committee may determine consistent with this
Plan.

     

    8.           STOCK
APPRECIATION RIGHTS.

     

    The
Committee may also authorize grants to Participants of Stock Appreciation
Rights. A Stock Appreciation Right provides a Participant the right to receive
from the Company an amount, which shall be determined by the Committee and shall
be expressed as a percentage (not exceeding 100 percent), of the Spread at the
time of the exercise of such right. Any grant of Stock Appreciation Rights under
this Plan shall be upon such terms and conditions as the Committee may determine
in accordance with the following provisions:

     

    (a)           Any
grant may specify that the amount payable upon the exercise of a Stock
Appreciation Right may be paid by the Company in cash, Shares or any combination
thereof and may (i) either grant to the Participant or reserve to the Committee
the right to elect among those alternatives or (ii) preclude the right of the
Participant to receive and the Company to issue Shares or other equity
securities in lieu of cash;

     

    (b)           Any
grant may specify that the amount payable upon the exercise of a Stock
Appreciation Right shall not exceed a maximum specified by the Committee on the
Grant Date;

     

    (c)           Any
grant may specify (i) a waiting period or periods before Stock Appreciation
Rights shall become exercisable and (ii) permissible dates or periods on or
during which Stock Appreciation Rights shall be exercisable; provided, however,
that such specifications may not permit an exercise of the Award that would
violate Section 409A;

     

    (d)           Any
grant may specify that a Stock Appreciation Right may be exercised only in the
event of a Change in Control of the Company or other similar transaction or
event; provided, however that, such provision (A) may not cause Awards intended
to be exempt from Section 409A to become subject to Section 409A and (B) may not
cause the Awards subject to Section 409A to violate the requirements of Section
409A;

     

    (e)           On
or after the Grant Date of any Stock Appreciation Rights, the Committee may
provide for the payment to the Participant of Dividend Equivalents thereon in
cash or Shares on a current, deferred or contingent basis; provided, that the
right to Dividend Equivalents may not cause an Award that is not otherwise
subject to Section 409A to become subject to 409A and shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A;

     

    (f)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Optionee, which shall describe the
subject Stock Appreciation Rights, identify any related Options, state that the
Stock Appreciation Rights are subject to all of the terms and conditions of this
Plan and contain such other terms and provisions as the Committee may determine
consistent with this Plan;

     

    (g)           Each
grant of a Tandem Stock Appreciation Right shall provide that such Tandem Stock
Appreciation Right may be exercised only (i) at a time when the related Option
(or any similar right granted under this or any other Plan of the Company) is
also exercisable and the

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Spread is
positive; and (ii) by surrender of the related Option (or such other right) for
cancellation;

     

    (h)           Each
grant of a Stock Appreciation Right shall specify in respect of each Stock
Appreciation Right a Base Price per Share, which shall be equal to or greater
than the Fair Market Value of the Shares on the Grant Date. Successive grants of
Stock Appreciation Rights may be made to the same Participant regardless of
whether any Stock Appreciation Rights previously granted to such Participant
remain unexercised. Each grant shall specify the period or periods of continuous
employment of the Participant by the Company or any Subsidiary that are
necessary before the Stock Appreciation Rights or installments thereof shall
become exercisable, and any grant may provide for the earlier exercise of such
rights in the event of a Change in Control of the Company or other similar
transaction or event; provided, however, such provision (A) may not cause Awards
intended to be exempt from Section 409A to become subject to Section 409A and
(B) may not cause the Awards subject to Section 409A to violate the requirements
of Section 409A.  No Stock Appreciation Right granted under this Plan
may be exercised more than 10 years from the Grant Date.  An Award
that is subject to Section 409A may not be granted in tandem with an Award that
is not otherwise subject to Section 409A.

     

    9.           RESTRICTED
SHARES.

     

    The
Committee may also authorize grants to Participants of Restricted Shares upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:

     

    (a)           Each
grant shall constitute an immediate transfer of the ownership of Shares to the
Participant in consideration of the performance of services, entitling such
Participant to dividend, voting and other ownership rights, subject to the
substantial risk of forfeiture and restrictions on transfer hereinafter
described.

     

    (b)           Each
grant may be made without additional consideration from the Participant or in
consideration of a payment by the Participant that is less than the Fair Market
Value on the Grant Date.

     

    (c)           Each
grant shall provide that the Restricted Shares covered thereby shall be subject
to a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code for a period to be determined by the Committee on the Grant Date, and any
grant or sale may provide for the earlier termination of such risk of forfeiture
in the event of a Change in Control of the Company or other similar transaction
or event.

     

    (d)           Each
grant shall provide that, during the period for which such substantial risk of
forfeiture is to continue, the transferability of the Restricted Shares shall be
prohibited or restricted in the manner and to the extent prescribed by the
Committee on the Grant Date. Such restrictions may include, without limitation,
rights of repurchase or first refusal by the Company or provisions subjecting
the Restricted Shares to a continuing substantial risk of forfeiture in the
hands of any transferee.

     

    (e)           Any
grant or the vesting thereof may be further conditioned upon the attainment of
Performance Objectives established by the Committee in accordance with the
applicable provisions of Section 11 of this Plan regarding Performance Shares
and Performance Units.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

     

    (f)           Any
grant may require that any or all dividends or other distributions paid on the
Restricted Shares during the period of such restrictions be automatically
sequestered and reinvested on an immediate or deferred basis in the form of cash
or additional Shares, which may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.  Any such arrangements with respect to distributions or
dividends paid on Restricted Shares that provide for a “deferral of
compensation” within the meaning of Section 409A, shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A.

     

    (g)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant and containing such terms
and provisions as the Committee may determine consistent with this Plan. Unless
otherwise directed by the Committee, all certificates representing Restricted
Shares, together with a stock power that shall be endorsed in blank by the
Participant with respect to such Shares, shall be held in custody by the Company
until all restrictions thereon lapse.

     

    (h)           At
the end of the restricted period and provided that any other restrictive
conditions of the Restricted Shares Award are met, or at such earlier time as
otherwise determined by the Committee, all restrictions set forth in the Award
Agreement relating to the Restricted Share Award or in the Plan shall lapse as
to the restricted Shares subject thereto, and a stock certificate for the
appropriate number of Shares, free of the restrictions and restricted stock
legend, shall be delivered to the Participant or the Participant's beneficiary
or estate, as the case may be.

     

    10.           DEFERRED
SHARES.

     

    The
Committee may authorize grants of Deferred Shares to Participants upon such
terms and conditions as the Committee may determine in accordance with the
following provisions; provided, that all such Awards that are subject to Section
409A shall satisfy the requirements of Section 409A:

     

    (a)           Each
grant shall constitute the agreement by the Company to issue or transfer Shares
to the Participant in the future in consideration of the performance of
services, subject to the fulfillment during the Deferral Period of such
conditions as the Committee may specify.

     

    (b)           Each
grant may be made without additional consideration from the Participant or in
consideration of a payment by the Participant that is less than the Fair Market
Value on the Grant Date.

     

    (c)           Each
grant shall provide that the Deferred Shares covered thereby shall be subject to
a Deferral Period, which shall be fixed by the Committee on the Grant Date, and
any grant or sale may provide for the earlier termination of such period in the
event of a Change in Control of the Company or other similar transaction or
event; provided, that, such provision (A) may not cause Awards intended to be
exempt from Section 409A to become subject to Section 409A and (B) may not cause
the Awards subject to Section 409A to violate the requirements of Section
409A.

     

    (d)           During
the Deferral Period, the Participant shall not have any right to transfer any
rights under the subject Award, shall not have any rights of ownership in the
Deferred Shares

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    and shall
not have any right to vote such Shares, but the Committee may on or after the
Grant Date authorize the payment of Dividend Equivalents on such Shares in cash
or additional Shares on a current, deferred or contingent basis; provided, that
the payment of Dividend Equivalents may not cause an Award that is not otherwise
subject to Section 409A to become subject to 409A and shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A.

     

    (e)           Any
grant or the vesting thereof may be further conditioned upon the attainment of
Performance Objectives established by the Committee in accordance with the
applicable provisions of Section 11 of this Plan regarding Performance Shares
and Performance Units. Except as otherwise determined by the Committee, all
Deferred Shares and all rights of the grantee to such Deferred Shares shall
terminate, without further obligation on the part of the Company, unless the
Grantee remains in continuous employment of the Company for the entire Deferral
Period in relation to which such Deferred Shares were granted and unless any
other restrictive conditions relating to the Deferred Shares are
met.

     

    (f)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant and containing such terms
and provisions as the Committee may determine consistent with this
Plan.

     

    
      	
              11.

            	
              PERFORMANCE
      SHARES AND PERFORMANCE UNITS.

            

    

     

    The
Committee also may authorize grants of Performance Shares and Performance Units,
which shall become payable to the Participant upon the achievement of specified
Performance Objectives, upon such terms and conditions as the Committee may
determine in accordance with the following provisions:

     

    (a)           Each
grant shall specify the number of Performance Shares or Performance Units to
which it pertains, which may be subject to adjustment to reflect changes in
compensation or other factors.

     

    (b)           The
Performance Period with respect to each Performance Share or Performance Unit
shall commence on a date specified by the Committee at the time of grant and may
be subject to earlier termination in the event of a Change in Control of the
Company or other similar transaction or event; provided, that, such provision
(A) may not cause Awards intended to be exempt from Section 409A to become
subject to Section 409A and (B) may not cause the Awards subject to Section 409A
to violate the requirements of Section 409A.

     

    (c)           Each
Award shall specify the Performance Objectives that are to be achieved by the
Participant with respect to the grant or the vesting thereof.

     

    (d)           Each
grant may specify in respect of the specified Performance Objectives a minimum
acceptable level of achievement below which no payment will be made and shall
set forth a formula or other procedure for determining the amount of any payment
to be made if performance is at or above such minimum acceptable level but falls
short of the maximum achievement of the specified Performance
Objectives.

     

    (e)           Each
grant shall specify the time and manner of payment of Performance Shares or
Performance Units that shall have been earned, and any grant may specify that
any such

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    amount
may be paid by the Company in cash, Shares or any combination thereof and may
either grant to the Participant or reserve to the Committee the right to elect
among those alternatives.

     

    (f)           Any
grant of Performance Shares or Performance Units may specify that the amount
payable, or the number of Shares issued, with respect thereto may not exceed a
maximum specified by the Committee on the Grant Date.

     

    (g)           Any
grant of Performance Shares may provide for the payment to the Participant of
Dividend Equivalents thereon in cash or additional Shares on a current, deferred
or contingent basis; provided, that, the payment of Dividend Equivalents may not
cause an Award that is not otherwise subject to Section 409A to become subject
to 409A and shall be set forth as a separate arrangement that satisfies the
requirements of Section 409A.

     

    (h)           If
provided in the terms of the grant, the Committee may adjust Performance
Objectives and the related minimum acceptable level of achievement if, in the
sole judgment of the Committee, events or transactions have occurred after the
Grant Date that are unrelated to the performance of the Participant and result
in distortion of the Performance Objectives or the related minimum acceptable
level of achievement; provided, that such adjustment (A) may not cause Awards
intended to be exempt from Section 409A to become subject to Section 409A and
(B) may not cause the Awards subject to Section 409A to violate the requirements
of Section 409A.

     

    (i)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant, which shall state that the
Performance Shares or Performance Units are subject to all of the terms and
conditions of this Plan and such other terms and provisions as the Committee may
determine consistent with this Plan.

     

    
      	
              12.

            	
              OTHER
      STOCK-BASED AWARDS.

            

    

     

    The
Committee shall have the authority to grant to Participants an "Other
Stock-Based Award," which shall consist of any right that is (a) not an Award
described in Sections 7 through 11 above and (b) an Award of Shares or an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares), as deemed by the Committee to be consistent
with the purposes of the Plan. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Stock-Based Award.

     

    
      	
              13.

            	
              AWARDS
      TO NON-EMPLOYEE DIRECTORS.

            

    

     

    The Board
may grant to Non-Employee Director's awards in the form of Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Shares, Deferred Shares and/or
Other Stock Based Awards, including unrestricted Shares.  The grants
may be made according to an approved formula of the Board or made at the
discretion of the Board from time to time. The Board shall determine the terms
and conditions of any such Awards, including the terms and conditions which
shall apply upon a termination of the Non-Employee Director's service as a
member of the Board or an advisory board of a Subsidiary, and shall have full
power and authority in its discretion to administer such Awards, subject to the
terms of the Plan and applicable law.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

     

    
      	
              14.

            	
              PROVISIONS
      APPLICABLE TO COVERED OFFICERS AND PERFORMANCE-BASED
    AWARDS.

            

    

     

    Notwithstanding
anything in the Plan to the contrary, unless the Committee determines otherwise,
all performance-based Awards granted hereunder shall be subject to the terms and
provisions of this Section 14:

     

    (a)           The
Committee may grant to Covered Officers performance-based Awards that vest or
become exercisable upon the attainment of performance targets related to one or
more Performance Objectives selected by the Committee from among the list of
Performance Objectives contained herein. For the purposes of this Section 14,
performance goals shall be limited to one or more of the Performance Objectives
or any combination thereof. Each Performance Objective may be expressed on an
absolute and/or relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of the Company and/or the past
or current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders'
equity and/or Shares outstanding, or to assets or net assets.

     

    (b)           With
respect to any Covered Officer, the maximum annual number of Shares in respect
of which all performance-based Restricted Shares, Deferred Shares, Performance
Shares, Performance Units and Other Stock-Based Awards may be granted under the
Plan is 50,000 and the maximum annual amount of any Award settled in cash is
$250,000.

     

    (c)           To
the extent necessary to comply with Section 162(m) of the Code, with respect to
Restricted Share Awards, Deferred Share Awards, Performance Share Awards,
Performance Unit Awards and Other Stock-Based Awards, no later than 90 days
following the commencement of each Performance Period (or such other time as may
be required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) select the Performance Objective or Objectives applicable to the
Performance Period, (ii) establish the various targets and bonus amounts which
may be earned for such Performance Period, and (iii) specify the relationship
between Performance Objectives and targets and the amounts to be earned by each
Covered Officer for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether the
applicable performance targets have been achieved and the amounts, if any,
payable to Covered Officers for such Performance Period. In determining the
amount earned by a Covered Officer for a given Performance Period, subject to
any applicable Award Agreement, the Committee shall have the right to reduce
(but not increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance
Period.

     

    15.           TRANSFERABILITY.

     

    (a)           Except
as provided in Section 15(b), no Award granted under this Plan may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of by a Participant other than by will or the laws of descent and distribution,
and Options and Stock Appreciation Rights shall be exercisable during a
Participant's lifetime only by the Participant or,

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    in the
event of the Participant's legal incapacity, by his guardian or legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision.

     

    (b)           The
Committee may expressly provide in a Nonqualified Stock Option agreement (or an
amendment to such an agreement) that a Participant may transfer such
Nonqualified Stock Option to a spouse or lineal descendant (a "Family Member"),
a trust for the exclusive benefit of Family Members, a partnership or other
entity in which all the beneficial owners are Family Members, or any other
entity affiliated with the Participant that may be approved by the Committee.
Subsequent transfers of any such Nonqualified Stock Option shall be prohibited
except in accordance with this Section 15(b). All terms and conditions of any
such Nonqualified Stock Option, including provisions relating to the termination
of the Participant's employment or service with the Company or a Subsidiary,
shall continue to apply following a transfer made in accordance with this
Section 15(b).

     

    (c)           Any
Award made under this Plan may provide that all or any part of the Shares that
are (i) to be issued or transferred by the Company upon the exercise of Options
or Stock Appreciation Rights, upon the termination of the Deferral Period
applicable to Deferred Shares or upon payment under any grant of Performance
Shares or Performance Units, or (ii) no longer subject to the substantial risk
of forfeiture and restrictions on transfer referred to in Section 9 of this
Plan, shall be subject to further restrictions upon transfer.

     

    16.           FRACTIONAL
SHARES.

     

    No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any fractional Shares or
whether such fractional Shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.

     

    17.           WITHHOLDING
TAXES.

     

    Each
Participant is solely responsible for the payment of any tax liability
(including any taxes, interest and penalties that may arise under Section 409A)
with respect to an Award.  To the extent that the
Company is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under this Plan, it shall be a condition to the receipt of such payment
or the realization of such benefit that the Participant or such other person
make arrangements satisfactory to the Company for payment of all such taxes
required to be withheld. At the discretion of the Committee, such arrangements
may include relinquishment of a portion of such benefit.  The
Committee may provide, at its discretion, for additional cash payments to
holders of Awards to defray or offset any tax arising from the grant, vesting,
exercise or payments of any Award other than ISO's; provided, however that any
such cash payments shall be structured either (i) to comply with Section 409A or
(b) to be exempt from Section 409A.

     

    
      	
              18.

            	
              CERTAIN
      TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF
      ABSENCE.

            

    

     

    Notwithstanding
any other provision of this Plan to the contrary, in the event of termination of
employment by reason of death, Disability, Normal Retirement, Early Retirement
with the consent of the Company or leave of absence approved by the Company, or
in the event

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    of
Hardship or other special circumstances, of a Participant who holds an Option or
Stock Appreciation Right that is not immediately and fully exercisable, any
Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, any Deferred Shares as to
which the Deferral Period is not complete, any Performance Shares or Performance
Units that have not been fully earned, or any Shares that are subject to any
transfer restriction pursuant to Section 15(b) or (c) of this Plan, the
Committee may in its sole discretion take any action that it deems to be
equitable under the circumstances or in the best interests of the Company,
including without limitation waiving or modifying any limitation or requirement
with respect to any Award under this Plan; provided that such actions, waivers
or modifications (A) may not cause Awards intended to be exempt from Section
409A to become subject to Section 409A and (B) may not cause the Awards subject
to Section 409A to violate the requirements of Section 409A.

     

    
      	
              19.

            	
              AMENDMENTS
      AND OTHER MATTERS.

            

    

     

    (a)           The
Board may amend, alter, suspend, discontinue or terminate the Plan or any
portion thereof at any time, subject to the limitations of Sections 7(b), 4, and
26(b)(iii) hereof; provided that no such amendment, alteration, suspension,
discontinuation or termination shall increase any of the limitations specified
in Sections 3 or 14(b) of this Plan, other than to reflect an adjustment made in
accordance with Section 4, without the further approval of the shareholders of
the Company.

     

    (b)           Subject
to the restrictions of Sections 7(b), 4, and 26(b)(iii) hereof, the Committee
may waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted, prospectively
or retroactively; provided that, except for amendments made to comply with
applicable law (including without limitation Section 409A), stock exchange
rules, or accounting rules, any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would adversely affect the
rights of any Participant or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary.

     

    (c)           Subject
to the restrictions of Sections 7(b), 4, and 26(b)(iii) hereof, the Committee is
hereby authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4 hereof)
affecting the Company, any Subsidiary or Affiliate, or the financial statements
of the Company or any Subsidiary or Affiliate, or of changes in applicable laws
(including Section 409A), regulations, accounting principles, stock exchange
rules, or accounting rules, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan;
provided that no such adjustment shall be authorized to the extent that such
authority would be inconsistent with a performance-based Award's meeting the
requirements of Section 162(m) of the Code.

     

    (d)           This
Plan shall not confer upon any Participant any right with respect to continuance
of employment or other service with the Company or any Subsidiary and shall not
interfere in any way with any right that the Company or any Subsidiary would
otherwise have to terminate any Participant's employment or other service at any
time.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

     

    (e)           To
the extent that any provision of this Plan would prevent any Option that was
intended to qualify under particular provisions of the Code from so qualifying,
such provision of this Plan shall be null and void with respect to such Option,
provided that such provision shall remain in effect with respect to other
Options, and there shall be no further effect on any provision of this
Plan.

     

    20.           GOVERNING
LAW.

     

    The
validity, construction and effect of this Plan and any Award hereunder shall be
determined in accordance with the laws (including those governing contracts) of
the State of North Carolina, without giving effect to the conflicts of law
principles thereof.

     

    21.           NO
RIGHTS TO AWARDS.

     

    No Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Non-Employee Directors, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the same
with respect to each recipient.

     

    22.           SHARE
CERTIFICATES.

     

    All
certificates for Shares or other securities of the Company or any Subsidiary or
Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which such Shares or other securities are then listed, and any applicable
federal or state laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.

     

    23.           AWARD
AGREEMENTS.

     

    Each
Award hereunder shall be evidenced by an Award Agreement that shall be delivered
to the Participant and shall specify the terms and conditions of the Award and
any rules applicable thereto. In the event of a conflict between the terms of
the Plan and any Award Agreement, the terms of the Plan shall prevail. The Award
Agreement shall be executed or acknowledged by the Participant only if required
by the Committee.

     

    24.           NO
LIMIT ON OTHER COMPENSATION ARRANGEMENTS.

     

    Nothing
contained in the Plan shall prevent the Company or any Subsidiary or Affiliate
from adopting or continuing in effect other compensation arrangements, which
may, but need not, provide for the grant of Options, Restricted Stock, Shares
and other types of Awards provided for hereunder (subject to stockholder
approval as such approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases; provided that such
arrangements may not cause any Awards granted hereunder to violate Section 409A
or cause any Awards granted hereunder that are exempt from Section 409A to
become subject to Section 409A.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

     

    25.           SEVERABILITY.

     

    If any
provision of the Plan or any Award is, or becomes, or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to the
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

     

    26.           OTHER
LAWS.

     

    (a)           The
Committee may refuse to issue or transfer any Shares or other consideration
under an Award if, acting in its sole discretion, it determines that the
issuance or transfer of such Shares or such other consideration might violate
any applicable law or regulation or entitle the Company to recover the same
under Section 16(b) of the Exchange Act, and any payment tendered to the Company
by a Participant, other holder or beneficiary in connection with the exercise of
such Award shall be promptly refunded to the relevant Participant, holder, or
beneficiary.  Without limiting the generality of the foregoing, no
Award granted hereunder shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and until the Committee
in its sole discretion has determined that any such offer, if made, would be in
compliance with all applicable requirements of the U.S. federal securities laws
and any other laws to which such offer, if made, would be subject.

     

    (b)           Certain Limitations to
Ensure Compliance with Section 409A.

     

    (i)           In General.  It is
the intent of the parties that, to the extent Section 409A is applicable, this
Plan and all payments made pursuant to any Award hereunder shall be in
compliance with the requirements of Section 409A.  To the extent
Section 409A is applicable, if any provision of this Plan, or any Award,
payment, distribution, deferral election, transaction or other action or
arrangement contemplated by this Plan shall not be in compliance with Section
409A, then such Award, payment distribution, deferral election, transaction or
other action or arrangement shall not be undertaken and, to the extent permitted
by Section 409A, the Plan shall be deemed automatically amended without further
action on the part of the shareholders of the Company or the Board to the
minimum extent necessary to comply with Section 409A and will thereafter be
given effect as so amended.  If postponing payment of any amounts due
to specified employees (within the meaning of Section 409A) under this Plan is
necessary for compliance with the requirements of Section 409A to avoid adverse
tax consequences to the Participant, then payment of such amounts shall be
postponed to comply with Section 409A.  Any and all payments that are
postponed under this Section 26(b)(i) shall be paid to the Participant in a lump
sum at the earliest time that does not result in adverse tax consequences to the
Participant under Section 409A.

     

    (ii)           409A Awards. Without limiting
the generality of the Section 26(b)(i), the following rules will apply to Awards
that constitute a “nonqualified deferred compensation plan” within the meaning
of Section 409A (a “409A Award”):

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

     

    (1)           Elections. If a Participant
is permitted to elect to defer an Award or any payment under an Award, such
election will be permitted only at times in compliance with Section 409A
(including transition rules thereunder).

     

    (2)           Exercise and Distribution.
Except as provided in Section 26(b)(ii)(3) hereof, no 409A Award shall be
exercisable (if the exercise would result in a distribution) or otherwise
distributable to a Participant (or his or her beneficiary) except upon the
occurrence of one of the following (or a date related to the occurrence of one
of the following), which must be specified in a written document governing such
409A Award and otherwise meet the requirements of Treasury Regulation Section
1.409A-3:

     

    a.           A
specified time or a fixed schedule;

     

    b.           The
Participant’s separation from service (within the meaning of Treasury
Regulation  Section 1.409A-1(h) and other applicable rules under
Section 409A), subject to any postponement of such payment that may be required
by Section 26(b)(i) above;

     

    c.           The
death of the Participant;

     

    d.           The
date the Participant has experienced a Disability; and

     

    e.           The
occurrence of a Change in Control.

     

    (3)           No Acceleration. The exercise
or distribution of a 409A Award may not be accelerated prior to the time
specified in accordance with Section 26(b)(ii)(2) hereof, except to the extent
otherwise permitted by Section 409A including Treasury Regulation Section
1.409A-3(j).

     

    (iii)           Limitation on
Adjustments.  Any amendment, modification, substitution,
termination, or liquidation of, or addition, waiver, cancellation, acceleration,
extension, or deferral of any conditions or rights under, this Plan or any Award
(A) must not cause Awards intended to be exempt from Section 409A to become
subject to Section 409A and (B) must not cause the Awards subject to Section
409A to violate the requirements of Section 409A.

     

    (iv)           Scope and
Application.  For purposes of this Agreement, references to a
provision, plan, or event “satisfying” the requirements of Section 409A or being
in “compliance” with the requirements of Section 409A shall mean that such
provision, plan or event will not cause adverse tax consequences to the
Participant under Section 409A.  For purposes of this Agreement,
reverences to a provision, plan, or event that “fails to comply” with Section
409A or that “violates” Section 409A shall mean that such provision, plan, or
event will cause adverse tax consequences to the Participant under Section
409A.  Grants of Options, and Stock Appreciation Rights under this
Agreement are intended to be exempt from Section 409A unless otherwise expressly
specified by the Committee.  The rules applicable to 409A Awards under
this Section 26(b) constitute further restrictions on terms of Awards set forth
elsewhere in this Plan.

     

    27.           NO
TRUST OR FUND CREATED.

     

    Neither
the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Subsidiary or Affiliate

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any Subsidiary or Affiliate pursuant to
an Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Subsidiary or Affiliate.

     

    28.           HEADINGS.

     

    Headings
are given to the Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision
thereof.

     

    29.           EFFECTIVE
DATE AND SHAREHOLDER APPROVAL.

     

    This Plan
shall become effective upon its approval by the Board subject to approval by the
shareholders of the Company at the next Annual Meeting of Shareholders. The
Committee may grant Awards subject to the condition that this Plan shall have
been approved by the shareholders of the Company.

     

    30.           TERMINATION.

     

    This Plan
shall terminate ten years from the date on which this Plan was first approved by
the Board, and no Award shall be granted after that date. Unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
granted hereunder may, and the authority of the Committee to amend, alter,
adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the authority
for grant of new Awards hereunder has been exhausted.

     

    22ex10_30.htm

    EXHIBIT
10.30

    

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

    

    THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into effective as of the 31st day of December, 2008 (the “Effective Date”) by
and among FNB United Corp., a North Carolina corporation (“FNB”), CommunityONE
Bank, National Association, a national banking corporation formerly known as
First National Bank and Trust Company and wholly owned subsidiary of FNB (the
“Bank”), and Michael C.  Miller, President of each of FNB and the Bank
(the “Executive”).  FNB and the Bank are hereinafter sometimes
referred to together or individually as the “Employer.”

    

    WITNESSETH:

    

    WHEREAS,
the Executive is currently employed as the President of each of FNB and the Bank
pursuant to the terms of an employment agreement between the Executive and the
Bank dated as of January 1, 2006 (the “Prior Agreement”) and is highly
knowledgeable about their businesses, operations, markets and customers;
and

    

    WHEREAS,
the Executive is a valued executive of the Employer and, to induce the Executive
to continue employment with the Employer and to enhance the Executive’s job
security, the Employer entered into the Prior Agreement to provide compensation
to the Executive in certain events, including but not limited to the Executive’s
termination of employment following a change in control of the Employer;
and

    

    WHEREAS,
because the Executive is familiar with and will continue to gain extensive
knowledge regarding the Employer’s products, relationships, trade secrets and
confidential information relating to the Employer and its business, products,
processes and developments and has generated and will continue to generate
confidential information in the course of his duties, the Employer wished to
protect its long-term interests by having the Executive enter into certain
nondisclosure and noncompetition covenants set forth in the Prior Agreement;
and

    

    WHEREAS,
the parties desire to amend and restate the Prior Agreement to bring the Prior
Agreement into compliance with Section 409A of the Internal Revenue Code of
1986, as amended from time to time (including corresponding provisions of
succeeding law) (the “Code”), the regulations promulgated thereunder, and other
guidance issued thereunder by the Department of the Treasury and/or the Internal
Revenue Service (“Section 409A”); and

    

    WHEREAS;
the parties intend that this Agreement shall amend, restate and supersede the
Prior Agreement in its entirety, and that from and after the effective date of
this Agreement, the Prior Agreement shall be of no further force and effect;
and

    

    WHEREAS,
none of the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    359.1(f)(1)(ii)
[12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Employer, is
contemplated insofar as the Employer or any affiliates are
concerned.

    

    NOW, THEREFORE, in consideration of the
terms contained herein, including the compensation the Employer agrees to pay to
the Executive upon certain events, the Executive's continued employment with the
Employer, the Executive's covenants and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Employer and
the Executive hereby agree as follows:

    

    1.           Employment
and Duties.

     

    (a)           Employment.  During
the Employment Term (as defined in Section 3 below), and upon the terms and
conditions set forth in this Agreement, the Employer shall employ the Executive,
and the Executive shall serve, as President and Chief Executive Officer of each
of FNB and the Bank. As such, the Executive shall have the responsibilities,
duties and authority reasonably accorded to, expected of, and consistent with
those positions and will report directly to the board of directors of each of
FNB and the Bank (hereinafter sometimes referred to together or individually as
the “Board”).  The Executive shall serve the Employer faithfully,
diligently, competently, and to the best of his ability, and he shall
exclusively devote his full time, energy, and attention to the business of the
Employer and to the promotion of the Employer’s interests throughout the
Employment Term.  The Executive shall faithfully adhere to, execute
and fulfill all lawful requests, instructions and policies made by the Board or
its authorized agent(s).

     

    (b)           No Other
Employment.  Without the written consent of FNB’s board of
directors, during the Employment Term, the Executive shall not render services
to or for any person, firm, corporation, or other entity or organization in
exchange for compensation, regardless of the form in which such compensation is
paid and regardless of whether it is paid directly or indirectly to the
Executive. The foregoing limitation shall not be construed as prohibiting the
Executive from managing his personal affairs in a manner that does not interfere
with the proper performance of his duties and responsibilities as President or
making or managing personal investments in such form or manner as will not
require his services in the operation or affairs of the companies or enterprises
in which such investments are made and will not violate Section 6
below.

     

    (c)           Board of Directors of
FNB.  The Executive is currently serving as a director of
FNB.  FNB shall nominate the Executive for election as a director at
such times as necessary so that the Executive will, if elected by shareholders,
remain a director of FNB throughout the term of this Agreement.  The
Executive hereby consents to serve as a director of FNB, and the Executive
hereby consents to being named as a director of FNB in documents filed by FNB
with the Securities and Exchange Commission.  The Executive shall be
deemed to have resigned as a director of FNB effective immediately after
termination of the Executive’s employment under Section 4 of this Agreement
other than by reason of the Executive’s retirement under Section 4(g),
regardless of whether the Executive submits a formal, written resignation as
director.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (d)           Board of Directors of the
Bank.   The Executive is currently serving as a director
of the Bank.  The Board shall undertake every lawful effort to ensure
that the Executive continues throughout the term of his employment to be elected
or reelected as a director of the Bank.  The Executive shall be deemed
to have resigned as a director of the Bank effective immediately after
termination of the Executive’s employment under Section 4 of this Agreement
other than by reason of the Executive’s retirement under Section 4(g),
regardless of whether the Executive submits a formal, written resignation as
director.

     

    2.           Compensation.   For
all services rendered by the Executive during the Employment Term as defined in
Section 3 below, the Employer shall compensate the Executive as
follows:

     

    (a)           Base
Salary.  During the Employment Term, the Employer shall pay the
Executive an annual salary in an amount not less than the amount of the
Executive’s annual salary as of the Effective Date (such salary as it may be
increased from time to time being hereinafter referred to as the “Base
Salary”).  Such salary shall be payable in accordance with the
Employer’s customary payroll practices and shall be subject to all applicable
federal and state withholding, payroll and other taxes.  During the
Employment Term, the Base Salary shall be reviewed annually by the Compensation
Committee of FNB’s board of directors or by such other board committee as has
jurisdiction over executive compensation and may be increased from time to time
consistent with such review.

     

    (b)            Perquisites, Benefits and Other
Compensation.   During the Employment Term, the Executive
shall be entitled to receive additional benefits and compensation from the
Employer in such form and to such extent as specified below:

     

    (i)           Benefit Plans and
Programs.  The Executive will be entitled to participate, in
accordance with the provisions thereof, in all group health, disability and life
insurance, and all bonus, pension, retirement and other employee benefit plans
and programs made available by the Employer to its employees generally or to its
senior officers.  Without limiting the generality of the foregoing,
the Executive shall be entitled to participate, in accordance with the
provisions thereof, in the Employer’s arrangement for performance compensation
for stakeholders (or any successor plan) (the “Stakeholders Plan”) and the FNB
United/CommunityONE Executive Short-Term Incentive Plan (hereinafter together
referred to as the “Bonus Plans”).  In addition, the Executive shall
be eligible to participate in the Employer’s stock-based incentive compensation
plans then available to other employees or executives of the Employer in
accordance with the provisions of such plans and with awards thereunder
determined by FNB’s board of directors or by the Compensation Committee of the
Board, in its sole discretion.

     

    (ii)           Supplemental
Plan.  The Executive will be entitled to participate, in
accordance with the provisions thereof, in the FNB Supplemental Executive
Retirement Plan, as such plan may be amended from time to time.

     

    (iii)           Club
Dues.  The Employer shall pay or reimburse the Executive for
the monthly dues and assessments necessary for the Executive to maintain the
status of an active member of the Asheboro Country Club and Pinewood Country
Club or such other clubs as

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    are
reasonably necessary to the conduct of the Employer’s business and as the
Compensation Committee of FNB’s board of directors may from time to time
approve.  The Employer shall also pay or reimburse the Executive for
the dues and expenses incurred by the Executive for membership in such civic
clubs or groups as are reasonably necessary to the conduct of the Employer’s
business and as may be approved by the Compensation Committee.

     

    (iv)           Vacation.  The
Executive shall be entitled to paid annual vacation and sick leave in accordance
with the policies established from time to time by the Employer.

     

    (v)           Automobile.  The
Employer shall provide the Executive with a suitable vehicle for his exclusive
use in the discharge of his duties hereunder and shall pay all operating and
service expenses, including automobile insurance, related to such
vehicle.  Any personal use of such vehicle by the Executive will be
appropriately accounted for and reported as additional
compensation.

     

    (vi)           Business
Expenses.  The Employer shall reimburse the Executive for any
reasonable out-of-pocket business and travel expenses incurred by the Executive
in the ordinary course of performing his duties for the Employer upon
presentation by the Executive, from time to time, of appropriate documentation
therefor and in accordance with the Employer’s policies and practices as
established or modified from time to time.

     

    (vii)           Meeting and Convention
Attendance.  The Employer shall pay all registration, travel,
accommodation and meal expenses for the Executive to attend such meetings and
conferences as are approved by the Board or an appropriate committee of the
Board.  The Employer shall also pay all registration, travel,
accommodation and meal expenses for the Executive and his spouse to attend the
annual conventions of the American and North Carolina Bankers Associations each
year.

     

    3.            Term.  The initial
term of this Agreement shall be for a period of three years commencing on the
Effective Date.  On the first anniversary of the Effective Date of
this Employment Agreement and on each anniversary thereafter, this Agreement
shall be extended automatically for one additional year unless FNB’s board of
directors determines that the term shall not be extended.  If the
board of directors determines not to extend the term, it shall promptly notify
the Executive in writing.  If the board of directors decides not to
extend the term of this Agreement, this Agreement shall nevertheless remain in
full force until its term expires.  The board of director’s decision
not to extend the term of this Agreement shall not – by itself – give the
Executive any rights under this Agreement to claim an adverse change in his
position, compensation, or circumstances or otherwise to claim entitlement to
severance benefits under this Agreement.  Unless sooner terminated,
this Agreement and the Executive’s employment hereunder shall terminate on
December 31 of the year in which the Executive attains age 65.  The
Executive's total term of employment with the Employer during the initial and
any extended term is collectively defined and sometimes referred to under this
Agreement as the "Employment Term."

     

    4.           Termination.    The
Executive’s term of employment under this Agreement may be terminated before the
end of the initial term or any extension thereof as set forth in this Section
4.  Notwithstanding anything contained herein to the contrary, the
Executive’s

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    employment
with the Employer shall not be considered to have terminated for purposes of the
Executive’s receiving any compensation or other benefits otherwise provided
under this Agreement unless (i) he would be considered to have incurred a
“separation from service” within the meaning of Section 409A from the
Employer and any
other entity that, along with the Employer, would be considered a “service
recipient” within the meaning of Section 409A or (ii) the payment of such
compensation or such other benefits would not be subject to Section
409A.

     

    (a)           Death.  In the
event of the death of the Executive during his employment under this Agreement,
this Agreement shall be terminated as of the date of death.  In such
event, the Employer shall pay the Executive’s Base Salary, at the rate in effect
at the time of his death and through the last day of the calendar month in which
such death occurs, to the Executive’s designated beneficiary, or, in the absence
of such designation, to the estate or other legal representative of the
Executive.  In addition, the Employer shall pay to the Executive’s
designated beneficiary, or, in the absence of such designation, to the estate or
other legal representative of the Executive, at the same time as bonus payments
for the year of death would otherwise be payable under the Stakeholders Plan, a
prorated bonus for the year of death that the Executive would have received if
he had been employed throughout such year and had received the same performance
rating as he received for the immediately preceding year, prorated on a daily
basis as of the date of the Executive’s death.  Any rights and
benefits the Executive’s estate or any other person may have under employee
benefit plans and programs of the Employer in the event of the Executive’s death
shall be determined in accordance with the terms of such plans and
programs.

     

    (b)           Long-Term
Disability.  If the Executive suffers any disability while
employed under this Agreement that prevents him from performing his duties under
this Agreement for a period of 90 consecutive days, then, unless otherwise then
agreed in writing by the parties hereto, the employment of the Executive under
this Agreement shall, at the election of the Employer, be terminated effective
as of the ninetieth day of such period.  Upon termination of the
Executive’s employment by reason of disability under this Section 4(b), the
Executive shall be entitled to receive his Base Salary, at the rate in effect on
the date of such termination, less any disability insurance payments paid to the
Executive on a policy maintained for the benefit of the Executive by the
Employer, through the end of the then current term of this
Agreement.  Such salary continuation shall be subject to all
applicable federal and state withholding taxes and any postponement of payment
that may be required pursuant to Section 15 below.  Any rights and
benefits the Executive may have under the employee benefit plans and programs of
the Employer in the event of the Executive’s disability shall be determined in
accordance with the terms of such plans and programs.

     

    For purposes of this Agreement,
“disability” shall mean the inability, by reason of bodily injury or physical or
mental disease, or any combination thereof, of the Executive to perform his
customary or other comparable duties with the Employer, with or without
reasonable accommodation.  In the event that the Executive and the
Employer are unable to agree as to whether the Executive is suffering a
disability, the Executive and the Employer shall each select a physician and the
two physicians so chosen shall make the determination or, if they are unable to
agree, they shall select a third physician, and the determination as to whether
the Executive is suffering a disability shall be based upon the determination of
a majority of the three physicians.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    The
Employer shall pay the reasonable fees and expenses of all physicians selected
pursuant to this Section 4(b).

     

    (c)           Termination for
Cause.  Nothing herein shall prevent the Employer from
terminating the Executive’s employment at any time for Cause (as hereinafter
defined).  Upon termination for Cause, the Executive shall receive his
Base Salary only through the date that such termination becomes effective and
the amount of any compensation previously deferred by the Executive, provided
that the payment of any such deferred amount will be made in accordance with the
provisions of the plan, program or arrangement of the Employer permitting the
deferral.  Neither the Executive nor any other person shall be
entitled to any further payments from the Employer, for salary or any other
amounts.  Notwithstanding the foregoing, any rights and benefits the
Executive may have under the employee benefit plans and programs of the Employer
following a termination of the Executive’s employment for Cause shall be
determined in accordance with the terms of such plans, agreements and
programs.

     

    For purposes of this Agreement,
termination for Cause shall mean a termination by the Employer of the
Executive’s employment by a vote of the majority of the Board members then in
office, as a result of (i) an intentional, willful and continued failure by
the Executive to perform his duties in the capacities indicated above (other
than due to disability); (ii) an intentional, willful and material breach
by the Executive of his fiduciary duties of loyalty and care to the Employer;
(iii) an intentional, willful and knowing violation by the Executive of any
provision of this Agreement; (iv) an intentional, willful and knowing
violation by the Executive of the Employer’s Code of Business Ethics or Code of
Ethics for Senior Financial Officers; (v) a conviction of, or the entering
of a plea of nolo contendere by the Executive for any felony or any crime
involving fraud or dishonesty, or (vi) a willful and knowing violation of
any material federal or state banking law or regulation applicable to the
Employer or the occurrence of any event described in Section 19 of the Federal
Deposit Insurance Act or any other act or event as a result of which the
Executive becomes unacceptable to, or is removed, suspended or prohibited from
participating in the conduct of the Employer’s affairs by any regulatory
authority having jurisdiction over the Employer; provided, however, that the
Board has given the Executive advance notice of such termination for Cause,
including the reasons therefor, together with a reasonable opportunity for the
Executive to appear with counsel before the Board and to reply to such
notice.

     

    (d)           Termination Other than for Cause and
Not in Connection with a Change in Control.  The Employer may
terminate the Executive’s employment under this Agreement at any time upon 90
days written notice to the Executive for whatever reason it deems appropriate,
or for no reason.  In the event such termination by the Employer
occurs and is not due to death as provided in Section 4(a) above, disability as
provided in Section 4(b) above or for Cause as provided in Section 4(c) above,
the Employer shall (i) continue the Executive’s Base Salary, at the rate in
effect at the time of such termination, through the end of the then current term
of this Agreement, (ii) pay to the Executive for the year of termination
and for each subsequent calendar year or portion thereof through the end of the
then current term of this Agreement an amount (prorated in the case of any
partial year) equal to the average of the bonuses paid to the Executive under
the Bonus Plans for the three calendar years immediately preceding the year of
termination, such payments to be made at the normal times for payment of bonuses
under the Bonus Plans, and (iii) pay to the Executive the amount of any
compensation previously deferred

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    by the
Executive, provided that the payment of any such deferred amount will be made in
accordance with the provisions of the plan, program or arrangement of the
Employer permitting the deferral.  All compensation continuation shall
be subject to applicable federal and state withholding taxes and any
postponement of payment that may be required pursuant to Section 15
below.  Any rights and benefits the Executive may have under employee
benefit plans and programs of the Employer following a termination of the
Executive’s employment by the Employer other than for Cause, including rights
and benefits under retirement plans and programs, shall be determined in
accordance with the terms of such plans and programs; provided that all stock
options and restricted stock awards granted to the Executive and outstanding as
of the date of termination (other than those under which vesting is
performance-based or is dependent upon the satisfaction of conditions other than
continued employment) shall become immediately and fully vested and the
Executive shall have up to three years to exercise all such outstanding options
following the date of termination but in no event beyond their specified
term.  Notwithstanding the foregoing, no such accelerated vesting or
change in exercise period shall be permitted if it would cause an option or
restricted stock award that is not otherwise subject to Section 409A to become
subject to Section 409A or if it would cause an option or restricted stock award
that is subject to Section 409A to violate Section 409A.

     

    In
addition to the foregoing, in the event of a termination pursuant to this
Section 4(d) and provided the Executive properly elects coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Employer shall reimburse the Executive for one hundred percent (100%) of all
applicable premiums for continuation coverage for the Executive under the group
health plan of the Employer in which the Executive was a participant at the time
of the termination of his employment.  On a monthly basis following a
termination pursuant to this Section 4(d), the Employer shall pay to Executive a
cash payment that shall equal the premium costs that the Executive paid on an
after-tax basis over the preceding month period for such COBRA coverage until
the earlier of (w) the end of the term remaining under this Agreement at the
time the Executive’s employment is terminated, (x) December 31 of the year the
Executive attains age 65, (y) the date on which the Executive is eligible to
participate in a group health plan of another employer as a full-time employee,
or (z) the Executive’s death; provided, however that, as of the nineteenth month
following a termination pursuant to this Section 4(d), the Executive shall not
be entitled to further reimbursement for premium costs for such COBRA
coverage.

     

    In the
event the Executive is eligible to be covered by the Postretirement Medical and
Life Insurance Benefits Plan, or any successor or similar plan, of the Employer
at the time of his termination pursuant to this Section 4(d), the Executive may
elect, in lieu of electing COBRA continuation coverage under the provisions of
the immediately preceding paragraph, to participate in such Postretirement
Medical and Life Insurance Benefits Plan of the Employer. On a monthly basis
following a termination pursuant to this Section 4(d), the Employer shall pay to
the Executive a cash payment that shall equal the premium costs that the
Executive paid on an after-tax basis over the month period for coverage under
such Postretirement Medical and Life Insurance Benefits Plan, as adjusted to
reflect the Employer’s subsidized cost-sharing arrangement, if any, that is
otherwise provided to all similarly situated employees based on their years of
service with the Employer until the earlier of (w) the end of the term remaining
under this Agreement at the time the Executive’s employment is terminated, (x)
December 31 of the year the Executive attains age 65, (y) the date on which the
Executive is eligible to participate in

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    a group
health plan of another employer as a full-time employee, or (z) the Executive’s
death; provided, however that, as of the nineteenth month following the
Executive’s termination pursuant to this Section 4(d), the Executive shall not
be entitled to further reimbursement for premium costs for coverage under such
Postretirement Medical and Life Insurance Benefits Plan. After the 18th month
following a termination pursuant to this Section 4(d), the Executive shall
continue to be entitled to participate in the Postretirement Medical and Life
Insurance Benefits Plan of the Employer and to receive the Employer’s subsidized
cost-sharing arrangement, if any, that is otherwise provided to all similarly
situated employees based on their years of service with the
Employer.

     

    In
addition to the foregoing, in the event of a termination pursuant to this
Section 4(d) the Employer shall reimburse the Executive for one hundred percent
(100%) of all applicable premiums actually paid by the Executive for disability
insurance and, if the Executive does not elect to participate in the
Postretirement Medical and Life Insurance Benefits Plan of the Employer pursuant
to the immediately preceding paragraph, life insurance policies following
termination of employment not to exceed, in scope or benefit, any group
disability or life insurance plan made available by the Employer to similarly
situated employees in which the Executive was a participant at the time of his
termination of employment.  On a monthly basis following a termination
pursuant to this Section 4(d), the Employer shall pay to the Executive a cash
payment that shall equal the premium costs that the Executive paid on an
after-tax basis over the month period for coverage under such disability and, if
applicable, life insurance policies until the earlier of (w) the end of the term
remaining under this Agreement at the time the Executive’s employment is
terminated, (x) December 31 of the year the Executive attains age 65, (y) the
date on which the Executive is eligible to participate in a group disability
and, if applicable, life insurance plan of another employer as a full-time
employee, or (z) the Executive’s death; provided, however that, as of the
nineteenth month following the Executive’s termination pursuant to this Section
4(d), the Executive shall not be entitled to further reimbursement for premium
costs for coverage under such disability and, if applicable, life insurance
policies.

     

    In no
event shall the amount of expenses eligible for reimbursement under this Section
4(d) for any calendar year affect the expenses eligible for reimbursement in
another calendar year.  In no event shall any reimbursement made
pursuant to the two immediately preceding paragraphs be made later than the last
day of the calendar year following the year in which the Executive incurred the
expenses being reimbursed.  Any reimbursement payments made pursuant
to either of the two immediately preceding paragraphs shall be subject to any
postponement of payment that may be required by Section 15.  In the
event a termination by the Employer of the Executive’s employment under this
Agreement occurs within 24 months following a Change in Control (as defined in
Section 5(c)) and is not due to death as provided in Section 4(a) above,
disability as provided in Section 4(b) above, or for Cause as provided in
Section 4(c) above, then the Executive’s rights to compensation shall be
governed by Section 5 and not this Section 4(d).

     

    (e)           At the Executive’s Option with Good
Reason.  The Executive may terminate his employment with Good
Reason (as defined below) upon at least 60 days advance notice to Employer;
provided that the termination will take effect at the end of the 60-day notice
period unless the event or circumstance constituting Good Reason is cured by the
Employer or

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    unless
the notice of termination with Good Reason is revoked by the Executive within
such 60-day period.  In the event of such a voluntary termination of
employment with Good Reason, the Employer shall (i) continue the
Executive’s Base Salary, at the rate in effect at the time of such termination,
through the end of the then current term of this Agreement, (ii) pay to the
Executive for the year of termination and for each subsequent calendar year or
portion thereof through the end of the then current term of this Agreement an
amount (prorated in the case of any partial year) equal to the average of the
bonuses paid to the Executive under the Bonus Plans for the three calendar years
immediately preceding the year of termination, such payments to be made at the
normal times for payment of bonuses under the Bonus Plans, and (iii) pay to
the Executive the amount of any compensation previously deferred by the
Executive, provided that the payment of any such deferred amount will be made in
accordance with the provisions of the plan, program or arrangement of the
Employer permitting the deferral.  All compensation continuation shall
be subject to applicable federal and state withholding taxes and any
postponement of payment that may be required pursuant to Section 15
below.  Any rights and benefits the Executive may have under employee
benefit plans and programs of the Employer following a termination by the
Executive of his employment for Good Reason, including rights and benefits under
retirement plans and programs, shall be determined in accordance with the terms
of such plans and programs; provided that all stock options and restricted stock
awards granted to the Executive and outstanding as of the date of termination
(other than those under which vesting is performance-based or is dependent upon
the satisfaction of conditions other than continued employment) shall become
immediately and fully vested and the Executive shall have up to three years to
exercise all such outstanding options following the date of termination but in
no event beyond their specified term.  Notwithstanding the foregoing,
no such accelerated vesting or change in exercise period shall be permitted if
it would cause an option or restricted stock award that is not otherwise subject
to Section 409A to become subject to Section 409A or if it would cause an option
or restricted stock award that is subject to Section 409A to violate Section
409A.

     

    In
addition to the foregoing, in the event of a termination pursuant to this
Section 4(e) and provided the Executive properly elects coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Employer shall reimburse the Executive for one hundred percent (100%) of all
applicable premiums for continuation coverage for the Executive under the group
health plan of the Employer in which the Executive was a participant at the time
of the termination of his employment.  On a monthly basis following a
termination pursuant to this Section 4(e), the Employer shall pay to Executive a
cash payment that shall equal the premium costs that the Executive paid on an
after-tax basis over the preceding month period for such COBRA coverage until
the earlier of (w) the end of the term remaining under this Agreement at the
time the Executive’s employment is terminated, (x) December 31 of the year the
Executive attains age 65, (y) the date on which the Executive is eligible to
participate in a group health plan of another employer as a full-time employee,
or (z) the Executive’s death; provided, however that, as of the nineteenth month
following a termination pursuant to this Section 4(e), the Executive shall not
be entitled to further reimbursement for premium costs for such COBRA
coverage.

     

    In the
event the Executive is eligible to be covered by the Postretirement Medical and
Life Insurance Benefits Plan, or any successor or similar plan, of the Employer
at the time of his termination pursuant to this Section 4(e), the Executive may
elect, in lieu of electing COBRA

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    continuation
coverage under the provisions of the immediately preceding paragraph, to
participate in such Postretirement Medical and Life Insurance Benefits Plan of
the Employer. On a monthly basis following a termination pursuant to this
Section 4(e), the Employer shall pay to the Executive a cash payment that shall
equal the premium costs that the Executive paid on an after-tax basis over the
month period for coverage under such Postretirement Medical and Life Insurance
Benefits Plan, as adjusted to reflect the Employer’s subsidized cost-sharing
arrangement, if any, that is otherwise provided to all similarly situated
employees based on their years of service with the Employer until the earlier of
(w) the end of the term remaining under this Agreement at the time the
Executive’s employment is terminated, (x) December 31 of the year the Executive
attains age 65, (y) the date on which the Executive is eligible to participate
in a group health plan of another employer as a full-time employee, or (z) the
Executive’s death; provided, however that, as of the nineteenth month following
the Executive’s termination pursuant to this Section 4(e), the Executive shall
not be entitled to further reimbursement for premium costs for coverage under
such Postretirement Medical and Life Insurance Benefits Plan. After the 18th
month following a termination pursuant to this Section 4(e), the Executive shall
continue to be entitled to participate in the Postretirement Medical and Life
Insurance Benefits Plan of the Employer and to receive the Employer’s subsidized
cost-sharing arrangement, if any, that is otherwise provided to all similarly
situated employees based on their years of service with the
Employer.

     

    In
addition to the foregoing, in the event of a termination pursuant to this
Section 4(e) the Employer shall reimburse the Executive for one hundred percent
(100%) of all applicable premiums actually paid by the Executive for disability
insurance and, if the Executive does not elect to participate in the
Postretirement Medical and Life Insurance Benefits Plan of the Employer pursuant
to the immediately preceding paragraph, life insurance policies following
termination of employment not to exceed, in scope or benefit, any group
disability or life insurance plan made available by the Employer to similarly
situated employees in which the Executive was a participant at the time of his
termination of employment.  On a monthly basis following a termination
pursuant to this Section 4(e), the Employer shall pay to the Executive a cash
payment that shall equal the premium costs that the Executive paid on an
after-tax basis over the month period for coverage under such disability and, if
applicable, life insurance policies until the earlier of (w) the end of the term
remaining under this Agreement at the time the Executive’s employment is
terminated, (x) December 31 of the year the Executive attains age 65, (y) the
date on which the Executive is eligible to participate in a group disability
and, if applicable, life insurance plan of another employer as a full-time
employee, or (z) the Executive’s death; provided, however that, as of the
nineteenth month following the Executive’s termination pursuant to this Section
4(e), the Executive shall not be entitled to further reimbursement for premium
costs for coverage under such disability and, if applicable, life insurance
policies.

     

    In no
event shall the amount of expenses eligible for reimbursement under this Section
4(e) for any calendar year affect the expenses eligible for reimbursement in
another calendar year.  In no event shall any reimbursement made
pursuant to the two immediately preceding paragraphs be made later than the last
day of the calendar year following the year in which the Executive incurred the
expenses being reimbursed.  Any reimbursement payments made pursuant
to either of the two immediately preceding paragraphs shall be subject to any
postponement of payment that may be required by Section 15.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    For
purposes of this Agreement, termination with Good Reason means a termination of
the Executive’s employment by the Executive due to a failure of the Employer or
any successor to fulfill its obligations under this Agreement in any material
respect, including (a)any failure to elect or reelect or to appoint or reappoint
the Executive to the office of President and Chief Executive Officer of each of
FNB and the Bank or as a member of each of their boards of directors, or
(b) any other material change by the Employer in the functions, duties or
responsibilities of the Executive’s position as chief executive officer with the
Employer that would reduce the ranking or level, dignity, responsibility,
importance or scope of such position, or (c) any imposition on the
Executive of a requirement to be permanently based at a location more than 50
miles from the principal office of the Employer as of the date of this Agreement
without the consent of the Executive, or (d) any reduction without the
consent of the Executive in the Executive’s annual salary below the Base Salary
then provided for under Section 2(a).

     

    In the event a termination by the
Executive of his employment under this Agreement occurs within 24 months
following a Change in Control (as defined in Section 5(c)) and such termination
is for Good Reason, then the Executive’s rights to compensation shall be
governed by Section 5 and not this Section 4(e).

     

    (f)           At the Executive’s Option without
Good Reason.  The Executive may terminate his employment
without Good Reason at any time upon at least 60 days advance written notice to
the Employer; provided, however, that the Employer, in its discretion, may cause
such termination to be effective at any time during such notice
period.  In the event of such a voluntary termination of employment
without Good Reason, the Executive will be entitled to receive only any earned
but unpaid Base Salary and the other benefits of this Agreement through the date
on which the Executive's termination becomes
effective.  Notwithstanding the foregoing, any rights and benefits the
Executive may have under employee benefit plans and programs of the Employer
following a voluntary termination of the Executive’s employment without Good
Reason, including rights and benefits under retirement plans and programs, shall
be determined in accordance with the terms of such plans and
programs.

     

    (g)           Retirement.  The
Executive’s employment under this Agreement shall terminate upon the date of the
Executive’s retirement, which date (hereinafter referred to as the “Retirement
Date”) shall be the earlier to occur of (i) December 31 of the year in which the
Executive attains age 65, and (ii) the date on which the Executive voluntarily
terminates his employment upon satisfaction of the requirements for early
retirement under the Employer’s retirement plans.  In the event of the
Executive’s retirement, (i) the Executive shall be entitled to receive all
earned but unpaid Base Salary through the Retirement Date; (ii) the
Employer shall pay to the Executive, at the same time as bonus payments for the
year in which the Retirement Date occurs would otherwise be made under the
Stakeholders Plan, subject to any postponement of such payment that may be
required by Section 15, a prorated bonus for such year equal to the amount of
the bonus the Executive would have received if he had been employed throughout
such year; prorated on a daily basis as of the Retirement Date; (iii) all stock
options and restricted stock awards granted to the Executive and outstanding as
of the date the Retirement Date (other than those under which vesting is
performance-based or is dependent upon the satisfaction of conditions other than
continued employment) shall become immediately and fully vested; and
(iv) the Executive shall receive such retirement and other benefits as he
is entitled to receive under, and in accordance with, the terms of the
Employer’s retirement and other benefit plans.  Notwithstanding the
foregoing, no such accelerated vesting provided for in clause (iii)

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    above
shall be permitted if it would cause an option or restricted stock award that is
not otherwise subject to Section 409A to become subject to Section 409A or if it
would cause an option or restricted stock award that is subject to Section 409A
to violate Section 409A.

     

    5.           Termination
Following a Change in Control.

     

    (a)           Change in Control Cash
Benefits.  If the Executive’s employment is terminated by the
Employer other than for Cause or by the Executive with Good Reason within 24
months following a Change in Control, then the Executive shall be entitled to
receive an aggregate amount in cash equal to 2.99 multiplied by the Executive’s
average annual cash compensation for the five fiscal years immediately preceding
the Change in Control.  Such amount shall be payable on the date that
is six months after termination of employment.

     

    (b)           Benefit Plans.  In
addition to the benefit set forth in Section 5(a), in the event of a termination
pursuant to Section 5(a) and provided the Executive properly elects coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), the Employer shall reimburse the Executive for one hundred percent
(100%) of all applicable premiums for continuation coverage for the Executive
under the group health plan of the Employer in which the Executive was a
participant at the time of the termination of his employment.  On a
monthly basis following a termination pursuant to Section 5(a), the Employer
shall pay to Executive a cash payment that shall equal the premium costs that
the Executive paid on an after-tax basis over the preceding month period for
such COBRA coverage until the earlier of (w) the end of the term remaining under
this Agreement at the time the Executive’s employment is terminated, (x)
December 31 of the year the Executive attains age 65, (y) the date on which the
Executive is eligible to participate in a group health plan of another employer
as a full-time employee, or (z) the Executive’s death; provided, however that,
as of the nineteenth month following a termination pursuant to Section 5(a), the
Executive shall not be entitled to further reimbursement for premium costs for
such COBRA coverage.

     

    In the event the Executive is eligible
to be covered by the Postretirement Medical and Life Insurance Benefits Plan, or
any successor or similar plan, of the Employer at the time of his termination
pursuant to Section 5(a), the Executive may elect, in lieu of electing COBRA
continuation coverage under the provisions of the immediately preceding
paragraph, to participate in such Postretirement Medical and Life Insurance
Benefits Plan of the Employer. On a monthly basis following a termination
pursuant to Section 5(a), the Employer shall pay to the Executive a cash payment
that shall equal the premium costs that the Executive paid on an after-tax basis
over the month period for coverage under such Postretirement Medical and Life
Insurance Benefits Plan, as adjusted to reflect the Employer’s subsidized
cost-sharing arrangement, if any, that is otherwise provided to all similarly
situated employees based on their years of service with the Employer until the
earlier of (w) the end of the term remaining under this Agreement at the time
the Executive’s employment is terminated, (x) December 31 of the year the
Executive attains age 65, (y) the date on which the Executive is eligible to
participate in a group health plan of another employer as a full-time employee,
or (z) the Executive’s death; provided, however that, as of the nineteenth month
following the Executive’s termination pursuant to Section 5(a), the Executive
shall not be entitled to further reimbursement for premium costs for coverage
under such Postretirement Medical and Life Insurance Benefits Plan. After the
18th month following a termination pursuant to Section 5(a), the Executive
shall

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    continue
to be entitled to participate in the Postretirement Medical and Life Insurance
Benefits Plan of the Employer and to receive the Employer’s subsidized
cost-sharing arrangement, if any, that is otherwise provided to all similarly
situated employees based on their years of service with the
Employer.

     

    In addition to the foregoing, in the
event of a termination pursuant to Section 5(a) the Employer shall reimburse the
Executive for one hundred percent (100%) of all applicable premiums actually
paid by the Executive for disability insurance and, if the Executive does not
elect to participate in the Postretirement Medical and Life Insurance Benefits
Plan of the Employer pursuant to the immediately preceding paragraph, life
insurance policies following termination of employment not to exceed, in scope
or benefit, any group disability or life insurance plan made available by the
Employer to similarly situated employees in which the Executive was a
participant at the time of his termination of employment.  On a
monthly basis following a termination pursuant to Section 5(a), the Employer
shall pay to the Executive a cash payment that shall equal the premium costs
that the Executive paid on an after-tax basis over the month period for coverage
under such disability and, if applicable, life insurance policies until the
earlier of (w) the end of the term remaining under this Agreement at the time
the Executive’s employment is terminated, (x) December 31 of the year the
Executive attains age 65, (y) the date on which the Executive is eligible to
participate in a group disability and, if applicable, life insurance plan of
another employer as a full-time employee, or (z) the Executive’s death;
provided, however that, as of the nineteenth month following the Executive’s
termination pursuant to Section 5(a), the Executive shall not be entitled to
further reimbursement for premium costs for coverage under such disability and,
if applicable, life insurance policies.

     

    In no
event shall the amount of expenses eligible for reimbursement under this Section
5(b) for any calendar year affect the expenses eligible for reimbursement in
another calendar year.  In no event shall any reimbursement made
pursuant to the two immediately preceding paragraphs be made later than the last
day of the calendar year following the year in which the Executive incurred the
expenses being reimbursed.  Any reimbursement payments made pursuant
to either of the two immediately preceding paragraphs shall be subject to any
postponement of payment that may be required by Section 15.

     

    The
Employer shall also cause the Executive to become fully vested in any
qualified and nonqualified plans, programs or arrangements in which the
Executive participated if the plan, program or arrangement does not address the
effect of a Change in Control; provided, that (x) such vesting does not cause
any such plan, program or arrangement that is not otherwise subject to Section
409A to become subject to Section 409A and (y) such vesting does not cause any
such plan, program or arrangement that is subject to Section 409A to violate
Section 409A.  Subject to the foregoing, any rights and benefits the
Executive may have under the employee benefit plans and programs of the Employer
following a termination of the Executive’s employment by the Employer other than
for Cause or by the Executive with Good Reason shall be determined in accordance
with the terms of such plans and programs.

     

    (c)           Definition of Change in
Control.  For the purposes of this Agreement, the term “Change
of Control” shall mean a change in control as defined in Section 409A, including
–

     

    (i)           Change in ownership: a change
in ownership of the Bank occurs on the date any one person, or more than one
person acting as a group, acquires ownership of

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    stock of
FNB or the Bank, that together with stock of FNB or the Bank held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of stock of FNB or the Bank,

     

    (ii)           Change in effective control:
(x) 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) ownership of stock possessing 30% or more of the total
voting power of the stock of FNB or the Bank, or (y) a majority of the
board of directors of FNB is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the board of
directors of FNB before the date of the appointment or election; provided,
however, for purposes of this Section 5(c)(ii), the terms FNB or the Bank shall
refer to the relevant corporation identified in Treasury Regulation
1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder for
purposes of that regulation, or

     

    (iii)           Change in ownership of a substantial
portion of assets: a change in ownership of a substantial portion of the
assets of the Bank or FNB 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 of FNB or the Bank having a total gross fair market value equal
to or exceeding 40% of the total gross fair market value of all of the assets of
FNB or the Bank, as applicable, immediately before the acquisition or
acquisitions.  For this purpose, gross fair market value means the
value of the assets of FNB or the Bank, as applicable, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with the assets.

     

    (d)           No Multiple Severance
Payments.  If the Executive receives payment under this Section
5, he shall not be entitled to any severance benefits under Section
4.

     

    (e)           No Solicitation of Change in
Control.  The Executive will not solicit, counsel or encourage
any third party to offer, propose or pursue, or to solicit, counsel or encourage
another third party to offer, propose or pursue, any acquisition, merger or
other change in control of FNB or the Bank without the prior authorization of
the Board of Directors of the Bank or FNB as reflected in the minutes of a
regular or special meeting, or in a written consent action, of the Board of
Directors of the Bank or FNB.  Any violation of this Section 5(e)
occurring in connection with an offer, proposal or pursuit by a third party to
engage in an acquisition, merger or other change in control of FNB or the Bank
shall be deemed to constitute a forfeiture by the Executive of all of his rights
under Sections 5(a) and 5(b) hereof.

     

    (f)           Gross-Up for
Taxes.

     

    (i)           If
the Executive receives the cash payment under Section 5(a) and acceleration of
benefits under any benefit, compensation, or incentive plan or arrangement with
the Employer (collectively, the “Total Benefits”), and if any part of the Total
Benefits is subject to excise taxes (the “Excise Tax”) under section 280G and
section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the
Employer shall pay to the Executive at the time specified in subsection (iii)
below an additional amount (the “Gross-Up Payment”) such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Total
Benefits

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    and any
U.S federal, state, and for local income or payroll tax upon the Gross-Up
Payment, but before deduction for any U.S. federal, state and local income or
payroll tax on the Total Benefits, shall be equal to the Total
Benefits.  For purposes of calculating the Gross-Up Payment, the
Executive shall be deemed to pay income taxes at the highest applicable marginal
rate of federal, state or local income taxation for the calendar year in which
the Gross-Up Payment is to be made.

     

    (ii)           Subject
to any determination made by the Internal Revenue Service (the “IRS”), all
determinations as to whether a Gross-Up Payment is required and the amount of
Gross-Up Payment and the assumptions to be used in arriving at the determination
shall be made by the Employer’s independent certified public accountants or tax
counsel selected by such accountants or both (the “Accountants”) in accordance
with the principles of section 280G of the Code.  All fees and
expenses of the Accountants will be borne by the Employer.  Subject to
any determinations made by the IRS, determinations of the Accountants under this
Agreement with respect to (x) the initial amount of any Gross-Up Payment and (y)
any subsequent adjustment of such payment shall be binding on the Employer and
the Executive.

     

    (iii)           The
Gross-Up Payment calculated pursuant to Section 5(f)(ii) shall be paid no later
than the 30th day
following an event occurring that subjects the Executive to the Excise Tax;
provided, however, that if the amount of such Gross-Up Payment or portion
thereof cannot be reasonably determined on or before such day, the Employer
shall pay to the Executive the amount of the Gross-Up Payment no later than 10
days following the determination of the Gross-Up Payment by the
Accountants.  Notwithstanding the foregoing, the Gross-Up Payment
shall be paid to or for the benefit of the Executive no later than 15 business
days prior to the date by which the Executive is required to pay the Excise Tax
or any portion of the Gross-Up Payment to any federal, state or local taxing
authority, without regard to extensions and shall be subject to any delay
required by Section 15.

     

    (iv)           In
the event that the Excise Tax is subsequently determined by the Accountants to
be less than the amount taken into account hereunder at the time the Gross-Up
Payment is made, the Executive shall repay to the Employer, at the time that the
amount of such reduction in Excise Tax is finally determined, the portion of the
prior Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and U.S. federal, state and
local income tax imposed on the portion of the Gross-Up Payment being repaid by
the Executive if such repayment results in a reduction in Excise Tax or a U.S.
federal, state and local income tax deduction), plus interest on the amount of
such repayment at the rate provided in section 1274(b)(2)(B) of the
Code.  Notwithstanding the foregoing, in the event any portion of the
Gross-Up Payment to be refunded to the Employer has been paid to any U.S.
federal, state and local tax authority, repayment thereof (and related amounts)
shall not be required until actual refund or credit of such portion has been
made to the Executive and interest payable to the Employer shall not exceed the
interest received or credited to the Executive by such tax authority for the
period it held such portion.  The Executive and the Employer shall
cooperate in good faith in determining the course of action to be pursued (and
the method of allocating the expense thereof) if the Executive’s claim for
refund or credit is denied.  However, if agreement cannot be reached,
the Employer shall decide the appropriate course of action to pursue provided
that the action does not adversely affect any issues the Executive may have with
respect to his tax return, other than the Excise Tax.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

     

    (v)           In
the event that the Excise Tax is later determined by the Accountants or the IRS
to exceed the amount taken into account hereunder at the time the Gross-Up
Payment is made (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Employer
shall make an additional Gross-Up Payment to or for the benefit of the Executive
in respect of such excess (plus any interest or penalties payable with respect
to such excess) at the time that the amount of such excess is finally
determined; provided, that such payment shall be made no later than the end of
Executive’s taxable year next following the Executive’s taxable year in which
the Executive remits the related taxes to any federal, state or local taxing
authority.

     

    (vi)           In
the event of any controversy with the IRS (or other taxing authority) with
regard to the Excise Tax, the Executive shall permit the Employer to control
issues related to the Excise Tax (at its expense), provided that such issues do
not potentially materially adversely affect the Executive.  In the
event issues are interrelated, the Executive and the Employer shall in good
faith cooperate so as not to jeopardize resolution of either or any
issue.  In the event of any conference with any taxing authority as to
the Excise Tax or associated income taxes, the Executive shall permit the
representative of the Employer to accompany the Executive, and the Executive and
the Executive’s representative shall cooperate with the Employer and its
representative.

     

    (vii)           The
Employer shall be responsible for all charges of the Accountant.  Any
amounts paid pursuant to this Section 5(f)(vii) shall be made no later than the
last day of the calendar year following the year in which the expenses were
incurred.  In no event shall the amount of expenses eligible for
payment by the Company under this Section 5(f)(vii) for any calendar year affect
the expenses eligible for payment in another calendar year, and in no event may
the right to payments under this paragraph be liquidated or exchanged for any
other right or benefit.

     

    (viii)           The
Employer and the Executive shall promptly deliver to each other copies of any
written communications, and summaries of any oral communications, with any
taxing authority regarding the Excise Tax.

     

    6.           Covenant Not to
Compete.   For a period commencing on the date hereof and
continuing until (i) one year after the
date of expiration of the Employment Term or the date that any termination of
Executive’s employment under this Agreement becomes effective or (ii) the last day of the
period after the date that any termination of the Executive’s employment under
this Agreement becomes effective in which the Executive is entitled to receive
any Base Salary pursuant to Section 4 hereof, whichever is later, the Executive
will not, without the written consent of FNB or the Bank, directly or
indirectly:

     

    (a)           own
any interest in, manage, operate, control, be employed by, render consulting or
advisory services to, or participate in or be connected with the management or
control of any business that is then engaged, or proposing to engage, in the
operation of a bank, savings bank, credit union, mortgage company, savings and
loan association or similar financial institution that conducts any of its
operations within the counties in North Carolina in which the Employer or any
affiliate conducts operations as of the Effective Date and within any other
counties in North Carolina or in any other states added during the Employment
Term by the

     

    
      
         

      

      
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    Employer’s,
or any affiliate’s, conducting operations therein; provided, however, that the
Executive may, without violating this Agreement, own as a passive investment not
in excess of three percent (3%) of the outstanding capital stock of any such
business whose stock is publicly traded or quoted on the NASDAQ over-the-counter
market, the New York Stock Exchange, the American Stock Exchange, the National
Daily Quotation System “Pink Sheets” or the OTC Bulletin Board;

     

    (b)           influence
or attempt to influence any customer of the Employer or any affiliate to
discontinue its use of the Employer’s (or such affiliate’s) services or to
divert such business to any other person, firm or corporation;

     

    (c)           interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Employer or any affiliate and any of its respective customers,
suppliers, principals, distributors, lessors or licensors; and

     

    (d)           solicit
any officer or executive of the Employer or any affiliate, whose base annual
salary at the time of the Executive’s termination was $20,000 or more, to work
for any other person, firm or corporation.

     

    It is
expressly agreed that the provisions and covenants in this Section 6 shall not
apply and shall be of no force or effect in the event that (i) the Employer
fails to honor its obligations under this Agreement after termination of the
Executive’s employment, or (ii) the Executive’s employment hereunder is
terminated within 24 months after a Change in Control either by the Employer
other than for Cause or by the Executive with Good Reason.

     

    In the
event the Executive breaches any of the provisions contained herein and the
Employer seeks compliance with such provisions by judicial proceedings, the time
period during which the Executive is restricted by such provisions shall be
extended by the time during which the Executive has actually competed with the
Employer or been in violation of any such provision and any period of litigation
required to enforce the Executive’s obligations under this
Agreement.

     

    The
Executive and the Employer intend that Section 6 of this Agreement be enforced
as written.  However, if one or more of the provisions contained in
Section 6 shall for any reason be held to be unenforceable because of the
duration or scope of such provision or the area covered thereby, the Executive
and the Employer agree that the court making such determination shall have the
full power to reform, by “blue penciling” or any other means, the duration,
scope and/or area of such provision and in its reformed form such provision
shall then be enforceable and shall be binding on the parties.

     

    7.           Covenant Not to Disclose Confidential
Information.   The Executive hereby acknowledges and
agrees that (i) in the course of his service as an executive of the Employer, he
has and will gain substantial knowledge of and familiarity with the Employer’s
customers and its dealings with them, and other information concerning the
business of the Employer, all of which constitute valuable assets and privileged
information that is particularly sensitive due to the fiduciary responsibilities
inherent in the Employer’s business; and (ii) to protect the interest in and to
assure the benefit of the business of the Employer, it is reasonable and
necessary to place

     

    
      
         

      

      
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    certain
restrictions on the Executive’s ability to disclose information about the
business and customers of the Employer.  For that purpose, and in
consideration of the agreements contained herein, the Executive covenants and
agrees that any and all data, figures, projections, estimates, lists, files,
records, documents, manuals or other such materials or information (financial or
otherwise) relating to the Employer and its business, regulatory examinations,
financial results and condition, lending and deposit operations, customers
(including lists of the customers and information regarding their accounts and
business dealings with the Employer), policies and procedures, computer systems
and software, shareholders, executives, officers and directors (herein referred
to as “Confidential Information”) are proprietary to the Employer and are
valuable, special and unique assets of the business to which the Executive will
have access during his employment hereunder.  The Executive shall
consider, treat and maintain all Confidential Information as the confidential,
private and privileged records and information of the
Employer.  Further, at all times during the term of his employment and
following the termination of his employment under this Agreement for any reason,
and except as shall be required in the course of the performance by the
Executive of his duties on behalf of the Employer or otherwise pursuant to the
direct, written authorization of the Employer, the Executive will not divulge
any Confidential Information to any other person, firm, corporation, employer,
bank or similar financial institution, remove any such Confidential Information
in written or other recorded form from the Employer’s premises, or make any use
of the Confidential Information for his own purposes or for the benefit of any
person, firm, corporation, employer, bank or similar financial institution other
than the Employer.  However, following the termination of the
Executive’s employment with the Employer, this Section 7 shall not apply to any
Confidential Information which then is in the public domain (provided that the
Executive was not responsible, directly or indirectly, for permitting such
Confidential Information to enter the public domain without the Employer’s
consent), or which is obtained by the Executive from a third party which or who
is not obligated under an agreement of confidentiality with respect to such
information.

     

    8.           Acknowledgements.

     

    (a)           Reasonableness.  The
Executive hereby acknowledges that the enforcement of Sections 6 and 7 of this
Agreement is necessary to ensure the preservation, protection and continuity of
the business, trade secrets and goodwill of the Employer, and that the
restrictions set forth in Sections 6 and 7 of this Agreement are reasonable as
to time, scope and territory and in all other respects.

     

    (b)           Survival of
Obligations.  The Executive understands that his obligations
under Sections 6 and 7 of this Agreement will continue whether or not his
employment with the Employer is terminated voluntarily or involuntarily, or
whether for Cause, or other than for Cause, with Good Reason or without Good
Reason or not.  The existence of any claim or cause of action by the
Executive against the Employer shall not constitute and shall not be asserted as
a defense to the enforcement by the Employer of this Agreement.

     

    (c)           Remedies.  The
Executive acknowledges that in the event of any breach of the provisions of
Sections 6 and 7 hereof by the Executive, the Employer’s remedies at law would
be inadequate, and the Employer shall be entitled to an injunction (without any
bond or other security being required), restraining such breach, and costs and
attorneys' fees relating to

     

    
      
         

      

      
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    any such
proceeding or any other legal action to enforce the provisions of this
Agreement, but nothing herein shall be construed to preclude the Employer from
pursuing any other remedies at law or in equity available to it for any such
breach.

     

    9.           Assignment and Binding
Effect.   This Agreement shall be binding upon, and shall
inure to the benefit of, the Executive and the Employer and, as permitted by
this Agreement, their respective successors and assigns.  This
Agreement is personal to the Executive and, without the prior written consent of
the Employer, neither this Agreement nor any right or interest hereunder shall
be assignable by the Executive other than by will or the laws of descent and
distribution, and any attempt, voluntary or involuntary, to effect any such
prohibited assignment (including, without limitation, by transfer, charge,
pledge, hypothecation or sale) shall be null, void and of no
effect.  The Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange or otherwise) to
all or substantially all of the business or assets or both of the Employer to
assume expressly in writing and agree to perform this Agreement in the same
manner and to the same extent that the Employer would be required to perform it
if no such succession had taken place.  As used in this Agreement,
“the Employer” shall mean the Employer as defined in the preamble and any
successor to the business or assets or both of FNB or the Bank as stated above
that assumes and agrees to perform this Agreement by operation of law or
otherwise.

     

    10.           Complete
Agreement.   This Agreement replaces any previous
agreement relating to the same or similar subject matter which the Executive and
the Employer may have entered into with respect to the Executive's employment by
the Employer, including specifically the Agreement entered into between the
Executive and the Employer dated January 1, 2006.  The Executive has
no oral representations, understandings or agreements with the Employer or any
of its officers, directors or representatives covering the same subject matter
as this Agreement. This written Agreement is the final, complete and exclusive
statement and expression of the Employment Agreement between the Employer and
the Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. Except as set forth in Section 15, this written Agreement
may not be later modified except by a further writing signed by a duly
authorized officer of the Employer and the Executive, and no term of this
Agreement may be waived except by writing signed by the party waiving the
benefit of such term.

     

    11.           Full Settlement; No Duty to
Mitigate.   The Employer’s obligation to make any payment
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu and in full settlement of all other severance
payments to the Executive under any other severance plan, arrangement or
agreement of the Employer and its affiliates, and in full settlement of any and
all claims or rights of the Executive for severance, separation or salary
continuation payments resulting from the termination of his
employment.  In no event shall the Executive be obligated to seek
other employment or to take other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, and
except as specifically provided herein, such amounts shall not be reduced
whether or not the Executive obtains other employment.

     

    12.           Payment of Legal
Fees.   In the event of any litigation or other proceeding
between the Employer and the Executive with respect to the subject matter of
this Agreement

     

    
      
         

      

      
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    and the
enforcement of rights hereunder, the Employer shall reimburse the Executive for
his reasonable costs and expenses relating to such litigation or other
proceeding, including reasonable attorneys’ fees and expenses, provided that
such litigation or other proceeding results in any: (i) settlement requiring
the Employer to make a payment, continue to make payments or provide any other
benefits to the Executive, or (ii) judgment, order or
award against the Employer in favor of the Executive or his spouse, legal
representative or heirs, unless such judgment, order or award is subsequently
reversed on appeal or in a collateral proceeding.  At the request of
the Executive, costs and expenses (including reasonable attorneys’ fees) of up
to $100,000 incurred in connection with any litigation or other proceeding
referred to in this Section shall be paid by the Employer in advance of the
final disposition of the litigation or other proceeding referred to in this
Section shall be paid by the Employer in advance of the final disposition of the
litigation or other proceeding upon receipt of an undertaking by or on behalf of
the Executive to repay the amounts advanced if it is ultimately determined that
he is not entitled to reimbursement of such costs and expenses by the Employer
as set forth in this Section.

     

    13.           Source of Payment.  
All payments provided for under this Agreement shall be paid in cash from the
general funds of the Employer.  The Employer shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Employer shall make any investments to aid it in
meeting its obligations hereunder, the Executive shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments.  Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Employer and the Executive or
any other person.  To the extent that any person acquires a right to
receive payments from the Employer hereunder, such right shall be no greater
than the right of an unsecured creditor.

     

    14.           Consultation with Counsel and
Interpretation of this Agreement.   The Executive
acknowledges and agrees that he has had the assistance of counsel of his
choosing in the negotiation of this Agreement, or he has chosen not to have the
assistance of his own counsel.  Both parties hereto having
participated in the negotiation and drafting of this Agreement, they hereby
agree that there shall not be strict interpretation against either party in
connection with any review of this Agreement in which interpretation thereof is
an issue.

     

    15.           Code §
409A.   It is the intent of the parties that this
Agreement and all payments made hereunder shall be in compliance with the
requirements of section 409A of the Code and the regulations promulgated
thereunder.  If any provision of this Agreement shall not be in
compliance with section 409A of the Code and the regulations thereunder, then
such provision shall be deemed automatically amended without further action on
the part of the Employer or the Executive to the minimum extent necessary to
cause such provision to be in compliance and such provision will thereafter be
given effect as so amended.  If postponing payment of any amounts or
benefits due under this Agreement is necessary for compliance with the
requirements of section 409A of the Code and the regulations thereunder to avoid
adverse tax consequences to the Executive, then payment of such amounts shall be
postponed to comply with section 409A.  Any and all payments that are
postponed under this Section 15 shall be paid to the Executive in a lump sum at
the earliest time that does not result in adverse tax consequences to the
Executive under section 409A.

     

    
      
         

      

      
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    16.           Notices.   All
notices hereunder shall be (i) delivered by hand,
(ii) sent by
first-class certified mail, postage prepaid, return receipt requested, (iii) delivered by
overnight commercial courier, or (iv) transmitted by
telecopy or facsimile machine, to the following address of the party to whom
such notice is to be made, or to such other address as such party may designate
in the same manner provided herein: 

     

    If to the
Employer:

    

    FNB United Corp.

    Attention:  Compensation
Committee

    101 Sunset Avenue

    Asheboro, North Carolina
27203

    

    With copy to:

    

    Schell Bray Aycock Abel &
Livingston PLLC

    Attention: Melanie S.
Tuttle

    230 North Elm Street

    1500 Renaissance Plaza

    Greensboro, North Carolina
27420

    

    If to the
Executive, to his last address as shown on the personnel records of the
Employer.

    

    17.           Headings.  The
section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

     

    18.           Governing Law.  This
Agreement shall in all respects be construed according to the internal laws of
the State of North Carolina, without giving effect to any conflict of laws
provision or rule.  By entering into this Agreement, the Executive
acknowledges that he is subject to the jurisdiction of both the federal and
state courts in the State of North Carolina.  Any actions or
proceedings instituted under this Agreement shall be brought and tried solely in
courts located in Randolph County, North Carolina or in the federal court having
jurisdiction in Asheboro, North Carolina.  The Executive expressly
waives his rights to have any such actions or proceedings brought or tried
elsewhere.

     

    19.           Severability.  In
case any one or more of the provisions contained in this Agreement for any
reason shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and each such other provision shall to the full
extent consistent with law continue in full force and effect.

     

    20.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.

     

    
      
         

      

      
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    21.           Compliance with Requirements of
Troubled Assets Relief Program. Notwithstanding anything herein to the
contrary, in the event that the Employer is a participant in the Troubled Assets
Relief Program (“TARP”), including, without limitation, the Capital Purchase
Program, established under the Emergency Economic Stabilization Act of 2008,
then during such time as the United States Department of the Treasury
(“Treasury”) holds an equity or debt position in the Employer, the terms of this
Agreement shall be deemed automatically amended without further action on the
part of the Employer or the Executive to comply with any applicable executive
compensation requirements of TARP, including, without limitation, (i) requiring
the Executive to relinquish to the Employer any bonus or incentive compensation
paid that is based on statements of earnings, gains, or other criteria that are
later proven to be materially inaccurate; and (ii) if necessary, reducing any
compensation of the Executive so as not to receive any excess “golden parachute”
payments (based on the applicable Code provision). The Executive shall waive any
claims he may have against the Employer or Treasury as a result of any
amendments to this Agreement required by TARP.

     

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

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	
                                                      FNB
      UNITED CORP.

                                                    
	 
      	 
      	 
      
	 
      	
                                                      By

                                                    	
                                                      /s/
      Thomas A. Jordan

                                                    
	 
      	 
      	
                                                      Thomas
      A. Jordan

                                                    
	 
      	 
      	
                                                      Chair,
      Compensation Committee

                                                    
	 
      	 
      	
                                                      of
      the Board of Directors

                                                    
	 
      	 
      	 
      
	 
      	
                                                      COMMUNITYONE
      BANK, NATIONAL

                                                    
	 
      	
                                                      ASSOCIATION

                                                    
	 
      	 
      	 
      
	 
      	
                                                      By

                                                    	
                                                      /s/
      Thomas A. Jordan

                                                    
	 
      	 
      	
                                                      Thomas
      A. Jordan

                                                    
	 
      	 
      	
                                                      of
      the Board of Directors

                                                    
	 
      	 
      	 
      
	 
      	
                                                      EXECUTIVE:

                                                    
	 
      	 
      	 
      
	 
      	
                                                      /s/
      Michael C. Miller

                                                    
	 
      	
                                                      Michael
      C.
Miller

                                                    

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
 

    22

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