Document:

FIDELITY FEDERAL BANK & TRUST
                           CHANGE IN CONTROL AGREEMENT
                                       FOR
                                ROBERT L. FUGATE

     This CHANGE IN CONTROL  AGREEMENT  ("Agreement")  is made  effective  as of
December __, 2005 by and between a Fidelity  Federal  Bank & Trust,  a federally
chartered   stock  savings  bank  (the  "Bank"),   and  Robert  L.  Fugate  (the
"Executive").  Any reference to "Company" herein shall mean Fidelity Bankshares,
Inc., or any successor thereto.

     WHEREAS, the Bank and the Executive had previously entered into a Change in
Control Agreement, effective as of January 1, 2004; and

     WHEREAS, the Bank recognizes the substantial contribution the Executive has
made to the Bank and wishes to protect  his  position  therewith  for the period
provided in this Agreement; and

     WHEREAS,  the Executive has been elected to, and has agreed to serve in the
position of Executive  Vice  President  and Banking  Operations  Manager for the
Bank, a position of substantial responsibility; and

     WHEREAS, the Executive is deemed a "Specified Employee" for purposes of new
Section 409A of the Internal  Revenue Code ("Code") and the payments  under this
Change in Control Agreement are deemed to be "deferred  compensation," such that
the Agreement is required to be modified to conform to the  requirements of Code
Section 409A.

     NOW, THEREFORE, in consideration of the contribution of the Executive,  and
upon the other terms and  conditions  hereinafter  provided,  the parties hereto
agree as follows:

1.   TERM OF AGREEMENT

     The term of this Agreement shall be deemed to have commenced as of the date
first above  written and shall  continue  for a period of  thirty-six  (36) full
calendar months  thereafter.  Commencing on the first  anniversary  date of this
Agreement   ("Anniversary   Date")  and  continuing  at  each  Anniversary  Date
thereafter,  the Board of  Directors  of the Bank (the  "Board")  may extend the
Agreement  for  an  additional  year.  The  Board  will  conduct  a  performance
evaluation of the Executive  for purposes of  determining  whether to extend the
Agreement,  and the  results  thereof  shall be  included  in the minutes of the
Board's meeting.

2.   PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL

     (a) Upon the  occurrence  of a Change in Control of the Bank or the Company
(as herein defined) the provisions of Section 3 shall apply.

<PAGE>

     (b) A "Change  in  Control"  of the Bank or the  Company  shall  mean (i) a
change in ownership of the Bank or the Company  under  paragraph  (a) below,  or
(ii) a change in effective  control of the Bank or the Company  under  paragraph
(b) below,  or (iii) a change in the ownership of a  substantial  portion of the
assets of the Bank or the Company under paragraph (c) below:

                  (a)      Change in the ownership of the Bank or the Company. A
                           change in the ownership of the Bank or the Company
                           shall occur on the date that any one person, or more
                           than one person acting as a group (as defined in
                           Proposed Treasury Regulation Section
                           1.409A-3(g)(5)(v)(B)), acquires ownership of stock of
                           the corporation that, together with stock held by
                           such person or group, constitutes more than 50
                           percent of the total fair market value or total
                           voting power of the stock of such corporation.

                  (b)      Change in the effective  control of the Bank or the
                           Company.  A change in the effective  control of the
                           Bank or the Company  shall occur on the date that
                           either (i) any one person,  or more than one person
                           acting as a group (as defined in Proposed Treasury
                           Regulation Section  1.409A-3(g)(5)(v)(B)), 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 of the
                           corporation  possessing 35 percent or more of the
                           total voting power of the stock of such corporation;
                           or (ii) a majority of members of the corporation's
                           Board of  Directors is replaced during any 12-month
                           period by directors whose appointment or election is
                           not endorsed by a majority of the members of the
                           corporation's  Board of directors prior to the date
                           of the appointment or election,  provided that this
                           sub-section  (ii) is  inapplicable  where a majority
                           shareholder  of the Bank or the  Company is
                           another corporation.

                  (c)      Change in the  ownership  of a  substantial  portion
                           of the Bank or the  Company's assets. A change in the
                           ownership of a substantial  portion of the Bank or
                           the Company's assets shall occur on the date that
                           any one person,  or more than one person  acting as
                           a group (as defined in Proposed Treasury Regulation
                           Section 1.409A-3(g)(5)(v)(B)), acquires (or has
                           acquired  during the 12-month period ending on the
                           date of the most recent acquisition by such person
                           or persons)  assets  from the  corporation that have
                           a total gross fair market value equal to or more than
                           40% of the total gross fair market value of (i) all
                           of the assets of the Bank or the Company, or (ii)
                           the value of the assets  being  disposed  of, either
                           of which is  determined without regard to any
                           liabilities associated with such assets.

                  (d)      For all purposes hereunder, the definition of Change
                           in Control shall be construed to be consistent with
                           the requirements of Proposed Treasury Regulation
                           Section 1.409A-3(g), except to the extent that such
                           proposed regulations are superseded by subsequent
                           guidance.

                                       2
<PAGE>

     (c) The Executive shall not have the right to receive benefits  pursuant to
Section 3 hereof in the event of  Termination  for Cause  prior to the Change in
Control.  The term "Termination for Cause" shall mean termination because of the
Executive's  intentional failure to perform stated duties,  personal dishonesty,
incompetence,  willful  misconduct,  any  breach  of  fiduciary  duty  involving
personal  profit,  willful  violation of any law, rule,  regulation  (other than
traffic  violations or similar offenses) or final cease and desist order, or any
material  breach of any material  provision of this  Agreement.  In  determining
incompetence,  the  acts  or  omissions  shall  be  measured  against  standards
generally prevailing in the savings institution  industry.  For purposes of this
paragraph,  no act or  failure  to act on the  part of the  Executive  shall  be
considered "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's action or omission
was in the  best  interest  of the  Bank.  Notwithstanding  the  foregoing,  the
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been  delivered to him a copy of a  resolution  duly adopted by
the affirmative vote of not less than  three-fourths of the members of the Board
at a meeting of the Board  called and held for that  purpose  (after  reasonable
notice to the Executive and an opportunity for him, together with counsel, to be
heard before the Board),  finding  that in the good faith  opinion of the Board,
the  Executive  was  guilty  of  conduct  justifying  Termination  for Cause and
specifying the particulars  thereof in detail.  The Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause. Any stock options granted to Executive under any stock option plan of
the Bank, the Company or any subsidiary or affiliate thereof,  shall become null
and void  effective upon  Executive's  Termination  for Cause,  and shall not be
exercisable by Executive at any time subsequent to such Termination for Cause.

3.   CHANGE IN CONTROL BENEFITS

     Upon the occurrence of a Change in Control,  the Bank shall be obligated to
pay the Executive,  or in the event of his subsequent  death, his beneficiary or
beneficiaries, or his estate, as the case may be, the following:

     (a) a payment  equal to three times the sum of (i) the highest rate of base
salary, and (ii) highest rate of bonus awarded to the Executive during the prior
three years, subject to applicable  withholding taxes. The payment shall be made
in a lump sum on the  effective  date of the Change in  Control.  Such  payments
shall not be reduced in the event Executive  obtains other employment  following
the Change in Control;

     (b) for so long as  Executive is employed by the Bank and/or  Company,  and
continuing  for a period of  thirty-six  (36) months  following  termination  of
employment,  continued  life  insurance  coverage for  Executive and health care
coverage  (including  dental) for  Executive and  Executive's  dependents at the
Bank's own  expense (at the end of which,  Executive  shall be entitled to elect
the maximum  continued  health care coverage  available in  accordance  with the
COBRA  provisions  of  Section  4980B of the  Code) and such  coverage  shall be
substantially  identical to the coverage  maintained  by the Bank or the Company
for the Executive prior to the Change in Control;

                                       3
<PAGE>

     (c) any outstanding unvested stock options or shares of restricted stock of
the Company that have been awarded to Executive  shall become fully vested as of
the Change in Control;

     (d) at the time of or within sixty (60) days (or within such shorter period
to the extent that information can be reasonably  obtained) following the Change
in Control,  a lump sum payment in an amount  equal to the present  value of the
Bank's  contributions  that would be made on Executive's behalf under the Bank's
401(k)  Plan  and  employee   stock   ownership  plan  (and  any  other  defined
contribution  plan maintained by the Bank) if he continued  working for the Bank
for a thirty-six (36) month period following the Change in Control,  earning the
base salary that would be achieved  during the remaining  unexpired term of this
Agreement (assuming,  if a Change in Control has occurred,  that the annual base
salary  increases at the rate of six percent  (6%) per year on each  Anniversary
Date over the remaining  unexpired term of the Agreement) and making the maximum
amount of employee  contributions  permitted,  if any, under such plan or plans,
where such  present  values are to be  determined  using a discount  rate of six
percent (6%) per year;

     (e) at the time of or within sixty (60) days (or within such shorter period
to the extent that information can reasonably be obtained)  following the Change
in Control,  a lump sum payment in an amount equal to the excess, if any, of (A)
the  present  value of the  benefits  to which he would be  entitled  under  the
Fidelity Federal Savings Bank of Florida Supplemental  Executive Retirement Plan
(and any other deferred  compensation plan for management or highly  compensated
employees that are maintained by the Bank) if he continued  working for the Bank
for the thirty-six (36) month period following the Change in Control at the base
salary and bonus that would be achieved  during the remaining  unexpired term of
this Agreement (assuming,  if a Change in Control has occurred, that annual base
salary and bonus each  increase at the rate of six percent (6%) per year on each
Anniversary Date for the remaining unexpired term of the Agreement) over (B) the
present  value of the benefits to which he is actually  entitled  under any such
plan, as of the date of the Change in Control,  where the present  values are to
be determined using a discount rate of six percent (6%) and the mortality tables
prescribed under Section 72 of the Code;

     (f)  Payments  under  Section  3(d) and  Section  3(e) above  shall be made
irrespective of whether termination of employment has occurred.  Notwithstanding
anything   herein  to  the  contrary,   if  termination  of  employment   occurs
simultaneously  with the  effective  date of the  Change  in  Control,  and such
termination  is deemed a "Separation  from  Service"  within the meaning of Code
Section 409A,  then the payments  required under this Section 3 shall be delayed
until the first day of the seventh month following such Separation from Service,
but only if required by Code Section 409A;

     (g) Notwithstanding the preceding paragraphs of this Section 3, in no event
shall the aggregate payments or benefits to be made or afforded to the Executive
under said paragraphs (the "Change in Control  Benefits")  constitute an "excess
parachute payment" under Section 280G of the Code or any successor thereto,  and
in order to avoid such a result, the Change in Control Benefits will be reduced,
if necessary, to an amount (the "Non-Triggering  Amount"), the value of which is
one dollar ($1.00) less than an amount equal to three (3) times the  Executive's
"base  amount,"  as  determined  in  accordance  with  said  Section  280G.  The
allocation of the  reduction  required  hereby among Change in Control  Benefits
provided by the  preceding  paragraphs  of this Section 3 shall be determined by
the Executive.

                                       4
<PAGE>

4.   SOURCE OF PAYMENTS

     (a) All payments provided in this Agreement shall be timely paid in cash or
check  from the  general  funds of the Bank.  Executive  and the Bank,  however,
acknowledge  that pursuant to that certain Change in Control  Agreement  between
Executive and the Company dated as of the date of this  Agreement  (the "Company
Change in Control Agreement"),  the Company has guaranteed payment and provision
of all amounts and benefits due hereunder to Executive  and, if such amounts and
benefits  due from the Bank are not timely paid or  provided  by the Bank,  such
amounts and benefits shall be paid or provided by the Company.

     (b)  Notwithstanding  any provision  herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided in this  Agreement,  are paid to or
received  by  Executive  under the  Company  Change in Control  Agreement,  such
compensation  payments  and  benefits  will be  subtracted  from any amounts due
simultaneously to Executive under similar provisions of this Agreement.

     (c) For  financial  statement  purposes,  Change in Control  payments  made
pursuant  to the  provisions  of  Section 3 of each of the  Agreements  shall be
charged and paid in accordance  with the terms of Section 3(g) of this Agreement
and Section 4 of the Company Change in Control Agreement.

5.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior  agreement  between the Bank and the Executive,  except
that this  Agreement  shall not  affect or  operate  to reduce  any  benefit  or
compensation inuring to the Executive of a kind elsewhere provided. No provision
of this Agreement  shall be interpreted to mean that the Executive is subject to
receiving fewer benefits than those  available to him without  reference to this
Agreement.

6.   NO ATTACHMENT

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This Agreement  shall be binding upon, and inure to the benefit of, the
Executive, the Bank and their respective successors and assigns.

                                       5
<PAGE>

7.   MODIFICATION AND WAIVER

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such  term  or  condition  for  the  future  or as to any act  other  than  that
specifically waived.

8.   REQUIRED PROVISIONS

     (a) The Bank may terminate  the  Executive's  employment  at any time.  The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 2(c) hereinabove.

     (b) If Executive is suspended  from office  and/or  temporarily  prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section  8(e)(3)  or  8(g)(1)  of the  Federal  Deposit  Insurance  Act  (12 USC
ss.1818(e)(3)  and  ss.1818(g)(1)),  the Bank's  obligations under this contract
shall be  suspended  as of the date of  service  unless  stayed  by  appropriate
proceedings.  If the  charges in the notice are  dismissed,  the Bank may in its
discretion (i) pay Executive all or part of the compensation  withheld while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of the obligations which were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section  8(e)(4)  or  8g(1)  of  the  Federal  Deposit  Insurance  Act  (12  USC
ss.1818(e)(4)  and  ss.1818(g)(1)),  all  obligations  of the  Bank  under  this
contract  shall  terminate  as of the  effective  date of the order,  but vested
rights of the contracting parties shall not be affected.

     (d) If the Bank is in default as defined in Section  3(x)(1) of the Federal
Deposit Insurance Act (12 USC ss.1813(x)(1)),  all obligations of the Bank under
this  contract  shall  terminate as of the date of default,  but this  paragraph
shall not affect any vested rights of the contracting parties.

     (e) All  obligations  of the Bank under this contract  shall be terminated,
except to the extent  determined that  continuation of the contract is necessary
for the continued  operation of the Bank by the Director of the Office of Thrift
Supervision  ("OTS")  or his  designee  at the  time  (i)  the  Federal  Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide assistance to
or on behalf of the Bank under the  authority  contained in Section 13(c) of the
Federal Deposit  Insurance Act (12 USC ss.1823(c));  or (ii) the Director of the
OTS or his designee approves a supervisory merger to resolve problems related to
the  operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.

                                       6
<PAGE>

     (f) Notwithstanding anything herein contained to the contrary, any payments
to  Executive  by the  Bank  pursuant  to  this  Agreement  are  subject  to and
conditioned  upon their  compliance  with Section  18(k) of the Federal  Deposit
Insurance  Act,  12 U.S.C.  Section  1828(k),  and the  regulations  promulgated
thereunder in 12 C.F.R. Part 359.

9.   SEVERABILITY

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

10.  HEADINGS FOR REFERENCE ONLY

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

11.  GOVERNING LAW

     The  validity,   interpretation,   performance,  and  enforcement  of  this
Agreement  shall  be  governed  by the  laws of the  State  of  Florida,  unless
preempted by Federal law as now or hereafter in effect.

     Except as otherwise expressly provided elsewhere in this Agreement,  in the
event that any dispute  should  arise  between  the  parties as to the  meaning,
effect,  performance,  enforcement,  or other  issue  in  connection  with  this
Agreement, which dispute cannot be resolved by the parties, the dispute shall be
decided  by final  and  binding  arbitration  of a panel  of three  arbitrators.
Proceedings in arbitration and its conduct shall be governed by the rules of the
American Arbitration  Association ("AAA") applicable to commercial  arbitrations
(the "Rules")  except as modified by this Section.  The Executive  shall appoint
one arbitrator,  the Bank shall appoint one  arbitrator,  and the third shall be
appointed by the two arbitrators  appointed by the parties. The third arbitrator
shall be impartial  and shall serve as chairman of the panel.  The parties shall
appoint  their  arbitrators  within  thirty  (30)  days  after  the  demand  for
arbitration is served, failing which the AAA promptly shall appoint a defaulting
party's  arbitrator,  and the two arbitrators  shall select the third arbitrator
within  fifteen  (15) days after their  appointment,  or if they cannot agree or
fail to so appoint,  then the AAA promptly  shall appoint the third  arbitrator.
The  arbitrators  shall render their decision in writing within thirty (30) days
after the close of  evidence  or other  termination  of the  proceedings  by the
panel,  and the  decision  of a majority of the  arbitrators  shall be final and
binding upon the parties, nonappealable, except in accordance with the Rules and
enforceable in accordance  with the Florida  Arbitration  Code or any applicable
successor  legislation.  Any hearings in the  arbitration  shall be held in Palm
Beach County, Florida unless the parties shall agree upon a different venue, and
shall be private and not open to the public.  Each party shall bear the fees and
expenses of its arbitrator, counsel, and witnesses, and the fees and expenses of
the third  arbitrator  shall be shared equally by the parties.  The costs of the
arbitration,  including  the fees of AAA,  shall be  borne  as  directed  in the
decision of the panel.

                                       7
<PAGE>

12.  PAYMENT OF LEGAL FEES

     All reasonable legal fees paid or incurred by the Executive pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or reimbursed by the Bank if the Executive is successful on the merits  pursuant
to a legal judgment, arbitration or settlement.

13.  INDEMNIFICATION

     The Bank shall provide the Executive  (including  his heirs,  executors and
administrators)   with  coverage  under  a  standard  directors'  and  officers'
liability insurance policy at its expense,  or in lieu thereof,  shall indemnify
the  Executive  (and his heirs,  executors  and  administrators)  to the fullest
extent  permitted  under  federal law and as provided in the Bank's  Charter and
Bylaws  against  all  expenses  and  liabilities  reasonably  incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be  involved  by reason of his  having  been a  director  or officer of the Bank
(whether  or not he  continues  to be a  director  or  officer  at the  time  of
incurring  such  expenses or  liabilities),  such  expenses and  liabilities  to
include,  but not be limited to, judgments,  court costs and attorneys' fees and
the cost of reasonable settlements.

14.  SUCCESSOR TO THE BANK

     The Bank  shall  require  any  successor  or  assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially   all  the  business  or  assets  of  the  Bank,   expressly   and
unconditionally to assume and agree to perform the Bank's obligations under this
Agreement,  in the same  manner  and to the same  extent  that the Bank would be
required to perform if no such succession or assignment had taken place.

15.  SIGNATURES

     IN WITNESS  WHEREOF,  the Bank has caused this  Agreement to be executed by
its duly authorized officer, and the Executive has signed this Agreement, on the
day and date first above written.

ATTEST:                           FIDELITY FEDERAL BANK & TRUST

__________________                By:
                                      -----------------------------------------
                                      President

WITNESS:                          EXECUTIVE

__________________                By:
                                      -----------------------------------------
                                      Robert L. Fugate

                                       8FIDELITY BANKSHARES, INC.

                    AMENDED AND RESTATED EXECUTIVE AGREEMENT

     WHEREAS, Brian C. Mahoney ("Executive") and Fidelity Bankshares,  Inc. (the
"Company")  originally entered into an Executive Agreement dated March 27, 2003,
which is now  being  amended  and  restated  effective  as of the date set forth
below,  in order to comply with  Section  409A of the  Internal  Revenue Code of
1986,  as amended  ("Executive  Agreement")  to  guarantee  and ensure  that the
Executive  shall  receive the full value of the benefits to which he is entitled
under various benefit plans sponsored by the Company or by Fidelity Federal Bank
& Trust (the "Bank") in which the Executive is a participant; and

     WHEREAS,  tax law provisions  relating to "golden parachute payments" could
have the effect of reducing the benefits  otherwise  promised to Executive under
the  various  benefit  plans  sponsored  by the Bank as a result  of a Change in
Control of the  Company or the Bank,  either as the result of  cut-backs  in the
benefit due to restrictions  imposed by the Bank's  regulators or the imposition
of an excise tax on the deemed "excess parachute payment"; and

     WHEREAS,  the Board believes that this  Executive  Agreement is in the best
interests  of the Company and its  shareholders  and will  provide the  benefits
intended to be provided to  Executive in the event of a change in control of the
Company or the Bank,  without any reduction  because of tax code  "penalties" or
excise taxes relating to a change in control; and

     WHEREAS,  the  Company  and the  Executive  also  desire to enter into this
Executive  Agreement  for the  purpose of  providing  further  incentive  to the
Executive to achieve  successful results in the management and operations of the
Company.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereto
hereby agree as follows:

     1. In the event of a Change in Control (as  defined  herein) of the Bank or
the  Company,  the  Executive  shall be entitled  to  receive,  pursuant to this
Executive  Agreement,  an amount  payable by the  Company,  in  addition  to any
compensation or benefits otherwise paid by the Bank or the Company,  which shall
equal the difference,  if any,  between (i) the amount that would be paid by the
Bank  under  the  terms of the  various  benefit  plans  without  regard  to any
reduction  that may be required or imposed by any  regulatory  authority  having
jurisdiction  over the Bank, and (ii) the amount that is actually paid to or for
the benefit of the Executive by the Bank under the terms of the various  benefit
plans.

     2. In addition, in each calendar year that Executive is entitled to receive
payments or benefits  under the  provisions of a benefit plan and this Executive
Agreement,  the  independent  accountants  of the Company shall  determine if an
excess  parachute  payment (as defined in Section 4999 of the  Internal  Revenue
Code of 1986, as amended (the "Code")) exists.  Such determination shall be made
after taking any reductions  permitted  pursuant to Section 280G of the Code and
the  regulations  thereunder.  Any amount  determined to be an excess  parachute
payment after taking into account such reductions shall be hereafter referred to
as the "Initial Excess Parachute Payment". As soon as practicable after a Change

<PAGE>

in Control,  the Initial Excess  Parachute  Payment shall be determined.  At the
time at which the Executive  would be entitled to a payment under the provisions
of a  benefit  plan and this  Executive  Agreement  or,  if the  Executive  is a
Specified  Employee  (as  defined  in  Proposed  Treasury   Regulations  Section
1.409A-1(i))  and the payment is due to the Executive's  Separation from Service
(as defined in Proposed  Treasury  Regulations  Section  1.409A-1(h)),  the date
which is six (6)  months  after  the  date of the  Executive's  Separation  from
Service (but only if such delay is required by Code Section  409A),  the Company
shall pay  Executive,  subject  to  applicable  withholding  requirements  under
applicable state or federal law an amount equal to:

          (i)              twenty percent (20%) of the Initial Excess Parachute
                           Payment (or such other amount equal to the tax
                           imposed under Section 4999 of the Code), and

          (ii)             such additional amount (tax allowance) as may be
                           necessary to compensate Executive for the payment by
                           Executive of state and federal income and excise
                           taxes on the payment provided under Clause (i) and on
                           any payments under this Clause (ii). In computing
                           such tax allowance, the payment to be made under
                           Clause (i) shall be multiplied by the "gross up
                           percentage" ("GUP"). The GUP shall be determined as
                           follows:

                                    Tax Rate
                              GUP = ----------
                                   1- Tax Rate

                           The Tax Rate for purposes of computing the GUP shall
                           be the highest marginal federal and state income and
                           employment-related tax rate, including any applicable
                           excise tax rate, applicable to the Executive in the
                           year in which the payment under Clause (i) is made.

     3. Notwithstanding the foregoing, if it shall subsequently be determined in
a final judicial  determination  or a final  administrative  settlement to which
Executive  is a party  that the excess  parachute  payment as defined in Section
4999 of the Code,  reduced as described  above,  is  different  from the Initial
Excess Parachute  Payment (such different amount being hereafter  referred to as
the  "Determinative  Excess Parachute  Payment") then the Company's  independent
accountants  shall determine the amount (the "Adjustment  Amount") the Executive
must pay to the Company or the Company must pay to the Executive in order to put
the Executive  (or the Company,  as the case may be) in the same position as the
Executive  (or the  Company,  as the case may be) would have been if the Initial
Excess Parachute  Payment had been equal to the  Determinative  Excess Parachute
Payment. In determining the Adjustment Amount, the independent accountants shall
take into account any and all taxes  (including any penalties and interest) paid
by or for Executive or refunded to Executive or for Executive's benefit. As soon
as practicable after the Adjustment  Amount has been so determined,  the Company
shall pay the  Adjustment  Amount to Executive or the Executive  shall repay the
Adjustment  Amount  to the  Company,  as the case may be.  The  purpose  of this
paragraph is to assure that (i) the Executive is not paid more as  reimbursement
for the golden  parachute  excise tax than it may  ultimately  be  determined is
necessary  to make him whole,  and (ii) if it is  subsequently  determined  that
additional golden parachute excise tax is owed by him, additional  reimbursement
payments will be made to him to make him whole for the additional excise tax.

                                       2
<PAGE>

     4. In each calendar year that Executive receives payments or benefits under
one or more benefit plans sponsored by the Bank or the Company,  Executive shall
report on his state and  federal  income  tax  returns  such  information  as is
consistent with the  determination  made by the  independent  accountants of the
Company as described  above.  The Company  shall  indemnify  and hold  Executive
harmless  from  any  and all  losses,  costs  and  expenses  (including  without
limitation,  reasonable  attorney's  fees,  interest,  fines and penalties) that
Executive incurs as a result of so reporting such  information.  Executive shall
promptly notify the Company in writing whenever the Executive receives notice of
the institution of a judicial or administrative proceeding,  formal or informal,
in which the federal tax treatment  under Section 4999 of the Code of any amount
paid or payable  under this  Supplemental  Agreement is being  reviewed or is in
dispute.  The Company  shall  assume  control at its expense  over all legal and
accounting  matters  pertaining  to such  federal tax  treatment  (except to the
extent  necessary or  appropriate  for Executive to resolve any such  proceeding
with respect to any matter unrelated to amounts paid or payable pursuant to this
contract).  The  Executive  shall  cooperate  fully with the Company in any such
proceeding.  The Executive  shall not enter into any compromise or settlement or
otherwise  prejudice  any rights the  Company may have in  connection  therewith
without prior consent to the Company.

     5.  For  these  purposes,  a  "Change  in  Control"  shall  mean any of the
following:

               (a) "Change in Control" shall mean (i) a change in the ownership
         of the Company, (ii) a change in the effective control of the Company,
         or (iii) a change in the ownership of a substantial portion of the
         assets of the Company, as described below.

               (b) A change in the ownership of a corporation occurs on the date
         that any one person, or more than one person acting as a group (as
         defined in Proposed Treasury Regulations section 1.409A-3(g)(5)(v)(B)),
         acquires ownership of stock of the Company that, together with stock
         held by such person or group, constitutes more than 50 percent of the
         total fair market value or total voting power of the stock of such
         corporation. For these purposes, a change in ownership will not be
         deemed to have occurred if no stock of the Company is outstanding.

               (c) A change in the effective control of the Company occurs on
         the date that either (i) any one person, or more than one person acting
         as a group (as defined in Proposed Treasury Regulations section
         1.409A-3(g)(5)(vi)(B)) 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 of the Company possessing 35 percent or
         more of the total voting power of the stock of such Company, or (ii) a
         majority of the members of the Company's board of directors is replaced
         during any 12-month period by directors whose appointment or election
         is not endorsed by a majority of the members of the Company's board of
         directors prior to the date of the appointment or election, provided
         that this subsection "(ii)" is inapplicable where a majority
         shareholder of the Company is another corporation.

               (d) A change in a substantial portion of the Company's assets
         occurs on the date that any one person or more than one person acting
         as a group (as defined in Proposed Treasury Regulations section

                                       3
<PAGE>

         1.409A-3(g)(5)(vii)(C)) acquires (or has acquired during the 12-month
         period ending on the date of the most recent acquisition by such person
         or persons) assets from the Company that have a total gross fair market
         value equal to or more than 40 percent of the total gross fair market
         value of (i) all of the assets of the Company, or (ii) the value of the
         assets being disposed of, either of which is determined without regard
         to any liabilities associated with such assets. For all purposes
         hereunder, the definition of Change in Control shall be construed to be
         consistent with the requirements of Proposed Treasury Regulations
         section 1.409A-3(g)(5), except to the extent that such proposed
         regulations are superseded by subsequent guidance.

     6. This Executive Agreement shall be binding on the Company, its successors
and assigns and the benefits  hereunder shall inure to the benefit of Executive,
his heirs and beneficiaries.

     IN WITNESS  WHEREOF,  Fidelity  Bankshares,  Inc. has caused this Executive
Agreement  to be  executed  and its  seal to be  affixed  hereunto  by its  duly
authorized officer,  and Executive has signed this Executive Agreement as of the
____ day of December, 2005.

ATTEST:                                     FIDELITY BANKSHARES, INC.

                                            By:
------------------------------------            -------------------------------
Secretary

WITNESS:                                    EXECUTIVE

                                            By:
------------------------------------            -------------------------------
                                                Brian C. Mahoney

                                       4

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